September 6, 2023 • 27 mins
Estonia Prime Minister Kaja Kallas shares with Azeem Azhar how governments can strengthen democracy, legitimacy and resilience by embracing technology, all while standing up to an aggressive neighbor.
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Speaker 1 (00:07):
As large democracies become modern digital states, they'll get inspiration
from their smallest allies. That is a premise for today's conversation.
I'm as Emazar, Welcome to the Exponentially podcast. AI is
not only changing the way we live, it's forcing governments
(00:30):
to reinvent themselves to become digital natives. But how can
large countries like the United States reform without becoming vulnerable
to the digital downside of cyber attacks and polarization. Estonia,
a tiny ex Soviet republic that successfully turned to the
West having joined NATO, the EU, and the World Trade Organization,
(00:54):
might just offer a guide. The country is voraciously digital.
In two thousand and five, it became first to offer
online voting, and despite suffering the world's first sovereign cyber
attack two years later, trust in the government's digital infrastructure
is so high that a majority of voters cast their
ballots online in this year's election. So I went to
(01:15):
the capital Talent to discuss the digital success story with
Kaya Kallas, the recently re elected Prime Minister, at her
official residence, Stenbock House. Prime Minister Pallas, thank you for
being with me today. Thank you for inviting me into
a wonderful place of works with so much history.
Speaker 2 (01:35):
Welcome to Steenberkers. Nice to have you here.
Speaker 1 (01:39):
Just a little over thirty years ago, Estonia was under
Soviet oppression, and Estonia's own journey has been an exponential
one in just three decades. I'm very curious to learn
from you initially how distant or close to those times
of Soviet rule and rule from Moscow feel to you today.
Speaker 3 (02:01):
Well, they feel distant, but at the same time not
so distant. I mean I was born under Soviet occupation,
then we restored our independence. I was in university when
we rebuilt our economy and all the legal system, and
then I was already lawyer, really using those laws and
(02:23):
seeing this all develop over thirty years, and the development
in our economy, I mean, our GDP has risen by
three point five times over the times, and our salaries
have risen forty five times compared to the beginning.
Speaker 2 (02:42):
So it has been a remarkable journey.
Speaker 3 (02:46):
But we are a small country, which means that we
have also a lot of possibilities to use that size into,
you know, being so flexible regarding the fertunities that are coming.
And of course when we restored our independence, we had
to build everything from scratch because so many things that
(03:09):
the Soviet occupation normalized, for example, like corruption, and so
we had to start from zero evens up zero right,
and therefore going to digital was one of those tools.
Speaker 2 (03:22):
That we use.
Speaker 1 (03:22):
But it's interesting that you use the word Soviet occupation
about the fifty year period that Estonia was part of
the USSR, because of course Estonia had been an independent
country before then, but it was quite a unique republic
in the context of the USSR because of its proximity
(03:44):
to the Nordics, because it's so close to Finland, it's
a twenty minute plane ride. I guess you must have
had access to finish media growing up as well, in
a way perhaps that other Soviet republics couldn't access.
Speaker 3 (03:58):
This is true, but we know were fit under that occupation,
so it is belonging to the Western world, and was
also why all the Russians wanted to come to Estonia
during that time. And you know, the nineteen twenties, our
Russian population was about three point two percent, but as
(04:22):
they deported Estonians and brought in Russians in the end
of Soviet occupation, it was thirty percent, of.
Speaker 1 (04:29):
Course, and your family was affected with the deportations. I
think some mems of your family were deported by Stalin.
Speaker 3 (04:36):
This is not a unique story in Estonia. I mean
every family has a story like this. My family, My
mother was only six months old baby when she was
deported to Siberia in a cattle wagon with my grandmother
and great grandmother, while my grandfather was sent to prison camps.
Speaker 2 (04:56):
So this is the sad history.
Speaker 1 (04:57):
It's a sad history in fact, But there might have
been some resentments, and yet you manage to have a
country that doesn't seem to have even now a lot
of ethnic conflagration between these two groups. And I say
even now, of course, because we're sitting more than a
year into Russia's illegal invasion of Ukraine. How has the
(05:20):
nation itself managed what could have been a cause for
a fracture?
Speaker 3 (05:26):
As we say here, we might have a different past
with our Russian speaking minority, but we have a common future.
And our Russian speaking minority, especially those who are living
closer to Russia, they can see that life on the
Russia side is so much worse than it is on
the Stonian side. So they are clearly with us and
(05:46):
they understand what is going on in Ukraine.
Speaker 2 (05:50):
But why this.
Speaker 3 (05:52):
Is so clear to us is that what we are
seeing in Ukraine unfolding is the same atrocities that our
grandparents went through, and that is why it is so
black and white, and we want to avoid those for
anybody else. But on the positive side, I must say
that when we celebrated our thirtieth anniversary of restoring our independence,
(06:17):
then I as a Prime minister, asked the young people
to write me essays about those times when we restored
our independence. And while I was reading those essays, what
struck me was that our young people nowadays are exactly
the same as the German or the French young people
(06:38):
because they take freedom for granted. And for me, I mean,
I'm of the lucky generation that didn't have freedom and
has the freedom now, so I'm not taking this for granted.
