By Alex Hardy, Nick Robinson and Andreas Haggman
On Monday November 15th, we were kindly invited to join a number of politicians, diplomats and leading experts in business at the historic Pewterers’ Hall in central London – hosted by the British-Estonian Chamber of Commerce.
The theme: “How can British business remain in Europe?” was highly topical given the recent Brexit decision following the EU referendum back in June 2016. Whilst light-hearted jokes were directed at the UK’s decision to leave, the general direction of the day—and subsequent Anglo-Eesti relations in the future—was clear to us: to what extent could future alliances between the two countries begin to flourish and prosper as the UK prepares for life outside the European Union?
It quickly became evident in the immediate aftermath of the referendum result that Estonia was keen to position itself as a key ally and potential “lifeboat” for any UK business, or individual, that was becoming increasingly concerned by the huge amount of uncertainty and confusion that now potentially clouds their future. This lifeboat would not arrive in the form of any predetermined trade agreement, partnership or ‘special arrangement’ (although this could be yet to come), but instead via Estonian e-Residency. Established in 2014, the novel initiative has become the world’s first transnational digital identity, offering anyone around the world access to the wide range of digital services that the Estonian government currently provide to its own physical residents. The pull for UK citizens was clear as, once vetted and approved, an e-Resident is able to:
- Administer their own Estonian company – and subsequently operate that company within the EU;
- Administer said company from anywhere in the world, operating fully location independent;
- Digitally sign and transmit documents and contracts, bypassing traditional elements of corporate bureaucracy (digital signatures are now as legally binding as handwritten ones);
- Manage accounts and declare Estonian taxes online;
- Conduct e-banking and remote money transfers (setting up a bank account in Estonia can now also be achieved from your own office!);
- Access international payment service providers (e.g. PayPal, TransferWise).
e-Residency can now be seen as the quickest (and most effective) way of dodging potential EU trade barriers, and it appears the Estonian government had all (referendum result) bases covered from the beginning. A landing page—created especially for UK citizens and aptly named howtostayin.eu—went live around June 24th, joining a vast swathe of online Newspaper articles and Twitter promotions that were awash with suggestions on how one could possibly remain.
Thoughts soon turned to the first panel discussion of the day. Of chief and pertinent concern to the discussants were of course current international affairs, relating in no short order to the recent decision for the UK to leave the European Union, but also the election of Donald Trump as US president, and the collapse of Taavi Rõivas’ government in Tallinn following a vote of no confidence in parliament. The implications of all of the above on the e-Residency programme, and indeed Estonia’s wider international role were all touched upon by a panel of experts including Edward Lucas, a senior editor at the Economist, and Kaspar Korjus, the managing director of the e-residency programme. Whilst disappointment and sadness with the UK’s decision to leave the Union was expressed – and indeed led to one Scottish member of the panel, Peter Ferry, to question if indeed it will happen at all (and for Scotland in particular) – a particular phrase, utilised by speaker Viljar Lubi, was that the UK and Estonia will need to foster “new ways of doing things” and that the global, liberal order would work around whatever difficulties it was currently facing.
The discussion did lurch into the realm of popular geopolitics, with one speaker noting that Tallinn was recently ranked as the 50th largest economic centre in the world. A modest achievement, noted the speaker, before with great relish adding that Moscow had fallen to 83rd, and that “living well was the best revenge” (for the prior Russian led Soviet occupation which intrinsically shaped much modern Estonian history). Of particular emphasis, reinforced by Ambassador Lauri Bambus and Viljar Lubi, was what Estonia could offer to the world as a small independent nation. The focus was one of innovation, and perhaps more forward and outward thinking in an increasingly globalised world. Both were keen to reinforce that Estonia suffered less from “legacy issues”, comparative to the UK in particular, and had benefitted from a population and infrastructure which was more open to modernisation and trying new technologies. Furthermore, the speakers were keen to reinforce the very Estonian model of data transparency and how e-Residency was designed with the modern consumer at its heart. There was also illustration of the financial benefits to digitisation, with the UK spending approximately 3% of its GDP on administration, whilst Estonia by contrast, thanks to its digital systems, spending a mere 0.07%. The cryptographic technology which reinforces the government systems and indeed e-Residency as a whole, was touched upon, if not explained in minute, technical detail.
