Myriad Live 2017 with Taavi Kotka, former CIO Estonia
Myriad live with Taavi Kotka, former CIO EstoniaPosted by BeachCity on Wednesday, March 29, 2017
Chris: Here we have Taavi Kotka.
Taavi Kotka: Yeah, it's hard to pronounce.
Suzzanne: How do you say it then?
Taavi Kotka: Kotka.
Taavi Kotka: Kotka.
Taavi Kotka: Yeah.
Chris: I just need to re-check the audio here.
Suzzanne: This is what happens when you do live interviews.
Taavi Kotka: Too much noise around?
Chris: No, it's all good! Here we go. It's all good.
Taavi Kotka: Yeah. Okay.
Chris: You're from Estonia?
Taavi Kotka: True.
Chris: Yeah. True. We want more than one-word answers, okay? Former CIO of Estonia, which is Chief Innovation Officer. Is that correct?
Taavi Kotka: Information Officer.
Chris: Information Officer.
Taavi Kotka: Yeah.
Suzzanne: What's the difference between information and innovation?
Taavi Kotka: Actually, there is no difference.
Suzzanne: [crosstalk 00:00:38] the same thing?
Taavi Kotka: It's more known. CIO as a term; it's more known as an Information Officer. Everything that is related in IT. It was basically the number one position in IT, telecommunications. Something was broken and then I was guilty.
Suzzanne: You came in? That's how you came in?
Taavi Kotka: No. I didn't came in, I was guilty.
Chris: You were guilty.
Taavi Kotka: Yeah. If you're government employee, there always has to be someone to blame, so yeah.
Suzzanne: You're the scapegoat. That's a bad role, but it's a fun role.
Taavi Kotka: Yeah, it was total fun.
Chris: Total fun. Good, good, good, good. Now, I've been prepped with some background questions about ... Tell us. Sorry, I'm going to cut to the chase and go back to ... You were here as a keynote speaker for Myriad. You were up on stage. What was the key message you were trying to get across or get out there into the world?
Taavi Kotka: Actually I wasn't on the stage. I was on stage like yesterday evening when there was a precession, but they're supposed to be today, but because it was flooding-
Suzzanne: The hurricane, and the hurricane.
Taavi Kotka: They cut the event. I couldn't be on stage.
Suzzanne: What was the main message you wanted everyone to understand?
Taavi Kotka: I mean, the world is changing, you know? What happens is more and more people are becoming freelancers. As they become freelancers, it also means that they start looking for services. Those are government services, very convenient for them. The thing that you actually buy government services from your own government. It's so yesterday.
Chris: Do you want to take that call?
Taavi Kotka: No. What it means is that if you count all the freelancers in, if you multiply that their yearly salary, you get more than 20 trillion market. The way how people will start buying government services is the same way they buy music. 20 years ago it was only CD in your local CD store. Now how you buy, you pay 10 bucks per month and get everything.
Suzzanne: What does everything mean? Are you talking about resources, internet access, Healthcare-
Taavi Kotka: No, no, no. Think about what government provides. Today you can get an education from MIT without leaving Australia. With telemedicine, you might get many of your health problems solved without actually buying them from Australia. Business environment, if there is a country that provides you better, less-hassle service, you might buy it. That's what I'm saying, it's a huge market. Government has always been fighting for physical talent, but now it's more about [inaudible 00:03:42] talent.
Suzzanne: I understand that you worked for the government. You understand being an entrepreneur and working for the government as well. What are the core differences government is lacking that they could learn from entrepreneurs?
Taavi Kotka: To be honest, you never can learn government. You have to work there many decades to understand deep down. They're not bad people, first of all. Government people, they want to do also cool stuff. Everybody wants to do cool stuff. Nobody wants to do boring stuff. If you think that, "Those bureaucrats only care about their own career," it's not true. If you offer them a proper path ... If you show them this could be done, they're actually very good workers and then they succeed. e-Residency, without government officers, would be impossible to achieve. They actually want to do cool stuff.
