At the St Gallen Symposium on 3 May 2017, Estonian President Kersti Kaljulaid recounted her country’s experience digitalising services and gave everyone a digital ID that eliminated the need to queue at a bank or pick up mail from a post office. She then highlighted the way technological development will change jobs and challenge governments’ ability to tax income.
Estonia has a population of 1.3 million. All Estonians have a digital ID and can use this to sign and time-stamp documents such as private contracts, apply for different public services, pay fines and taxes, query the registries, change their services packages and simply send encrypted e-mails.
This digital identity is created at birth, when a doctor enters the details of a birth into medical records. The parents can then later on, using their own IDs, add a name to the baby with an already created e-identity. They can then start applying for social services and kindergarten places.
Estonia reports to have saved 2 per cent of their gross domestic product by not visiting any public office and have very few bank offices left in the country. Post offices have been replaced by automatic delivery lockers too. A delivery announcement is routinely send as an SMS. The laziness of people to go and queue allows businesses to save huge costs by offering digital, automated solutions without facing the risk of losing their client base.
Estonia’s solution to the future of jobs focuses on the ability of modern technology to raise the earning capacity of the society as a whole.
President Kersti Kaljulaid insisted that one must not view technological development simply as something limited to better industrial processes and would then contribute to job losses. In fact, many jobs created by technological development are neutral to occupation or education.
Technology has expanded options beyond a person’s physical range. Technology has the potential to increase earning capacity and lowers provision costs in traditional tasks. In addition, technology use and more free time for larger numbers of people stemming from efficiency gains, create new jobs that we do not know of yet.
To sum up, job creation will continue beyond the industrial age as it did beyond the agricultural period.
Estonia has identified their next societal disruption: sustaining their tax base in an era where new jobs and income-generating methods are free from the constraints of physical location, and are therefore geographically not attributable to any one state. Governments would then lose the best years of the tax income from the life-cycle value creation of each individual.
Governments need to start thinking about how they will replace the current models’ tax river – flowing in from the lifetime of careers defined as employee, employer, enterprise, independent worker, renter – with new streams.
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Source: The Straits Times, 6 May 2017