Podcast #22 – Sandra Särav on Estonia’s Digital Shift, Innovation, and Citizen-Focused Government

Doug Dvorak (00:03.406)
Good day Mission Podcast Community. I’m your host and podcast navigator Doug Dvorak and I’m extremely excited to bring you inspiring stories from incredible guests. These individuals are on a mission to create remarkable possibilities that not only enhance their own lives but also make a lasting impact.

Doug Dvorak (00:32.662)
on the communities and countries around them and that they serve. Stay tuned for some truly amazing conversations. My guest today is Sandra Sarov.

Welcome, Sandra, to the Mission Possible podcast. We are incredibly honored and excited to have you join yourself. A digital trailblazer. You are the undersecretary of state of economy and innovation for the Republic of Estonia. Sandra, you and Estonia stand at the forefront of one of the world’s most digitally advanced societies as a key architect of Estonia’s economic and innovation strategy.

You’re helping to shape a future government and technology where they can work hand in hand to foster transparency, efficiency, and entrepreneurial success. With a background that bridges public policy, business, and technology, Sandra has been an instrumental expert in driving initiatives that have positioned Estonia as a global leader in digital governments, e-residency, and agile public-private partnerships.

We’re going to explore that with Sandra today. So Sandra, welcome again to the Mission Possible podcast. It’s great to see you.

Sandra Särav (02:08.275)
Thank you so much and this was the kindest introduction I’ve ever been given so it’s really nice to be here.

Doug Dvorak (02:14.638)
Well, coming back from Estonia, and as I shared with you before we started the podcast 10 years ago, if you had told me, Doug, you’ll have gone to Estonia three times in the next 10 years, two of which twice to Estonia and Tallinn in the first year, I’d say, what are you drinking? Any vodka? I don’t know, but I was just blown away. We just came back from three and a half weeks biking the Baltics, ending in Tallinn, and we’re just blown away by the people.

The can-do attitude and I think to your point because they’re getting out of winter and spring and it’s summer more people out and they were definitely had a spring in their sub. But Sandra can you give our listeners a quick overview of your role as Undersecretary of State for Economy and Innovation in Estonia?

Sandra Särav (03:03.443)
For sure. And just to say Estonia and the rest of the Baltics are best place to bike because our highest peak of all of the three Baltic countries is 318 meters. There’s an actually I think it’s a Latvian movie where the woman says to the man that if you really love me you will take me to Suur Munamägi which is the high egg mountain. This 318 meters we’re proud of. So you’re always welcome back.

Doug Dvorak (03:25.912)
We were there. Thank you. I will in the spirit of honesty and transparency, my bike, my wife and I were on an e-bike, but it was wonderful. so tell unpack for us, you know, going back to that question, you know, what, what really give our listeners a quick overview of your role as undersecretary of state for economy and innovation for Estonia.

Sandra Särav (03:36.68)
Yeah.

Sandra Särav (03:48.276)
So in short, I lead the economic policy of Estonia. This means…

What can we do across the public sector to boost our economy, to build the best possible business environment? In my team directly, I have 11 smaller teams leading policy making on topics varying from startup policy to space policy to innovation policy to in between topics of more traditional nature such as industry policy, tourism policy.

I also have a team in my team, is called Accelerate Estonia, which is literally a governmental innovation lab. And I have a few governmental owned companies, Innovate Estonia or Enterprise Estonia, which is the largest entity handing out support and services to businesses in Estonia to science parks or technopoles, which help startups accelerate. so in short, we try to figure out on a daily basis what type of legislative regulatory changes financial instruments, support, whatever our companies need in order to live in the best possible business environment. Estonia is never going to compete when it comes to monetary offerings with countries such as Germany or know the US but if we can build the best possible business environment where you can set up your company fast and it’s convenient to run it this is what my team does.

Doug Dvorak (05:12.91)
Excellent there there was a quote from Ronald Reagan about big government Heavy legislation it was a ten-word phrase that when gov us government officials Introduced themselves. I’m from the government and I’m here to help.

It that’s an oxymoron, but I really got the feel and the vibe in Estonia to exactly what you just unpacked for our listeners that you’re very pro business smart business, but you’re really on par with forward thinking countries like Singapore in terms of all the initiatives for lowering the the the bars to entry in real on really focused on public policy, government policy, economic policy that drives what we all know, capital goes where capital is loved. And I see a lot of international businesses in Estonia. Thank you for that. So what first drew you to the public sector, particularly in a space so focused on innovation and economic transformation?

Sandra Särav (06:17.779)
I’ve actually been back and forth when I first decided to join the public sector, which was now almost 10 years ago. My then boss told me that Sandra, you’ll be bored to death. But now I have worked back.

Back and forth in public sector and private sector and and I can tell you with full confidence that I’m working at the most fast-paced environment I’ve ever worked at and this is the government sector. I used to work in a global big tech company and an American company and I quite quickly realized there that I like to make decisions fast I like to make changes fast and I couldn’t do this at this company so I came to a public sector in Estonia to make fast decisions.

But all in all, I like working in public sector is something you can never have in private sector, which is the sense of mission. I mean, you get to change the course literally of what your country is doing and where your country is going. Your everyday decision making affects the companies who want to come to Estonia, who want to stay here, who will grow from here.

Doug Dvorak (07:07.352)
Mmm.

Sandra Särav (07:21.203)
It’s lot of responsibility, but also the impact part is the biggest. With salaries, we can never compete with private sector. But just the sense of impact, not only grating value to a small circle of shareholders, but your entire country, nothing can beat that.