Speaker 1 (06:48):
There's something in that word, the phrasing you use that
you're in a lucky generation who didn't take freedom for granted.
Speaker 2 (06:56):
Because it's vice versa.
Speaker 3 (06:58):
That means I was born on the Soviet occupation, we
didn't have anything, we didn't have candies in the shops,
we didn't have any choice, and now we have all
that right but why I was saying that I was
happy to read their essays to understand that we have
done something right because they don't have the fears that
(07:18):
my generation has, who remembers that it can all fall
apart again.
Speaker 1 (07:23):
I suppose maybe it's a it's an unvarnished opinion from me,
but I picture Estonia and Estonian society is more resilient
than my experience of the UK or the US is.
And I wonder whether I build that picture because of
your proximity to Russia. Because in two thousand and seven
(07:48):
you were the first country to suffer a sovereign cyber attack.
You're largely believed to emanate it from Moscow.
Speaker 3 (07:57):
It is clear that we were at in two thousand
and seven, and we after that concentrated on, I mean,
building our resilience and the foundation. It was a cyber attack,
Yes it was a cyber attack. But this is also
during this war, we see the conventional war in Ukraine,
(08:19):
but there's also a hybrid war, an information war, a
cyber war going on, energy war going on. In two
thousand and seven, we established this computer Emergency Rescue Team
that is also helping not only the government but also
the companies because it is about the weakest link. We
are so connected everybody, so even you know, hospitals a
(08:45):
few years ago they only had to worry about some
drug addict coming and stealing the morphine. Now they are
a security risk because if they are cyber attacked, you know, there.
Speaker 2 (08:55):
Could be civilian casualties.
Speaker 3 (08:58):
And that's why the NATO Center of Excellency regarding the
Cybersecurity was established in Estonia and we are sharing the
experience and trying to build or help build the resilience
in other societies as well.
Speaker 1 (09:13):
There is this point about the integration of a public
and private sector in developing a sense of resilience because
a kinectic attack, do you depend on your air force
or your army to respond. And the cyber attack, it
can come in through the bank, or the primary school,
or someone's insurance company and then it can reach national
(09:36):
infrastructure straight after.
Speaker 2 (09:37):
Yeah.
Speaker 3 (09:38):
What I always tell regarding the cybersecurity is that when
companies are cyber attacked, they feel ashamed.
Speaker 2 (09:45):
You know that we.
Speaker 3 (09:47):
Let our guard down and we didn't I mean, and
it went through and we paid ransom or something like that.
Speaker 2 (09:54):
And they don't talk about this.
Speaker 3 (09:55):
But the good guys should share information because the bad
guys too share information. So in order to prepare for
future cyber attacks, we have to share this information if
something happens, because then others can build on that experience
and build their resilience on it.
Speaker 2 (10:15):
And this is extremely extremely.
Speaker 1 (10:17):
Important, super interesting. If a firm believes that being cyber
attacked is a bad thing, they will really do the
minimum reporting they need exactly, which then makes the next
cyber attack more likely.
Speaker 2 (10:29):
And more likely and other companies more vulnerable.
Speaker 3 (10:33):
And why we have this computer emergency rescue team is
now also helping the companies to find their vulnerable places.
It's not anymore that you know, the security of a
country only depends on government. It's it's also the private companies.
And I think what is also maybe different here is
(10:58):
that our p well trust government and government services regarding
digital issues, whereas maybe not so much the private companies, right,
Whereas in some other countries it's more like people give
away a lot to the private companies and there's like, oh,
(11:19):
I'm not giving it to the state. But I think
what is important that I've always stressed is the digital identities.
I mean, in the real world country issues of passport.
Speaker 2 (11:31):
You are who you say you are. Absolutely in the
online world.
Speaker 1 (11:36):
On the internet, no one knows your dog exactly exactly.
Speaker 3 (11:39):
It's my famous famous cartoon is like that's right, well,
and the digital identity solved that issue.
Speaker 1 (11:51):
Estonia is also so well known though, for its private
sector and its entrepreneurialism in the digital space. In fact,
the first time I came to Estonia and twenty years ago,
it was to come and look at some private companies
and I saw a company called Privador out of the
University of tATu. It's now known as God's Time, which
(12:12):
is quite a successful security and encryption company. And of
course you had the tremendous success with Skype, and Skype
gave birth to a new ecosystem, and companies like transfer
wise known as wys and Bolt and pipe Drive and
pact them and Starship which makes little robots that deliver food.
Speaker 2 (12:33):
I host every year the student companies.
Speaker 3 (12:36):
And what is interesting about this is that our market
is so small that all the students think about the
global problems that they want to solve, right, and that's
why we have most startups per capita, and a lot
of good ideas well.
Speaker 1 (12:51):
Most startups are capita. I think amongst the highest venture
capital are capitas, the funds that are required to get
these startups get But I was curious about why do
you think Estonia has that special source. Is it about
strong technical education? Is it about having to rebuild an
economy because the Soviet Union hadn't left a robust economy here.
