Is ESTONIA the European SILICON VALLEY? – VisualPolitik EN

Is ESTONIA the European SILICON VALLEY? – VisualPolitik EN

Estonia might be a country that you’ve only
hear about on the Eurovision Song Contest… If you are one of the few people who actually
watch that. But the reality is Estonia is a pioneering
country in many fields, some might even call it the Silicon Valley of Europe. Companies like Skype and TransferWise were
both created here. This is surprising given that just 30 years
ago, this country was part of the Soviet Union. In fact, geographically Estonia’s situation
is far from ideal. Their weather there is pretty terrible and
they have fewer than three hours of daylight in some winter months. Plus, they have a never-ending demographic
crisis that seems almost impossible to resolve. Unlike most countries, the female population
of Estonia is significantly higher than the male population. This means, people find it harder to find
a partner and have children. This is why every year Estonia maintains a
course of population reduction. And yet, despite all of this, Estonia is still
the most technologically modern country in all of Europe. In fact, it is the only nation where the access
to internet is recognized in the Constitution. But what makes Estonia get into our Countries
Hall of Fame is the so-called E-RESIDENCY. This means: any person, no matter where are
they from, can fill a form and become a virtual citizen of the country. But what does this really mean? Today, we are going to explain you this, but
before we get into that, let´s look back at their history. TITLE: THE FIRST VICTIMS OF VLADIMIR PUTIN In 1991, Estonia got its independence from
the Soviet Union. Yes, other countries like Belarus or Ukraine
did at the same time. But in those cases, their new democratically
elected governments had a strong influence from the former communist elite. Estonia was different. Their first democratic Prime Minister, Mart
Laar, formed a cabinet with an average age of 30 years old. These where young people with new ideas and
who had no debts with the Soviet old guard. This is how Estonia opened their economy to
the international market. They adopted a capitalist system and a fairly
unique political system that would become well known for its minimalism. Actually, this is the word that defines Estonia
better than any other: MINIMALISM. Even their flag is a simplistic representation
of their traditional landscape. Even their taxation follows a so-called “flat
rate tax system.” What does this mean? Well, here everyone pays the same percentage
of tax, no matter how much do they earn. In this case, their income tax is just 20%. With these policies, it´s easy to understand
why they quickly attracted foreign investments, especially from Finland and other Scandinavian
countries. Nonetheless, this was not enough to grow at
the rate they wanted. At the beginning of the 90s, just half of
the population had phones in their homes. Further the infrastructure, built during the
Soviet era, were far from acceptable. And as you can imagine, this is not a great
set up for a country wanting economic recovery. Since they had no money to build physical
roads, they decided to invest what they had in virtual roads: the country’s telecommunications. And, 15 years later, Estonia was the first
country on Earth to implement an electronic voting system. But hold on a second because all these reforms
didn´t come for free. During these 15 years of forward progress,
the Russian minority that used to rule over Estonia became politically isolated. This is why in 2007, the Kremlin, with Putin
in office, decided to act. This is how the first cyber attack in history
was organized. And yes, a cyber attack on a government that
relied heavily on a digital infrastructure became a big deal. During the attack, Estonia lost their administration
– which meant even the hospitals couldn’t function. This is why, since that day, NATO has based
their cyber-security headquarters in Tallinn, the Estonian capital. But that was not the end of Estonia’s problems… TITLE: THE FINANCIAL CRISIS Two years later, in 2009, the financial crisis
struck the Estonian economy hard, which was especially exposed because of it’s significant
foreign investment. All of a sudden, the government had no money. Plus, this was the time when they were supposed
to adopt the Euro as their currency. So, even if they wanted to switch, they didn’t
have the money to set up a new currency in the country. So they had two options: cut spending or raise
taxes dramatically. Unlike other countries like Spain, Estonia
took the first option. In a matter of months the Government fired
over 10,000 workers, which was a third of their entire staff. Politicians lowered their salaries and froze
all state investments, including many construction projects. All of these budget cuts caused the Estonian