Doug Dvorak (07:39.31)
Excellent, thank you. So let’s transition into some questions relative to digital transformation and innovation. Estonia is often referred to as one of the most digitally advanced societies in the world. What were the key steps that made this transformation possible?

Sandra Särav (07:55.528)
Yes, so first, it’s often referred to, yes, so, you know, whether it’s the wire, the economists, say, Estonia is one of the most digitalized countries in the world. I think it’s BS to say someone is the most digitalized because it shouldn’t be an end goal in itself. I mean, your end goal is not to be, I don’t know, rich. want to achieve something with your money. So as a government, your end goal shouldn’t be…

Doug Dvorak (08:06.731)
Really?

Sandra Särav (08:19.347)
Be to be the most digitalized, it should be to be the most efficient. And this is actually where our journey started. mean, our journey started from necessity after regaining independence in 1990s or 1991. had limited vision, sorry, not limited vision, vice versa. We had limited resources, but a very strong vision. We decided to leapfrog the analog stages and go digital immediately. There was a very clear political will. We had a very young government.

Doug Dvorak (08:24.493)
I would agree.

Sandra Särav (08:49.301)
Our people trusted our government because we had been occupied by the Soviet Union for half a century where we couldn’t do our own decision-making so we trusted them. We immediately started working in public-private partnership with our companies and we made a few smart decisions to begin with. We launched a digital identity very very very early on and we copy pasted the system from Finland and I like to say that with a difference that we made it work.

Doug Dvorak (09:17.784)
Hahaha

Sandra Särav (09:17.991)
Because in Finland the ID card wasn’t a mandatory document, in Estonia we made it mandatory. We launched xxROADS, which is a data exchange layer. And these two things became the backbone for everything from e-tax to e-health, etc. And I think what I said, that we copy pasted the ID card, for instance, from Finland.

One of the most important things is that Estonia wanted to do things our own way, but we weren’t afraid to copy systems that worked elsewhere. The problem was we didn’t have much to copy from, but we started with cool things. You’ve been to Tallinn, I mean, you’ve seen our old town. We set up like computer camps for students so they could learn how to use computers. The political leaders made the decision that we’re going to equip all schools as fast as we can with computers. And those guys and girls who were at these computer camps in old town…

are the ones who built the sky for instance. So we made quite a few smart decisions at the time I would say.

Doug Dvorak (10:17.966)
Excellent. So, Sandra, what role does the private sector play in driving Estonia’s innovation strategy?

Sandra Särav (10:24.849)
Yeah.

So our success story couldn’t be a success story without the private sector. Many of the platforms we use still today are built in partnership with startups and with our tech companies. The government sets the framework, but in innovation, it’s team effort with the private sector. If it’s the digital ID or our information systems, we procure a lot from the private sector. So we see that states should be an enabler, not a competitor. And this mindset makes the collaboration natural.

It’s fintech, it’s e-government, defense tech, which is a new crucial topic for Estonia. We procure a lot from the private sector. And these days the government has set the goal that when we do public procurement, public tenders, we shouldn’t say we want A, C and D and this is how you should deliver it to us. Innovative procurement or innovative tenders means that we say we want more durable roads, which are also sustainable. So the private company comes and builds you those.

Roads and say what are your alternatives these days. So we don’t set the rules in a very tight way because we give more freedom for the private sector to come and tell us what should be done. Because innovation shouldn’t be led by public sector. The public sector should listen to the private sector because they’re always going to have more money, faster decision-making processes. And I think this is one of the key things. Without our private sector we wouldn’t be where we are right now.

Doug Dvorak (11:56.142)
Excellent. And you mentioned and I read a lot and saw on the Estonian news, a growing sector of your economy is e-defense now with a lot of the EU for a variety of reasons, taking 1.5 % of GDP for defense. When you look at Poland, they’re close to five. But how is this sector evolving along with your role and your government sector?

Sandra Särav (12:25.575)
Yeah, it’s definitely one of the top sectors we’re looking at right now. We try to do our best to support any new companies coming from the defense tech. So I think it was now almost two years ago when, and it’s done, we have a founders association. So most of the startup founders belong to one association. They have a rotating presidency. One of the founders is a president for one year. And they’re literally, you know, the government’s reach out go to entity to ask what’s going on? do you need in the sector? And so they launched something called the Defense Tech Meetup. So this was now almost two years ago. I went there and I saw these companies, these people from Ukraine who literally came from the war front. They were there and said, public procurement takes nine months in Ukraine right now and we’re in the middle of the war. Or we had a few companies saying, we want to test this. We want to test that, the regulations and rules don’t allow us.

Then the startup founders who have built the companies you mentioned who have built Bolt or Vibe Drive or Verif, they said, we have money, just tell us where to put it. So we quite quickly realized us as a government, mean, we don’t need to tell those companies what to do, but we can help with lifting regulation where it’s outdated, it doesn’t make sense anymore. We can help with testing.

Whether it’s drones, mean, the US is building amazing defense tech companies, but you there are examples where you pour money into drone companies and when they go actually to the battlefield in Ukraine, they don’t fly as far as intended. They don’t find their home base back because they haven’t been tested in real life environment. So it’s for us as government to help unlock the possibilities for them to test these new technologies. And we also launched the defense tech funds because now it’s changing, but let’s say one half years ago, one year ago, there was a huge issue that a lot of capital that goes through funds, especially public funding, it has these moral standards, which means that if we use your retirement money, we cannot allow you to invest into lethal technologies.

