Estonia Brief Series

1 Inside Estonia: How the EU’s E-State Thinks About Defense Tech

How the EU’s E-State

2 Inside Estonia: How the EU’s E-State Thinks About Defense Tech

First published in 2024 by NDIA’s affiliate, the Emerging Technologies Institute. 2101 Wilson Blvd, Suite 700, Arlington, VA 22201, United States of America. (703) 522-1820 © 2024 by the National Defense Industrial Association. All rights reserved. This report is made possible by general support to NDIA and the Emerging Technologies Institute. No direct sponsorship contributed to this report. This report is produced by NDIA, a non-partisan, non-profit, educational association that has been designated by the IRS as a 501(c)(3) nonprofit organization and was founded to educate its constituencies on all aspects of national security. Its research is nonpartisan.

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office on AI, technology, and security issues and the author of the upcoming book, Rebooting a Nation: The Incredible Rise of Estonia E-Government, and the Startup Revolution. Previously, he worked in a variety of roles and geographies including in Tallinn as Head of Business Development for e-Residency, the Republic of Estonia’s flagship digital initiative. Other experiences include working as a fellow in Cameroon staffed to a local startup via Venture for Africa; serving as a NYCx Fellow; working as a Partner at Tribe.AI, a managed marketplace for top AI talent; and leading a venture for a Rocket Internet AG subsidiary in Berlin. He started his career at a YC and Andreessen Horowitz backed startup. Joel is passionate about maximizing impact and likes operating at the intersection of tech, national security, and American dynamism. 3 Inside Estonia: How the EU’s E-State Thinks About Defense Tech

try made up of just 1.3 million people (about the population of New Hampshire). As a member of the European Union (EU) and North Atlantic Treaty Organization (NATO), it proudly meets its defense commitments and, as of 2024, spends three percent of GDP on defense while having sent soldiers to Afghanistan, Iraq, and the Sahel on NATO missions. It also hosts the import- ant NATO Cooperative Cyber Defence Centre of Excellence (CCDCOE) – one of the largest Centres of Excellence in NATO.

its weight on nearly all topics related to technology since it restored its independence from the Soviet Union in 1991. Life in Estonia has long been significantly affected by geography, with the country’s history replete with occupations by neigh- boring empires from Sweden and Russia. It is that history of occupation that has long been the determining factor in the country’s geopolitics, defense strategy, and deep investment into technology. In February 2022, that history reared its ugly head once again with Russia’s invasion of Ukraine, which many

harbinger of things to come.

50 years of occupation by the Soviet Union – its economy was decimated. Forced collectivization destroyed a once-thriv- ing agricultural sector. The planned economy led to wasteful investments in factories and industrial operations that were outdated and noncompetitive at a time when the country had to compete in the global market. Through a combination of dramatic and rapidly implemented free-market reforms in the early and mid ‘90s, ranging from a flat tax to removing tariffs on goods to force a competitive economy, the coun- try quickly turned from an economic basket case to a case study in market economics. However, there was little usable non-defense-related infrastructure in the country. Faced with the difficult choice of how to modernize, Estonian leadership eschewed the standard development pathway. Instead of pur- suing traditional development and governance, the country would go all in on digital, earning it the sobriquet “e-Estonia” or “E-stonia” as it developed e-governance technologies. This decision began to underpin the functions of the state, from online voting to an e-tax system and a cybersecurity sector that repels the most advanced attacks from Russian hackers. 1 Republic of Estonia. Prime Minister: we are creating an investment fund to accelerate the development of the Estonian defence industry. 2 May, 2024, https://www.valitsus.ee/en/news/prime-minister-we-are-creating-investment-fund-accelerate-development-estonian-defence 2 ERR News. Estonia's defense budget to reach 3.2 percent of GDP in 2024. 26 September, 2023, https://news.err.ee/1609113089/estonia-s-defense-budget- to-reach-3-2-percent-of-gdp-in-2024 3 Lindstaedt, Natasha. Ukraine war: Russia’s Baltic neighbours to create massive border defences as Trump continues undermining NATO. The Conversation. 22 March, 2024, https://theconversation.com/ukraine-war-russias-baltic-neighbours-to-create-massive-border-defences-as-trump-continues- undermining-nato-225944 4 Gray, Andrew. Estonian PM Kallas backs new EU defence industry commissioner post. Reuters. 21 March, 2024, https://www.reuters.com/world/europe estonian-pm-kallas-backs-new-eu-defence-industry-commissioner-post-2024-03-21/