Speaker 3 (13:15):
First in the Soviet Union you didn't have any private property,
so you didn't have any market economy. So when you
haven't had those opportunities, you are so willing to use
those opportunities that unfold. So that is the first thing.
The second thing is the education, definitely, so trying to
focus on stem subjects. And the most popular cartoon in
(13:38):
Estonia is a cartoon of a girl dog who is
an inventor and all the you know, the songs are
about you know, math is great, chemistry is interesting, you know, physics.
Speaker 2 (13:50):
Yeah.
Speaker 1 (13:51):
I would have loved this cartoon.
Speaker 2 (13:52):
Yeah, yeah, yeah, So I can send it to you.
Speaker 3 (13:56):
There are both no, no, it's it's in English as
well as so, you know, they do all these lists
and apparently in terms of if female entrepreneurs or inventors,
we are in the top.
Speaker 2 (14:10):
Of the world.
Speaker 3 (14:10):
I was like, Okay, this cartoon is really great, yeah
driving it?
Speaker 1 (14:14):
Can I unpick something you said earlier? You said we
had no market economy, and that very hard for many
of us to understand. What does that mean?
Speaker 3 (14:23):
The Civil Code of Estonia was really really small because
it didn't have a lot of paragraphs because you didn't
have any property.
Speaker 1 (14:31):
To so you didn't need any laws to.
Speaker 3 (14:34):
You didn't and you didn't really have all those agreements
and everything had to be built from scratch. So the
ones who were writing the laws, picking up all the
good examples around the world were the law students because
they spoke languages and so first thing we understood back
(14:55):
then was that what makes investors trust your country is
the rule of law. So building the laws and the
legal system was very important in order to attract investments
and also keeping that and getting rid of corruption.
Speaker 1 (15:13):
And you must have just missed the opportunity to be
one of the students to work on these laws.
Speaker 3 (15:20):
No. Actually, I was in a university and I started
in a law firm when I was eighteen and giving advice.
Because the clients were young, the market was young, the
laws were young. A lot of things were forgiven, and
I think this mentality has remained, you know, the startup
mentality that also for the government, so that is okay
(15:45):
to fail because you learned something on the way and
you can you know, rebuild on that something new.
Speaker 1 (15:59):
If I sum up what this journey looks like, there
is a sense of nationhood that delivers a national resilience,
and that resilience comes from having not had freedom perhaps
and then having freedom and understanding its value living next
to a threat, which leads to also to the development
(16:23):
of the framework for opportunity. Right, you build these new laws,
these institutions that enable a democratic and market economy, connected
to a strong education system that had a focus on
STEM and then perhaps a little bit of good fortune
that this happens around the time the digital revolution is
(16:44):
taking place.
Speaker 3 (16:45):
We introduced the digital identities already two thousand.
Speaker 2 (16:50):
I mean many didn't have internet yet.
Speaker 3 (16:54):
That is also the leadership from the government's side, because
people didn't know that they need identities. But building the
framework and starting to build this e governance and also
the data that you get from this and making it
open to the companies and using that I think was
(17:16):
one of the fundamentals being a small nation.
Speaker 2 (17:19):
By being digital, you can be much bigger.
Speaker 3 (17:22):
We have the E residence program and we are having
all the services that.
Speaker 2 (17:29):
We can use.
Speaker 1 (17:29):
The E residency program is so clever. It allows someone
who's not an Estonian citizen to get an e residency
in Estonia so they can start to build a business
that can work in the digital marketplace, but have the
(17:50):
benefits of Estonia's relationships within the EU and Estonia's legal system.
Even if they don't necessarily come physically physically here, what's
that actually done?
Speaker 3 (18:03):
So that means the tax money eventually, and it also
means that you have a lot of friends around the world.
I mean, when Brexit happened, we had a lot of
residents coming from your It's like, okay, how can we
still enjoy the European Union and everything that is related
(18:26):
to it. I think what we have understood since two
thousands is that people are more and more living their
lives online, so the government also has to be there
with the services. Otherwise the people just alienate from the
state because I can do everything online. The only establishment
(18:46):
or institution that I can't deal with is my government.
And I think the government should be where the people are.
But that requires the identities and we could so many
issues with this.
Speaker 1 (19:01):
And so we have this interesting picture that builds up,
which is that there's this vibrant private sector and billions
of people have used Estonian Company's products and do every day.
But underneath that is this digital government infrastructure that in
a way is enabling all of this. And there is
(19:21):
online voting in Estonia, and I think in your recent
elections and majority of votes were cast by people on
their computers or on their smartphones.
Speaker 3 (19:29):
It's not that clear that it will increase the voters,
but the young people definitely vote online, and we have
more and more people going from the regular voting to
online voting because it's so convenient.
Speaker 1 (19:44):
There's something else there that I found really fascinating, which
is as a government, you're only allowed to ask a
citizen once for their information, and so every department has
to use the information the government already has, whereas if
you're in the United States and the UK and you're
trying to do something with a different government department, you're
in there typing in the same information time and time again. Now,
(20:06):
what is that a cultural trope? Is that a design decision?