Sandra Särav (14:34.301)
So in Estonia we launched the Defence Tech Fund where we said it’s okay if we do direct investments into lethal technologies. So us as a government we tried to see where exactly is our role, where we can help, we’re here to help, where can we really help and then define this role and actually make sure that we collaborate with the sector.

Doug Dvorak (14:53.518)
Thank you. We’ve talked about public, private, industry, government, partnerships, collaboration. Can you talk a little bit about the importance of education? You’ve got a relatively young, well-educated, in-country, tech savvy workforce. Talk about the impact education, those coding camps, has had on the rapid digitization of Estonia.

Sandra Särav (15:17.661)
Firstly, general, Estonian students are very diligent in the sense that when we look at the OECD PISA tests, when it comes to European countries, Estonia is absolutely peaking. Estonian students are the best in Europe when it comes to maths, when it comes to language knowledge, all these sorts of things. After the Asian countries, I think we’re third or fourth in the world. So education is crucial. We start teaching.

Basic programming, basic coding as early on as kindergarten level. So of course the kids learn through play. It’s basic if then. But then all schools are equipped with computer classes, robotics, things like this. But it’s not only those.

Those people who enter into life who get these training. At first, when we started in 1990s, early 2000s, when we started with digitalization, we literally had training camps for retired people. So we were like, what’s up? Do you want to learn how to use a computer? My grandma used to work for Estonian post office when they switched. You know, she was there when you were still connecting the wires to make the phone calls. And then she saw the change when actually computers were implemented into her workplace.

Doug Dvorak (16:26.253)
Really?

Sandra Särav (16:30.806)
So instead of letting her go and finding new people they trained her how to use those computers, which was crucial I don’t know how’s the case in the US but in Estonia if you go to supermarket for sure you’re gonna have someone who’s trying to sell you what’s your retirement fund or who’s your telecom service provider, stuff like this. So literally early 2000s we had people in the supermarket who would come over and say, do you have an ID card? Do you know how to use it? So we tried to teach people how to use it. And I think this is one of the crucial things that most governments miss that…

They don’t build services that are actually easy enough to use so we can educate everyone to use them. And again, here I have to bring my grandmother in because this is my favorite story ever. So I used to live in Brussels and she lived in Estonia. we gave her a smartphone. So I would have to send her pictures of me in Brussels and she would send me pictures of herself and grandfather celebrating their anniversary, cetera, et cetera. So I keep sending her pictures and at one point she tells me,

Dear child, you don’t need to send me pictures anymore. I’m on Instagram now. So my grandma literally managed to download Instagram and started using it. And I think, you know, this should be the threshold how we should build government services that…

Doug Dvorak (17:37.666)
Hahaha

Sandra Särav (17:49.128)
You know, your grandma can figure out on her own how to use the government services, but for some reason governments don’t realize this. But otherwise education is crucial and of course, mean, as with most of the Western world, we’re an aging population. This is a problem in all of Europe. We’re going to be in massive need of workforce. So we need to figure out how everyone can be fit for the jobs that are the future jobs.

Doug Dvorak (18:16.654)
And I love what you said, not only about the ease of use and easy to navigate the application, but giving the foundational digital skills, not only to young, but to the more senior, because it can be extremely frustrating just knowing my relatives that are older and how stuck some of them can be. And you have to have those skills if you want to navigate, survive in 2025. That’s excellent.

Sandra, how does Estonia balance rapid digitalization with cybersecurity and privacy concerns for its citizens?

Sandra Särav (18:58.93)
Yeah. Trust is the foundation of everything digital. One of the reasons why Estonia can be so digital is because we haven’t had any major breakdowns or data breaches.

We have prioritized cybersecurity from scratch. But it also comes with a negative side of the story because in 2007 Estonia was the first country in the world who said openly we have been cyber attacked by another nation state. So we had massive cyber attacks and even in 2007 there were no data leaks, no data breaches. They were just a series of DDoS attacks, distributed denial of service attacks, which meant that the government

Doug Dvorak (19:26.996)
Really?

Sandra Särav (19:41.062)
Governmental websites, bank websites, things were down. However, no data was leaked. And we had been saying in Europe, we need to focus on cybersecurity. And now Estonia is home to NATO’s Cybersecurity Centre of Excellence, EU’s IT agency. We host the world’s most complex cyber defence exercise called Lock Shields. Estonia was the very first country in the world to launch a data embassy in another country. So Estonia hosts the most crucial data sets in Luxembourg and
So whatever happens to our country, Estonia is so small, you mentioned 1.3, 1.4 million people, we can take ourselves, move to a farmhouse somewhere in Texas and still function as a country with a 1.3 million people if we have access to the data sets in Luxembourg, right? So we were one of the few ones who started saying that the owners of the data should be the citizens and the businesses themselves. We built systems where citizens whose data is being accessed, you can actually see who accessed your data. So you know it’s again it’s a real life story. I was speeding, the police caught me.

You know, I go into the police car, I show them my ID document. They don’t need anything. They don’t need my driver’s license. They don’t need anything from me. They just see my ID document. And then they could see, I saw what type of data they saw about me. But they only saw if I had had any previous speeding tickets, if I had a criminal record. If it was really me, they saw my identity documents and if the car was registered under my name. They couldn’t see my medical records because they don’t have the right to see your medical records. So it’s not only cyber secure.

Sandra Särav (21:19.304)
It’s also inherent security and data integrity that is built into our systems. And again, we do this with the help of our private sector.

Doug Dvorak (21:28.846)
And the foundational, the first step is trust.