GDP to fall 14% that year. To make a comparison, the US, at their worst
moment, saw their GDP fall just 8%. Nonetheless, after going through a terrible
2009, Estonia started to recover immediately. Since they didn’t raise taxes and their
business policies were quite flexible, many of those who lost their jobs started their
own companies. Now, let´s take a look at their unemployment
chart… Between 2008 and 2009, Estonia went from a
4% unemployment rate to a 19% rate. At the time, this was the highest rate in
all of Europe, even bigger than Spain or Greece. However, in just two years, they cut this
figure in half. And now, they have a admirable 6%. The same goes for their salaries. Today, a person who works in Tallinn is making
more money than most people in Southern Europe. In summary: Estonia is a model for other countries
to follow. And now we’re going to have a look to see
what they key aspects were that made this country quite so successful. TITLE: DIGITAL ADMINISTRATION Estonia pioneered the creation of the “digital
ID card.” Now many other countries are copying this
model… but it’s never been quite as successful as the original. The reason is that the ID card is actually
useful. For instance, during the elections, any citizen
can take this card, connect it to a computer and vote no matter where they are. There is no need for registration. This is particularly convenient if you are
on holiday or if you live in another country. Every expat knows the hassle of voting while
abroad – waiting at the embassy to cast a ballot. Further, there have been many elections where
the votes coming in from abroad get lost… In Estonia you can use your ID card to do
any kind of paperwork with the government… including paying taxes. And forget about those long forms that other
tax authorities insist you fill out. In Estonia, you can everything using your
mobile phone in a matter of minutes. In fact the government has access to the banks,
so they can easily find out your income. This happens in every other country, including
the US. The only difference is that in Estonia, they
think it’s stupid to ask the same question twice. So you simply go over your citizen profile,
confirm all the data, and pay in one click. But hold on a minute because the best is yet
to come… Imagine that one government official wants
to spy on personal data. Well, then you will get a notification on
the control panel of your government profile. You can even see, exactly who the person is
who is looking at your information and even request an explanation on why is he or she
doing that. This means, Estonia has way more transparency
and privacy controls than any other democracy. But if you still think this is not enough,
here it comes the thing that puts Estonia over the top… TITLE: ESTONIAN E-RESIDENCY We have all heard about big companies that
place their fiscal headquarters in Panama or Luxembourg. However, this kind of tax structure is almost
impossible for an SME or a freelancer. Well, in Estonia they realized that they needed
new citizens. As I said, the country faces a demographic
crisis and their weather sucks. This is why in 2014 they decided to offer
their cutting-edge administration to the whole world, no matter where a person comes from. And now you might wonder: why is this useful? Of course, this is not the equivalent to a
citizenship visa and you can’t use it as a passport. But it is a digital identity issued by an
European Government, and it helps if you want to make international transactions or open
a bank account in Estonia. Something that might be useful if you are
watching this video from a place like Ukraine or Venezuela. This virtual card also makes it even easier
for you to start a company in Estonia without moving there or doing a lot of complex paper
work. OK, now I can hear you now saying… Estonia is a fiscal haven, right? Well, sorry, but no… Corporate tax in Estonia is about 20%, which
is the same as they pay in Finland for example. What Estonia offers are two things: rule of
law and simplicity. Maybe you think that’s too little to offer? But, they have already had over 10,000 people
register – in just two years. Among them, there is the Japanese Prime Minister,
Shinzo Abe. In other words, Estonia has invented a brand
new concept: the “liquid citizenship.” And now here is our question for you: Do you
think other countries will follow this model? There will be a time where everyone chooses
Estonia citizenship? You can leave your answer in the comments
below. And don’t forget to subscribe. We put out brand new videos every Monday and
Thursday so subscribe and you won’t miss any post. If you want to find more information, check
the links on the description box below. If you liked this video, give us a thumbs
up. And as always, I’ll see you in the next