Chris: Did you just mention e-Residency just then?
Taavi Kotka: Yeah.
Chris: Yeah, yeah, cool. Tell us about e-Residency.
Taavi Kotka: e-Residency is a simple tool to make Estonia bigger. What we wanted to achieve is the same thing like companies. If they want to make more revenue, they need more customers. The government said, "Actually, we have the same goal." You want to make your country bigger, you want to make more revenue, you need more people. Or you need to [inaudible 00:05:18] on the ground like you do, but we don't have anything in our ground.
Chris: Normally we have the sun. We're trying to harness that as our biggest resource, or at least I think we should be anyway.
Suzzanne: It's a destination, a lifestyle choice as well.
Chris: We can't see it at the moment. Tell us more about e-Residency. Did that actually help grow Estonia?
Taavi Kotka: We have currently around 19,000 e-Residents. It seems to be a small number, but we just started. 19,000 is actually three percent growth of our working age labour force.
Taavi Kotka: You think about it like we basically have cracked the idea of how to grow your population virtually, because only ... The people who are connected to your economy will actually produce your GDP. If you have more people connected to your economy, you have more potential to grow your GDP. We have grown the population side. We have grown the three percent. The GDP hasn't grown the same amount yet, but that's just a starting point.
Suzzanne: That kind of proves the point that you can grow a business and make a business just being virtually online, almost. The idea of a border or country is obsolete almost.
Taavi Kotka: Yeah. The point is that people who start buying services where it's convenient, hassle-free, and cheap. If running a company, let's say in Germany costs like, several thousands of Euros, and if we can do it with less than 1,000 per year, they would choose that.
Suzzanne: Of course they would. It's all about revenue.
Taavi Kotka: Yeah, and it's also ... Listing and running a business in Estonia means that you can run its location independently. If today you live in Australia, tomorrow you're in Bali, and next month in UK, all good. You can still be on business because we have digital signature, and all the private sector and public sector institutions that provide their services location independently. You can be a global citizen and at the same time run business.
Suzzanne: That amazing because the future of works is moving towards that way. We're becoming freelancers, from-road workers, and people who want to be digital nomads is another word for what you're describing as well.
Taavi Kotka: I keep some numbers. Forbes has measured that around 35-36% of United States labour force is freelancers. They estimate that this number grows up to 40% by 2020. What it means is we are not talking about thousands anymore. We are talking about tens of millions of people. When they figure out that they actually can provide this service globally, not only in the location they physically are, it's a huge market. That's a 20 trillion market already, 20 trillion market. It's now up to banks, financial institutions. It's up to the businesses. It's up to countries, up to the cities, who grabs that market. Definitely we cannot grab it, count them all physically, but the thing that you will have for example, in Estonia e-Residency, Dubai e-Residency, United States e-Residency. That will be a new normality. The thing that you actually have ... The best possible solution for your business globally, and you have several of them ... That's the new normality.
You don't get your new from the one source only. You don't buy your music from one source only. It depends, what's your taste and what's your mood. The same happens with businesses.
Chris: Is that removing the likes of Visas and all of those kinds of barriers as well?
Taavi Kotka: No.
Suzzanne: [crosstalk 00:09:27] they'd just be independent countries, but they're providing skills online where I could type into Estonia, or another country, Africa, because they have the skillsets that I want and could be on virtual online.
Taavi Kotka: The physical world remains. Obviously it gets smoother, crossing the borders and stuff, but it remains. You still have to stay, and in lines ... No.
Chris: That problem was just too difficult to change quickly, so let's go virtual?
Taavi Kotka: No, it's not, but the thing is we have so many countries and they all have their own tools, and have a solution that fits them all ... It's just impossible to agree.
Basically what we will see is that there will be a physical layer, as we see today, and there will be virtual layers. You might be a physical citizen of Australia, but at the same time you are a virtual citizen of ... You're Estonian, or you're vegan, or you are Christian. You can build many additional layers on top of that, and that's the future. The beauty is that the technology helps people to collaborate, agree on principles, agree on goals. It helps to support this [inaudible 00:10:53] to act as a virtual country.