Sandra Särav (21:32.382)
Trust is crucial. Estonia hosts hundreds and hundreds of governmental delegations every year. They come to our briefing center, they see what we have done and they say, but we cannot do this in our country. I’ve had fights, not physical fights, but verbal fights with countries saying paper is more secure than digital. I say, my medical records, if anyone accesses my medical records and only licensed doctors can, it always leaves a trace behind.

Is time stamped. I can always see who accessed my data. I can always ask them why did you access my data. When it comes to physical paper records, if someone now goes to the doctor’s office, opens the drawer, looks at my medical records, unless I take fingerprints, I can never see who accessed them, right? In the digital world, you always have a trace.

Doug Dvorak (22:24.014)
That’s excellent. So Sandra, what has been the most difficult challenge in Estonia’s digital journey and how did your government overcome it?

Sandra Särav (22:33.236)
So again, I told you many governments come to Estonia and they say, hey, I mean, you’re so small, you can do it. We cannot do it. We’re so big. But with small size comes lack of resources, right? Getting everyone to prioritize digitalization. So let’s take the minister of the interior and the police systems or defense systems. They say, you know, we need to hire more policemen. We need to train them.

We cannot focus on digitalization. So getting everyone to prioritize it, keeping up with new systems and not getting stuck in legacy, convincing politicians that you have to make those initial investments. But how we overcame it is in Estonia, we have a 10 year digital strategy always. It doesn’t matter who’s

who’s running the office in political terms. Government officials such as myself were also elected, but were elected for a five-year term. And if the politicians change, we don’t change. So we set the strategy. It’s going to be set for 10 years. And it says, where do we want to go with the digital priorities? And along with the strategy, one central office, the government’s office also hands out money or finances to build those services. So if you’re in the ministry, of social affairs and want to build a new e-health system if you’re in the minister of interior and want to build a new system for i don’t know processing my living permits you have to come through the government’s eio office which checks

whether you are in alignment with actually the digital strategy and only this way they hand you the funding. So this makes sure that everyone prioritizes digitalization. They don’t need to prioritize it over their own initiatives from their own budgets because it’s handled from one centralized budget. you know, since we say this brings so much efficiency, it’s a random number, but we say only with the use of digital signature, we save more than 2 % of our GDP.

Doug Dvorak (24:33.208)
Really?

Sandra Särav (24:33.526)
Politicians realize that actually it’s also efficiency They want to do it as well. So keep it short and simple

Doug Dvorak (24:41.782)
Excellent. Let’s transition now and talk about Estonia’s economic development and global collaboration. How is Estonia leveraging its digital advancements to attract foreign investment and support local startups?

Sandra Särav (24:55.602)
Yeah. so.

I mentioned, this is where I began, that we’re never going to be able to race with the likes of France or Germany or the US when it comes to handing monetary support to companies. So digitalization for us means we have to build the best possible business environment. And for us, the best possible business environment is an efficient one. So how we attract foreign investments, companies to come to Estonia is we say, you literally can open up a company in Estonia in 15 minutes. And it’s literally a world record, 15 minutes and 33 seconds.

You can open up a company, can start running the company. You can do anything from applying for licenses. Let’s say you want to open up a restaurant. You need to have your food license, your alcohol license. You can do everything from one single point of contact online. You say, okay, let me check if I’m eligible for subsidies for governmental support. Again, you can do it from one single point of contact. So we try to bring this efficiency and we say to companies, if you come to Estonia, mean, it’s also we have 0 % corporate tax and reinstatement.

Reinvested profits. It’s not a tax haven. However, if you are established in Estonia, it’s 0 % corporate tax on reinvested profits. We try to make it as simple as possible. It’s the best tax system in the OECD countries for 11 years in a row because it’s so simple. So we build the best possible business environment and we do it with the help of digitalization.

Doug Dvorak (26:20.204)
Also read when I was in town that you can get divorced online too.

Sandra Särav (26:24.594)
Yes, so I have a personal story here. Not the divorce part, but the marriage part. you saw Estonians, they’re all smiling, et cetera. Estonians are normally very, very shy. So two years ago, we digitalized marriage. So now you can propose.

digitally. My husband, my now husband proposed to me physically, but then I filed in the documents digitally at Frankfurt airport after two glasses of wine. And so I was really hoping that maybe now people have more courage to get married if they can, you don’t have to look the other person in the eye. You can actually file in the documents digitally. And now as of end of last year, you can also file for divorce digitally. Of course, for those acts, you have to actually physically show up as well for the actual

Doug Dvorak (26:51.79)
Hahaha

Doug Dvorak (27:01.742)
Wow.

Sandra Särav (27:11.766)
Know ceremony to make sure that these are two consenting people. But the third service that we hadn’t digitalized yet since a few years ago was buying real estate. But the current house where I live in we already bought it with fully e-notary. You never had to show up anywhere. You identify yourself with the same ID card and voila.

Doug Dvorak (27:33.56)
So is there any pushback or blowback in Estonia from the population about all this rapid digitalization and the threat of AI and all your e-initiatives that’s going to kill jobs?

