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Welcome to Estonia! By Mike Southon / 29.01.09
Here is a radical suggestion to make the best of the current tough
times: why not move to Estonia?
I was there recently, explaining how to cope with the current
recession. Last time we in the UK went through one, in 1991, they
were rather preoccupied with becoming independent from the Soviet
Union. At the time, many expected the worst; they had seen both
German and Soviet tanks in recent history. But they came through the
process as a new, young country, keen to share their own skills with
the outside world.
Their mathematicians were able to leverage the benefits of the new
internet technology, and not having archaic legacy systems,
Estonia resolved to make itself an e-country and put
everything on the web.
Today, they have an entirely connected country, with a
completely transparent legislature and everyone happy to submit
their tax returns on-line. Identity cards were seamlessly
introduced; it obviously helped to have a population used to such a
level of surveillance, but the main driver in their swift adoption
was making the identity cards also work on the public transport
system.
Mobile phones are used for almost everything, including a
simple public parking system, now being taken up by local
authorities around the world and soon for voting in elections.
Estonia's dynamic business environment was able to catalyse several
well-known international successes, including Skype, the
internet-based voice service.
Generally, Estonia is doing better in the recession than most
countries. They have suffered an inevitable slump in property
prices, arguably an expected consequence of the previous
unsustainable boom. Many people have lost money, but the wise ones
are just biding their time, waiting for the market to recover; after
all, there is only a finite amount of space in the country, as in
the UK.
Of course, Estonia is only a very small country with around 1.5
million people, and so does not represent a very big market for
the major players. But Estonia's small size also provides one
important advantage. You can get things done.
I had a very agreeable chat over a beer with Estonia's president.
Toomas Hendrik Ilves. Charming and relaxed, he explained that
Estonia had fared better in the recent crisis as their banks are
owned by Swedish and Finnish institutions, which suffered back in
1991, and have consequently been much more circumspect and
risk-averse recently.
He gave me details of their low fixed rate of corporation tax and
100% relief for companies that re-invest. He suggested that more
people from the UK might want to base their companies in Estonia,
easy to do as they are a member of the Economic Union.
You may recall a recent news item detailing how our National Health
Service has fallen down the league table below Estonia, and another
which expressed concerns over the costs and problems associated with
the twelve billion pound patient record system currently under
development.
I met an Estonian doctor, Madis Tiik, who has been looking at
the same challenge in his own country. Lacking any detailed
understanding of complex project management, and oblivious to
suggestions that it was impossible to implement, he just got on and
did it; the system is being rolled out next year.
Having an IT background, I understand that the UK database is much
larger, and that there are many different data items including
text-based records and X-Rays. But I also observe that Friends
Reunited and Facebook seem to be managing quite well, and using
simple document and image standards and XML, you can put anything in
a web browser.
Perhaps this is why many successful entrepreneurs move to islands or
other small countries. They remember the tribal atmosphere of the
early days of their start-up, and having status in this community
can make things happen quickly, so long as you know the right
people. The key is then not to become dictatorial, as seems to be
the issue in Sark.
The key drivers are inclusion and transparency. Some people
argue that early funding of the ARPA project in the 80s (which
eventually became the internet in the 90s) was a plot by the powers
that be to make sure they could read all our e-mails and know where
we were at all times. Plus, the bigger the country, the more silly
rules there tend to be.
If this is the case, then would you not prefer to be in a small
country like Estonia, where you can get things done quickly, and
more importantly, make a real difference?
mike@beermat.biz
More columns at
www.ft.com/mikesouthon
This article Copyright ©Mike Southon 2009 All Rights Reserved
Originally published in The Financial Times.
Mike Southon can be contacted at mike@beermat.biz,
http://www.beermat.biz/
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