Estonian CEEC Review report on information society

Estonian CEEC Review report on information society

Implementation of the EU-CEEC IS Forum recommendations 

Report for the Joint High Level Committee 

Tallinn, 2000

1. Introduction

The current report provides a review of implementation of the conclusions and recommendations of the 3rd EU-CEEC Information Society Forum (Brussels, Oct ’97) in Estonia and reports to the Ministerial Conference of May 2000 in Warsaw. The main topics covered in the subsequent chapters are:
·information society (IS) developments in Estonia,
·development of the legal framework and action plans,
·setting up co-ordination mechanisms and focal points,
·mobilisation of industry, 
·applications and best practices that have been developed.

1.1. National context on IS in Estonia

Due to many economic, geopolitical, historical and cultural factors information society in Estonia is developing very rapidly. Both public and private sectors as well as third sector have done much in supporting such developments. Overall education level is rather high and whole society is rather innovatively tempered. 
Estonia has one of the most advanced reforming economies in central and eastern Europe. The quality and success of its reforms over the last ten years has earned Estonia a place to start fast track negotiations to join the European Union with five other central European countries. Estonia's economic success is based on a consistent commitment to reforms and Estonian economy is on the increase beginning from 1995. GDP Growth rate was 4.3 percent for 1995, 4.0 percent for 1996, 10.6 percent for 1997 and 4 percent for 1998. Estonian enterprises are supporting the development of information society via building informational infrastructure, introducing electronic services, and so on.
Estonian public sector has strongly supported such developments as well. There are several important legislative acts approved with several other ones coming during the next half a year. Many best practices come from public sectorand introduction of democratic principles starting 1990's has encouraged independent decision-making and increased expectations forcing public sector to reform itself. 
There are several public bodies and non-profit associations, supporting the information society developments in Estonia, some of which are in more details described in Section 5:
·National Advisory body for IS strategy and policy is the Government committee Estonian Informatics Council, reorganised in 1996,
·The Department of State Information Systems of State Chancellery of Estonia (DSIS, http://www.riik.ee/infosystems/) is co-ordinating the work of state information systems,
·The Estonian Informatics Centre ( http://www.eik.ee/english/) is a state agency providing services to the ministries and other government agencies and performing different state functions in the field of informatics,
·The Ministry responsible for telecommunications is the Ministry of Transport and Communications (http://www.tsm.ee,
·Several other ministries are also involved in the stimulation of the development of the information society, e.g. the Ministry of Education (http://www.ee/HM/),
·An important role is played by the universities (University of Tartu, Tallinn Technical University) and research institutes (Institute of Cybernetics) in shaping the information society,
·Several non-governmental organisations and projects are also linked to the developments of information society such as Open Estonia Foundation (http://www.oef.org.ee/), the Estonian Foundation for European Union Education and Research Programmes «Archimedes» (http://www.euedu.ee/english/index.html).
·There are several professional information technology (IT) organisations, such as Estonian Software Union (http://www.eits.ee/) and Estonian Computer Association (http://www.afa.ee/english/index.html). 

1.2. National vision for IS

The high-level source document on IS development, the Principles of Estonian Information Policy (http://www.eik.ee/english/policy/princip.htm) was approved by the Estonian Parliament on May 13, 1998. The information policy (de facto information society policy) is an integral part of public policy reflecting the principles of the actions of the state in the creation of an information society – areas of interest and regulation mechanisms - in an era of rapid technological change. Government information policy takes into account the goals set up in regulating different spheres of social life and introduces opportunities for presenting innovative solutions. 
The Policy document serves as a basis for an action plan for establishing an information society. The Information Policy Action Plan (http://www.eik.ee/english/policy/plan.htm) in its turn is the basis for all Government agencies to make specific proposals to the Government, proposals with schedules, sources of finances, and responsibilities for implementation of information policy programmes every year. Action plan has been approved by government in April 1998 and May 1999. 

2. Information society developments to-date in Estonia

2.1. Telecommunications

Recent developments in telecommunications networks and services could be described as follows:
·implementation of cable distribution act;
·implementation of the new telecommunications law approved in February 2000;
·Estonian Telephone Company is digitalizing the existing network and according to the Concession Agreement it is obliged to cover rural areas with telephone lines;
·there is strong competition in liberalised markets (Internet, leased-lines, dial-up) and during 1999 important changes in prices have taken place;
·rapid penetration of mobile telephones and introduction of value-added services.
The companies which have the greatest influence on the developments of the informational infrastructure are the telecommunications operators, out of which one company (AS Eesti Telefon) has exclusive rights on the basic services market and three companies (AS Eesti Mobiiltelefon, Radiolinja Eesti and Ritabell) compete on a fully liberalised mobile phone market. 
Through alternative communications networks, telecommunications services could be provided also by railway company AS Eesti Raudtee, gas company AS Eesti Gaas and energy company AS Eesti Energia. 
There are two active competitors on the paging communications market: AS Baltcom Eesti and Eesti Kaugotsingu AS. 
The main Internet service providers are Estonian Telephone Company, AS Esdata (Estnet), Data Telecom (Eunet Eesti), Unineti Andmeside AS, AS Microlink OnLine and AS Infonet. There are tens of smaller private sector service providers. The main Internet service provider for scientific and educational sector is EENet, which manages the largest data communications network in Estonia. The main service provider for government institutions is the Department of the Communications of the Estonian Informatics Centre (ASO). For some user groups such as the police and the security police, telecommunication services are also provided by Valitsusside.
There are also several cable TV service providers, which having a capability to provide telecommunication services have an important role in shaping the Estonian information society. The most important of them are Levicom Broadband, AS Tallinna Kaabeltelevisioon, Levi Kaabel, Starman Kaabeltelevisiooni AS, AS STV Kaabeltelevisioon and AS Telset. 
The Ministry responsible for telecommunications is the Ministry of Transport and Communications (http://www.tsm.ee). It develops national communications policies in co-ordination with other government bodies and local governments, develops national programmes, drafts regulations and analyses the legislation in the telecommunications areas and co-ordinates the development of standards. Its functions cover also participation in the development of telecommunications-related pricing policy, development and co-ordination of international co-operation in the area of telecommunications and arrangement of the licensing procedures. 

