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The Great Disruption: The Advent Of E-Government




Technologies like blockchain, artificial intelligence, and machine learning have staked their claims in the financial realm. As waves of innovation accelerate technological disruption we can expect to see more use cases emerging for these new technologies outside the financial industry. One of the most exciting, and significant, is electronic government.

Humanity has always utilized technology. In one form or another, people have been using and creating things to make or do other things for ages. Today, technological aptitude is fundamental for individuals, companies, and countries, because our digital technology has enabled our global society to develop in specific and unprecedented ways. The greatest changes may still be ahead of us.

There are trends emerging around the world that showcase how governments are being disrupted by digital. The paradigms of citizenship, patriotism, and even national boarders are evolving into the cyber realm. The greatest disruption will come from the application of new and revolutionary technologies to the machinery of government. Although there are multiple digital government initiatives around the globe, the most prominent foray by a nation state into e-governance has been by the Republic of Estonia.

Estonia: The Most Advanced Digital Society In the World

“Even though there are only a little over a million of us, thanks to Estonia’s capabilities, we can make ten million payments, perform ten million requests and sign ten million contracts in just ten minutes. Even ten times larger states cannot beat us. But the good news is that it is possible to join our exclusive club of digitally empowered citizens.” – Kersti Kaljulaid, President of Estonia

The story of how Estonia became a global model for e-governance starts during the cold-war. To peel back the layers of history and infrastructure development that underpin Estonia’s modern digital government, ETHNews spoke with Katre Kasmel, head of communication for Enterprise Estonia’s e-Residency program. “Estonia is the first country in the world creating a borderless digital society for global citizens by offering e-Residency,” she said. “After regaining its independence in 1991, Estonia realized that it is impossible to physically serve a small population spread across a large territory.” This insight is the starting point for understanding why and how Estonia is so technologically progressive. 

Estonia is relatively large in a European context; it is bigger than the Netherlands or Switzerland, yet Estonia only has a population of around 1.3 million people. When Estonians began to rebuild after the fall of the Soviet Union, rather than building brick and mortar service offices in each village for banking and government, the Estonian people, in both the private and public sectors, decided to take advantage of the emerging technologies of the late 80s and early 90s. By developing digital solutions and e-services to solve problems and streamline processes for their new government, the Estonian people laid the foundation for what would become a model for governments of the future. “In result of this,” continued Kasmel, “twenty-six years later Estonia has one of the most developed national digital infrastructures in the world. Estonia is a country where a digital signature is preferable to a physical one, taxes take only a few minutes to file, and online elections have taken place for over a decade. The whole territory of Estonia is covered with wireless networks, and in our small country more than 1200 public WiFi networks are officially registered. 99.6% of banking transactions are done electronically, and 96.3% of people declared their taxes electronically.” This digitization, and more, was bootstrapped by a national initiative called e-Estonia, and now saves Estonians 800 years of working time annually.

The electronic governance provided by e-Estonia is a textbook example of how leveraging technology can improve efficiency, transparency, and accountability in government. The e-Estonia platform, which serves the citizens of Estonia, ensures that 99% of the country’s public services are available online day or night. Per the website: “E-services are only impossible for marriages, divorces and real-estate transactions.” Kasmel elaborated: “The secure digital identity system and e-services allowed location independence and made it possible to serve not only the country’s sparsely populated areas, but also the entire Estonian diaspora.” Once the vast majority of governmental services were digitized, the state and private sector both needed to be able to verify who was physically accessing e-services. Thus, in 2002, Estonia started issuing digital identification cards to its citizens. The government does not penalize citizens for failing to obtain a digital ID card, however, the incentives for using one are great. These cards allow residents to securely identify themselves online, authenticate legal transactions, and sign digital documents. Moreover, there is now a mobile ID tool for smartphones in Estonia analogous to the digital ID card, allowing citizens greater flexibility of use and access. “Estonians living all over the world can maintain a connection to their country via e-services, and if necessary, even participate in elections,” said Kasmel. “The ability to serve the diaspora led to a logical outcome. As it is possible to offer convenient and effective e-services to Estonians living abroad, why not also offer the services to non-Estonians, even those who do not live in Estonia, but who may need better everyday solutions than those available in their own country.” This is how the e-Estonia initiative led to the e-Residency program currently being offered by the Estonian government.

With e-Residency, Estonia is creating what essentially amounts to a country in cyber space. Everyone on Earth has the ability to pursue their entrepreneurial potential in this new digital nation regardless of where they live. Kasmel continued: “with e-Residency, we aspire to unlock global growth by democratizing access to entrepreneurship and e-commerce. E-Residents can digitally open a company within a day and run the company from anywhere in the world, apply for a business banking account and credit card, conduct e-banking and use international payment service providers. All of this can be done digitally.”

One of the best examples of how Estonian e-Residency is empowering people worldwide is from the initiative’s partnership with the UN Conference on Trade and Development. The collaboration has led to another initiative, known as eTrade For All, which is piloting a program in Delhi, India, to help women start their online businesses through e-Residency. Notably, Estonian e-Residency does not entail Estonian citizenship, physical residency rights, Estonian taxation, or rights of entry to Estonia or the European Union. Estonia has truly set the bar high for other governments to follow and distinguished itself as a technologically enlightened government. Other nations are likely to follow Estonia’s lead by adopting new technologies for governance, and in some, initiatives are already underway. You might be surprised to learn that the United States of America has a plan of its own to address the specific governance opportunities posed by the advent of blockchain, artificial intelligence, and machine learning technologies.

