Why Adaptiveness is at the Heart of Network Readiness: The Case of Estonia

For the past two decades, Estonia has won global plaudits as an impressive trailblazer in digital innovation and is known as “the most advanced digital society in the world”. Notably, its ‘e-Estonia’ program is hailed as a global benchmark for digital government, with 99% of government services digitized. From e-health solutions to internet voting and cybersecurity, Estonia has a strong track record of embracing digital disruption and enhancing its readiness for the digital future across government, economy and society.

However, the notion of ‘network readiness’ demands countries are continuously, dynamically digitally adaptive, constantly reacting to and embracing digital changes. In other words, the key marker of excellent network readiness is staying ahead of the curve. The example of Estonia – a high-income, high-performing digital economy – offers lessons for global economies in different stages of diverse digitization worldwide.

The Portulans Institute’s Network Readiness Index (NRI) is an ideal, data-based tool to gauge Estonia’s readiness for the digital future, highlighting both its strengths and weaknesses. In the 2020 NRI, and compared to 134 economies included in the index, Estonia was ranked in 23rd place globally, and 15th place in Europe. While Estonia displays strong performance across many areas, the country’s main strong suits relate to digital connectivity, security and trust, and digital government.

Across multiple measures, Estonia’s performance in aspects of digital connectivity is world-leading. In particular, Estonia’s students benefit from the world’s highest level of internet access in schools, the result of a long-term investment in digital learning, yielding particularly good results in the past year, with the rise of remote learning. As a result, Estonia ranks in 8th place worldwide for network-ready individuals, a sub-pillar which measures excellence in ICT skills, the adult literacy rate and internet users, among other indicators. As for businesses, Estonia’s firms rank in 4th place worldwide for their use of digital tools, contributing to a friendly, flourishing start-up environment (ranked in 1st place worldwide by Index Venture, and called a “kind of Silicon Valley on the Baltic Sea”).

Turning to security and trust, after the 2007 cyber attacks (acknowledged by many as the world’s first cyber war), Estonia embarked on a program of cyber defence, building a durable and dynamic cybersecurity strategy. In 2008, the NATO Cooperative Cyber Defence Centre of Excellence was established in Tallinn, focused on enhancing Estonia’s cyber readiness. As of 2020, Estonia’s cybersecurity performance was ranked 5th in the world, according to the NRI. Tallinn regularly holds cyber diplomacy and security training for other countries, and has enhanced its levels of trust (13th place) and regulation (11th place), making Governance its strongest NRI pillar (11th place).

Estonia’s strong performance in readiness for the digital future would not be possible without its digital government, pioneered in the early 2000s by former President Toomas Hendrik Ilves and former Prime Minister Andrus Ansip. While the OECD’s Digital Government Index (DGI) demonstrates a worrying trajectory for Estonia’s performance in digital government, the e-Estonia program enables world-leading levels of e-participation; the government’s use of online services is ranked 2nd worldwide. In particular, Estonia’s e-identity cards are used by 98% of Estonian citizens, generating over 900 million signatures and opening a door to most, if not all, essential activities, such as internet voting, banking proof of identification, and checking medical records. Consequently, Estonia’s level of digital inclusion is ranked in 8th place worldwide.

While Estonia remains a world-leading digital innovator with applaudable levels of network readiness, within its track record are some areas of concern. Readiness for the digital future demands adaptiveness, forward-thinking and dynamism are integrated into the heart of a country’s digital strategy. In the fields of open, digital government and harnessing future technologies, Estonia’s performance may begin to raise eyebrows.

First and foremost, Estonia’s previously mentioned slipping performance in the OECD’s Digital Government Index is cause for concern, according to experts. Ranked in 2nd place worldwide in 2016, Estonia now performs below the OECD average, in 18th place. This picture is reflected by certain indicators in the NRI, which point to sub-par performance in the government’s publication and use of open data (44th place) and the government’s promotion of investment in emerging technologies (34th place). Former political leaders have expressed concern that the country’s current downwards trajectory of digital government is the result of the emergent ultra right-wing movement, threatening its open, inclusive digital innovation culture. Interviewed by the Financial Times, digital government expert Arthur Mickoleit commented that the country “prioritized the engineering part of [e-services] and had maybe a little less space for innovation and out-of-the-box thinking.”

Continued commitment to the digital future is a benchmark of excellence among digital societies worldwide. With the rapid onset of the Fourth Industrial Revolution and its constituent disruptive technologies, countries that do not harness people-first, inclusive digital innovations risk falling behind the curve of digital progress. Beyond digital government, Estonia’s ranking for the ‘Future Technology’ sub-pillar (including indicators relating availability, investment and spending) may be a red flag, ranked 38th place worldwide, not to mention its 53rd place ranking for its medium- and high-tech industry. In fact, Estonia was the first country worldwide to integrate blockchain technologies at the government level; PwC calls Estonia “the digital republic secured by blockchain”. However, its relatively sub-par rankings may indicate the need for the country to improve its commitment to investing in and encouraging the use of emerging technologies.

The case of Estonia underlines the importance of lessons learned in the pursuance of network readiness, as opposed to the creation of transferable, transplant-able ‘recipes’ for success. As demonstrated by Estonia’s mixed track record in digital innovation in recent years, strong network readiness is hinged upon building adaptiveness and dynamism into the heart of economic, societal and governmental digital transformation.


This blog is part of the ‘NRI Regional Spotlight’ series: a series in which Portulans staff use the Network Readiness Index data and findings to produce targeted analysis and commentary (in addition to insights from the Global Innovation Index and the Global Talent Competitiveness Index). Interested in a deep-dive into your country’s tech competitiveness, innovation readiness and global talent? Email info@portulansinstitute.org