2.2. IS applications

Information technology is applied in all sectors of economy. For example, Estonian public administration agencies have reached a relatively mature state with respect to IT. More than 90% of all public sector employees, who need a computerised workplace and a LAN connection, have these tools. Another example is the RIPE DNS hostcount (hosts per 10 000 population). According to this estimation, Estonia is in the middle of the second ten countries in Europe, ahead of such countries as Belgium, France, Spain, and Italy. (Hostcount by DNS domains per 1000 inhabitants is 19.8; Dec. 1999). The other example of high penetration of IS applications in the private sector is Internet banking which is on the level of high-developed Nordic countries. For example, 12% of the clients of Hansapank (one of the two largest banks in Estonia) uses Internet. This number is higher than the percentage of Internet clients of Swedbank, the majority owner of Hansapank.
The total number of computer users is 400 thousand (37% of population, 15-74 years old) and about 6 inhabitants out of 100 have a computer at home. The number of regular Internet users is estimated to be 120 000 - 83 inhabitants out of 1000.
Access to the Internet is also available via Public Internet Access Points (PIAP's, facilities where everybody can use the basic computer and Internet services free of charge). Since 1997, more than 70 PIAP's have been established. Together with Tiger Tour, an important annual road-show showing information and communication technologies and its application areas to wider public, the network of PIAP’s has increased the awareness level Estonian inhabitants concerning ICT.
It is estimated that the number of IS projects in Estonia which satisfy the ESIS definition ("Information Society projects use data processing and telecommunications technologies to support innovative methods of communication between members of society for a wide range of purposes (e.g. education and training, healthcare and social care, culture, administration, industry and commerce, research & development, etc.). Projects of this type will generally be interactive (two-way communication between users and systems or among users) and involve remote access (with users and systems able to communicate over a distance). Projects may have a societal dimension or will possibly serve as a model for other organisations and businesses.") is about 50-60. Of these, about 40 % are under development, about 30% will start in the near future and about 30% are being planned. Some of the projects under development are listed in Section 7.2. (For more information see http://www.ispo.cec.be/esis/)
As Internet is relatively popular and highly available, the public sector keeps on suggesting different projects related to information dissemination. As a result a lot of Estonian public sector organisations have web-pages: 
 

Total number of "population"
Total number of Web sites
% of website / total number of "population"
Source
Primary and secondary schools
722
149
21 %
Statistical Office, Statistical Yearbook of Estonia 1999.
High schools and universities
37
22
60 %
Ministry of Education; Statistical Office, Statistical Yearbook of Estonia 1999.
National ministries
12
12
100%
Regional and local authorities
269
85
32 %
Statistical Office, Statistical Yearbook of Estonia 1999; 

Association of Estonian Cities;

Portal http://www.ee/www/;

Portal http://www.neti.ee/.

Hospitals/clinics
78*
11*
14 %

Statistical Office, Statistical Yearbook of Estonia 1999.

Museums
117
37
32 %

Statistical Office, Statistical Yearbook of Estonia 1999.

Libraries
717**
19
3 %

Statistical Office, Statistical Yearbook of Estonia 1999.

*Hospitals only
** There are 599 public libraries and 103specialized and scientific libraries in Estonia in 1998. The number does not include school libraries.
Information society projects that change the way people live and work are underway both in the public and private sector. In the public sector, the state registers form a major effort to process more public information in a more effective way. The Coalition Agreement of the Reform Party, Pro Patria and Mõõdukad - from February 1999, introduces a number of initiatives in IT area. Among these, for the implementation of Tiger`s leap into public administration, the Coalition: 
1.will enlarge the participation of specialists in the modernization and incorporation of extant computer networks in Estonian`s governmental and administrative systems; 
2.will create public network of Internet access points across Estonia 
3.will hook up all governments to a single electronic communication/exchange system 
4.will reduce paper work and bureaucratic run-around by improving interagency computer communications and checking the public relations activities of officials 
5.will use information technology in the modernization of public administration and legitimize the electronic signature 
6.will create the Estonian Info College together with the universities and private enterprise 
7.will reduce the VAT for the procurement of information technology
Most governmental organisations have their websites, which are integrated through the common access point (http://www.riik.ee).
In addition, Office of Public Administration (created in the State Chancellery in January 1999, actual work started in November 1999) has the task to co-ordinate the development of public administration in different governmental institutions and to analyse the development of public administration in Estonia. One of their documents, the "Principles of the Government's Public Administration Reform Programme", published in December 1999, includes chapters on better application of information and communication technologies in the public sector as one of the priority areas.

