Why Estonia may be Europe's model country

Skype got its start in a grim Soviet-era complex on the outskirts of Tallinn, where the USSR secretly assembled its first computer. Mr. Tallinn credits a spirit of entrepreneurship and creativity that filled Estonia in the 1990s, giving rise to a spirited community of computer developers. "If you happen to start a new country in the 1990s, you have the advantage of drafting new laws with the knowledge that the Internet is out there," says Tallinn.

Estonia's early adoption of the Internet has turned it into one of the world's most wired countries (it's often called e-Stonia). There's free wireless Internet at almost every street corner. People pay their parking tickets with their cellphones and voters cast their ballots digitally – the first people to do so in the world.

"The Internet and [information technology] infrastructure is a way of life," says Linnar Viik, intellectual capital theory professor at the Estonia IT College. "This way of life and the values of this society aren't controlled by state ministries of defense. They are supported by culture, education, the economy."

A cyberarmy rises

In January, Estonia deployed its volunteer cyberarmy, the 60-member Cyber Defense League. It's Estonia's electronic National Guard. Created in the wake of a massive 2007 hacker attack, which was blamed on Russian hackers (but never officially proven), the online watchdogs have turned Estonia into the model for defending against computer warfare. To make sure cyberexperts are available in case of an emergency, it is contemplating making service in the Cyber Defense League part of a national draft.

Estonians express an almost instinctive sense of national duty, something that many say stems from decades of painful occupation. "The concept of independence is fragile and sensitive and important in Estonia," says Mr. Viik.

From atop the Tallinn citadel of Toompea, a former Baroque palace that now houses the Estonian Parliament, one gets a good view of medieval Tallinn, encircled by towering walls. The city built it high under Swedish rule in the 1600s to protect itself from invaders. For more than 500 years, this forested country – the size of New Hampshire and Vermont combined – was up for grabs.

Nation after nation – Den­mark, Sweden, Germany, Russia, the Soviet Union – had a turn at domination. Only once in those 500 years, from 1920 to 1940, did Estonians consider Tallinn their own capital.

"War and occupation and Stalinist terror is what really influenced the attitudes," says Olaf Mertelsmann, professor of contemporary history at the University of Tartu in Estonia. "This is why independence is sometimes glorified."

Estonia's challenges

To be certain, Estonia has a long road ahead. The latest global economic crisis hit hard. One in 10 people is unemployed. One-fifth of the population lives in poverty, and tensions remain high with the 300,000 ethnic Russians – one-third of the population – living in Estonia. How to integrate them remains a quandary. Yet Estonia does not want to spend its way to prosperity.

"Conservatism has always been a common feature for us," says Ligi, the finance minister. By the end of 2010, its budget deficit dropped to 1.7 percent of gross domestic product, well below the EU's 3 percent limit. (By comparison, Ireland and Greece had deficits of more than 14 percent of GDP.) Estonia's economy is predicted to grow by 5 percent this year.

"In many ways," says Professor Mer­tels­­­mann, "it is the West that has to learn from the East, and not the other way around."

Previous

1 | 2