Was that some somebody who thought this is really important
for us to get legitimacy.
Speaker 2 (20:16):
It's all about customer experience really.
Speaker 3 (20:18):
I mean, we don't use the plastics for your driver's
license anymore. So you don't know when it's going to expire,
really because you don't really use it. So my state
writes me an email, your driver's license is expiring. You
have two choices, either to go to a office costume more,
(20:38):
or to do it online. You have to get your
doctor's approval that you can still drive a car, and
is still your signature we have this, is still your address?
Is that the picture we can use? We have that
picture of you? Yes, check, check, check, it's done. And
now we are trying to do like more of this
(20:59):
personalized event paced the services, so that for example, your
kid is born, so the government says that, okay, you
can register here, you can do this, you have to
do this, and so you don't have to think that
what else do you have to do because you're the
first time parent and you.
Speaker 1 (21:15):
Don't really know, you don't have a lot of headspace.
Speaker 2 (21:17):
Yeah to be that is true, and yeah, yeah, that
is true.
Speaker 1 (21:21):
Yeah, technology is changing exponentially and we in the last
five ten years have seen this incredible transformation through artificial
intelligence and many many new risks emerging from it. So
what do you do as a forward looking government in
terms of addressing the risks of AI.
Speaker 3 (21:42):
We can't pretend that this is not coming, So we
aren't ignoring this, No, we don't do that.
Speaker 2 (21:48):
But at the same time.
Speaker 3 (21:50):
We are very cautious of overregulating because if you start
to regulate in a very early phase, then you focus
on the incumbents because this is what you know, and oh, okay,
this way it operates. But every time you focus on
the incumbent, you actually make the rules that are made.
Speaker 2 (22:08):
For the incumbent and not for everybody else.
Speaker 3 (22:11):
So the balance question is about how to not kill
innovation at the same time addressing the risks that there are.
Speaker 2 (22:22):
I think that very.
Speaker 3 (22:23):
Often on the exactly exactly that I wanted to point out,
that your opin union is focusing trying to get all
the risks, and I think that is not finding and
striking the right balance regarding this. I think it needs
more of still this startup mentality that of course cooperation
(22:48):
with the companies that are working on the AI, but
also going to find this balance in between so that
you don't kill the innovation on the way, and it
is difficult, I must say. In our government, we tried
to find ways we can use the AI and we
(23:09):
have over one hundred user cases already where we use that.
Speaker 1 (23:14):
The premise of our conversation was that as we move
into these exponential times of radically changing technologies, that legitimacy,
resilience and engagement will be critical capabilities for the governments,
and that digital capabilities are the ones that will allow
that to happen. To what extent do you think that
(23:36):
these are lessons that can be learned and should be
learned by other countries, in particular larger countries.
Speaker 3 (23:43):
There are many lessons on the way, and I always
say that when we have tested something, you know, it's
like a beta version before you go online in a
bigger scale. We have tested yes, yes, exactly, so we
have tested that and these are the bugs. So we
have tried to show other countries what is our experience
(24:06):
regarding this. But I think we have to cooperate and
I see that there is a difference of mindset. I mean,
I bring you one example. We had a debate on
the European level and the representative of one country said
to something that we were doing.
Speaker 2 (24:23):
Is like, oh my god, you're doing.
Speaker 3 (24:24):
This and this is the most sensitive data there is,
and I replied that it's also the data that helps
the people the most. So it depends how you see it.
Do you only see the risks or you also see
the opportunities that there are, And of course you can't
overlook the risks. I'm not proposing that, but you have
to see the opportunities.
Speaker 2 (24:44):
Again.
Speaker 3 (24:45):
If the private companies are driving this, then the governments
are left behind. And if the tools are there, you
can't you know, out regulate them because they are already there.
It's like the industrial revolution, you know. You can't say
that you can't use the shoeing machine when it has
been invented, right, you have to think about what comes
(25:08):
with it.
Speaker 1 (25:08):
Kaya Kallas, it's a very fine balance that you have struck.
Thank you so much for sharing with me today.
Speaker 2 (25:14):
Thank you.
Speaker 1 (25:20):
Reflecting on my conversation with the Prime Minister, I'm struck
by a few things. She really gets digital. She understands
what government apps should look like and what citizens need
from them. But she also raised the importance of values,
the values of public private cooperation, the values of alliances,
and the values of protecting democracy, perhaps because a memory
(25:42):
of oppression is still so recent in Estonian memory, but
I think these are all great lessons for bigger countries
as well. Thanks for listening to the Exponentially podcast. If
you enjoy the show, please leave a review or rating.
It really does help others find us. The Exponentially podcast
(26:03):
is presented by me Azeem Azar. The sound designer is
Will Horrocks. The research was led by Chloe Ippah and
music composed by Emily Green and John Zarcone. The show
is produced by Frederic Cassella, Maria Garrilov and me Azeem Azar.
Special thanks to Indrek Cassella, Sage Bauman, Jeff Grocott and
Magnus Henrickson. The executive producers are Andrew Barden, Adam Kamiski
(26:26):
and Kyle Kramer. David Ravella is the managing editor. Exponentially
was created by Frederick Cassella and is an Eat the
Pie I plus one limited production in association with Bloomberg
LC
As large democracies become modern digital states, they'll get inspiration
from their smallest allies. That is a premise for today's conversation.