2.3. R&D aspects

Research and development activities currently under development include adopting standards and agreements of electronic business, promotion of high-tech production, creating the informatization program for education and the computer competence certificate, developing a program to make information industry companies competitive in EU IT procurement, developing recommendations and drafts on promotion of research and development initiated both in the public and the private sector, development standards for information systems, standards and conditions of exchange of public administration data, development of Estonian language translation systems, and other.
In developing new technologies, one of the most successful fields is cryptography. Academic institutions have investigated important aspects of IS development such as globalisation of enterprises through electronic promotion. First major steps have also been taken in the field of electronic commerce. 
Estonian Research and Technologial Development (RTD) restructuring process started in 1988 after the declaration of sovereignity. The main changes in RTD have been connected with restructuring of higher education, research establishments, funding and, decision-making. Most research institutions were united with universities as independent units; Estonian Research and Development Council (RDC), Estonian Science Fund, Estonian Innovation Fund were established, etc. Estonian RDC has given priority to four technological fields: information technology, gene technology, environmental technology and, material science. 
The Estonian RTD system performs well in basic research and the present R&D portfolio has a good potential for technological development. However, consensual solution on the balance of basic and applied research needs to be accepted on national RTD policy level, the links between RTD institutions and industry need to be more strengthened.
The basic science and university research management is conducted by the Ministry of Education, the technological development and innovation management by the Ministry of Economic Affairs. In the field of research and development the main advisory body to the government is the Estonian Research and Development Council.
The Estonian Academy of Sciences as a non-governmental body is a unifying organisation on scientific competence. The Estonian Science Foundation, Innovation Foundation and Science Competence Council are involved in the financing of RTD. The vast majority of RTD is carried out in universities and public research institutes. 
The main research centres are concentrated around the University of Tartu, Tallinn Technical University and Estonian Agricultural University.
The main state research institutions are: Estonian Biocentre, Institute of Chemical Physics and Biophysics, and Tartu Observatory, Estonian Institute of Cardiology, Estonian Marine Institute, Institute of Estonian Language.

2.4. Others

Estonian political leaders have expressed their concern about the scarcity of IT specialists. To overcome this problem, an IT college with practical orientation is being founded. The college should begin working in Autumn, 2000. The teaching will be based on the academic potential of Estonia's leading universities.
The Estonian language technology program (http://www.eki.ee/keeletehnoloogia/) has resulted in the following systems or demo-versions: Estonian optical character recognition software, language technology application for translation of legal texts, speech synthesis from an Estonian language text, morphological analyser, morphological synthesiser, syntax analyser, Estonian thesaurus, thesaurus of legal terms, and others.

3. The Estonian Information Policy Action Plan

3.1.  Overview of Estonian IS National plans

The Principles of Estonian Information Policy was approved by the Estonian Parliament on May 13, 1998. The Information Policy Action Plan has been approved by government in April 1998 and May 1999. It includes sections devoted to:
1.The information society and awareness about it, including protection of personal data
2.Accession to the European Union
3.Legislation development
4.Creating a competitive economy, including improvement of private sector and support of the information industry in Estonia
5.Education, research, and development
6.Regional development
7.Modernization of government, including the open government issues, state budget, IT procurement, state information systems, and statistics.
Each section presents a number of projects in its area, giving the name of the project, the intended intermediate result, the implementation mechanism, potential contributor(s), financing, current status, and reference to the underlying document.
There is continuos development of the Estonian Information Policy Action Plan going on. The Government of Estonia decided to approve on June 1, 1999 the changes proposed by the Estonian Informatics Council. 
Also, it was decided to give priority in 2000 and 2001 to the following initiatives: 
1.counties’ data communications target program "Village Road"; 
2.document management target program of government institutions; 
3.actions in the field of the necessary regulations, organisational structure and technological environment to establish digital signature; 
4.the program of informatising high schools. 

3.2.  Budget provision

Co-ordination of the state budget on information technology and related services is performed by the State Chancellery, State information systems department in cooperation with Ministry of Finance. Expenditures on IT form about one percent from the overall state budget. Recently the IT budget process has been reformed towards more simple provisions. The public sector IT budget proposal was 190 million kroons for 2000. Due to tight restrictions on the state budget (16 % less than in 1999) it is difficult to initiate large-scale development projects. 

3.3.  Main planned measures by sectors

In the following an excerpt of the measures proposed in the Action Plan will be given. Some activities are described in more detail the sections 3.4 - 3.6. 
·Measures for the information society and awareness about it, including protection of personal data: establishment of an office for coordination of activities, providing information on IS, activating the institution for supervision of data protection, assessment of security level of the public administration agencies;
·Legislation development planned: implementation of the WTO IT agreement, protection of intellectual and industrial property, IT tax allowances, legislation on electronic business, shaping of Estonian cryptography policy, digital signature and document;
·Creating a competitive economy, including improvement of private sector and support of the information industry in Estonia: state program for informatics development, liberalization of telecommunication, promotion of high-technology production, creation of a substructure dealing with the information industry, reflection of information industry in statistics, export subsidies, increasing competitiveness and export potential of information industry companies, promotion of research and development in the IT, promotion of standardization;
·Education, research, and development: the informatization program for education, computer competence certificate, continuing education and certification of chief information officers, promotion of high-tech production, standards and agreements of electronic business, a program to make information industry companies competitive in EU IT procurement, project to create opportunities of balanced development to the whole of Estonia, economic and social cohesion, development standards for information systems, standards and conditions of exchange of public administration data;
·Modernisation of government, including the open government issues: modernisation of the state sector, creating an information server informing people about the public administration agencies, participation in elaboration of the procedures for IT state procurement, improving data security in government agencies, organising public administration data exchange, convergence of statistics with EV norms, developing a database of the state IT resources. 