100 comments on “Is ESTONIA the European SILICON VALLEY? – VisualPolitik EN

  1. The weather isn’t THAT bad. You make it sound like Siberia. Coldest month in Tallinn is February, with an average daytime high of -2C (and average overnight low of -7C). Chilly yes but not frigid. The extremely low daylight in December and January must be quite depressing though.

  2. Digitalisation is not a panacea, I learned it the hard way. I got an e-residency card in Estonia, but it never worked. It does not go with this browser, not with that browser, not with apple computers and so on and so forth. You just drown in complicated instructions. Frankly, it is high time to also make a video on this new phenomenon: e-bureaucracy, which is ten times worse than the notary in Luxemburg. When digitalisation does not pay any attention to usability, you end up donating a couple of hundred Euros to the Estonian Government to no avail. Nobody can help you, and if you go to an Embassy you will see the old Soviet heritage right in front of you…

  3. id cards aren't only in Estonia.. even some dell laptops have id card slots and dell is an American company

  4. Other countries will not embrace the Estonian model, because too many bureaucrats would lose their jobs, and politicians would lose power.

    I’d love that tax system in the US though.

  5. Estonia's weather is IDEAL… everyone wants to work hard to escape and there's nothing better to do than stay indoors and work all day…

  6. Instead of messing about, setting up piecemeal projects that don't work, maybe the Netherlands should take over the Estonian e-democracy system (e-residency, integrated information system and passes and all) and simply tweak it a bit by making it possible for people to use their pass as a bank card and train ticket as well.

    It's time to get real and join the 21th century

  7. Estonia is such a disappointment. It had the opportunity to rid a western nation of the cancer of teaching unions and state education. To this day, Estonia still has an education ministry and it recognises and even cooperates with the parasites in education. This never ends well – as states merely subsidise radicalism, revolution and trade protection. Estonia needs to rediscover its taste for dethroning tsars and giving power back to the people.

  8. Can't make summer with only 2 seagulls, (mind skype & transwise) to make Estonia as Silicon Valley has to born again. Going slowly.

  9. What make's IDcard so important ? It is mandatory, passport is not. There are very fiew thing you can't do online in Estonia. One is divourse application, other one I have to think about it .

  10. Hey dude, about the tax system! You've got a mistake.

    Corporate tax is 0 in Estonia, there is no such tax. Small businesses also do not have to pay VAT (they can, if they want to, but VAT is mandatory when a business grows up to €40k per year). That means running a business is free for you when you reinvest. Which is basically everything you do when you start a new enterprise.

    A tax occurs when you put money in a pocket: either it's your salary or annual dividends. 
    Salary is obligatory to 20% of personal income tax, 33% of social tax and 2,4% loss of job insurance. And 2% you should save for your retirement.
    Dividends are obligatory to 16,28% of personal income tax and that's all.
    You can also get a taxed amount discount up to 500€ per month if you make less than 2100€ per month. That means if your salary is 900€ – you only pay taxes for 400€ of it (900-500).

    VAT is 20%. If your small enterprise makes less than 3333€ per month you may not bother about it.

  11. Estonia is a freer country than the US according to the Human Freedom Index (8.48 vs 8.39) and has a lower cost of living according to numbeo (51.61 vs 68.95); and more girls than guys?

  12. It is not citizenship, they allow foreigners to virtually operate out of Estonia and pay taxes there. Weather doesn't always suck. Summertime Tallinn has restaurant patios full of Helsinki people drinking beer and catching rays.

  13. Some problems estonia will face in future. I live here and I am one of the few who doesn't make money. It's my choice of course. In my humble opinion Estonia will have to face Chinese. I'm Italian I have seen in my country. They open shops don't spend money in the country they live at all the prices will be extremely low. So as in italy people will buy from them and local shops will close little by little.
    Another problem is their extreme literacy.
    It's absurd.
    But Estonians people are so highly educated and they speak and incredible amount of languages this has brought us foreigners to ignore their language and costumes. I learned Estonian by my choice many majority don't and of course old Russian community Ignore too.
    Maybe economically is developing but linguistically is dying and they know. In these they could follow the steps of Russian community . I do cleaning into an hotel and all are russians I basically learned it In 3 months because otherwise you don't communicate.
    About the weather who gives a shit in Canada is worse .
    I'm happy in estonia and I wish to them great future.

  14. There is a video on the 'Computerphile' channel which explains why electronic voting is not really a good idea.

    Even given the concept of 'liquid citizenship' does that mean immigrating there is really any easier?.

