I recently shared some thoughts on how surprisingly hard it has been to adjust to the fact how mundane and bureaucratic everyday activities still can be in otherwise tech-advanced Silicon Valley, compared with back home in Estonia. This video is from Stanford GSB YouTube channel.
This video and article was first published by Sten Tamkivi and formed part of his presentation for Stanford Graduate School of Business.
I am 35 years old and I wrote the first cheque in my life a few months ago. It was for something at my son’s public school, and for some reason they were not willing to accept debit card, credit card, Square or PayPal. I didn’t even offer a wire transfer – the only time I’ve tried to do that in the US, I had to take an hour to physically go to a bank branch and fill out two sheets of forms. So, I wrote a cheque to the school, pen on paper.
Two weeks ago I went to San Francisco, parked my car on the street — using my mobile phone as any normal person would. I got a ticket two minutes later. When I went to the Transport Agency’s [SFMTA] website to challenge it — figuring that if you can pay fines online, proving that you’ve done nothing wrong shouldn’t be any harder. I learned that I need again to print two pages of paper, sign them on paper, get an envelope and a stamp from somewhere, and send it to San Francisco by snail mail to start a few weeks of dialogue just to argue that my car was actually legally parked. I did nothing wrong and spent at least a few hours on this.
These little adventures back into the 19th century would be just amusing, and well aligned with the horses and carriage my US bank proudly wears on their logo, if they weren’t so tragic. Hence I talk to you about the miserable waste they generate for the society; how unjustified these pains are; and the future that should be here now.
First, everyday frictions cost a lot to us personally and to the society. Why is that when Facebook is two seconds slower than usual, you are starting to get anxious — but another hour wasted at the DMV is a necessary evil you’ll just bare with?
Let’s say that we are all spending, on average, 10 minutes a week on this analogue bureaucracy. 10 saved minutes a week is about one full working day a year. For 38 million people in California alone, we would be talking about 100,000 human years wasted in a single year. Or, if this “years per year” construct is too abstract, think of it as 1,500 human lifetimes wasted a single year. If you want to think about the entire US – add a zero. 15,000 human lifetimes.
And by the way, I’m afraid that wasting just an extra, unnecessary 10 minutes a week on things you have to do, rather than the thing you want to do, could be a slight underestimate, don’t you think? The stories I shared above were all several hours each to sort out…
Secondly, let me remind you, it is 2013 and we are in the middle of Silicon Valley. The place which is famous around the world for creating all these beautiful technologies meant for consumers on the internet. The newest and coolest tools for social networking; for searching and sharing pictures; buying things; meeting people; listening to music and watching movies — they are often born in the Valley and then expand to take over the rest of the world.
There is no way to argue that these pains of being a good citizen are about the lack of understanding of technology; the lack of talent; or the ability to design human-friendly services. Think about it – if Apple designed the DMV’s retail experience, what would it look like?
I came to Stanford from Estonia. How many of you have heard of Estonia?
Those of you who raised a hand, let me guess what you’ve heard. Maybe that unfortunate incident when we were occupied by a certain Communist superpower for over 50 years? Or that it can get quite cold and dark and snowy so far up north?
What, I guess, many of you might not have heard is that the Freedom of the Net Report, published by Freedom House in Washington, DC, United States ranks honourably at the second spot in the world for internet freedom. Surprisingly, the number one spot belongs to Estonia.
We have a million people online, which wouldn’t be anything that remarkable if you didn’t consider we have less than 1.3 million people in Estonia overall.
The country is covered with high speed wireless broadband and for the large part it is free. 100% of schools and the government have been online for a while now.
80% internet penetration is pretty similar to the US, but more importantly, let’s look at what that ubiquitous connectivity is used for. 99% of bank transactions are online. We joke that these 1% of transactions are made in banks by the truly rich – those rich in excess time.
94% of tax reports are filed online. And by the latter I don’t mean that there is a web form you have to fill, but that you click “next-next-submit” to verify a pre-populated electronic data and, in majority of cases, get any returns on your bank account two days later.
We put a nationwide digital signature in place since 2001, which means that by today, 92% of the people carry digital certificates on their ID card or in their mobile phone. This allows them to legally sign any document or log in to any site proving that they are who they claim to be. As one application, in 2005 we were the first country in history to hold nationwide elections on the internet and in 2011, already a quarter of all votes for our parliament came digitally. But more importantly, as many other parts of the open infrastructure, this is not “a government thing”, but something private people and companies can freely use to securely transact with each other, too.