3.4.  Measures targeted at SMEs

From the measures proposed in the Action Plan, the following have been targeted at SMEs:
·PHARE International Information Society Program,
·IT tax allowances,
·Legislation on electronic business,
·Promotion of high-tech production,
·Fostering of IT research and development,
·Development of standardization,
·Identification and supporting of information industry as a branch of economy,
·Creation of a substructure supporting the development of information industry,
·Program on increasing the competitiveness and export potential of information industry companies,
·Estonian participation in the Fifth Framework Programme.

3.5.  Regional aspects

The following initiatives in the Action Plan are targeted at regional development: balanced regional development, economic and social cohesion, improving access to networks for all people, county information systems. Among the specific projects initiated in the regional development area are the following.
The Public Internet Access Points initiative helps to prevent and reduce the inequality in the society based on access to information by creating public Internet access points, especially in rural regions.
Tiigrituur is an annual 8-day roadshow, covering different Estonian cities, set up to provide opportunities for a much wider range of people to have free use of computers, the Internet and participate in lectures. 
EEBone project is initiated by the Department of the State Information Systems of the State Chancellery, managed by the Estonian Informatics Centre, and is a part of the governmental computer communication program. It is described in more details in section 7.3. 
The main goals of the Village Road project are creation of data communications infrastructure in rural regions, development of data communications in rural regions to the level where everybody could get data communication services at the same price than in urban areas, as well as providing access to data communications networks to all local governments. Project Village Road started from the end of 1998. From the Government decision from 1.06.99 on priorities of IS development for 2000 and 2001: project Village Roadconnects all Estonian municipalities to the wide area network by end of 2000.

3.6.  Others

A very important area for Estonia is accession to the European Union. The activities targeted in the Action Plan at this process are overview of prerequisites which Estonia must fulfil in the field of IT for accession, overview of legislation pertaining to IT, contacts and cooperation with the EU programs, and EU information server for the general public.

4. Development of the regulatory frameworks in Estonia

4.1. Telecommunications liberalisation

The main bodies in charge of the regulatory issues in the field of telecommunications are as follows: 
·the Ministry of Transport and Communications; 
·Estonian National Communications Board (http://www.sa.ee/sa/);
·National Competition Board (http://www.konkurentsiamet.ee).
The overall developments of Estonian telecommunications policy are oriented towards liberalisation. This means the end of the Concession Agreement (http://www.telekom.ee/concession_agreement.htm) signed between the Government of the Republic of Estonia (http://www.riik.ee) and Estonian Telephone Company Limited (ETC Ltd., http://www.telekom.ee). The Concession Agreement signed in 1992 granted exclusive rights to ETC for eight years (until 01.01.2001) to provide basic services (local, national and international switched fixed voice telephony services, telex and telegraphic services, their installation and interconnection to them).
Telecommunications area has been until recenty regulated in Estonia by the Communications Actadopted in 1991, and according to the EU Commission Opinion ("Agenda 2000") it establishes the basis for liberalisation and licensing policy. There is also Cable Distribution Act to regulate the terms of deployment and conditions of operation of cable networks, and on the provision of cable television services and telecommunications services by cable operators.
New Telecommunication Law was approved in February 2000. The Law is in line with EU recommendations and telecommunications sector is fully liberalized starting January 2001. With the enforcement of the Law Estonian National Communications Board (NCB) starts working as independent national regulatory authority. 
 
Liberalisation status
Comments
Infrastructures
Public telecommunication network (PSTN)
No liberalisation at all
Exclusive rights granted to Estonian Telephone Company Ltd. until January 1, 2001. Concession Agreement.
Leased lines
Fully liberalised market
Licence from the Ministry of Transport and Communications.
Alternative infrastructure (Highway, railways, electricity utilities …)
Fully liberalised market
Licence is needed from the Ministry of Transport and Communication. 
Broadcasting and cable TV
Fully liberalised market 
Licence from the Ministry of Transport and Communication.
Voice telephony
Local communication
No liberalisation at all
Exclusive rights granted to Estonian Telephone Company Ltd. until January 1, 2001. Upon Concession Agreement the concession holder (Estonian Telephone Company Ltd.) can permit a subcontractor to provide and operate local networks.
Domestic long-distance
No liberalisation at all
Exclusive rights granted to Estonian Telephone Company Ltd. to operate international and long-distance basic telecommunications services until January 1, 2001. Concession Agreement. 
International communication
No liberalisation at all
Exclusive rights granted to Estonian Telephone Company Ltd. until January 1, 2001. Concession Agreement. 
Mobile communication
NMT 450, GSM 900, DCS 1800 
Fully liberalised market
Licence from the Ministry of Transport and Communication.
Paging
Fully liberalised market
Licence from the Ministry of Transport and Communication.
Satellite communications
Partially liberalised
Open for non-basic services if no connection the public network has to be made. Licence from the Ministry of Transport and Communications and frequency allocated by the NCB.
Data transmissions
Fully liberalised market
Licence from the Ministry of Transport and Communication.
Internet services provision
Fully liberalised market
No licence is needed to provide services if no connection to the public network has to be made.