Sandra Särav (27:49.588)
Yeah, I wouldn’t say so. I I said we’ve been doing this for, know, almost three decades now. And when people start using those services, they realize it brings them efficiency. They demand more. I mean, the very, very first digital service that we had was in the year 2000. It was e-tax declarations. Right now, if we would tell anyone that they would ever have to file any and this takes you literally a minute.

and it’s pre-filled, you don’t have to do anything. And if you would tell to any Estonian that, okay, it’s tax season, you’re gonna have to call your tax lawyer, you’re gonna have to find your receipts, they would tell you, are you crazy? Nobody would want to do it, right? So we’ve built those services gradually. One of the most successful things we built was in 2008, which was a digital prescription. All your prescriptions are only digital. And no one hands out the paper. So maybe like 15 years ago,

I went to a pharmacist there was super nice lady there maybe 70 years old and there had been Some issue in my family physician’s office and they couldn’t issue me a digital prescription They showed me a paper prescription and the 70 year old lady looks at my paper prescription and goes What is this?

I haven’t seen this in a long time. So people get used to things being so fast. Like people complain about Estonia, but when they go and live elsewhere, they come back and they say, I cannot handle the bureaucracy. And so actually people love these systems that they’re simple, that they’re efficient to use. And I think the crucial thing is we communicate, we say, you know, for instance, now instead of the physical ID card, we are launching a governmental app where you can access your services, but we do a testing period before we launch it.

People to test it, invite them to give feedback. So you don’t launch everything at once, you build this gradually and then the demand comes from the people who realize that, is actually beneficial for me.

Doug Dvorak (29:45.774)
That’s really interesting. You talked a little bit about what Estonia is doing in leading the world in terms of digitization, but can you share how Estonia collaborates with other nations or international institutions to export its digital model?

Sandra Särav (30:02.472)
Yeah, for sure. So again, this is through definitely a public private partnership through our other companies. So we export a lot of the things that we have built here in Estonia, we export to other countries. So…

You know, and one of the crucial things about Estonia, as opposed to these big tech companies, that we don’t sell Estonia in a box. We work with governments, we work with international institutions and our companies help them go develop solutions that fit local contexts. Everything from digital identity to cross border data exchange. Our companies help you build what they have built in Estonia and what works here. So currently we have shared our experience, I would say definitely with more than a hundred countries around the world.

Doug Dvorak (30:25.56)
Hmm.

Sandra Särav (30:48.214)
Have helped launch digital transformation projects through our private sector companies and in cooperation with the United Nations, with World Bank, with the EU. As I said, we mostly export our solutions to our companies and this is how we can give them back for helping us build our own digital society. Even the USDOD, Department of Defense, uses Estonia’s KSI blockchain tech.

Doug Dvorak (31:12.558)
Wow.

Sandra Särav (31:13.108)
And even at the governmental level, have smaller regional collaborations with the Nordic countries, Nordic Interoperability Institute, real-time economy which helps businesses submit their reports cross-border faster. We’re building a Nordic Deep Tech Valley to attract Deep Tech startups here.

and crucially we’re always happy to learn from others. I I travel a lot to other countries, whether it’s France, whether it’s Lithuania, or as far as Singapore, if they’re doing something well, I come home and I say, okay, they’re doing this really well, we should try and do it as well. So, US government shouldn’t be afraid to copy-paste systems that work elsewhere.

Doug Dvorak (31:58.102)
Excellent. So we’ve talked about, you know, those industries in Estonia that are on the cutting edge. But how is Estonia fostering innovation in more traditional sectors like manufacturing or agriculture?

Sandra Särav (32:11.924)
We believe that digital isn’t just for startups or tech isn’t just for startups.

It can be a tool for everyone. mean, in agriculture, companies are using AI and satellite data to optimize land use. In manufacturing, they use digital twins, smart logistics and so forth. We also support innovation clusters. We bring startups together with legacy companies or legacy industries to create new solutions. But in general, I mean, you hit the nail right on the head. This is the tricky part. I mean, if we’re 100 percent

fully digital government, we do have laggards behind in the private sector. It’s a bit of an anomaly in Estonia actually, because every 10th Estonian has their own company. So every 10th Estonian has their own company.

Doug Dvorak (32:57.952)
One more time, F, 10%.

So entrepreneurialism is alive and well in Estonia.

Sandra Särav (33:08.03)
For sure. And you wouldn’t believe it, but you know, people in rural areas, Estonia has a lot of islands. We have 2,222 islands. And the most entrepreneurial people live on those islands because if you don’t have local employment opportunities, you grade your own company. Because remember you can do it in 15 minutes and 33 seconds. And 94 % of all of the companies are micro companies, one to 10 people. So maybe all of them, if you’re setting up an ice cream booth, you know, in a small island, maybe you don’t need to digitalize.

So this is why the companies might not always be the most digitalized, but again, we have 10 unicorns. We have the most unicorns per capita in Europe, second most unicorns per capita in the world. Estonia has more AI startups per capita than the US. And of course, mean, this AI isn’t built only, you know, just…

to be used at an individual level, it’s for other companies as well to make their systems more efficient. But it’s still, this is the tricky part, how you get the traditional companies to use more tech technology. So this is where we do hand out governmental support. We say, hey, start using these basic accountancy software just so you can get your data right. And if you get your data right, this is the next step to figure out, you know…

How to prepare, I mean let’s say you’re a restaurant, how to prepare for you know what you need to order, how to prepare a menu, if you’re a hotel maybe you can figure out at what time to sell out the hotel at a smaller price instead of having a fully empty hotel etc. So we have examples of hotels who use AI tools to predict when to lower the price and so forth. So it can be everywhere but it’s not always the case.

Doug Dvorak (34:51.406)
You know, that brings up a talking point. Whenever I talk to Americans in my sphere of influence and they think about Europe or the EU, they have fond memories, but in a business context, they think of bureaucracy and inefficiency. And I heard a quote recently, the EU legislates, the US innovates, and China replicates.

