38 FINANCE & DEVELOPMENT | March 2018
IN THE TRENCHES
PHOTO: ALAMY / KRISTOFFER TRIPPLAAR
E-stonia Takes Off
Toomas Hendrik Ilves explains how
digitalization can make people’s lives a
whole lot easier
TOOMAS HENDRIK ILVES is the former president of
Estonia and the man be hind rebranding the coun-
try once best known for log ging to the place where
Skype was born. Inspired by his own childhood
experience learning computer programming in a
New Jersey high school, Ilves launched t he Tiger
Leap project–which involved building network
infrastr ucture and getting schools online. It wa s the
early 1990s; Estonia had regained it s independence
after the collapse of the Soviet Union, and Ilves
recognized the promise of technology as a means
of boosting its ailing economy.
Born in Sweden to Estonian parents who had
escaped the Iron Curtain, Ilves grew up in the
United States. It was while serving in Washington,
DC, as Estonia’s Ambassador to the United States
and Canada that Ilves laid the groundwork for the
country’s digitalization program known today as
e-Estonia. He was elected president of Estonia in
2006 and served two terms.
In this interview with FD’s Bruce Edwards,
Ilves says it was innovative policy more than
technology that enabled Estonia’s remarkable
F&D: Just how digitalized has Estonian society
THI: ere are only three tra nsactions involving the
government where you actually have to show up.
e rst is getting married, the second is the sa le
of real estate, and the t hird is divorce.
F&D: Are people well adapted to the sy stem?
THI: Yes. e common gripe among Estonians
abroad is that systems don’t work. After the end
of my term I came to Silicon Valley, the mecca of
information technology and innovat ion. Within
a 10-mile radius are the headquarters for Apple,
Facebook, Google, Tesla, and more. But when I
registered my daughter for school, I had to prove that
we lived in Palo Alto by bringing a photocopy of my
electricity bill. So you have th is enormous contrast.
We Estonians in Silicon Valley all wonder how
it’s possible that this is the center of the technology
universe, yet everyday li fe is so 1950s!
F&D: Certa in aspects of digitalization are highly
contested in a lot of countries because of the col-
lection of personal data. How dicult was it to
get Estonians to buy into this idea?
THI: People didn’t really object because it’s highly
secure. Part of it is architect ural: we don’t have any
central databa ses. You can only acce ss this system
through a high ly encrypted end-to-end, two-factor
authorization system. For that, you need a secu re
digital identity or ID card.
F&D: On what technology is it based?
You have a distributed data exchange layer, which
means that only you and those people you authorize
can access your data. If you authorize a doctor, only
that doctor can see your medical data. And every time
someone accesses the data, the system ags it. is is
how people know they’d get caught if they were to try.
Ultimately it is all based on trust. I can assure
you that even in the most horrendous of crimes,
the government of Estonia would not go into your
private data because there is f ull recognition on the
part of the government that, if the s ystem were ever
to be compromised, it would fall at and coll apse.
So no one takes that risk .