I'm as Emazar, Welcome to the Exponentially podcast. AI is
not only changing the way we live, it's forcing governments
(00:30):
to reinvent themselves to become digital natives. But how can
large countries like the United States reform without becoming vulnerable
to the digital downside of cyber attacks and polarization. Estonia,
a tiny ex Soviet republic that successfully turned to the
West having joined NATO, the EU, and the World Trade Organization,
(00:54):
might just offer a guide. The country is voraciously digital.
In two thousand and five, it became first to offer
online voting, and despite suffering the world's first sovereign cyber
attack two years later, trust in the government's digital infrastructure
is so high that a majority of voters cast their
ballots online in this year's election. So I went to
(01:15):
the capital Talent to discuss the digital success story with
Kaya Kallas, the recently re elected Prime Minister, at her
official residence, Stenbock House. Prime Minister Pallas, thank you for
being with me today. Thank you for inviting me into
a wonderful place of works with so much history.
Speaker 2 (01:35):
Welcome to Steenberkers. Nice to have you here.
Speaker 1 (01:39):
Just a little over thirty years ago, Estonia was under
Soviet oppression, and Estonia's own journey has been an exponential
one in just three decades. I'm very curious to learn
from you initially how distant or close to those times
of Soviet rule and rule from Moscow feel to you today.
Speaker 3 (02:01):
Well, they feel distant, but at the same time not
so distant. I mean I was born under Soviet occupation,
then we restored our independence. I was in university when
we rebuilt our economy and all the legal system, and
then I was already lawyer, really using those laws and
(02:23):
seeing this all develop over thirty years, and the development
in our economy, I mean, our GDP has risen by
three point five times over the times, and our salaries
have risen forty five times compared to the beginning.
Speaker 2 (02:42):
So it has been a remarkable journey.
Speaker 3 (02:46):
But we are a small country, which means that we
have also a lot of possibilities to use that size into,
you know, being so flexible regarding the fertunities that are coming.
And of course when we restored our independence, we had
to build everything from scratch because so many things that
(03:09):
the Soviet occupation normalized, for example, like corruption, and so
we had to start from zero evens up zero right,
and therefore going to digital was one of those tools.
Speaker 2 (03:22):
That we use.
Speaker 1 (03:22):
But it's interesting that you use the word Soviet occupation
about the fifty year period that Estonia was part of
the USSR, because of course Estonia had been an independent
country before then, but it was quite a unique republic
in the context of the USSR because of its proximity
(03:44):
to the Nordics, because it's so close to Finland, it's
a twenty minute plane ride. I guess you must have
had access to finish media growing up as well, in
a way perhaps that other Soviet republics couldn't access.
Speaker 3 (03:58):
This is true, but we know were fit under that occupation,
so it is belonging to the Western world, and was
also why all the Russians wanted to come to Estonia
during that time. And you know, the nineteen twenties, our
Russian population was about three point two percent, but as
(04:22):
they deported Estonians and brought in Russians in the end
of Soviet occupation, it was thirty percent, of.
Speaker 1 (04:29):
Course, and your family was affected with the deportations. I
think some mems of your family were deported by Stalin.
Speaker 3 (04:36):
This is not a unique story in Estonia. I mean
every family has a story like this. My family, My
mother was only six months old baby when she was
deported to Siberia in a cattle wagon with my grandmother
and great grandmother, while my grandfather was sent to prison camps.
Speaker 2 (04:56):
So this is the sad history.
Speaker 1 (04:57):
It's a sad history in fact, But there might have
been some resentments, and yet you manage to have a
country that doesn't seem to have even now a lot
of ethnic conflagration between these two groups. And I say
even now, of course, because we're sitting more than a
year into Russia's illegal invasion of Ukraine. How has the
(05:20):
nation itself managed what could have been a cause for
a fracture?
Speaker 3 (05:26):
As we say here, we might have a different past
with our Russian speaking minority, but we have a common future.
And our Russian speaking minority, especially those who are living
closer to Russia, they can see that life on the
Russia side is so much worse than it is on
the Stonian side. So they are clearly with us and
(05:46):
they understand what is going on in Ukraine.
Speaker 2 (05:50):
But why this.
Speaker 3 (05:52):
Is so clear to us is that what we are
seeing in Ukraine unfolding is the same atrocities that our
grandparents went through, and that is why it is so
black and white, and we want to avoid those for
anybody else. But on the positive side, I must say
that when we celebrated our thirtieth anniversary of restoring our independence,
(06:17):
then I as a Prime minister, asked the young people
to write me essays about those times when we restored
our independence. And while I was reading those essays, what
struck me was that our young people nowadays are exactly
the same as the German or the French young people
(06:38):
because they take freedom for granted. And for me, I mean,
I'm of the lucky generation that didn't have freedom and
has the freedom now, so I'm not taking this for granted.
