Growth of IT industry in Estonia: Government Strategies and Results - Report Example

? issues of IS/IT strategy and policy at the national level [Pick the Introduction This paper will study in detail the technological revolution that took place in Republic of Estonia. The main argument of the paper will be to have a deeper look on how the awareness was propagated in Republic of Estonia. The paper will analyze and argue that the experiences of the republic of Estonia are easily repeatable in other countries with proper analysis. In the paper, first we will discuss in details the steps that were taken in Estonia for the e-revolution then technological factors in another country “Kenya” will be discussed and a comparative study will be carried out in order to weigh the prolific performance of both countries. Growth of IT industry in Estonia, government strategies and results Republic of Estonia is a small state of Northern Europe in the Baltic region. It is one of the smallest countries of Europe which developed it from scratch after the destruction of the Wall of Berlin (O'Connor, 2003). Estonia has experienced a dramatic growth in the industrial and ICT domain because of diverse and multifarious factors. It was one of the leading countries which strived to increase the local liberalization of the markets for increased productivity and investments. The government officials in Estonia inculcated the fact from the start that the flexible policies in the business oriented domains are a key to the elevation of the economies. Estonia has emerged as a role model for other countries because the officials of the country understood the importance of Information technology from a very early start. The importance of computers started to emerge in the early nineties and the well versed administration of Estonia oversaw the importance of the computers in the daily life of the people and started to work in the favor of the technology. Apart from the ICT works. The economic policies were crafted in such a way that they can give a boost to external investments. Flat tax and zero tax policies gave Estonia a chance to change the centralized market economy to free market economy where there were multifarious chances of investments and economic growth. At the initial level, Estonia was a country in which all the economic growth was based on the agriculture and the annexation policy of the USSR along with the Nazi occupation of Estonia damaged the economy but after the independence and the destruction of the Berlin wall, the first step which was to start the flat tax rate of around 26% started to increase the economy of Estonia. Having joined WTO in 1999, there were many efforts taken in Estonia by the government to give us a strong base to the country’s economy to make it eligible for the international standards. Estonian government always followed the Milton Friedman rules and regulation and lowered the tax after different intervals to give the benefits to the common masses. The liberalization of the local markets was the first and foremost factor that made Estonia what it is today. The Estonian government started to open the horizons for the market for the external investors and as a result of the free market, the two competing companies of Finland and Sweden which were named as Sonera and Telia respectively were the first to enter the markets of Estonia. The workforce of Estonia was really talented and their hourly rates were far lower than the other countries and this was a very attractive factor for the business men because early nineties was a time when people were in search of great talent at a nominal cost. The Estonia telephone company was handed over with its 49% shares to the Swedish and Finnish companies to give them a chance to enter the markets of Estonia and improve them because the officials were interested to elevate the working standards of the telecom companies with an emphasis on the integration of the IT standards. There were a lot of benefits due to these foreign investments because the local workforce was able to get the chances of state of the art training with the experience of the international standards (e-Estonia). The Estonian government was totally aware of the importance of information technology and that is the reason why every budget in Estonia gave around 1% of the shares to IT domain at the time when there was no awareness regarding the ICT development. There were increased chances of computer education and economic growth in the computer domain because the budget was given an emphasized heed to the computer oriented domains. The penetration of international companies in the local markets of Estonia increases the local standards because the Swedish companies started to introduce the optic fibers in Estonia at the time when the concept of optic fibers was very rare globally. The rate of elevation of the ICT standards can be understood from the fact the united bank and other banks of Estonia started to offer e-banking services in the mid nineties whereas there was no concept of e-banking at that time around the world. The reason behind this swift technological growth is the strong urge of the administration and the people of Estonia to compete despite being the smallest nation in the whole Europe (StseKolovotis, 2008). There were very less natural resources in Estonia but the people of the country decided to compete the world from the early start and they oversaw the computer technology as the deciding factor in the modern world economies. President of the republic, Lennart Meri decided to start the country wide campaign for the awareness about the internet and this campaign used the slogan “Internet connect people not computers” People were given lectures, workshops and advices about the usage and benefits of internet. There were coaches and intentional teachers hired from around the world to give chance to people to learn from them. This campaign was started in 1998 and the results were evident within some time as there were an increased number of people who learnt the importance of internet (RIK, 2010). All the computers in the schools were connected to each other via internet. The first ever computer college called “Estonia information technology college”. There was another program called as Look@world which has focused to increase the internet users throughout the country. Many private companies, international partners, government level agencies and educational institutes took part in these movements and as a result of these campaigns, there was an elevation of around 10% in the users of internet and normal working class people were able to use the computer at internet. The basic PC using skills were developed in the children from the early start. The results of these efforts are really fruitful because more than 90% of the Estonians use internet banking and 86% of the citizens file their taxes electronically. The efforts of ICT awareness factors are really paying off now because there is an increased ratio of the economic growth. The economic growth is now around 9.1% annually and this ratio is one of the highest economic elevation ratios around the world. (Kitsing, 2011) Margus Puuo who is head of department at information systems and economic miniseries explains the economic lifecycle