  15. Weather is dope.. can ski in winter and enjoy warm weather in summer.. Also 3h of daylight in winter, who cares when you have almost 23 hours of daylight in one day of summer?? And there being loads more whaamen than men.. pfft, only old whaamen, due to all the men drinking themselves to death before age of 70 I guess. Also other things, driving themselves to death and so on.. ALSO IT IS NOT CONFIRMED THAT THE CYBER ATTACK WAS CAUSED BY RUSSIA, it might have been, BUT MAYBE IT WASN'T, so don't present it as a fact, but as a likelyhood

  16. E-residency is not a citizenship. There is a big difference. "E-residency" is the same as this: , just without a hype and catchy words.

  17. Cool, I love hearing good things about Estonia and I admire the previous president Henrik or what is his name? but all these IT things that you seem to be so surprised about are old for me, I live in China and they have been doing all these things for the past few years, I got my foreign citizen registration on wechat( Chinese what’s up) I pay my bills, order food, pay by QR codes for groceries and ect, hail for taxis, buy tickets for domestic and international both train and plane. I can even run my business via WeChat. I’ve never been to the EU, but was in the US and Japan and hence I say those countries suck in terms of digitalization. China is the 1 when it comes about e-economy.
    PS: I’m a Russian citizen.

  18. I dont know y this shit propaganda face video starting automatically. This channel is propaganda channel and fucking shit face .

  19. I think that Estonia's system is a novel idea but, I do not like too much in the internet. I think that internet business is good for many things but, you will always need brick and mortar. The internet is a tool but, I still had to go to work.

  20. There is a lot of debate as to whether Estonia is a Nordic country or not! There is a perspective in favour of it, here

  21. 39 years ago when Estonia was part of the USSR, its main industry was computers
    The computer programming industry was already in place because the Russians used Estonia as their computer technology hub.

  22. I really love your videos sooo if I could make a suggestion because for your next video. Can you make one about Cyprus, Greece and Israel trilateral agreements that have been going on for a while. The eastmed pipeline that the European Union is sponsoring and how does that affect the country with relatively the biggest power in the region Turkey? Thank you in advance xx

  23. You just had to take a swing on Russia. I don’t think they cyber attacked us… it’s a BS excuse to build a base here. But what do I care? I’m 13,000 km away from Estonia.

  24. Estonia's e-residency has been proved to be an invalid program and has no use or effect in real life. I've read about people turned down even after a face to face meeting.Banks and even Estonian government expect you to earn at least hundreds of thousands of Euros a month to provide you with their services.I'm in e-commerce and I've first read about this program a few years ago and I'm yet to meet a person who actually confirmed they use it.

  25. sorry dude but that's just a pile of horse shit.
    the only reason why a bunch of foreigners want to get residency is just to use estonia as a gate to Europe.
    The salaries here are certainly NOT almost the same as southern EU and you forgot to mention the crippling prices for food and realestate…just to compare, most of the food items in estonia are same price if not more expensive than its neighbour – Finland, but with estonia's average salary being around 1200 eur and Finland being around 3000… the math 😉 Welcome to estonia!

  26. Can I apply for asylum residency permit there if i come as tourist in Europe ? I have always a fear to be kept by police in my country because I do work online in cryptocurrency and this is illegal in my home country

  27. Matt laar was a huge fan of Milton Friedman he just did everything Milton said, and Estonia knew an economy miraclr

  28. Great video on Estonia I agree. I am from a much backward country called India. We have a similar system but doesn't necessarily need a physical card all the time. We call it a PAN card which is linked with your mobile phone . So just put in your PAN card no and you will receive an OTP or one time passwords within se one just put in that and verify. It works . However we have not yet connected it with health systems or voting online or public transportation. But certainly easier than carrying a card all the time. What do you say ?

  29. Estonian are lazy, drunk, russophobe cheaters embossed from the soviet ära. As tourist, Estonia is an interesting country to visit. Nice nature. Nice old town in Tallinn.

  30. Other countries need to do a lot to catch up with Estonia in terms of technology implementation. However, don't expect everyone to follow Estonian model and path as each of us have our own ways of doing the same thing.

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