Speaker 1 (06:48):
There's something in that word, the phrasing you use that
you're in a lucky generation who didn't take freedom for granted.
Speaker 2 (06:56):
Because it's vice versa.
Speaker 3 (06:58):
That means I was born on the Soviet occupation, we
didn't have anything, we didn't have candies in the shops,
we didn't have any choice, and now we have all
that right but why I was saying that I was
happy to read their essays to understand that we have
done something right because they don't have the fears that
(07:18):
my generation has, who remembers that it can all fall
apart again.
Speaker 1 (07:23):
I suppose maybe it's a it's an unvarnished opinion from me,
but I picture Estonia and Estonian society is more resilient
than my experience of the UK or the US is.
And I wonder whether I build that picture because of
your proximity to Russia. Because in two thousand and seven
(07:48):
you were the first country to suffer a sovereign cyber attack.
You're largely believed to emanate it from Moscow.
Speaker 3 (07:57):
It is clear that we were at in two thousand
and seven, and we after that concentrated on, I mean,
building our resilience and the foundation. It was a cyber attack,
Yes it was a cyber attack. But this is also
during this war, we see the conventional war in Ukraine,
(08:19):
but there's also a hybrid war, an information war, a
cyber war going on, energy war going on. In two
thousand and seven, we established this computer Emergency Rescue Team
that is also helping not only the government but also
the companies because it is about the weakest link. We
are so connected everybody, so even you know, hospitals a
(08:45):
few years ago they only had to worry about some
drug addict coming and stealing the morphine. Now they are
a security risk because if they are cyber attacked, you know, there.
Speaker 2 (08:55):
Could be civilian casualties.
Speaker 3 (08:58):
And that's why the NATO Center of Excellency regarding the
Cybersecurity was established in Estonia and we are sharing the
experience and trying to build or help build the resilience
in other societies as well.
Speaker 1 (09:13):
There is this point about the integration of a public
and private sector in developing a sense of resilience because
a kinectic attack, do you depend on your air force
or your army to respond. And the cyber attack, it
can come in through the bank, or the primary school,
or someone's insurance company and then it can reach national
(09:36):
infrastructure straight after.
Speaker 2 (09:37):
Yeah.
Speaker 3 (09:38):
What I always tell regarding the cybersecurity is that when
companies are cyber attacked, they feel ashamed.
Speaker 2 (09:45):
You know that we.
Speaker 3 (09:47):
Let our guard down and we didn't I mean, and
it went through and we paid ransom or something like that.
Speaker 2 (09:54):
And they don't talk about this.
Speaker 3 (09:55):
But the good guys should share information because the bad
guys too share information. So in order to prepare for
future cyber attacks, we have to share this information if
something happens, because then others can build on that experience
and build their resilience on it.
Speaker 2 (10:15):
And this is extremely extremely.
Speaker 1 (10:17):
Important, super interesting. If a firm believes that being cyber
attacked is a bad thing, they will really do the
minimum reporting they need exactly, which then makes the next
cyber attack more likely.
Speaker 2 (10:29):
And more likely and other companies more vulnerable.
Speaker 3 (10:33):
And why we have this computer emergency rescue team is
now also helping the companies to find their vulnerable places.
It's not anymore that you know, the security of a
country only depends on government. It's it's also the private companies.
And I think what is also maybe different here is
(10:58):
that our p well trust government and government services regarding
digital issues, whereas maybe not so much the private companies, right,
Whereas in some other countries it's more like people give
away a lot to the private companies and there's like, oh,
(11:19):
I'm not giving it to the state. But I think
what is important that I've always stressed is the digital identities.
I mean, in the real world country issues of passport.
Speaker 2 (11:31):
You are who you say you are. Absolutely in the
online world.
Speaker 1 (11:36):
On the internet, no one knows your dog exactly exactly.
Speaker 3 (11:39):
It's my famous famous cartoon is like that's right, well,
and the digital identity solved that issue.
Speaker 1 (11:51):
Estonia is also so well known though, for its private
sector and its entrepreneurialism in the digital space. In fact,
the first time I came to Estonia and twenty years ago,
it was to come and look at some private companies
and I saw a company called Privador out of the
University of tATu. It's now known as God's Time, which
(12:12):
is quite a successful security and encryption company. And of
course you had the tremendous success with Skype, and Skype
gave birth to a new ecosystem, and companies like transfer
wise known as wys and Bolt and pipe Drive and
pact them and Starship which makes little robots that deliver food.
Speaker 2 (12:33):
I host every year the student companies.
Speaker 3 (12:36):
And what is interesting about this is that our market
is so small that all the students think about the
global problems that they want to solve, right, and that's
why we have most startups per capita, and a lot
of good ideas well.
Speaker 1 (12:51):
Most startups are capita. I think amongst the highest venture
capital are capitas, the funds that are required to get
these startups get But I was curious about why do
you think Estonia has that special source. Is it about
strong technical education? Is it about having to rebuild an
economy because the Soviet Union hadn't left a robust economy here.
Speaker 3 (13:15):
First in the Soviet Union you didn't have any private property,
so you didn't have any market economy. So when you
haven't had those opportunities, you are so willing to use
those opportunities that unfold. So that is the first thing.