Chris: Beautiful, beautiful. I understand this obviously is storing a lot of people's personal data, this e-Residency programme. Is it, or is it more of a ... No?
Taavi Kotka: I think your local bank or [inaudible 00:11:13] has more information about you than we store about you when you become an Estonia resident. Another thing you have to give us is biometrics because we run database ... We run a background to see if you are a terrorist or something.
Suzzanne: You have the common interest that you have the cyber-security, right?
Taavi Kotka: True.
Suzzanne: Why do you think cyber-security is so important?
Taavi Kotka: The whole virtual-thing actually relies on trust. If there is no trust, there is no solution. If people don't trust the system, they don't use it. That's why we ... All the country can't go back on paper anymore. That's why we emphasise that type of security as extremely important.
Suzzanne: Are you using Blockchain to help with that identity, or the cyber-security stuff?
Taavi Kotka: I like the thing. If something is high, then everybody actually points it out.
Suzzanne: I'm just wondering now, [crosstalk 00:12:09] do you think there's a technology that you could utilise-
Taavi Kotka: To be honest, many of the solutions that Blockchain offers at the moment-
Chris: Do you mind saying again?
Suzzanne: The Blockchain.
Taavi Kotka: Many of those solutions that Blockchain offers, I actually have them solved. In Europe [inaudible 00:12:28] sign digitally, or having efficient [inaudible 00:12:33] all that kind of stuff.
Suzzanne: Also, imitable identity. If you put it in there, that's where the trust comes into it. I'm wondering if-
Taavi Kotka: We use Blockchain in Healthcare, so it's an extra security layer to guarantee that the integrity is there.
Suzzanne: I feel like it's important that you emphasise the idea of trust. I like that you're really focusing instead just about cyber-security, but the fact that you focus on trust is actually an interesting kind of perspective.
Taavi Kotka: Sure.
Chris: Good. I think phone's about to go flat. It's been hammered today. I want to make sure I get a little bit of insight into how do you operate as a human being, and how do you stay clear of mind.
Suzzanne: Do you exercise? Do you-
Taavi Kotka: I don't exercise. A sport is a direct path to the grave. No, no, no. I love to walk and I love to do gardening. That's my hobby.
Suzzanne: Is it a way to just help you chill out? Is that why you do it? It sounds like you have a lot of business going through you and a lot of information going through you. How do you deal with overwhelming information?
Taavi Kotka: I have three children. That's a bigger problem actually.
Chris: So do I.
Taavi Kotka: No, I stay chill and life is fun. You should enjoy that. I think even important, life is too short to do-
Suzzanne: Boring stuff.
Taavi Kotka: Boring stuff, yeah. Whenever you are hooked with boring stuff, chop it.
Suzzanne: Chop it.
Taavi Kotka: Yeah, change the life.
Suzzanne: You live your life based on the nines and 10s. Anything below eight, you just chop it.
Taavi Kotka: That's a good, cool concept. Here also, I came to this conference because I saw what Skype did with Estonia. Having guys programming stuff that basically changed the world and you're starting to gather with them and you'll live together with them. I think many people my age or even younger persons understood, "Okay, this is possible. I also can change the world if they did."
This kind of conference is what Myriad had here, has a huge importance because you can have all the money in the world or you can have the best infrastructure to support startups, but you'll still need to see examples. You still need to see this motivation, motivating people like Peter Schwartz yesterday. You have to see them explaining what goes on and how you can change the world.
Suzzanne: Thank you so much for that. I enjoyed the conversation.
Chris: Yeah, me too. Absolutely a pleasure to meet you, Taavi and thanks very much for your time. I know you're busy, even though you missed your speech. You're probably busier now, got to do even more interviews. Thanks so much for listening, guys. Follow us on Beach City Life on Facebook and thank you. Thanks, Taavi. Hopefully he'll share that on Facebook, too.