Developing the Estonian digital state cannot happen at the expense of the competitive ability of traditional companies that form the backbone of the Estonian economy. Our greatest bottleneck is a limited labor market in the IT sector, which resource all market participants need to use a sparingly as possible, Priit Penjam writes.
A plan to merge public sector information and communications technology base services was unveiled in October.
It has been suggested that the decision constitutes the first step in a longer plan, with ministry-based e-state giants, such as TEHIK, SMIT, RMIT etc. to be merged into an even bigger "hyper IT agency" next. All to further boost our digital state capacity and efficiency.
However, the way we build and man our digitization projects is increasingly becoming more important than agency mergers and efforts to reduce duplication that tend to make sense when reflected in spreadsheet documents.
Developing and maintaining the world's most successful e-state, incubating hundreds of potential unicorn, hosting the IT centers of international organizations and digitizing the entire economy to boot sounds like too much for a tiny country's labor market to facilitate.
In truth, we have reached a phase where the biggest bottleneck in terms of our society's digital development is no longer financial resources or the population's digital skills but a stable supply of labor.
Only more radiant projects merit enough attention and juice, while the more routine but absolutely necessary work of digitizing hundreds of industrial, transport, services and commercial businesses is inevitably taking a back seat.
The European Commission's multi-billion-euro digital effort in the recovery package might fail to produce results provided the market will not change to a considerable degree – if the digitization process itself is not updated, standardized and digitized.
Costs need to be brought down for the private sector
Finestmedia has over the years worked with SMIT, the Transport Authority, Tax Board, Office of the Riigikogu and many others organizations developing massive e-state services.
This has provided us with a lot of experience for understanding non-standardized processes, their digitization and automation. This includes event-based service chains, information systems with AI elements and other "latest and greatest" things.
Unfortunately, the price of such projects is well beyond an average company's investment capacity, while the financial effect of the innovation is usually not deemed worth the development cost in the private sector. If the digital turn really is a matter of the heart not just for politicians and officials, next to funding, we also need to conceptually change the services package.
State's task to be responsible
Developing the Estonian digital state cannot happen at the expense of the competitive ability of traditional companies that form the backbone of the Estonian economy. Our greatest bottleneck is a limited labor market in the IT sector, which resource all market participants need to use a sparingly as possible, including the state when developing digital public services.
Despite securing funding from the state budget or another major grant from the EU, every new state development needs to consider whether taking another bite out of that limited labor market is justified.
Perhaps it would be possible to achieve this goal more effectively, for example, by adopting more standardized software solutions when developing digital services? Because every state e-service still consists of data, work flow, coordination etc.
It is clear that there are several crucial digital turn junctions. A good support system for launching the update process is undoubtedly necessary, while other bottlenecks need to be realized.
Therefore, it should be considered whether we should fund the development of the service itself by favoring more innovative standard solutions next to increasingly nuanced custom ones. This conclusion inevitably follows tallying up the man-hours the entire digital turn requires.
Editor: Marcus Turovski