Estonia, the tiny Baltic state that holds fewer people than San Diego, has been praised recently for both the apparent success of the country’s austerity policies (and President Toomas Hendrik Ilves’ very public defense of it against Paul Krugman) and the country’s remarkable emergence as an Eastern Europe technology hub.
Speaking at the Concordia Summit at New York’s Grand Hyatt Hotel on Friday, Ilves was on hand to discuss the latter. The feisty, perpetually bow-tied head of state outlined two clear factors in Estonia’s technological success — and made a convincing argument that the United States wasn’t doing either well.
First, let’s go over how successful Estonia has been. According to the Economist, the country has the most startups per person, and Skype — programmed by Estonians and funded by Danes and Swedes — became an international success story after it was sold to eBay for $2.6 billion (it was later sold to Microsoft for $8.5 billion). That’s a situation that many European countries would like to be in.
So how did Estonia — population 1.3 million, GDP per capita $22,100 — do it?