INFOGRAPHIC: Estonia at 24 in the Digital Evolution Index

Estonia is doing well when it comes to digital public services, but not as well when it comes to digital economy. (ERR)
2/23/2015 1:00 PM
Category: Sci-Tech

Estonia is in the average position when it comes to e-commerce, the report from The Fletcher School at Tufts University (US) says.

The Digital Evolution Index (DEI), a report conducted by The Fletcher School, measures the digital trajectories of 50 countries to provide actionable, data-informed insights for businesses, investors and policymakers. It analyzes the key underlying drivers and barriers that govern a country’s evolution into a digital economy: demand, supply, institutional environment and innovation. But most importantly, the index provides a longitudinal analysis of these four drivers during the years 2008 to 2013 that reveals both the current state of a country’s digital economy, as well as changes over time. In other words, some countries that may stand out now, are receding in the long term.

Estonia just about scrapes in the “Stand Out” bracket. DEI defines “Stand Out” countries as those that have shown high levels of digital development in the past and continue to remain on an upward trajectory. These have highly evolved digital ecosystems, with very competitive e-commerce markets supported by cutting edge infrastructure and sophisticated domestic consumers. However, the report says that sustaining upward trajectories at this level is difficult. “To remain Stand Out markets, these countries need to continue to fast-track innovation and seek markets beyond their borders,” it says. Furthermore, on the DEI measuring scale, Estonia is a “slowly advancing country”, as opposed to a “rapidly advancing country”, such as Philippines or Malaysia, for example. Yet most other European countries are described in the report as either “stalling out” or “slowly receding”.

Estonia's overall position in the rankings, based on 50 countries, is 24th, ahead of Spain and behind Malaysia. The ranking is topped by Singapore, followed by Sweden and Hong Kong. Finland is also in the top 10, at number 7.

ERR asked ‎Jaak Vilo, the head of the Institute of Computer Science, University of Tartu, to give his opinion on the index' results.

Vilo said that the general poverty is still obstructing Estonia's position in these rankings. “Estonian people have not massively embraced or invested in the e-commerce markets. Many wealthier countries are clearly ahead of Estonia. We are proud of our public e-services, but when it comes to digital economy in the private sector, its share in the economy is not significant,” he said.

According to Vilo, the digital economy in Estonia needs more long-term investment, including increasing the quality of IT-related education. If there are more highly skilled people in the IT-sector, then it would also bring more investment to the country. “Our current IT-sector with its 20,000 employees is too small and the lack of available skilled specialists is dragging us down in the digital economy rankings.”

Vilo added that the country's IT-infrastructure and its digital solutions are excellent for internal usage, but it is very difficult to export these solutions, if not impossible. “In reality, the export will be conducted by startups that are based on novel ideas or by the international R&D centers that are based in Estonia.”

S. Tambur

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