and growth of the IT industry in Estonia and says that after the destruction of Berlin wall and post annexation era with USSR, they had to build from scratch. The centralized economy was giving them a lot of difficulties in increasing the scope of penetration in the global markets but when they started to de-centralize the economy and started to inculcate the free market economies, the people around the world started to invest and the results were coming very swiftly after a few hectic years. The information age officially started in Estonia when the parliament of the country approved the law named as “Principal of state information policy”. This policy not only revolutionized the ICT domains of the country, it also gave the immense benefits to the local level population which allowed them to enjoy the true benefits of information technology in their daily lives. There were three phases in the implementation of this law and the computer revolution was divided into many steps. The first step was to change the document lifecycle and management systems in the government offices and agencies altogether and the sub mission, signing, registration and updating of all the documents were started to migrate to the computers. The paperless concepts were introduced in which the offices will not have to work on the basis of hard papers rather each and every process should be done on computers. This will not only increase the speed of work rather it will also augment the security and chances of human errors will be depleted. There is an increased phenomenon of the proper inclination towards the computer systems in the Estonian offices. The preservation, signing and registration was started to be done electronically on the computers and all the offices of the government level agencies were using the computers as the primary tool of work rather than pen and paper. This not only depleted the time o the working hours , the secure and less redundant nature o the computers allowed to increase the transparency in the offices and as a result, there were more economic benefits due to these policies. As the computers do not accept the redundant and false entities in their databases, there was no possibility of forging the false entries in the files. The second step was to migrate all the data from the papers to the computer generated databases in which all the data was save electronically. The concept of public databases was introduced and there was a project called X-Road using which all the data was maintained on centralized servers. Al the authentication and checking of the records was done using the query based architecture of these databases. People started t deploy low level databases in their offices through which they can maintain the data and also increase the productivity at the workplace. The government was finding it really easy to maintain the records of all the citizens in the central repository. The third step was to computerize the records of the citizens and there were different projects named as e-citizen, TOM, e-Tax and digitization of the public safety record. These projects allowed the government to increase the level of public safety by optimizing the record level security. The entire authentication was done through central records and there were fewer redundancies and false forgeries were detected at once because o the computer generated patterns. All these technologies were developed in Estonia at that point in time in which the other parts of the world were not dedicated to revolutionize the field of human working in each and every domain. This gave a competitive edge to this county and information age was started to develop in Estonia. Citizen portals and web projects were started at the government level with an intention to give the services at one publicly accessed interface. People could access the resources by simple clicks sitting at their home. The government gazette was made public on the website and people could access and download all the resources which were needed for day to day activities. There were fewer efforts at the offices and people did not have to travel from their home to government offices just to get the forms. There was an increased level of security because of these services because of the fact that people were more trust worthy of these services. The concept of publicly accessible internet was started in Estonia which revolutionized the overall canvas of ICT. At the start it was only limited to libraries but after 2001, more than 1,100 internet access points were built at public places, parks, hotels, shops, libraries etc. The above mentioned steps are easily repeatable in other countries because of the fact that there is a very increased awareness around the world. The steps like X road and e banking are really easy to implement around the world but there is just a need of political will and investment. The scales of technical capabilities being nurtured around the world are being increased because of the immense technological experiences. The installation of internet access points and implementation of 3g and 4g technologies are really easy these days because of the fact that people around the world are in great need of the internet based responsive web based layouts. If a low level of investments are given and there is a political will in the leadership then all the steps that were taken in Estonia are easily repeatable in other countries. Growth of IT industry in Kenya In the present age of information technology, computers are regarded as the cardinal and incumbent tools which have penetrated the normal routines of our lives because of the immense usability and productivity. The internet has a colossal role to play behind this augmented use of computers because it is responsible for connecting the globe into one web where people across different geographical locations can interact with each other and share anything they want. The users of internet are being augmented on daily basis and the emerging corporate world is deploying e-commerce as the basic building block for their businesses through which they can galvanize their local products and services around the world in order to gain monetary benefits. The underdeveloped countries, despite of their depleted rate of economic growth have inculcated the fact that they cannot survive in the modern world without adapting the computing technology an internet. The past decade has experienced a dramatic increase of use of computers in the underdeveloped countries to not only for the sake of entertainment but also for resolving economic, social and diverse community issues. One of these countries is Kenya which has a very low economic growth rate but there is an advanced capacity of internet and computer usage there. People are interested to adapt computer as their main entity in their offices and business and the concept of paperless offices is also wide spreading. The information age has affected this part of Africa a lot and now more than 60% of Kenyans are using computers as their main source of performing daily activities of interaction, business, daily transactions and payments. The mobile technology has allowed the Kenyans to interact with each other in a highly sophisticated and swift way and this factor has also