But that’s not the case in Estonia. It’s very nimble in the tax system, the tax code. It’s really more nimble than some of the other EU nations, not trying to cast dispersions on them. But really, simplicity, value, trust is really the cornerstones that’s leading this digital change. Now, Senator, from where you sit, what advice would you offer to other governments trying to implement systematic digital change?

Sandra Särav (35:45.768)
Yes, so one of things is what I keep telling don’t be afraid to copy paste if it works elsewhere. In general, start small but start. Many countries, I I’ve told you, they come to Estonia, they go back and say, hey, we cannot do it.

All of them admire what we have done, but they say, hey, we cannot do it. You can start. mean, start with picking one impactful service, build it well and let that be the proof point for citizens or companies that things can be done. If I were to start now, if I were the digital minister of any country in the world, I would start by building business services. Because if you’re a citizen of a country, unless you change your citizenship, unless you move away, you have to use the services of country. If you’re a company, you go to where the terms are more favorable, where the system is more favorable. So if you start building digital solutions and systems for businesses and businesses realize this is a great country to be in, you start attracting companies, you start attracting investments and then you realize, aha, digitalization can help us, you know.

Second crucial point, don’t digitalize bureaucracy or worse don’t digitize bureaucracy. Many countries do is that the same forms that you have to submit written in by hand, you have to submit then it’s the same thing you just do it digitally. In Estonia we don’t do forms or reports, we have information systems. Reimagine your processes entirely, don’t think that we’re you know converting paper text into ones and zeros.

And probably thirdly, build with people, not for them. think the worst governments, including in Estonia, the worst systems are where we don’t communicate with the end user, whether it’s your business, whether it’s your citizen. know, trust, transparency, telling them what you’re doing and getting feedback. These are the things where I would start.

Doug Dvorak (37:45.966)
Excellent. Let’s transition now into change leadership and vision. What leadership principles guide you as a change maker in government?

Sandra Särav (37:55.892)
Perhaps not principles specifically, but I believe real change doesn’t come from a hierarchy. have to realize that Estonia is one of the most non-hierarchical countries in world. You can go to a grocery store and your prime minister would be there picking a bottle of wine.

You know, everyone can speak to everyone. But this means also that we collaborate. If you don’t know the right person in Estonia, you know someone to call who will lead you to the right person. So in my team, I lead with the mindset that we achieve better outcomes if we talk, when we work with people, not for them. This means involving the private sector before making any policy changes. And this is not a recommendation. This is mandatory in my team. No new legislation can be passed.

New rule can be set up if you don’t speak to private sector and hear their feedback on it. I also value agile decision-making. I hate slow processes. You know, when you want to make a change, start with something, agility, test ideas quickly, learn from that what works elsewhere, and then you can adapt, you can change always. Don’t get stuck with perfecting one idea, you know, test.

Communicate, listen, get feedback. These are the main principles that guide me always.

Doug Dvorak (39:19.992)
So, you know, the US is going to be celebrating its 250th anniversary. How old is Estonia?

Sandra Särav (39:26.292)
Well, we turned the 100 in 2018, half of which was under the Soviet occupation. Estonia as a republic was established in 1918.

Doug Dvorak (39:39.918)
1918 and then you had your nightmare occupation. the Estonian culture has been around for centuries, if not millennia. And I compare and contrast that. remember going in and around on a day tour of old town Estonia and they say, this ship.

Sandra Särav (39:43.844)
Half a century of occupation but now we’re 107,

Doug Dvorak (40:05.726)
Ship owners guild started in 1450 and this guild and that and it just blew me away. So my question specifically how does Estonia maintain momentum in innovation while staying rooted in its values and heritage of the past?

Sandra Särav (40:21.982)
So I would say, and this is what I actually began with, digital is not a goal in itself. I mean, it’s how we can be more efficient and focus on what really matters. Going hiking into the nature. know, half of Estonia is covered in forests. Estonians enjoy their isolation. And in this sense, I can say that digital systems actually help us because we don’t need to interact with other people as much. And I’m only partially joking here. I mean, I told you, we digitalized the marriage proposal. So finally, the shy Estonians

Doug Dvorak (40:47.372)
No, I…

Sandra Särav (40:52.006)
Men can propose.

I think we make use of those new tools to still build on this heritage. know, food is really, really important in Estonian culture. We have a lot of Michelin star restaurants, Michelin guide restaurants. So they serve you, for instance, a traditional Estonian food with a little bit of a new, like, edgy, you know, taste to it, or different types of technologies are used. Estonia allows for novel foods. I’ve tested different types of novel foods.

made from I don’t know what…

So I think we embrace that digital is now part of how we live. Estonians are a singing folk. I’m literally the only Estonian who cannot sing. So this year we’re celebrating the Song Festival, which happens every five years, where we’re going to have 30,000 people singing in a choir to an audience of almost 100,000 people. And this is one of the biggest choir festivals in the world.

Doug Dvorak (41:39.0)
Ha

Sandra Särav (41:58.222)
And couple of years ago we thought, when metaverse was a thing, we thought, you know, this is such a beautiful tradition, the song festival, why not hold the next one also in metaverse? So we’re always open to these ideas, you know, if new tech comes on the table, how we can, you know, immerse our normal culture with this tech.

Doug Dvorak (42:16.28)
Well, and part of that book I was recommending is Baltic, Future of Europe. It said that the Baltics really, you know, late 80s before independence, it was the singing revolution. And people from Lithuania, Latvia, and Estonia had that chain of hands. I don’t know what the name of it is, but Baltic chain. were.