4.2. Use of Internet 

Use of Internet is regulated by several legal acts. The goal of the Personal Data Protection Act (RT1 1996, 48, 944), which came into force in 1996, is to protect the basic rights and liberties in processing personal data, in accordance with persons’ rights to get public data. Personal data is divided into sensitive and non-sensitive. 
Inspection of Data Protection is an agency responsible for monitoring compliance of processing personal data and database management with the requirements provided by law. Inspectorate of Data Protection exists from 1997 (www.dp.gov.ee).
Databases Act, which came into force in 1997, provides for the procedure for possession, use and disposal of state and local government databases, for the general principles of maintenance of databases belonging to the state, local governments and persons in private law, and for release and use of their data. 
“The Freedom of Information Act”– a legal act that will guarantee citizens’ constitutional right for information – is one of the most important regulations being prepared at the moment. This law should regulate what information on the administrative apparatus and its activities will be offered to the public and what are the means for doing it. The law should specify the essence of information meant for internal use only and the order for gaining access to such information; attention will also be given to the distinction of passive and active information distribution, the latter being also organised through the Internet. Minister of Interior is responsible for the draft. At the moment the draft is distributed to different Ministries for comments. After Government discusses the draft it will be sent to Parliament and will be adopted probably on the first half of year 2000.
Important in this area is the Government decision from 1.06.99 about priorities of IS development for 2000 and 2001. The priorities are: document management in public administration; project "Külatee" ("Village Road") - connects all Estonian municipalities to the wide area network by 2001; legislation, organisation and technical environment for digital signature. 

4.3. Electronic commerce

Consumer Protection Act, which came into force in 1994, defines the rights of the consumer in relation with the seller in purchasing and using the good, as well as the obligations of the seller, producer and mediator in protecting consumer rights, the liability for violating them and the organisation of consumer protection. 
The Communication Law, which came into force in 1991, states that all related to the message transmitted via mail or communications network is the secret of the sender and the receiver, which is protected by the laws of the Republic of Estonia. (§ 6)
The Parliamentis proceeding “Digital Signature Act”, the law is planned to adopt in the beginning of year 2000. 
Also relevant to the electronic commerce are the initiatives mentioned in the previous section, including the Government decision from 1.06.99 on priorities of IS development for 2000 and 2001 (legislation, organisation and technical environment for digital signature), the Freedom of Information Act, several pilot projects of implementation of digital signature, as well as the smart-card pilot project.

4.4. Others

Copyright Act (RT 1992, 49, 615) came into force on 15 February 1992. The act establishes a right for copyright protection for the outcome of the creation of the authors of literal, artistic and scientific works; the persons who might obtain rights for aforementioned works, their rights etc. The other main acts regulating the field of intellectual property are: 
·Layout Designs of Integrated Circuits Act (1999) 
·Industrial Design Protection Act (1997) 
·Patent Law (1994) 
·Useful Model/ Inventions Act (1994) 
·Trade Marks Act (1992) 
In 1993 (RT II 1993, 25) Estonia ratified the "Convention Establishing the World Intellectual Property Organisation" signed on 14 July 1967 in Stockholm.
Among other regulations, changes in legislation necessary for accession to EU are in discussion and development process. 

5. Setting up co-ordination mechanisms and focal points

5.1. Establishment of a National Advisory Body 

National Advisory body for IS strategy and policy is theGovernment committee Estonian Informatics Council, reorganised in 1996. The mission of the Estonian Informatics Council is to work out proposals for the development of the general principles and strategy of the Estonian information policy, to review and comment on plans for the development of information systems in the country and on draft laws regulating the field of informatics, as well as to give advice to the Government to carry out informatics development plans in the light of integration into Europe.
The Department of State Information Systems of State Chancellery of Estonia (DSIS) is co-ordinating the work of state information systems. From the Principles of Estonian Information Policy: "In order to make use of the opportunities provided by the international and domestic programmes, directed at the creation of IS, the Government expands the activities of the existing institutions, that deal directly with information policy". DSIS is the Government advisory unit for the IT budget within the state budget and has the following functions:
·Creation of a development strategy of informatics; monitoring of the developments 
·Participation in the work of inter-agency target programs and project management groups 
·Creation of legal acts on informatics; expertise of other legal acts from the IT point of view 
·Organising co-operation between IT managers of different ministries 
·Organising IT co-operation of county information systems 
·Organising co-operation and integration of national registers 
·Organising IT audits in national information systems and their design 
·Organising training for IT specialists, working out training programs and carrying out human resources development in the field of IT. 

5.2. Awareness measures

People’s awareness of the information society in Estonia has grown rapidly in the result of cooperation between different organizations and of organizing several large-scale activities, some of which are described in the following sections.
In the public sector, the Ministry of Education is active in developing the IT base of Estonian schools through the Tiger Leap Foundation. The most successful activity directed at public in this field has been the annual Tiger Leap Roadshow which is described in more details in section 7.3. 
The Estonian Foundation for European Union Education and Research Programmes "Archimedes" was established by the Estonian Government in April 1997 for the co-ordination and implementation of various EU programmes and initiatives in the field of research and education. Its activities also include activities related to the developments of information society.
Estonian Informatics Centre publishes the computer journal "Arvutimaailm" which is directed at a large audience and covers various aspects of information society. In co-operation with the television company TV3, fifteen double-presented information society and technology related transmissions have been delivered.
The main organization in the third sector active in raising the awareness of people has been until 2000 the Open Estonia Foundation, which through project calls has financed several innovative information society projects (for example the creation of Public Internet Access Points, development of on-line information services, organizing seminars and conferences). There are also several third sector professional organizations such as the Estonian Computer Association and Estonian Information Technology Association.

