A term that seems to be thrown about in the technology sphere, and indeed in the mainstream press these days is ‘disruptive innovation’. It’s the thing that every start-up, entrepreneur and venture capitalist strives towards. In the never-ending quest for convenience, consumers wholeheartedly buy products and services that save us time. So, when Uber came along and started providing a quicker and more efficient way to hail a taxi, the only people who properly objected were the cabbies themselves.
With the growth of the internet, distances are shrinking, the level of consumer choice is many times what it was twenty years ago, smartphones have made computing truly ‘mobile’ and information is largely free (providing you have an internet connection, of course). This creates an environment where disruptive innovation can happen very easily, as communication is both simplified and enhanced.
I read an article recently about how Estonia, a tiny European country of just over 1.3 million people, is pioneering digital citizenship. Every Estonian over the age of 15 is given a smart ID card, which they can use for thousands of online services like booking doctors appointments, online banking, online shopping, paying parking fines and voting. Every new-born baby is given a digital birth certificate – it’s easy to see that the country takes the idea very seriously.
While this is brilliant in its own right, even more brilliant is the fact that anyone in the world can apply for ‘e-residency’ in Estonia. Called ‘satellite Estonians’, these people are not full residents, but (among other things) they are able to set up a business in the country and hold a fully verified ID card (which is used to access the web securely). The ID makes doing business online safer, quicker and more convenient.
As more and more people around the world get access to the internet and connection speeds get faster, distances and state boundaries will become less and less relevant to business. For example, a driven, bright, African entrepreneur with a great idea could set up her company in Estonia. While her company would provide for Africans and have African employees, she pays taxes to the Estonian government, and that is where it is registered. For someone like her, having the business registered in an EU member state is beneficial for two main reasons: firstly, while Europe is by no means a perfect place to trade, the business infrastructure is highly developed and red tape and corruption are often less of a problem than in many African countries. Secondly, after a new EU rules comes into force soon, member states will be forced to recognise each other’s digital IDs. This further enhances e-Estonians’ ability to do business with other European governments.
What Estonia is doing is visionary and very clever, and potentially disruptive to international business as we know it. If this is a taste of the shape of things to come, governments around the world will have to work hard to remain attractive to a new breed of businesspeople. Making things ultra-convenient for people will become really important; great schools and a generous welfare system will mean nothing to someone who has no interest in emigrating to that country. Primary concerns will be focused on the business: cost-saving and being able to run a business as freely as possible are two.
Uber has shaken up taxi drivers around the world, just as AirBnB is disrupting the hotel industry and fast downloads have disrupted DVD rental shops. Admittedly there is a lot of money to be made with these innovations. But breaking down state boundaries and attempting to change the concept of citizenship could, in the long run, be a real force for good. As governments in Europe become more and more hostile to immigration from inside and outside the EU, Estonia is setting a wonderful example. Let’s just hope that the idea catches on!