Sandra Särav (42:38.748)
It’s the Baltic chain. I was there. I was a month old.

Doug Dvorak (42:44.174)
Goodness in in Vilnius, Tallinn, and Riga, we saw the plaque and and it just blew me away. The importance of of the singing revolution being tired of being dominated by a foreign power and a corrupt system, that being communism. Really impressive.

Sandra Särav (42:50.228)
Here we go.

Doug Dvorak (43:13.312)
Sondra, can you give us a peek into what Estonia is focusing on next relative to new technology digitization? it AI, blockchain, et cetera?

Sandra Särav (43:24.596)
So one of the key words you mentioned, blockchain, I think it’s history. We tested with first blockchain systems in 2007, immediately after those massive cyber attacks against Estonia. So actually, blockchain system was developed in Estonia before it was called blockchain. But we found very limited governmental use cases, we secure a few of the information systems with blockchain, but in general, we don’t see the hype.

Doug Dvorak (43:29.354)
Really?

Sandra Särav (43:51.028)
There was a book which was called Estonia, the first country fully in blockchain, which is not true. There are use cases, but it shouldn’t be everywhere. AI, we use a lot. We have a lot of governmental use cases, everything from where to send the traffic police to protect whether this person will become unemployed again if they come to the unemployment office and ask for support. We also use AI just to be cool, which in

in my mind doesn’t make so much sense. So before generative AI systems, we were trying to build sort of like a generative personal assistant called bureaucrat for Estonia.

And then along came generative AI and immediately became redundant, you know. So it always takes more time for governments to build systems. And this is why I said innovation should come from public sector. governmental ID 2.0 is in works. We’re just launching as we speak a governmental app where you can do everything. In Estonia, can already, you know, since 2005, can vote online and, you know, more than 50 % of people choose to vote online. But this app, I mean, it has every

from a driver’s license to anything so it’s simple. We’re working on proactive or personalized government so this means when you have a life event such as retiring or you know…

starting a new company, buying a car, having a baby. You don’t need to reach out to all different types of government institutions and figure out, I need my license there, I need to sign up my get for the kindergarten, I need to ask for subsidies for building a restaurant. So if you start a transaction such as retiring, then it means you only need to do the first step saying, I’m retiring now. And then everything else will happen in the background as processes, government institutions

Sandra Särav (45:46.982)
Talk to one another and share this information. This person just gave birth, this person just retired, they just purchased a car. So you can actually spend your time on doing more valuable things. You don’t have to reach out to government entities. We have been doing this but manually since the year 2001 because Estonia uses the most advanced data exchange layer in the world. We built it in 2001 but it still functions. So we’re connecting more than 3,500 services from public sector.

Private sector so you don’t ever have to share data yourself it’s the authorities companies who share the data in the background but this has been manual so now we want to make it proactive or personalized so these are some of the things we’re working on

Doug Dvorak (46:31.896)
So let’s transition into the last three closing reflective questions and then my favorite 10 rapid fire questions that I’m going to ask you rapidly, one word or short phrase response. But in your closing reflections, Sandra, if you could change one thing about the way countries approach innovation globally, what would it be?

Sandra Särav (46:54.804)
Innovation is not built in silos. Can I quote Vanilla Ice? stop, collaborate and listen.

Doug Dvorak (47:01.144)
Sure.

Sandra Särav (47:05.586)
Because I think this is what most countries do wrong, right? They’re like, okay, we want to build a new system. We want to do something. And they don’t look at what others have been doing. They don’t want to collaborate. They want to build everything from scratch on their own. you know, the worst thing is they say, we want to innovate. We want to be cool. And you don’t stop and listen. You just, you know, you just want to digitalize or innovate for the sake of innovation. If you start building something new, you start with a problem.

Doug Dvorak (47:05.709)
I love it.

Sandra Särav (47:35.462)
One of the most successful startups in all of Europe, in Estonia, is my former employer, Bolt. The CEO, when he launched this company, he was 19 years old and he was later on the youngest self-made billionaire in all of Europe. But he started a company because he saw there was a problem, so Bolt is equivalent to Uber in Europe. He started…

Doug Dvorak (47:55.638)
Yeah, we took it there. Yeah.

Sandra Särav (47:57.716)
Yeah, so because he started because he saw that the taxi system, the regular taxi system didn’t work in Estonia. So he built that company out of necessity. Often countries think that I want to innovate. I want to be cool. I want to be the most innovative country. I want to be the most digitalized country in the world. No, see where you have problems and start fixing those problems with innovative solutions. And don’t do it in silos. Check what other countries have done. You don’t have to copy paste. Literally, you can adjust the systems.

Where countries go wrong.

Doug Dvorak (48:29.422)
Excellent. Looking back at Estonia’s journey, what are you most proud of?

Sandra Särav (48:34.132)
I think…

How we have matured as a country, I mean, we didn’t have much of a head start. When we regained our independence in 1991, our economy had been in a standstill literally for 50 years. Before the Soviet occupation, so before Second World War, Estonia’s and Finland’s economy were exactly the same. And then for half a century, we were on a complete standstill. And then now, which is over 30 years, we have achieved 30 to 40 X increase.

which is a transformation that not many countries have achieved around the world. And then you come and say, I want to do a podcast with you. I want to speak about Estonia. I live in the US. I came to bike there. I loved how things go. And let’s discuss what you have done. mean, can you imagine 40 years ago that some country somewhere up in northern eastern of Europe

can speak to other countries and say, hey, we did like this, maybe you could try this as well. So how far we have come from literally nothing over the past 30 years, this is what I’m the most proud of.