5.3. National ISPO

Estonian National Co-ordination Office for awareness and IS implementation (national ISPO) is the Estonian Informatics Centre. It has been established in 1997 under the administration of the State Chancellery to solve the main IT problems common for several state organisations and to arrange the work of the state’s information systems. The Estonian Informatics Centre is a state agency providing services to the ministries and other government agencies, performing different state functions in the field of informatics and acting as an implementing body in general co-ordination of state information policy and public sector IT development. Its main directions of work include the following activities:
·Development of state registers 
·Development of computer networks and arranging of data communication in public administration 
·IT standardisation activities, solving the compatibility problems of IT systems in different state offices
·Development of data protection strategy and methods, preparing and organising its practical implementation 
·Elaboration of legal aspects of informatics 
·Accomplishment of IT public procurement (according to applications presented by the public institutions) 
·Project management, including preparation of IT projects for public institutions, organisation of IT audits in national information systems. 
·IT promotion and publishing activities, including publishing of journals "Arvutimaailm" (in Estonian) and "Baltic IT Review" 
·Monitoring the IT situation, collecting and analysing data on the development of state information systems.

5.4. Measures for SMEs

Many of the measures described above were targeted also at SMEs. In addition to these, we mention the folllowing:
·Fair "Innovatics", which in 1999 took place from April 8-9 in Tartu. The main focus of the fair was introducing new ideas how to produce new and innovative goods and services in Estonia, and how to respond to the market demand of such goods and services in the future. Also, a seminar "Cooperation as a key to innovation" was held at the fair.
·"Ee.kevad" is an annual meeting of Estonian Internet experts. In 1999 the meeting was held for the fourth time and it took place in Viljandi County at Lake Karula from May 28-30 The main topics discussed were the ID-card project, project Külatee, electronic commerce and the ATM communications technology. 
·"OK Fest" is an annual gathering of Estonian computer firms, held in 1999 for a fifth time at Kurgjärve in Võru County from July 23-25. During the gathering, several workshops, sport contests and social events taking place. 

5.5. Others

The United Nations Development Programme has also been an important shaper of the information society by supporting the creation of Public Internet Access Points and initiating several important surveys. The United Nations homepage in Estonia is http://www.undp.ee/.
Institute of Baltic Studies plans, supports and implements innovative information sharing projects mainly in the public sector. One of their fields of work is distance education via modern info and communications technology. 
The Union of Estonian Cities is a voluntary union of local governments, objective of which is to represent the common interests, managing co-operation, development of socio-economic and cultural activities and increasing the knowledge base of local governments. It also supports the development of information systems. 

6. Industry involvement in IS activities

6.1. Measures to mobilise industry

Both the Principles of Estonian Information Policy and its Action Plan support measures aimed at industry development. According to the first, the Government foresees the development of information policy that among others: 
·Supports the development of an information infrastructure; 
·Supports the creation of a competitive economy, especially through demonopolisation, speeding up the restitution of property, the development of electronic commerce and electronic banking; 
·Supports the modernisation and improvement of State defence as a result of developments in information technology. 
All these measures help to mobilize industry. Some specific recent events include the following.
A specific unit dealing with IS has been introduced in the Ministry of Economic affairs. Among its goals are promoting IS opportunities for industry, helping companies to recognize opportunities for IS developments, and establishing IT as a separate branch of economy at the statistical level. 
Professional associations such as Estonian Computer Association and Estonian Information Technology Association have organised promotional activities to raise the awareness of people and supported the corresponding developments in both the private and public sector.
For the implementation of Tiger`s leap into public administration, the Coalition will reduce the VAT for the procurement of information technology.

6.2. Domains and level of industry involvement in IS activities

Industry involvement in IS activities takes place in all main areas of economy, on various levels. The e-commerce is seen as a future challenge. The IT share of the state budget is about one percent and it is mostly spent through public tenders for private companies. One of the “driving forces” for industry has been public sector which spent during last 6-7 years more than 800 milj. kr. for IT projects.
Following are only few examles of recent developments:
1.Levicom BroadBand Ltd providing Internet services (AS Netexpress, Meediamaa Ltd.) and cable television services (through Tallinn Cable Television Ltd. and Levi Kaabel Ltd.) under the trademark of TELE2 has taken active interest in the market. In 1999 the company took over server Mail.ee providing electronic mail services free of charge and since September 1999 it also offers Internet connection free of charge (for the use of telephone lines Estonian Telephone Company has to be paid by users).
2.There are also important developments related to the biggest Baltic information technology affiliated company Microlink:
·The two leading suppliers of information service, Microlink Online from Estonia and Parks LvNet from Latvia made an announcement about their conclusion of strategic partnership,
·Microlink acquired the control over stock in software company IC Systems Ltd., the purpose is to increase the share of software production and information technology services in the turnover of the company,
·One hundred per cent of the shares of Internet company I-Network Services Ltd. were also bought, the objective being to take over the customers of the company and invest into network extension and modernisation. 
3.One of Estonian computer companies - Pennu Computer Technology Group – decided to change the business profile of the company and in addition to its main operating area (computer completion and sales, IT-services) it will concentrate on digital media and Internet solutions and interactive information solutions-portals. A Finnish portal development company Infopiste OY was involved as a strategic foreign partner. The new name of the company is XXL.EE Ltd. 