The second thing is the education, definitely, so trying to
focus on stem subjects. And the most popular cartoon in
(13:38):
Estonia is a cartoon of a girl dog who is
an inventor and all the you know, the songs are
about you know, math is great, chemistry is interesting, you know, physics.
Speaker 2 (13:50):
Yeah.
Speaker 1 (13:51):
I would have loved this cartoon.
Speaker 2 (13:52):
Yeah, yeah, yeah, So I can send it to you.
Speaker 3 (13:56):
There are both no, no, it's it's in English as
well as so, you know, they do all these lists
and apparently in terms of if female entrepreneurs or inventors,
we are in the top.
Speaker 2 (14:10):
Of the world.
Speaker 3 (14:10):
I was like, Okay, this cartoon is really great, yeah
driving it?
Speaker 1 (14:14):
Can I unpick something you said earlier? You said we
had no market economy, and that very hard for many
of us to understand. What does that mean?
Speaker 3 (14:23):
The Civil Code of Estonia was really really small because
it didn't have a lot of paragraphs because you didn't
have any property.
Speaker 1 (14:31):
To so you didn't need any laws to.
Speaker 3 (14:34):
You didn't and you didn't really have all those agreements
and everything had to be built from scratch. So the
ones who were writing the laws, picking up all the
good examples around the world were the law students because
they spoke languages and so first thing we understood back
(14:55):
then was that what makes investors trust your country is
the rule of law. So building the laws and the
legal system was very important in order to attract investments
and also keeping that and getting rid of corruption.
Speaker 1 (15:13):
And you must have just missed the opportunity to be
one of the students to work on these laws.
Speaker 3 (15:20):
No. Actually, I was in a university and I started
in a law firm when I was eighteen and giving advice.
Because the clients were young, the market was young, the
laws were young. A lot of things were forgiven, and
I think this mentality has remained, you know, the startup
mentality that also for the government, so that is okay
(15:45):
to fail because you learned something on the way and
you can you know, rebuild on that something new.
Speaker 1 (15:59):
If I sum up what this journey looks like, there
is a sense of nationhood that delivers a national resilience,
and that resilience comes from having not had freedom perhaps
and then having freedom and understanding its value living next
to a threat, which leads to also to the development
(16:23):
of the framework for opportunity. Right, you build these new laws,
these institutions that enable a democratic and market economy, connected
to a strong education system that had a focus on
STEM and then perhaps a little bit of good fortune
that this happens around the time the digital revolution is
(16:44):
taking place.
Speaker 3 (16:45):
We introduced the digital identities already two thousand.
Speaker 2 (16:50):
I mean many didn't have internet yet.
Speaker 3 (16:54):
That is also the leadership from the government's side, because
people didn't know that they need identities. But building the
framework and starting to build this e governance and also
the data that you get from this and making it
open to the companies and using that I think was
(17:16):
one of the fundamentals being a small nation.
Speaker 2 (17:19):
By being digital, you can be much bigger.
Speaker 3 (17:22):
We have the E residence program and we are having
all the services that.
Speaker 2 (17:29):
We can use.
Speaker 1 (17:29):
The E residency program is so clever. It allows someone
who's not an Estonian citizen to get an e residency
in Estonia so they can start to build a business
that can work in the digital marketplace, but have the
(17:50):
benefits of Estonia's relationships within the EU and Estonia's legal system.
Even if they don't necessarily come physically physically here, what's
that actually done?
Speaker 3 (18:03):
So that means the tax money eventually, and it also
means that you have a lot of friends around the world.
I mean, when Brexit happened, we had a lot of
residents coming from your It's like, okay, how can we
still enjoy the European Union and everything that is related
(18:26):
to it. I think what we have understood since two
thousands is that people are more and more living their
lives online, so the government also has to be there
with the services. Otherwise the people just alienate from the
state because I can do everything online. The only establishment
(18:46):
or institution that I can't deal with is my government.
And I think the government should be where the people are.
But that requires the identities and we could so many
issues with this.
Speaker 1 (19:01):
And so we have this interesting picture that builds up,
which is that there's this vibrant private sector and billions
of people have used Estonian Company's products and do every day.
But underneath that is this digital government infrastructure that in
a way is enabling all of this. And there is
(19:21):
online voting in Estonia, and I think in your recent
elections and majority of votes were cast by people on
their computers or on their smartphones.
Speaker 3 (19:29):
It's not that clear that it will increase the voters,
but the young people definitely vote online, and we have
more and more people going from the regular voting to
online voting because it's so convenient.
Speaker 1 (19:44):
There's something else there that I found really fascinating, which
is as a government, you're only allowed to ask a
citizen once for their information, and so every department has
to use the information the government already has, whereas if
you're in the United States and the UK and you're
trying to do something with a different government department, you're
in there typing in the same information time and time again. Now,
(20:06):
what is that a cultural trope? Is that a design decision?
Was that some somebody who thought this is really important
for us to get legitimacy.
Speaker 2 (20:16):
It's all about customer experience really.
