Estonia Shows the Strengths and Limits of Small States
The small country has produced an exceptional number of successful startups while its government uses software at the expense of bureaucracy. It still faces unresolved security challenges from Russia.
Estonia is a small country of 1.3 million people situated on the Baltic Sea, sharing land borders only with Latvia and the Russian Federation. Despite being the smallest country to emerge from the fall of communism in Europe in the 1990s, it has been one of the most economically successful since then. Estonia has the highest nominal GDP per capita of any former Soviet republic and has the second-highest GDP per capita in all of the former communist bloc, behind only Slovenia.1 Estonia has also been an early and consistent experimenter with digitization of government bureaucracy and services, has one of the single highest rates of successful tech startups per capita in the world, and is arguably the NATO country most likely to face a direct Russian military threat.