I am talking about the Estonian example here only because that’s where I’ve spent most of my life. I’m sure there are people in the audience who come from Singapore or South Korea or Finland or the Netherlands – they would have similar stories to share.
The point is not to brag or compete here. Given where we have got to with the accessible computing power, with the fact that every one of you is carrying it in your pocket right now and you’re always connected. Things that we have to do shouldn’t be so much harder than the things we want to do.
There is a future that should be here now. Because it is already here for many people who have similar or even less technology than you have in Silicon Valley.
When you leave this campus, into businesses or non-profits or government – or just your role as a citizen – I call for all of you to demand that future. Or even better – dream it, define it and deliver it every day.
And if you could use some further inspiration, some tiny countries around the world would be happy to share.
I
Photos: Picture pictures www.pictures.com.
Go Sten!
Exactly same challenges/situations in NYC. Happy to spread the word among startup community here.
Great comments Sten – you are doing great!! I grew up in Estonia – 14 years – one thing that Estonia is totally missing – depend on ourselves instead totally depending on the beauty of heavenly wisdom. See sda.com
One of the key questions the presentation started with was why do the banks in the US still use checks? The banking system in this country is hundreds of years old. Sure, that by itself is not the reason not to innovate, but it just serves as a reminder of how complex the problem may be. Estonia has perhaps a handful banks, if that, all of which built its infrastructure in the country in the last 18 years or so. The clearing system and the corresponding infrastructure in the US (http://goo.gl/bI7fe) handles money movements worth almost $500 trillion per year. There are so many players in the ecosystem of funds movement that you simply cannot redesign the ecosystem in a few decades. Estonia started from a blank sheet in the early 1990s, so you really end up just comparing apples and oranges. Yes, money movement is involved, but it’s a totally different scale, and a different set of problems, which you can’t simply change by changing legislation or by funding innovation at a single bank.
Your anecdotal encounter with the public school is not surprising at all. First, you can just use online bill payment to make a payment. Very electronic experience–doesn’t clear until a few days and although the bank actually issues a check to FED from the user’s perspective it’s a simple online payment. You can do it from your iPhone too if you’d like. Another thing to remember is that public schools do not accept payments as part of their daily operations, so having a Square-enabled device or some other POS device as part of their daily operations is probably not their top-most priority. Also, it’s a reconciliation problem. It’s easier for the older generation administrators to put a checkmark on paper and track who has paid than to start cross checking student IDs on a banking platform. They would also have to factor in the credit card fees, etc. Also, they are not in the business of making your life easier.
The second question that was raised was along the lines of: “How could any federal or local government plicate something like he e-Estonia platform?” I think you “preached” to the wrong audience. The entrepreneurs (or at least the type that would build solutions for the problems you describe) are usually motivated by revenue. The revenue source is determined by the government’s (federal or local) willingness to fund these types of projects. Funding has to be competitive, only then can a problem attract the best ideas. So the flaw is not so much in the lack of willingness to innovate in this area (the role of business schools graduates, IT community) as it is in the lack of willingness to fund the innovation (by the politicians). I would argue that the only reason Estonia was able to build the ecosystem, in addition to their willingness to invest into the incubator projects (http://en.wikipedia.org/wiki/Tiigrih%C3%BCpe), was simply because they had carte blanche prior to 1991 and the country has the adult population of less than 1 million. Although it is unclear how much of that funding was just given by the EU; so no big sacrifices were necessarily made even by the local politicians and government. Many of these projects were and probably still are funded by the EU tax payers.
Finally, the comparison of efficiency and turning those minutes into lifetimes is cute, but I’m not sure how it really illustrates much. I would argue that 10 minutes of daily bureaucracy is actually pretty good, depending on how much you deal with the public sector. The same argument can be made about reading or writing emails, responding to blogs (pun intended), consuming news content, etc., even eating or going to bathroom. Lots of lifetimes are “spent.” Just like schools are not in the business of making your life easier, the same goes for local governments. Did anyone in this thread think for a minute why protesting of tickets is not available online? Just a wild guess: it is there to lower the incentives of doing so in the first place; because people on average are whiners (especially the generation Y–the self-entitled brats), so the government would want only those to protest who truly feel that they were wronged. Put the service online and you’ll need a small army of people to process the claims because they would be too numerous.
Estonia is small and peopled by fairly well educated, newly free citizens. America is filled with people who disregard their responsibility as citizens both educationally and financially where the have nots seem not to care about inconveniences of the sort Tamkivi talks about here. This is a very complex issue though I agree fundamentally with him.