Doug Dvorak (49:42.126)
It’s so incredible. So what is your mission possible when it comes to the future of Estonia?

Sandra Särav (49:49.588)
Okay, so a couple of weeks ago our minister got some negative feedback in media because he was wearing a sweatshirt, which I’m wearing right now, but it’s in mirror, so I don’t know if you can see it, but it says making a…

Doug Dvorak (50:04.162)
Making illegal things legal.

Sandra Särav (50:08.274)
Yes, so this is what my team is working on. We’re making illegal things legal. this doesn’t mean we’re legalizing cannabis or whatever, which is still illegal in Australia.

Doug Dvorak (50:18.476)
What does it mean? Because I’m trying to rep, I would think it’s about cannabis or whatever. What is it, what’s the context for that?

Sandra Särav (50:25.204)
Yeah.

So the context is if you have a new business model, you want to test it, but the regulation stops you from testing it. We’re going to allow a short temporary period in the legislation to test the new systems in real life environment. back in 2017, Estonia legalized self-driving vehicles or more specifically self-driving package delivery robots. So we had this company called Starship. They were in Estonia. They were doing food deliveries.

Super cute little robots, but they literally had to have people walking next to their robots because legislation said you need to have a physical driver. You know, how stupid is this? So we changed the legislation and now in my team we’re we’re gonna be the first country in the EU I think third or fourth country in the world, which is gonna have an overarching regulatory sandbox.

If it’s a new company, I want to test novel foods, want to test the self-delivery pharmacies, I want to test drone technologies. Current legislation doesn’t allow me, so we were going to figure it out for you, how you can test it. And if we see it works in real life, it doesn’t affect, there are no traffic incidents, you know. We can live with those things that happen, then we’re going to make the legislation also accommodating to these new technologies. So we’re making illegal things legal.

Doug Dvorak (51:35.214)
Wow.

Doug Dvorak (51:48.748)
I love that, that’s really cool. So, rapid fire, I’m gonna give you 10 questions, one word or short response. Are you ready? Digital ID or handwritten signature.

Sandra Särav (51:53.864)
it’s like… Yes! Born ready.

Sandra Särav (52:00.968)
Digital 100%. I have horrible handwriting.

Doug Dvorak (52:04.032)
All right, most innovative country other than Estonia.

Sandra Särav (52:07.822)
Singapore.

Doug Dvorak (52:09.472)
A book that changed your life.

Sandra Särav (52:12.41)
Every book that I read. And I’m not afraid to actually now stop reading a book if I don’t like it. So that’s why every book I read influences me.

Doug Dvorak (52:14.091)
X

Doug Dvorak (52:20.994)
Favorite Estonian startup.

Sandra Särav (52:23.942)
All of our ten unicorns or Pactum AI, Starship, Varif, Pipe Drive… anything.

Doug Dvorak (52:31.326)
I use Skype, I use PipeDrive. In fact, I recommend PipeDrive in my business to other businesses. Coffee or tea to fuel your mornings. The next big thing in tech.

Sandra Särav (52:46.548)
Well, generative AI, next iterations. hope not artificial general intelligence, but hopefully user-centricity in everything we do.

Doug Dvorak (52:56.428)
What’s more critical, speed or precision?

Sandra Särav (52:59.752)
Both. Speed, speed. You can iron in the details later, just, you know, kick off the ideas immediately.

Doug Dvorak (53:06.942)
One app you can’t live without.

Sandra Särav (53:09.938)
My email app. Also Twitter or X.

Doug Dvorak (53:14.882)
Describe Estonia’s digital future in one word or a short phrase.

Sandra Särav (53:19.604)
Personalized.

Doug Dvorak (53:21.132)
What makes Estonia Estonian?

Sandra Särav (53:25.406)
Can I answer longer here? Okay. So it’s hilarious, but Estonians are super critical towards whatever we do, towards ourselves, what we have achieved. However, when someone criticizes us from the outside, we built the best possible support system ever. So we have a saying in Estonia that every Estonian’s favorite food is another Estonian. However, when someone comes, then we cater together and this is the most Estonian thing ever.

Doug Dvorak (53:26.71)
Sure.

Doug Dvorak (53:48.322)
Hahaha

Doug Dvorak (53:55.134)
Awesome. So, Sandra, thank you so very much. It’s been a high honor and privilege to have Sandra Sarov, the Undersecretary of State for Economy and Innovation for the Republic of Estonia. Sandra, if we get anywhere from 40 to 70,000 views per episode, if anyone viewing this podcast wants to get in touch with you, they want to start a business, they want to bring capital to Estonia, how should they reach out to you? What website should they go to? What’s the first step?

Sandra Särav (54:24.84)
Yeah, so in Estonia it’s easy. All government officials contact details are available. So just go to Ministry of Economy website of Estonia. You can find my email. You can even find my phone number. You can connect me via LinkedIn. Just reach out to me and say, hey, I want to build a company in 15 minutes. Actually, I want to do it faster. So let’s test it together and I’m going to be there for you.

Doug Dvorak (54:48.97)
Thank you, Sandra. It’s been an incredible hour together. I want to thank you for your time

easy to access. Just like you said, I went online. I had this incredible magazine that Life in Estonia where you had a great article and you were very efficient and responsive to be a guest on our Mission Possible podcast. So thank you Mission Podcast community. Check us out at missionpossible.biz. Like, subscribe and view. Carpe Diem.