given a hug boost to the economy. The integration of e-commerce with the already established business in Kenya has given the local markets, an exposure of the global markets where customers from around the world can now buy, negotiate and shop from the Kenyan outlets (American.edu). The medical domain has also been improved drastically due to the usage of ICT oriented tools. The automated cardiac test stations, central health records and easy testing has given a facility to the remote areas using which they can avail the state of the art medical and health equipments without any hurdle and effort. UNICEF has launched rehabilitation programs in Africa in which they send mass sms messages to the drought and natural disaster hit people and people can get notified about the latest happening around the, aid supplies etc. The new start ups related to ICT field has created a lot of new jobs in Kenya and people have started to think in the business oriented paradigm where they can use their assets and invest in the domain which has the future full of opportunities in the global canvas. The establishment of big incubation centers is definitely a problem at the present time in Kenya but the government is striving hard to provide the low level start ups with the initial help and monetary fund so that the culture of ICT related entrepreneurship can get nurtured.  iHub and Ushahidi are the two main leading organizations which are working for the production of information technology services in Kenya. -Ushahidi Platform, SwiftRiver Platform, and the Crowdmap are the three main platforms that are started by Ushahidi. The digital systems and social media platforms are being nurtured in Kenya. Ushahidi has developed a central database through which the international organizations can access the database and records o the citizens and African nationals to access the information that is required for the development of the human resource management.  Nokia, Pesapal, Microsoft, Google, Wananchi, InMobi, and Zuku  and other international partners are working with extreme motivation and dedication to start the new IT related startups in Kenya. (Jia, 2011) Comparison between the two cases The information technology advancements in Kenya and Estonia are comparable to some extent because both the countries faced problems at the start. The initiatives in the Estonia are more deep rooted and well verse because of the fact that they focused on the economic policies. The liberalization of the economy was the most important steps in the elevation of the IT industry whereas Kenyan authorities are facing many difficulties because of much depleted economic capacity. The sound economic systems of Estonia gave chances of external investments and companies from Sweden and Finland are openly coming to invest because there is no political turmoil in the country. The IT industry experienced a great boost in Estonia because the laws are passed through ha proper procedure. The parliament is willing to work with an inclination to support the general masses and the administration applies all the rules and regulations suggested by the parliament. The step by step approach in the application of the policies adapted in Estonia gives the chance to the external masses to get their requirements perfectly aligned with the global needs. Similarly, the ability to foresee the needs and demands of the global corporate industry is also giving a competitive edge. Kenya is lacking the political will to resolve the issues and there is a massive political turmoil which is the main hindrance in the development o the technological revolution. The administration in Estonia is more willing to provide the benefits to the general masses and they apply the public level facilities like common web portals and access points free of cost. The Kenyan government is not focusing on the development of economy first and this is the main reason behind the slow elevation of the IT standards. (Fengler, 2013) Factors of Difference The economic and political problems are some of the main differentiating factors between Kenya and Estonia. More than 50% of the population in Kenya live below the poverty line according to a survey and the lack of political will is augmenting this problem. People are more willing to search for the jobs and a better living standard rather than focusing on the internet oriented lifestyle. Poor leadership in Kenya is also posing problems and the foreign investments are not coming into the country. The tribal culture in Kenya is also a great threat to the development of the computer related revolution because of the fact that the tribal elders are not willing to give a chance of learning and economic development to the people because they fear that their vested interest will be at stake if they will allow their youth to study and interact with international standards. The lack of good exploitation of natural resources and depleted economy with the slow political process are some of the main factors which are forcing Kenya to lag behind the international standards (Hemmati, 2007). Estonia is located in Europe and there are increased chances of economic growth in this part of Europe. There is no political turmoil and the leadership has identified the information technology as the major aim to focus on for the economic development. Conclusion This paper concludes after carrying out a comparative of techno-economic situation of Estonia and Kenya, that dedication towards enhancement of technology and business environment assisted Estonia to emerge as an internationally recognized hub for business because, the government rose to the challenge of causing economic growth by offering flat tax rates, which in turn attracted foreign investment whereas, Kenya’s population is far less devoted towards technology and it is looking make their living from conventional means such as agriculture and manufacturing. However, traditional sources of income are considered obsolete in the world of the 21st century. Conclusively, Estonia is far stronger than Kenya because, the former nation’s leadership devoted the national resources towards enhancement of business environment and technology and thus, therefore prospered as an effective nation in the international arena. But, Kenya could match Estonia progress, if they dedicate resources towards acquiring and using technology with the help of international consultants. Additionally, the country’s administration is supposed to work for betterment of law and order, so that foreign investor could purr his or her money into the local s economy fearlessly. References E-Estonia (n.d.). Government | e-Estonia. Retrieved from http://e-estonia.com/e-estonia/digital-society/government Ameican.edu (n.d.). Information Technology Landscape in Kenya. Retrieved from http://www1.american.edu/initeb/dk1540a/Analysis.htm Fengler, W. (2013). kenya ict | World Bank Blogs. Retrieved from http://blogs.worldbank.org/category/tags/kenya-ict Jia, X. (2011, August 3). Kenya Leads in Africa’s Information Technology | Blogal Prosperity by the Center for Global Prosperity. Retrieved from http://globalprosperity.wordpress.com/2011/08/03/kenya-leads-in-africa%E2%80%99s-information-technology/ Kitsing, M. (2011). 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