Being a small country has huge upsides for founders looking to start a company, to test out their product or service, and get it approved in a more streamlined process than in other countries.
It’s quick and easy to set up a company in Estonia. Through its e-Residency scheme this can typically be achieved in a few hours, but the current record is just 15 minutes. There is 0% tax on reinvested profits which allows for real growth, and e-residents don’t even have to live in or have physical offices in Estonia to enjoy the government’s digital services.
In terms of testing, Margot Arula, Head of Legal and Intellectual Property at self-driving car manufacturer, Clevon, told The Stack: “Estonia is the perfect base for this kind of technology because it’s relatively small so it’s like a sandbox. You can test out new things without too much of a complex environment.”
With regards to regulatory progress, Priit Liivak, Chief Architect at digital transformation firm, Nortal, told The Stack: “It’s easier to move a smaller ship. Estonia due to its size has had a great position to implement new developments.”
As Arula further explained, “what you see in Germany is some regulations take five years, ten years. Here we can have them in one or two.” Clevon has had its self-driving cars on Tallinn’s roads for over a year with zero accidents so far. The city also has self-driving buses and robots that deliver goods to your front door. Other European countries could have the same if it weren’t for slower regulatory processes in their governments.
Collaboration is key
These startups do not only enjoy the digital and financial incentives, test-lab conditions, and speedier regulations provided by Estonia, but also state support and access that would be hard to get in other countries.
“Estonia is a very close-knit society,” Minister Riisalo told The Stack, “so we talk with people who are running the companies, doing the startups, so we know the needs and try to reflect them.”
This is certainly the case for Nortal, which has consulted on 40% of e-Estonia’s government services. “The support from the government side makes us truly a startup nation,” Liivak said. The business has graduated from Estonian-founded startup to fully-fledged global company with over 2000 employees.
The same is true at Clevon. “You have quite good access to government officials,” Arula said. “Everyone knows everyone in a way. You know who to talk to and you know how to make it happen.”
The Estonian transport authority has been involved in developing Clevon from early on. “Before they let us on the road, they ran some tests to see if there was a baseline level of safety that is guaranteed,” Arula added.
It is these relationships between startup founders and state bodies to which Arula attributes much of the company’s success, and in turn, the capital’s own digitalisation.
Adapting to beat adversaries
Prime Minister Kallas hopes Estonia’s startup success will inspire better governance and security in the country, especially after it was hit with devastating cyberattacks in 2007.
“Governments need to adopt the tools of tech startups and tech companies: constant iteration and obsession with user experience, decision based on data, learning from and reusing what others have already built,” she said.
The NATO Cooperative Cyber Defence Centre of Excellence was founded in Tallinn the year of the attacks, and last year, Estonia nearly doubled its annual cyber security budget. The Prime Minister’s latest pledge is to spend 3% of its GDP on defence overall.
As Liivak noted, “the threat is always out there in terms of data breaches and cyberattacks. We just need to be prepared.”
What next?
Estonia is leading the charge for digitalisation, and startups continue to enjoy the advantages of basing themselves there: the ease of founding a company in Estonia, the country’s small size making it a fertile ground for testing, the collaborative government and access to ministers, the quicker regulation processes, and a tech-ready workforce thanks to the country’s high-quality education in IT and engineering.
While an efficient digital government that is creating more jobs and helping startups to flourish may sound like an ideal more than a reality for many countries, Estonia is proof that the tech is not only there, but working and useful for citizens. Time for the rest of us to catch up?
Source link : https://www.thestack.technology/estonia-technology-hub-digital/
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Publish date : 2023-09-12 07:00:00
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