Speaker 3 (20:18):
I mean, we don't use the plastics for your driver's
license anymore. So you don't know when it's going to expire,
really because you don't really use it. So my state
writes me an email, your driver's license is expiring. You
have two choices, either to go to a office costume more,
(20:38):
or to do it online. You have to get your
doctor's approval that you can still drive a car, and
is still your signature we have this, is still your address?
Is that the picture we can use? We have that
picture of you? Yes, check, check, check, it's done. And
now we are trying to do like more of this
(20:59):
personalized event paced the services, so that for example, your
kid is born, so the government says that, okay, you
can register here, you can do this, you have to
do this, and so you don't have to think that
what else do you have to do because you're the
first time parent and you.
Speaker 1 (21:15):
Don't really know, you don't have a lot of headspace.
Speaker 2 (21:17):
Yeah to be that is true, and yeah, yeah, that
is true.
Speaker 1 (21:21):
Yeah, technology is changing exponentially and we in the last
five ten years have seen this incredible transformation through artificial
intelligence and many many new risks emerging from it. So
what do you do as a forward looking government in
terms of addressing the risks of AI.
Speaker 3 (21:42):
We can't pretend that this is not coming, So we
aren't ignoring this, No, we don't do that.
Speaker 2 (21:48):
But at the same time.
Speaker 3 (21:50):
We are very cautious of overregulating because if you start
to regulate in a very early phase, then you focus
on the incumbents because this is what you know, and oh, okay,
this way it operates. But every time you focus on
the incumbent, you actually make the rules that are made.
Speaker 2 (22:08):
For the incumbent and not for everybody else.
Speaker 3 (22:11):
So the balance question is about how to not kill
innovation at the same time addressing the risks that there are.
Speaker 2 (22:22):
I think that very.
Speaker 3 (22:23):
Often on the exactly exactly that I wanted to point out,
that your opin union is focusing trying to get all
the risks, and I think that is not finding and
striking the right balance regarding this. I think it needs
more of still this startup mentality that of course cooperation
(22:48):
with the companies that are working on the AI, but
also going to find this balance in between so that
you don't kill the innovation on the way, and it
is difficult, I must say. In our government, we tried
to find ways we can use the AI and we
(23:09):
have over one hundred user cases already where we use that.
Speaker 1 (23:14):
The premise of our conversation was that as we move
into these exponential times of radically changing technologies, that legitimacy,
resilience and engagement will be critical capabilities for the governments,
and that digital capabilities are the ones that will allow
that to happen. To what extent do you think that
(23:36):
these are lessons that can be learned and should be
learned by other countries, in particular larger countries.
Speaker 3 (23:43):
There are many lessons on the way, and I always
say that when we have tested something, you know, it's
like a beta version before you go online in a
bigger scale. We have tested yes, yes, exactly, so we
have tested that and these are the bugs. So we
have tried to show other countries what is our experience
(24:06):
regarding this. But I think we have to cooperate and
I see that there is a difference of mindset. I mean,
I bring you one example. We had a debate on
the European level and the representative of one country said
to something that we were doing.
Speaker 2 (24:23):
Is like, oh my god, you're doing.
Speaker 3 (24:24):
This and this is the most sensitive data there is,
and I replied that it's also the data that helps
the people the most. So it depends how you see it.
Do you only see the risks or you also see
the opportunities that there are, And of course you can't
overlook the risks. I'm not proposing that, but you have
to see the opportunities.
Speaker 2 (24:44):
Again.
Speaker 3 (24:45):
If the private companies are driving this, then the governments
are left behind. And if the tools are there, you
can't you know, out regulate them because they are already there.
It's like the industrial revolution, you know. You can't say
that you can't use the shoeing machine when it has
been invented, right, you have to think about what comes
(25:08):
with it.
Speaker 1 (25:08):
Kaya Kallas, it's a very fine balance that you have struck.
Thank you so much for sharing with me today.
Speaker 2 (25:14):
Thank you.
Speaker 1 (25:20):
Reflecting on my conversation with the Prime Minister, I'm struck
by a few things. She really gets digital. She understands
what government apps should look like and what citizens need
from them. But she also raised the importance of values,
the values of public private cooperation, the values of alliances,
and the values of protecting democracy, perhaps because a memory
(25:42):
of oppression is still so recent in Estonian memory, but
I think these are all great lessons for bigger countries
as well. Thanks for listening to the Exponentially podcast. If
you enjoy the show, please leave a review or rating.
It really does help others find us. The Exponentially podcast
(26:03):
is presented by me Azeem Azar. The sound designer is
Will Horrocks. The research was led by Chloe Ippah and
music composed by Emily Green and John Zarcone. The show
is produced by Frederic Cassella, Maria Garrilov and me Azeem Azar.
Special thanks to Indrek Cassella, Sage Bauman, Jeff Grocott and
Magnus Henrickson. The executive producers are Andrew Barden, Adam Kamiski
(26:26):
and Kyle Kramer. David Ravella is the managing editor. Exponentially
was created by Frederick Cassella and is an Eat the
Pie I plus one limited production in association with Bloomberg
LC
Host
Azeem Azhar
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