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Innovation lab promotes change in Estonia

11 minute read
Imagine that you are in a country where entrepreneurs connect with the government and succeed in transforming its image from a country involved in money laundering issues into a promising market for fintech companies.
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We cannot overcome challenges while working in isolation from each other, Why do governments insist on continuing this approach?

Imagine that you are in a country where entrepreneurs connect with the government and succeed in transforming its image from a country involved in money laundering issues into a promising market for fintech companies. Or imagine the government challenging the private sector to transform the country into a hub for tech-savvy individuals in their businesses or to transform the local economy into a proactive approach to its operations. This is the reality we are working for in Estonia.

So what's going on here?

Democratic governments often find themselves faced with a great paradox. They are supposed to address important issues that the private sector cannot resolve but find themselves with limited tools and possibilities. For example, A policymaker may seek to pave the way for the use of flying cars, but all he can do is introduce legislation that allows the use of drones. An official in another department may be looking to employ technologies in health care. However, his powers do not include policies related to startups. For my part, I wish I could reduce the gender pay gap but I'm only familiar with the tools I already know.

Let's reflect on the current situation a little bit, Individuals expect access to quality government services while governments remain unprepared to face challenges involving sectors outside their scope of operation. Thus, the levels of satisfaction and trust towards government services have reached an unprecedented low. In this sense, Accelerate Estonia takes it upon itself to follow different methodologies than usual. This unit was established in 2019 to be responsible for innovation within the Estonian government. Its goal is to overcome difficult challenges and transform them into new ideas that provide better services to society and higher economic value to the country.

Our focus is on addressing important challenges because we believe that smaller challenges are symptoms of a challenge that is too big to understand or change. But this will not deter us from trying, We have a past from which to draw evidence of the success of these attempts. Take, for example, the Apollo mission to the moon, which mobilized the government sector and the entire R&D apparatus to achieve a common goal. Or South Korea , which has made a quantum leap in its handling of food waste by introducing a new value chain that has provided great opportunities for new business establishment. One factor in common is that they were attractive to the private sector only after government intervention.

Hence, I believe that the main role of governments is to redesign markets that are not attractive to economic opportunities that benefit the private sector. More precisely, The government sector must find solutions to the challenges that involve risks that alienate the private sector and then absorb these risks before the private sector is ready to step in and take over. Then comes the role of "Accelerate Estonia" with its harmonious and multi-step mechanism.

Value creation

First of all, we need to identify policymakers who are genuinely interested in innovation that can bring about radical change. Hence identify important challenges associated with their area of competence or areas of public service. We then invite the private sector to propose solutions in these areas and share with policymakers the ideas they will commit to implementing. At an advanced stage, A board composed of stakeholders in the public and private sectors selects promising ideas. Our role is to provide a platform to incubate these ideas so that their owners can determine their proposition value to the public and private sectors, how they are implemented and the nature of their contribution to the creation of new markets. Specifically, Our choice falls on the challenges that require the government to take the first step.

As part of the process of understanding the risks that fall on government entities, They should provide support services or change market conditions to incentivize the private sector to propose solutions. Changing market conditions is not easy; government capabilities and attitudes are not concerned with these details. Accelerét Estonia therefore targets only initiatives that create markets.

The philosophy of "Accelerét Estonia" stems from the principle of achieving many results in simple steps. We cannot meet all challenges with a market-creating mindset. But taking some appropriate steps can significantly accelerate our growth. It is therefore important that we choose the challenge that we can effectively address.

From our experience and that of similar policy labs and accelerators, the most important step is to find the right team members. From a policy officer who wants to change in his or her area of expertise to a designated entrepreneur who is motivated enough to participate.

Incubating a better government sector

The Estonian government has come a long way in identifying important challenges or opportunities to turn them into sources of income. The best examples of this are, The eResidency project that has turned some of the regulatory steps taken by the Estonian government into a marketplace for more than 10,000 companies and a stable source of additional income. This project is based on making Estonian digital services available to anyone in the world interested in working in Estonia or establishing an electronic project in the European Union. The idea of this service was launched in late 2014 and has gained momentum as a "government startup" that benefits the community as a whole.

Accelerét Estonia seeks to leverage this experience to advance the government transformation process. Its objective is twofold: Finding new markets and addressing important government challenges. The key element lies in focusing on societal, economic and environmental needs or in areas where there are invaluable opportunities for innovation. The most beneficiaries are:

  1. Government agencies responsible for finding solutions to challenges
  2. Groups of society, economy or environment facing these challenges
  3. Companies and projects interested in taking advantage of new market opportunities
  4. Government by finding new sources of income

We currently have eight innovative ideas but expect to roll out nearly double by the second half of the year. In the long run, Turning challenges into new opportunities should become the mainstream of innovation. In the short term, We seek to demonstrate that the circular economy, KYC, digital logistics and social services will prove their worth provided the government is willing. Some public-private partnerships are also expected to change a lot globally, as Accelerate Estonia announced the launch of an electronic "hackathon" to help the government respond to the current coronavirus crisis.

This article was written by Mick Feinick, Director of "Acceleret Estonia".

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