The e-state of Estonia – and its Lessons for Our Digital Future

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The technology future that some fear, and others embrace, is descending upon us at a rapid pace. We are approaching a future where our physical and digital identities will merge; a future in which our biological traits, behavioral markers and other characteristics are used to identify us in the digital sphere, affecting more and more aspects of our daily lives.

There's a fear that granting computers that kind of information about us is inherently dangerous. By giving digital systems the “keys” to our very personas, we are potentially handing over control of our personas – our lives – to them.

However the digital future is not necessarily a bleak one; done right, a digital society can provide services, opportunities, education, and much more, all without sacrificing our individuality, privacy, or security. 

In fact, that kind of digital society already exists – and it's becoming a model for countries around the world. It's happening in Estonia, which over the last decade has become one of Europe's most digitally advanced countries and is providing lessons for governments, private enterprise, and institutions all around the world.

During that decade, Estonia has embraced digital technology, turning itself into a true “digital e-state,” for the benefit of its citizens. Estonians today no longer have to wait in line for government services. Bureaucratic tasks, at the individual or organizational level, are easily accomplished via apps, websites, electronic forms, etc.

A decade ago, Estonia experienced substantial economic hardships. The 2008 recession hit the country hard and unemployment reached double digits. At the time, the government lacked the funds to maintain its own services, pay employees and support its bureaucracy.

Estonia decided that the answer was to drastically cut back on government expenses and decided to move operations to the digital sphere and rather quickly, transferred all official services to the cloud. What started out as an attempt to fix the country’s financial crisis, ended up producing one of the greatest revolutions in national-scale organizational efficiency in Europe’s history.

In addition to saving mounds of paperwork, officials say the move to digital has elevated the countries annual GDP by 2%.
Estonia’s revamp also brought about a transformation to the country’s entire business environment. The new e-government opened the door for Estonia to establish itself as a startup hub and a friendly environment for entrepreneurship and foreign businesses. There are currently more than 21,000 foreign “e-residents” of Estonia, all of whom can conduct business in the country without living there.

Security a Top Priority
To accomplish this, Estonia had to ensure that the system was secure – and it accomplished that by developing an effective digital identification system. The first step they took was to issue a new form of individual identity authentication: the government launched a nationwide program to provide a secure 2048-bit ID-card to every Estonian citizen.

Shortly after, the government released a Mobile-ID authenticator that requires an encrypted sim-card, allowing citizens to safely use any government service with the highest level of security. The availability of both a hard token option in the form of an ID card, and a soft token method in the mobile app, assured a high acceptance rate among the population’s diverse age groups.

Utilizing high assurance authentication, the government replaced all its services with e-services, enabling the state to maximize efficiency and remove frustrating roadblocks for its citizens. Today, Estonia saves an average of six work days a year per citizen. It has also managed to drastically reduce government overhead and is now the easiest country in Europe to open a new business. 

Such advanced security is an important first step for any entity, whether a country or a small business, seeking to digitize its operations. In a recent IBM study found that 67% of participants stated they were confident in using biometric tools as a form of authentication, while 87% said they would be willing to use these technologies in the future. Even more telling was this: the overwhelming majority (75%) of young adults think that the traditional password is obsolete as an authentication method.

What this and other research in the industry has revealed is that changes in preferences are being driven by a tricky dichotomy when it comes to authentication. Users have to contend with the need to achieve high security assurance, while also wanting an easy user experience.

At an enterprise level, whether in business, government, or any other organization, this means keeping assets safe from intruders, while ensuring the smooth flow of operations. The future workforce will require a system that provides a hassle-free high assurance authentication that will balance usability with security.

The rise in popularity of alternative methods, such as biometrics and facial recognition, can be seen as a direct result of growing public awareness to the risks of password-based authentication and the threats they pose to digital identities.

Applying the Model to the Enterprise
Companies today use digital authentication to authorize both employees and clients to execute a wide spectrum of actions on the network, from transferring data to making payments. The more seamless and secure the authentication process utilized by a company, the more services - at a quicker pace, and with fewer costs - it can offer to its users. Achieving a high level of authentication efficiency not only protects the organization’s data, it also allows its users to do more.

What Estonia’s transformation has shown us is that this is not just a theoretical possibility, but an implementable, real-world solution. 

E-signature technology has already been shown to have saved countless manpower hours and resources for enterprises across the globe. Just like digital authentication revolutionized processes and bureaucracy for the Estonians, it can open up business options that were not available in the past by slashing costs and making services more easily accessible to customers.  

Organizations seeking to find the right authentication tools, will mean homing in on the solution that combines security strength with ease of usability. Some solutions excel in security but are cumbersome and complex to use, interfering with workflow, and ultimately compromising employee effectiveness. Others are easy for users to engage with, but are fundamentally weak, and in the end, leave users exposed. 

Like Estonia, an organization that utilizes advanced authentication technologies can bring their business operations to the next level, enabling users to access more services and reduce overhead, while improving user experience for both employees and customers. 

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