Ditching Legacy Thinking in Estonia

by Helen Wall, on Jan 17, 2017 10:04:17 AM

Twenty-five years ago, the Iron Curtain came down and many countries in EuropeAccelare - Strategy to Execution regained their independence.  In 1991, Estonia emerged from communist rule with an incredibly limited and backwards infrastructure.  Within the country at that time, only half of the households had phones and there was only one line that went out of the country that only the foreign minister could access.  In just over a two-decade period, their turnaround has been astonishing and they have become one of the world’s leading tech countries.  And they never looked back. 

What can other governments and organizations learn from Estonia?

  1. Lead with a performance culture

Estonia is a country that encourages entrepreneurship and innovation (more on innovation later).  There is a business hub in Tallinn called Tehnopol, which houses more than 150 tech companies.  The first employee of Skype and the founder of the peer-to-peer money transfer service TransferWise, Taavet Hinrikus, hails from Estonia.  Their culture of performance extends to the startup culture of the country, where there are a growing number of new companies being registered, and in 2011, high tech companies accounted for 15% of Estonia’s GDP.

Children in Estonia aspire to be entrepreneurs as careers when they grow up (changing from the 1980’s when the children wanted to be rock stars).  And this starts at a young age.  All classrooms in Estonia were online by 1998.  Free Wi-Fi is commonplace in Estonia.  Just recently, they started a program called ProbeTiiger, which teaches 5 year olds the basics of coding.

  1. Align policies to intended Strategy

In 1992, Mart Laar, drove the development of its high tech economy by implementing policies that allow new businesses like the high tech industry to prosper in Estonia.  The country implemented a flat income tax, and promoted free trade, sound money, and privatization.  In order to encourage business startups, new businesses could be easily and quickly registered.  The country also spent more time implementing a strong infrastructure.  In the early 1990’s, Finland offered their old analogue phone system to Estonia for free as they were upgrading to a digital system.  Estonia turned down their offer, instead deciding to take a bit longer to develop their own digital phone system.

  1. Embrace innovation

In just over a two-decade period, here are the incredible accomplishments of the relatively small country of Estonia:

  • Development of code behind Skype and Kazaa (early file sharing network)
  • In 2007, became first country to allow online voting in a general election
  • World’s fastest broadband speeds
  • Hold world record for number of start-ups per person
  • Paying for parking with mobile phones
  • Health records stored in digital cloud
  • 95% of Estonians file their tax returns online (takes about 5 minutes)
  • EWent from having a very limited telecommunications infrastructure to having one of the most advanced in the world

Much can be learned from Estonia and applied to federal and state government.  Foremost is getting rid of legacy thinking, the bane of most bureaucracies. 

Accelare’s Strategy to Execution (S2E) process provides the tools and rigor to create a performance culture.  Government leaders must drive the process, lead by example and make tough decisions for the long term – not the next election.  Top on most lists include bringing technologies to current and leading edge state, investing in competency based training for the new jobs the digital economy demands and encouraging and rewarding innovation in new industry-education collaboratives.

Click below to learn more about Accelare’s S2E process.



How did Estonia become a leader in technology?


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