Märt Aro, a cofounder of the globally operating university management software company, DreamApply, and the chairman of the Nordic EdTech Forum, “N8”, writes that each one of Estonia’s 1,400 public services available online could be exported and that’s still far from the full potential.
This is an edited and shorter version of the article originally published in FoundME media portal for startups, backed by Äripäev, Estonia’s leading business daily.
In Estonia, we have about 1,400 public services available online. Of these, only a handful are exported, as government services are typically built on a monolithic IT architecture and not designed for export. However, the Estonian private sector already has outstanding international success stories by exporting digital services.
For example, in the education sector, more than 10 companies offer digital services around the world: the research management software, Sona Systems; the language learning application, Lingvist; and the university management software, DreamApply. According to a study by the University of Tartu, the artificial intelligence-supported language learning system developed by Lingvist has already reached a level that is four hundred per cent more efficient for learning languages than traditional curriculum-based learning.
Thanks to its excellent work in the field of digital government, Estonia has a very positive international status, which could be used to turn its digital services into a source of revenue, including in the education sector. Many of the state’s end-user services could be developed by the private sector and exported.
What opportunities do we have?
Getting utopian, each one of these 1,400 public services could be exported and that’s still far from the full potential. For instance, in the education sector, a narrow vertical approach could be used. When one service solves a specific problem, it is called a micro service. For example, learning a multiplication table is one specific learning outcome that can be supported by specific software.
Taking education into small pieces in a person’s timeline from cradle to grave, it is very easy to imagine hundreds of thousands of technological solutions and tools to support learning different skills or obtaining knowledge. The economic potential there is huge. The DreamApply service alone has a global market of approximately USD2 billion.
If we were able to develop and successfully export hundreds of solutions based on a similar model in Estonia, the annual revenue could reach billions of euros. The question is, why aren’t we doing it yet?
The technological possibilities are there
Looking back in history, in the late 1980s, when governments around the world started actively implementing software to provide better quality public services, we did not yet have internet and were limited by the power of available servers. Typically, a compact system was built, often stored in a server park, located in the basement of a house, which served a couple of surrounding houses.
Today, the situation has changed drastically. There are many examples in the world of companies providing service out of one country to the whole world – Google, for example. Why not take this opportunity seriously and start designing a relevant policy for all public services in Estonia? We could achieve a situation where we do not pay for the services from the taxpayer’s pocket, but, instead, the export of digital government services brings our treasury significantly more revenue than we spend on the services altogether.
The idea that the local startups could be developing government services is not novel – it emerged over three years ago in a small group discussion between businesses and local politicians working to improve the standard of living in rural Estonia. Developing these services is realistic for small businesses as well as large ones – for example, in DreamApply, we started out with a team of only three people. However, the government policies need to enable effective interaction between the state and the nano-companies.
Both knowledge and practical skills for such technological developments already exist and there is a growing number of services developed by the private sector that are designed for export – in the education sector and in other e-government sectors. There is a need for a stronger political desire to direct resources towards developing exportable services. In order to move forward, the strong digital services team that we already have at the Estonian Ministry of Economic Affairs and Communications could use more meaningful backing.
The opinions in this article are those of the author.