Estonia Saves 2% Of GDP by Digital Signing
With hot summers and frigid winters, forests, and lakes covering three-quarters of its territory and more than 1,500 islands, the Republic of Estonia span 45,227 km2. Toomas Hendrik Ilves, the minister who led it for a whole decade (2006-2016), went so far as to say that “not many people know where Estonia is, but everyone knows Skype, so now I say I am the president of the country where Skype was born.” This communication tool was born there 17 years ago, becoming one of its best business cards.
But Estonia has not only stood out for Skype, but also for its highly advanced digitalization. Estonia is known for being a leading digital, technological, educational, and cybersecurity country, with a very tech-savvy population-Estonia has made many achievements in its digital journey and ranks first in the development of digital public services and among the top 10 European countries overall. It serves as a model for the international community at large.
Taavi Rõivas, former Prime Minister of Estonia, explained the extraordinary achievements that the digital landscape is bringing to Estonia. “Estonia saves two percent of GDP by signing things digitally,” he said. “Imagine if this could be global. And that is that Estonian citizens can do many things in the digital environment, from filing taxes to checking health records, to getting prescriptions, medicines, and so on.
Unlike many other countries, every Estonian, regardless of location, has a state-issued digital identity. Thanks to this, Estonia is years ahead of countries still trying to figure out how to authenticate people without physical contact. This electronic identity system, called eID, is the cornerstone of the country’s e-state. e-ID and the surrounding ecosystem are part of any citizen’s daily transactions in the public and private sectors. More than 99% of Estonians have an ID card and 70% of the population uses it regularly.
Heindrik’s ultimate vision is to turn public management into a true citizen service. In an interview, he reported that, according to his calculations, a person can save up to two weeks with his digital system. But in addition to offering convenience and practicality to citizens, these policies improve democratic readability. “Simple citizen-oriented solutions,” such as Estonia’s move to online voting in 2005, he said, “mean more participation and more democracy.” Estonian elections now welcome the participation of citizens living abroad in 116 countries.
But how has Estonia achieved this? By creating a very secure and universal digital identity document, with which you can make all kinds of transactions and sign any contract digitally. Every Estonian citizen has a digital identity document, which consists of a public number. The system works on a blockchain, which means that the histories of each transaction are decentralized and can be verified securely and transparently. Personal information remains private, and once a piece of information has been entered, it does not need to be re-entered. On the other hand, with a decentralized computer communication architecture, called X-road. The X-Road software-based solution is the backbone of e-Estonia. Invisible yet crucial, it allows the nation’s various public and private sector e-service information systems to link up and function in harmony. This architecture prevents massive data theft so that cybercriminals can do no more than block citizens’ access to certain services.
Heindrik believes that a half-baked digital system, as most countries in Europe have, is not a good solution. There is no technical reason why Estonia’s digital system should not work in other European countries. What needs to be done is to offer services to citizens, Europe must move forward, to create a system like Estonia’s throughout the European Union, and for them to be compatible. There is no reason to use obsolete technologies when in the 21st century we already have innovative technology, says Heindrik. He also believes that Estonia is revolutionizing taxation and corporate taxation. They are moving closer and closer to the concept of real-time.
The Estonian government estimates that its e-Estonia systems contribute ~ 2% annual GDP savings (e.g., 2% of 2017 U.S. GDP would be over $300 billion) and dramatically increases citizen participation, with one of the highest tax payment rates worldwide. e-ID solutions also enable better internal tracking of expenditures, helping to counteract current government mispayments of more than $100 million each year in the U.S., according to a 2015 Government Accountability Office estimate.
Many organizations are not yet taking full advantage of the potential value of digital transformation. If a country like Estonia saves so much money and time by signing digitally, what would happen if companies incorporated digital signature systems? They would save time and money, among other benefits.
With SignD’s QES document management is carried out online which offers the opportunity to save a considerable amount of money. Printing and paper costs are reduced, and space and working hours are saved by archiving paper copies. In addition, there are significant savings in logistics, as the electronic signature of documents makes courier services superfluous. Our QES is a signature that uses a qualified certificate and multifactor verification to identify the signatory. It is the only signature explicitly recognized as the legal equivalent of a handwritten signature in all EU member states. Our QES is guaranteed by a trusted, audited, and standardized service provider, with standardized methods that demand the highest levels of security and trust protocols.
Industries should take Estonia as a reference and upgrade online infrastructures to improve service delivery and save money and time in the digital age.