Driven by the idea of helping decision-makers accelerate the digital transformation of society, Microsoft presented the Digital Futures Index research. The Index shows the level of digitalization of 16 European countries, including Estonia. In addition to the current level of digitalization of the country, it detects the most prosperous areas but also the areas where there is more work to be done to accelerate the process of digital transformation and achieve the country’s potential. We talked to Vaida Sapole, Country Manager for Microsoft Baltics, about Estonia’s best results achieved as well as the fields where there is room for improvement.
What insights did we get from the research?
This research is important because it shows the current state of digitalization in Estonia – specifically in the areas of digital business, digital government and public sector, digital infrastructure, digital sector, and human capital. In addition, it helps us to understand and compare our digitalization level with the rest of the Central and Eastern European region, but also with the digital frontrunners, such as Finland, Sweden, and Denmark. The goal is to know where we are now but also to detect areas for progress.
Estonia is considered to be among the global leaders in the digitalization of public services. However, there’s room for improvement in the digitalization of the educational system, investment in tech talents, and improving the connectivity to fuel up the country’s digital journey.
The question now is how we can support society, learn from each other, and accelerate digital development. The fact is that digitally more advanced countries have proven to be greener, wealthier, more innovative, and more competitive.
Estonia has many talents and a high level of digital skills. How to keep experts?
Estonia has many talents and a high level of digital skills. However, there is a continuous need to invest in tech talents and education. Skilling has some of the strongest correlations with higher salaries, greater productivity, and sustainability measures, so further investment here will deliver a valuable outcome. Acquiring new skills is one of the crucial ways to retain talents, as talents today choose companies that invest in their development. It is essential to ensure that talents stay in the country by creating well-paid jobs and improving opportunities for IT professionals and entrepreneurs. Estonia’s entrepreneurial talent is also reflected in the number of startups which is the highest compared to other countries in the scope.
Estonian startups are well known for their innovation potential. How Microsoft cooperates with startups?
Estonian startups can use the support we provide through our Microsoft for Startups Founders Hub, which combines technology, expert guidance, and support that they need to reach the next stage of their development. Our platform allows Microsoft-qualified startups to use free Azure loans worth up to $ 150,000, get free access to development and productivity tools, benefit from mentoring support from business leaders and technology experts, and receive special startup offers from Microsoft partners.
Estonian startups have great innovative potential and we want to keep fueling this digital progress in Estonia. For example, Skype was one of the first Estonian startups embraced globally. The field has developed rapidly since then – all these sprouting new companies can benefit from the solutions we have to support them.
How much is domestic economy fueled by the ICT sector?
Estonian technology companies are extremely important for the economy. The ICT sector contributes enormously to the country’s GDP and drives digital development as technology companies take the lead in introducing digital tools and innovating business processes.
The country is on the right track. Digital growth has accelerated over the last two years. For example, citizens are increasingly interacting with public institutions through digital technology. What is missing is a greater number of private investments in research and development. We are also slightly behind in education. We need to equip more teachers with the necessary skills to integrate e-learning into the curriculum. An excellent example from which we can learn is Slovenia, where the digitalization of the education system is very highly developed.
The overall level of digital development in Estonia is above the average for Central and Eastern European countries. However, digitalization can be accelerated further. How?
Every business is being transformed into a technology business because digital innovations are shaping entire industries today. The digital transformation is driven by data, universal access to cloud computing, and the potential of advanced technologies such as artificial intelligence. The most successful companies will be those that are better at introducing digital technology such as cloud, IoT, and artificial intelligence. Estonia ranks high in cloud use. To accelerate the digital transformation and stay competitive with European countries, we need to invest in IT professionals and their continuous improvement.
A good example of taking a step further is the Estonian Government’s solution called Bürokratt, which will change not only the way citizens communicate with public institutions and authorities but the whole experience of using public services throughout one’s entire life cycle. Bürokratt is the world’s first public service AI-based virtual assistant, which will set a new standard for citizens. It’s a voice-enabled network of virtual assistants that will be interconnected and thus able to interact with different government entities through a single channel.
How should digitization progress?
The priority is creating a strong, sustainable, and inclusive economy. The fact is that more digitally advanced countries have higher levels of innovation and productivity, which makes them more attractive to professionals. The most successful businesses will be those that are better at mainstreaming digital technology – such as Cloud, IoT, and AI – across their organization. Having ICT specialists with the latest skills to effectively leverage and deploy advanced technologies at scale is key to enabling firms to accelerate digital transformation and be more competitive. Our Index suggests an uneven spread of tech talent amongst Estonian businesses, with high levels of ICT specialists in the workforce overall but a lower percentage of companies that employ IT pros. Addressing this divide by encouraging more firms to invest in tech specialists or outsource the necessary workloads to competent partners should unlock digitization potential.
Digitalization is one of the critical topics in the country. Digital solutions enable people to get faster and more efficient public services. We work with our partners to provide smart and time-saving solutions that improve the quality of service and the level of citizen experience.
During the past two years, we’ve embraced hybrid work. The new model of work has also brought new expectations from leaders. How would you describe a successful leader?
I believe that successful leaders inspire their teams through their personal qualities, expertise, and integrity. The hybrid way of working implies a certain level of separation from the team, so empathy and the ability to understand the needs of others become essential characteristics in creating thriving teams.
I really care about people and enjoy interacting with different personalities. I care about team growth and development, as it brings a sense of happiness to see them learn new things, grow in front of you, take on more responsibilities, or be promoted. It is a more challenging task to be a good leader in a hybrid environment, but completely attainable with mutual respect and open communication. All of us need to balance our productivity and well-being. Our Microsoft Viva is an employee experience platform that provides recommendations to enable us to be at our best while working but also to rest and enjoy private time.
How does Microsoft help to accelerate the digital transformation of Estonia?
Microsoft has been present in Estonia for almost 20 years. In this period, we have realized countless successful projects. We continue to work with our partner ecosystem to raise awareness of the importance of digital business transformation and to be a trusted partner in digital transformation to accelerate local innovation and growth, both for private sector companies, the public sector, and NGOs.
An important initiative to support society in accelerating progress is our Digital Skills Initiative, which has enabled more than 19,000 people in Estonia to acquire digital skills through free courses at LinkedIn Learning, Microsoft Learning, and the GitHub Learning Lab.
We have established cooperation with Tartu University and Tartu University hospital in building an AI solution that assists children with speech impediments. This solution enables a robot toy to understand what children say. They react much better to therapy with the robot than with a real person talking, even though the doctors are always present.
We are also fully engaged in cooperation with the Estonian Government in building a Bürokratt solution. These are all exciting projects, and I believe this is just the beginning of a long and successful collaboration.
How do you imagine Estonia of the future?
Estonia has a strong potential and all the prerequisites to become the digital center of Europe and to base its economic development on innovation and modern technologies, such as artificial intelligence. Artificial intelligence is a technology that defines our age and can do a lot for people, industry, and society, and the possibilities of application are innumerable. The power of technology lies in solving challenges, and Estonia is on the right path in using technology to accelerate economic and social development and become a wealthier, greener, more innovative, and more competitive country in which people live better.