6.3. SMEs specific aspects

Most Estonian companies fall into the SME category, therefore the examples from the previous sectors characterise also SME specific aspects. An important organisation providing support to SMEs is The Estonian Investment Agency (EIA, http://www.eia.ee/en/) - is a governmental body founded in 1994 to develop the Estonian economy by promoting foreign direct investment (FDI) into the country. Together with the Estonian Export Agency the EIA forms part of the Estonian Investment and Trade Development Foundation. 
A range of publications is available, including brochures and leaflets in various languages, sector specific materials and the quarterly newsletter Estonian Trade and Investment Review
To assist locating or expanding in Estonia the EIA can provide potential investors with the following free-of-charge services: 
·providing general and industry specific information on investment opportunities in Estonia 
·introducing useful contacts with members of the public and private sector 
·identifying potential co-operation and joint venture partners 
·organising visits to Estonia 
·finding industrial property 
There are major changes taking place in the organisation on foundations under the jurisdiction of different ministries. The current nine foundations will be replaced by two. The aim of this action is to stop duplicating the work of the private sector and increase the transparency of business support schemes. The availability of information about business support schemes should also increase and management structure of the development of private entepreneurship should become simpler.
One of the new foundations will deal with projects and the other with different kinds of investment and insurance.
Under the jurisdiction of the Ministry of Economic Affairs the following Foundations will be restructured:
  • Estonian Investment and Trade Development Foundation;
  • Small Business Loan Foundation; 
  • Estonian Export Credit and Guarantee Agency;
  • Estonian Housing Foundation;
  • Estonian Innovation Foundation.
Under the jurisdiction of the Ministry of Agriculture, Rural Credit Guarantee Fund will be terminated, as well as the Agriculture and Rural Life Credit Fund under the jurisdiction of the Ministry of Finance.
Under the jurisdiction of the Ministry of Transport and Communications, the plan includes the Estonian Infrastructure and Transport Development Foundation; and the Estonian Regional Development Foundation under the Ministry of Internal Affairs.

6.4. Others

A number of projects have also been developed in co-operation between the public and non-profit sector, such as: 
·The Institute of Baltic Studies (Balti Õpingute Instituut) in co-operation with the Office of European Integration (Eurointegratsiooni Büroo) launchedInternet based European Legal Information Network service, which carries the full body of European Union lawbased on the Celex license from Eur-OP.

·The Institute of Baltic Studies started the dissemination a CD-ROM version of a popular Estonian legal acts data base. The Estonian Legal Acts Data Base (Eesti õigusaktide andmebaas) available on the Internet has more than 27,000 users who view more than 15,000 documents every day. The data base is being administrated by the State Chancellery, The Institute of Baltic Studies and the Supreme Court (RiigikantseleiBalti Õpingute Instituut and Riigikohus).

7. Best practices and innovation promotion

7.1. Best practices, innovation and technology transfer mechanisms

The Estonian IT Standardization Technical Committee, founded on 29 October 1997, has accepted a number of IT related standards, including the national standard EVS 8: Requirements on Information Technology in the Estonian Language and Cultural Environment, ISO/IEC 2382 Information technology – Vocabulary, ISO/IEC 12207 IT Software life cycle processes, ISO 9000-3 Quality management and quality assurance standards -Part 3: Guidelines for the application of ISO 9001:1994 to the development, supply, installation and maintenance of computer software.

7.2. IS flagship projects

There are several IS projects that are considered as success stories both by Estonian and foreign experts. These include activities around Tiger Leap, Public Internet Access Points (PIAP's), Backbone Network for Estonian Governmental Institutions - EEBone , Village Road, and others (For more information please see http://www.ispo.cec.be/esis/esis2proj/eeprjlst.htm).

7.3. Examples of success stories 

The most successful activity directed at public within the Tiger Leap activity has been the annual Tiger Leap Roadshow, the aim of which is to raise the IT awareness level of the Estonian public. The tour made its way through eight towns and county centres of Estonia. The innovative content and good results of the Tiger Tour have won international recognition: Estonian Tiger Tour 1998 took the main prize at an international information technology competition The Global Bangemann Challenge in "The Equal Opportunities for Using Internet" category.
The Public Internet Access Points project helps to prevent and reduce the inequality in the society based on access to information by creating public internet access points, especially in rural regions. Public internet access points (PIAP-s) are rooms equipped with computers connected to internet where the use of computers is free of charge. The broader goals are of the project are increasing the level of education, reducing unemployment, developing local life, and others. UNDP Estonia and Open Estonia Foundation have been the major financers of the initiative so far.

Backbone Network for Estonian Governmental Institutions (EEBone) project is initiated by The Department of the State Information Systems of the State Chancellery, managed by the Estonian Informatics Centre,and is a part of the governmental computer communication program. EEBone is backbone of Estonian governmental institutions, connecting all 15 Estonian county centres, having connection to other Estonian networks and to the Internet. Currently, about 300 governmental institutions are connected to EEBone with about 5000 workstations

8. International activities

8.1. Co-operation at European level 

The contractual relationship between the EU and Estonia is the Europe Agreement signed on June 12, 1995, which entered into force on February 1, 1998. Estonia presented its application for membership of the European Union on November 1995 and is now in the first wave of five countries negotiating entry. The Europe Agreement was accompanied by a Joint Declaration legitimising the exclusive rights for Estonian Telephone Company Ltd (ETC) until January 1, 2001.
Estonia has had observer status in the World Trade Organisation since June 1992, and has the membership status from 1999. 