Red, White, and Blockchain: The Emergence of E-Governance in the United States

The United States is no slouch when it comes to technology and innovation. Yet there has been an apparent disconnect between the way our government is meant to function, and the way in which it actually functions. Recent scandals have highlighted the need for restoring trust in our voting system, healthcare system, and over all mechanisms of government accountability and transparency. Just as technology has redefined customer expectations in industry, so too has it redefined the citizen’s expectations from their governments. While some Americans may feel their government is seemingly missing the emergent e-governance trend, this notion couldn’t be farther from the truth. In fact, the United States has been quietly exercising leadership with regard to digitally transparent and accountable open government since 2011.

The Open Government Partnership (OGP) is a multi-national initiative that secures commitments from governments to promote transparency, fight corruption, empower citizens, and harness new technologies to strengthen governance. The United States was one of the original eight founding member nations for OGP, which now encompasses more than 75 participating countries and 15 subnational governments all dedicated to making their governments more open and accountable to their people.

One of the principal domestic officials dealing with applying new technologies to the United States governmental infrastructure is Justin “Doc” Herman, inter-agency lead for the US General Services Administration’s (GSA) Emerging Citizen Technology program. Herman told ETHNews: “Emerging technologies like blockchain and artificial intelligence are stretching out from the world of research and development laboratories and for the first time finding themselves in the hands of citizens, which is what we call the democratization of technology. Both advances in technology and processing power, as well as the availability of critical data, have ensured this moment would come. The problems we face in public services are not new, but now whole fields of new options and approaches are becoming available, not just to improve or streamline painful processes, but to eliminate them entirely. To do so effectively will require not just modernizing our approaches, but rethinking them fundamentally. That’s why we like to say we are cautiously optimistic, and why I don’t identify favorite use cases at the moment. We need to test, evaluate and let the process reveal our strongest paths forward. We owe it to the public to get this right, and to do that we need to open our walls and work in collaboration with businesses.”

To this end the GSA will be hosting the Emerging Technology and Open Data for a More Open Government workshop on September 8, 2017, at its offices in Washington, D.C. The GSA is inviting interested parties and new partners to help design potential goals for integration into the fourth US National Action Plan for Open Government. This document will in turn be delivered to the OGP as part of the United States’ role as a founding principal. Participants in the GSA workshop are being directed to draft proposals that, per the GSA blog, “specifically use artificial intelligence, blockchain and/or open data to advance government transparency, accountability, participation, and/or technological innovation. Goals must also introduce a new, ambitious open government initiative, and all goals must be entirely new to the US government or include a new element that was not part of a past initiative.”

“The most important part of our mission is that we are in a critical time of early adoption in emerging technologies we know will inevitably make an immense impact on public services,” said Herman. “Each decision we make today will determine what the road ahead looks like for years to come. The goal is to attract the best minds to work for the benefit of American taxpayers, to make sure all our public services can follow that path, and that we can learn from our experience when we reach barriers. We learn every day from the best ideas and most innovative approaches wherever they come from, and enjoy sharing and collaborating with partners around the world. The United States isn’t slow to adopt new technologies, we’ve been in blockchain for years and artificial intelligence for decades, but given the size and reach of our public services it can be more complex to mainstream them. And that is why we strive to test and evaluate wherever we can, so when we do mainstream a new technology, we can help ensure it improves our services for the American people. We are co-creating side-by-side with private sector innovators, civil society groups and researchers the first draft national goals for blockchain and artificial intelligence in a space the exemplifies the accountable, efficient government the American people need.”

The Future of E-Governance

The epic fluxes of technological disruption are spilling out of the private sector and into the public arena of government with increasing speed. While snapshots of government initiatives provide a glimpse into what’s next for e-governance, the best way of understanding what’s next might be to consult a futurist. In order to glean a general understanding of how things might look in the future, ETHNews spoke with 21-year old tech prodigy and co-founder of the decentralized management platform Aragon, Luis Cuende. Cuende, a Forbes 30 under 30, had previously commented on the e-governance phenomena in Estonia. He told ETHNews: “I like the e-Residency program, it’s a step forward. I’m sure the rest of the world, or at least some countries, will follow. I think that true globalization will come soon, and when that happens, the concept of a nation will be utterly outdated, and replaced by networks of value that will live and organize themselves on the Internet. The concept of citizens will be replaced by free individuals that are not subject to a country or an owner, but rather subject to the social contracts, represented by smart contracts on a blockchain, that they will be voluntarily part of. The biggest obstacle is going to be traditional politicians and corporate executives stuck in their old ways. The world is moving at such a rapid pace in its transformation to a global environment in where we operate, that they can’t keep up. Purely digital jurisdictions can provide different models of governance and democracy, there is no one right solution that will fit everyone, so the adoption will come at different paces for different groups of people. I think the main movement that will happen is that governance will decouple from land, making purely digital jurisdictions come to life and compete with the traditional, land-based jurisdictions.”

It seems that we may just be beginning the true digital revolution. Here’s to open government for the people, by the people!

Jordan Daniell

Jordan Daniell has a passion for techno-social developments and cultural evolution. In his spare time, he enjoys astronomy, playing the bagpipes, and exploring southern California on foot. Jordan holds value in Ether.

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