Estonia Map

Digital Transformation in Estonia

Estonia, the small country from Northern Europe, also known as The Baltic Tiger, is one of the most digitalized and innovative countries in the world, a recognized leader in Digitalization and a role model for other countries that want to pursue and implement large scale Digital Transformation strategies.

Estonia’s Economic and Political Context

Estonia Map

Estonia is a democratic parliamentary republic with the capital in Tallinn; with a population of 1,29 million, it is one of the smallest countries in the European Union and NATO (member since 2004). The country has the largest GDP per capita from all the former USSR member states and it is considered by the World Bank as a “a high-income economy” and the International Monetary Fund regards it as “an advanced economy”. The United Nations appreciates Estonia as a “developed country”, with a “very high” index of Human Development. It is also a leader in the freedom of press (3rd place worldwide in 2012), economic and political freedom, education.

In January 2011, the country did the transition to Euro and it became the 17th member of the Euro Zone. The Estonian economy is characterized by very low budget deficit, almost nonexistent public debt, relatively low flat income tax rate, free trade, competitive banking system, innovative e-governance with minimal bureaucracy, mobile digital services.

Because of its rapid development, Estonia is nicknamed “The Baltic Tiger”.

Digital Transformation


At the beginning of the 1990s, the IT industry and the Internet were growing rapidly and they offered new development perspectives for all areas of activity, in all sectors of the economy. In the same period, Estonia (part of the former URSS), because of its geo-political and economic context, developed and started implementing a complex and innovative nationwide Digital Transformation Strategy, in multiple directions: legislation, education, finance (banking), administration, health, citizenship.

The main results of this national project were the e-Estonia platform and the IT&C Cluster; they became a strong foundation for economic development and growth and also established Estonia as a pioneer and leader among the world’s nations, with a very high level of Digitalization:

  • 100% of educational institutions and government organizations are connected to the internet
  • 88% of households are connected to the Internet
  • 99% of banking transactions are done online
  • 95% of medical prescriptions are digital
  • 94% of the country’s population has a digital id
  • 98% of taxes were submitted online (2015)
  • 31% of the voting in the 2015 elections were submitted online

Estonia’s evolution in the Digital Evolution Index by The Fletcher School at Tufts University on


A major component of the Digital Transformation strategy was the Tiger Leap national project (started in 1996), which emphasized the high importance of developing a nation-wide Digital Information Infrastructure. The main notable results were the digitalization of public & educational organizations (investments in computers, software, trainings) and the introduction of Digital Capabilities trainings for the population. The country’s law was updated to allow the development and adoption of a national digital ID card (e-Identity), which served as a foundation for the next wave of digital services (e-health, e-taxes, e-voting, etc.)

In the private sector:

  • Banks introduced online services (much sooner than in other countries)
  • Entrepreneurs developed innovative e-payment solutions (ex: for parking) and other location based services.

In the following years e-Estonia continues its growth and in 2007 the country makes history by being the 1st one in the world to successfully defend itself against a large scale cyber-attack which targeted its digital infrastructure. In 2008, NATO opened in Tallinn a Cooperative Cyber Defense Centre of Excellence.

e-residency identity card templateIn 2014 the e-Estonia platform has been extended with e-Residency, a very innovative pilot program which allows global foreign investors to create and operate companies remotely (online) in Estonia and in the European Union + global markets.

The project’s potential was recognized very early by other countries (ex: Japan, UAE, Great Britain) which partnered with Estonia to facilitate their Digital Transformation process.

Estonia’s ICT Cluster

The Estonian ICT Cluster is the main engine behind the digital transformation innovation and development of the country; it is backed by 81 organizations and partners that:

  • employ 49% of resources from the sector
  • generate 61% of the ITC sector income
  • have customers in over 128 countries

The current development strategy of the Estonian ICT Cluster focuses on diversification and regional expansion:

  • partnerships with companies from Sweden and Latvia via the Estonian ICT Meta Cluster: approximately 400 de organizations
    • Digitalization serves as a support foundation for the next generation of clusters – the Meta Clusters: more agile and less dependent on region, boundaries
  • investments in the development and integration of Industry 4.0 technologies, partnerships with interested companies

The main capabilities of the Estonian ICT Cluster member companies: Interoperability, Digital Identity (e-identity) & Digital Signatures, Technology, Energy & Eco Resources, Electronic Governance (e-governance), Education, Finance, Health, Human Resources, Legislation / Justice, Logistics, Manufacturing, Mobile Solutions, Real Estate, Telecommunications (see for details).

The birth of the Estonian ICT Cluster is strongly coupled with the country’s National Digitalization Strategy:

  • 1992 – AFA (Estonian Computers Association) is founded
  • 1998 – discussions start between AFA and ITC sector companies
  • 2000 – TEL (Association of Telecommunications Companies) is founded
  • 2000 (March 23) – AFA and TEL merge, giving birth to ITL (Association of Estonian Information Technology and Telecommunications Companies), with 40-member organizations

The e-Estonia platform and its e-Services were made possible by the innovative vision and strong collaboration of ITL members.

Next Global Digitalization Wave

E-Estonia, a first of its kind digital integrated platform for e-citizenship, e-government, e-business, e-services, was developed in order to optimize administrative processes, reduce bureaucracy, costs and to serve as a foundation for future services development for both organizations and citizens.

Through the E-Estonia and E-Residency differentiators, the Estonian IT&C Cluster is in a position of strong competitive advantage and it will further contribute to Estonia’s economical growth and transformation; the announcements made at the end of 2015 come as a validation of the country’s strategy:

  • The European Union issued the Electronic Identification and Trusted Services Directive (eIDAS): beginning with 2016, all EU member states must recognize the digital identities, signatures issued by other member states
    • e-Residency is currently the only available short-term option for accessing EU digital e-citizenship; the other member states are only beginning to adopt this kind of solutions
  • Great Britain has reached an agreement with Estonia for IT&C collaboration
  • Japan announced they will be implementing their own digital identity and digital services platform for its citizens based on Estonia’s model and with their support
  • The United Arab Emirates signed a memorandum with Estonia for IT&C and e-government solutions development
  • Nasdaq Inc began a pilot project (shareholder participation) integrated with e-Residency, based on blockchain (the technology behind BitCoin)
  • The United Nations partnered with Estonia for the UNCTAD e-Trade for All program, which will make use of e-Residency to empower entrepreneurs from developing countries to start e-businesses and join in on the benefits brought by future global e-commerce developments

European UnionThe Estonian IT&C Cluster is today at the forefront of the Next Global Digitalization Wave unleashed by the Digital Transformation Strategies adopted especially in developed countries: multinational global e-citizenship, e-commerce, e-services platforms are emerging worldwide, building upon the model of e-Estonia and e-Residency.

The future digitalized support infrastructures / platforms will be interconnected, integrated and the European Union is already taking the first steps in this direction with eIDAS.

(latest update: 2017 November)


  1. UNCTAD and Estonia partnership – UN and e-Residency join forces to empower entrepreneurs in the developing world
  2. Nasdaq’s blockchain technology to transform the republic of Estonia’s e-Residency Shareholder Participation
  3. Estonian ICT Cluster / ITL
  4. Bhaskar Chakravorti, Ajay BhallaRavi, Shankar Chaturvedi, “60 Countries’ Digital Competitiveness, Indexed”, on
  5. Internet Org, “State of Connectivity: 2014 – A report on Global Internet Access”, (PDF)
  6. Michael E. Porter, “Strategy and the Internet”, Harvard Business Review, R0103D

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