The EU and Estonia signed a Free Trade Agreement on July 18, 1994 and it came into force on January 1, 1995. It contains provisions on competition and the economy, including harmonisation of legislation. 

Estonia has also reached free trade agreements with the European Free Trade Association (EFTA) countries and has applied for membership to the Central European Free Trade Agreement (CEFTA). Since April 1996 a Free Trade Agreement with Latvia and Lithuania has been in force and with Ukraine since 1995. 

The European Survey of Information Society projects(ESIS I and II) is financed by the European Commission. The survey is dealing besides technological aspects with social and economic aspects of information society. The objective is to support the development of Estonia towards information society through comparing the developments between 25 Mediterrinian and CEE countries and disseminating information about best practices. Archimedes Foundation, co-operating with the Department of State Information Systems of State Chancellery, is responsible for carring out the survey in Estonia.

The corresponding ministries cooperate in the EUROSTAT, "Early Warning System", and other activities. The relevant actions are included in the Action Plan (e.g., statistical cooperation). 

8.2. Implementation of international agreements on IS 

Estonia has joined numerous international conventions and agreements, including: 
·Convention of the International Telecommunication Union, Nairobi 1982 (22.04.92) 

·Constitution, Convention and Optional Protocol on the Compulsory Settlement of Disputes Relating to the Constitution, Convention and Administrative Regulations of the International Telecommunication Union adopted at ITU Extraordinary Conference in Geneva on 1992 (26.09.95) 

·Instrument Amending the Constitution and the Convention of the International Telecommunication Union (26.09.95) 

Estonia is a member of many organisations, such as: 

·the International Telecommunications Union (since 1992); 

·International Council for IT in Government Administration (ICA, from 1998)

·the European Telecommunications Standardisation Institute (starting March 1998); 

·Conference of Postal and Telecommunication Administration (CEPT, since 1994) 

Implementation of WTO’s Information Technology agreement is in process by Ministry of Foreign Affairs and Ministry of Economy Affairs.

On October 8, 1999, Estonia presented its application to join the Wassenaar Arrangement that regulates the export, import and transit of high technology and strategic goods.

On December 9, 1999, Riigikogu passed several laws concerning copyright and broadcasting, including

·The Law on Joining the International Convention on the Protection of the Rights of the Performer, Phonograph Producer and Broadcasting Organisation (Rome Convention);

·The Law on Ratification of the European Convention on Cross-Border Television and the Amendment Protocol.

8.3. International co-operation in R&D 

The preliminary data about cooperation in the Fifth Framework Programme for 1998-99 shows that Estonia participated in 105 proposals, from these 19 were funded. The amount of funding for the Estonian partners is 1,64 million EUR, which exceeds the Estonian contribution into the Fifth Framework Programme (5th FP). From the other side, in the 1st call for proposals of the IST programme no project with Estonian participation was financed.
Archimedes Foundation is acting as National Contact Point for the 5th FP and is running FEMIRC (innovation relay centre) as well.FEMIRC Estonia makes relevant information about national, regional and Community technology transfer programmes as well as on European RTD programmes and calls for proposals available and accessible to potential users in Estonia. Estonian companies and research institutes are helped in writing their proposals for Community RTD programmes, technology transfer programmes, etc. 

Workshops are arranged with participation of local and foreign experts. Different seminars are organised in bigger regional centres of Estonia and over Internet also. Those seminars promote innovation in different spheres. FEMIRC Estonia also helps to find partners for concrete projects through its own network or with help of European Innovation Relay Centre Network.

Besides other EU programs and projects Archimedes Foundation is running PHARE Information Systems in Education (ISE) Programme (http://www.ise.ee/indexeng.html). Its goal is toimplement a computerised management information system for Estonian general education and identify appropriate strategies for use of Information and Communication Technologies (ICT) in Estonian schools. 

Estonian universities have participated or participate in the Leonardo da Vinci, TEMPUS, COPERNICUS, ERASMUS, ESPRIT and other programmes. Estonia participates also in numerous R&D and educational organisations, including:

·SEFI - European Society for Engineering Education, 

·IMHE - OECD Institutional Management in Higher Education, 

·IACEE - International Association for Continuing Engineering Education, 

·UNESCO - United Nations Education Science and Cultural Organisation, 

·FEANI - European Federation of National Engineering Associations, 

·EAIR - European Higher Education Society, 

·HELCOM - Helsinki Commission of the Protection of the Baltic Sea, 

·UN-ECE - United Nations Economic Commission for Europe, 

·ECSB - European Council for Small Business, 

·ECSB - European Council of SME-s, 

·EAIE - European Association of International Education.

8.4. Regional co-operation (international level)

FEMIRC Estonia is also promoting regional co-operation working in close co-operation with similar organisations. 
For example, in cooperation of the Tartu Teaduspark and Ida-Viru Arendus a pilot project on innovation in business is activated. The goal of the project is to transfer results of Estonian R&D into less developed East and Southeast regions. The project is planned until March 2001 and is financed by Phare and from state budget.

9. Miscellaneous

The references for the sources of information presented in this report are inserted directly into relevant sections of the text.


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Last updated 06.06.2000