The talk seemed pitched not particularly to a technical audience, but one of political and economic interest. Engagement with the audience addressed concerns regarding data ownership, rebuilding confidence in public and private institutions and of political differences between the two nations. Specifically the issue of digital identity cards, something embraced within Estonia, would be considered politically unacceptable in the UK (at the time of writing, at least). This point in particular prompted some discussion in the networking that followed, with it being suggested that shifting demographics may change this political acceptability over time, with younger generations more keen to embrace technological innovation, along with the possibility of a scheme where UK citizens could opt in if there were service related benefits to doing so, but equally, those sceptical could choose to opt out. Additional discussion revolved around the utility of e-Residency. Was the name reflective of the product? Was it worthwhile, or merely a PR exercise? How does the current political turmoil in Estonia change this approach going forward? Can more be done to make e-citizenship more appealing to a wider number of people? (The current 15,000, whilst turning both profit and being a PR / soft power exercise, is some distance behind the initial projected numbers given when e-Residency was incepted).
Following a quick coffee break, the discussion continued with the second panel discussion focused around FinTech, a dynamic financial technology which the programmes boasted as being “a model for the world”. The second discussion had a stronger business focus, with emphasis being upon how the transparency of e-Residency could rebuild help to rebuild trust in private and public institutions in the post financial crash world. Whilst the second panel was business centric, it did also include Dan Morgan from the nonprofit sector and Lecturer in E-Governance Tõnis Vahesaar, who were keen to inject their perspectives of e-Residency, and how Britain can embrace FinTech technology and the digital economy.
At the conclusion of the event we retired to a public house to reflect on on the panel discussions, after which we took advantage of the Estonian diplomatic mission’s generous hospitality and attended an evening reception at the Estonian Embassy in South Kensington. Warmly welcomed by one of the attachés we soon set off, glasses in hand, to network with the other 40-odd attendees.
True to form, Andreas quickly found himself in a discussion about Russian strategy and tactics for invading Estonia, while Nick and Alex made headway fostering contacts pertinent to their PhD research. As the evening wore on and the supply of social lubricants dwindled, the conversations increasingly took a jovial turn. One highlight which we will all cherish was the thorough amusement provided by a former MP (who shall remain nameless) all too willing to perform a solo variety show, but which also resulted in an invitation to join them on their radio show on BBC Kent to discuss cyber security. Whether this will materialise remains to be seen, but no doubt we shall pursue it as far as we can.
Events like this, while not truly serendipitous because the overarching theme is networking, nevertheless provide fruitful opportunities that can further academic or career ambitions. We all came away with swathes of business cards for contacts who may prove useful, with one man in particular exceedingly keen to flaunt his name-dropping credentials (“I had lunch with Theresa May last year…”).
One important point to remember, however, is that only by going out and testing ideas with people outside the ivory tower can our ideas be validated for their applicability to real-world problems. This might be considered an academic version of what in the world of business start-ups is the Mom Test. Although academics do not (usually) seek commercial gain from their work, the principle that ideas should be tested against those people who are affected by the problem you are solving/exploring holds true. A room full of people with a demonstrably keen interest in e-Residency and affiliated initiatives provided a litmus test for Nick and Alex’s research, which they can only be judged to have passed with great aplomb.
Although Nick’s master’s thesis led him on the journey to becoming an e-Resident back in 2015, would Alex and Andreas be convinced to join him and become an e-Resident of the Republic of Estonia? Probably not, they admit. But the day proved beneficial and full of intrigue nonetheless. e-Residency posits itself as the conducive key for “unlocking the world’s entrepreneurial potential”, and whilst there are only 800 or so applicants from the UK so far (5th overall behind Finland, Russia, U.S. and Ukraine), we can all safely agree that this number will soon begin to multiply as the true permutations of Brexit begin to take shape and affect UK businesses and their relations with the rest of the EU and beyond.
Alex Hardy is a Royal Leverhulme funded PhD Research Student, interested in the everyday politics of cyber security. Having previously studied International Relations and Human Geography research at Durham and Newcastle University respectively, his research interests include critical geopolitics, security studies and the digital economy.
Nick Robinson is a current PhD student in the CDT for Cyber Security at Royal Holloway, having just completed his MSc in Geopolitics and Security. Stepping across both Geography and ISG departments, Nick’s research interests range from Estonian e-Residency, the use of data embassies, and technology and the media’s role within society more generally. He is a member of the editorial team here on the RHUL Geopolitics and Security blog.
Andreas Haggman is also a current PhD student in the CDT for Cyber Security at Royal Holloway. He completed his undergraduate and masters degrees in the War Studies department at King’s College London before joining the CDT in the autumn of 2014. Prior to and inbetween his degrees he spent time working in the video games industry, retail management and the defence sector. Andreas’s research interests lie in non-technical cyber security topics pertaining to military and government applications of cyber technologies, and organisational and policy responses to cyber security issues. He is also a member of the editorial team at the RHUL Geopolitics & Security blog.