SME-DRIVEN ECONOMY

Building digital startup unicorns along with world leader Estonia

Most digitised nation that invented Skype, Bolt will share ideas with East Africa's innovation hub

In Summary

• The northern Europe nation has the most $1bn+ digital startup companies per capita

• It shares a trend of SME-driven innovation with Kenya and wants to build on that

Estonia Foreign Affairs development cooperation director Kadi Metsandi during the opening of Mondo- East Africa Regional Office
Estonia Foreign Affairs development cooperation director Kadi Metsandi during the opening of Mondo- East Africa Regional Office
Image: HANDOUT

An Estonian delegation visited Kenya in March led by Kadi Metsandi, the Foreign Affairs ministry's director of Development Cooperation and Humanitarian Aid.

This was following the approval by the Kenyan Cabinet of the deal between Estonia and Kenya on ICT, one of the key areas Estonia shares its knowledge and experience globally, both in form of development cooperation as well as business diplomacy.

The visit focused on a series of meetings with development cooperation funding counterparts in Kenya in Edu tech, innovation and ICT.

Also on the agenda was discussions on the future cooperation with international development partners as well as potential project initiatives.

Following this visit, she was interviewed by Wycliffe Muga.

Some of our readers will not know very much about Estonia. Could you start by telling us the three or four things you think our Kenyan readers should know about your country?

Estonia is located in northern Europe beside the Baltic Sea. The capital is Tallinn. 

We have 1.3 million inhabitants. The size of Estonia would easily fit into Lake Victoria. Our language is Estonian, which is similar to Finnish. Estonians love the forest and nature, half of the country is covered in forest. We have a lot of entrepreneurial people; in fact, Estonia is the world leader in startup unicorns per capita. There are six unicorns so far: Skype, Playtech, TransferWise, Bolt, Pipedrive and Zego.

I believe Estonia has come up with an “Estonian Africa Strategy” to guide your engagements with the continent. Perhaps you could explain to us the need for such a strategy and what it hopes to accomplish. 

Indeed, in February, the Foreign Ministry launched the comprehensive strategy for engaging with African countries. I was honoured to lead the process, which lasted over a year between January 2020 and February 2021. During the preparations, we involved all different stakeholders: ministries, civil society, private sector, academia, diaspora, etc.

It covers foreign and security policy, economic relations and business diplomacy, development cooperation, humanitarian assistance, Estonian diaspora and consular affairs. As Estonia is a rather small country with limited human resources, we need to set a clear focus for our activities and make sure different policy areas act in synergy.

The following highlights our strategic thematic areas: digital and green transition, education, innovation and developing entrepreneurship. The overall objective is to help achieve the sustainable development goals and tackle the consequences of Covid-19.  

So, what specifically brought you to Kenya in mid-March? This was at a time when there was not all that much international travel taking place, and your trip must have required special arrangements.

Since the launch of the strategy in February, it is important to start the implementation process. Due to Covid-19, travel is indeed more restricted and complicated. I had to take several Covid-19 tests and provide the respective certificates at the airports. However, it was important for us to come to Kenya and convey the message also in person that Estonia would like to deepen the already good relations with Kenya. We see a lot of potential for further cooperation, with Kenya being the innovation hub of the African continent.  

Was it your first visit to Kenya?

It is my second visit. Your beautiful country was many years on my bucket list and finally, the dream came true in 2016, when my husband and I spent our holidays in Lake Nakuru and Masai Mara. During this trip, I had the chance to explore with my own eyes the beautiful nature of Kenya. You are so lucky to have such amazing wildlife. My absolute favourites during the game drive were lions and giraffes. 

Kenyan journalists at a breakfast meeting with the Estonian Defence Minister in 2016
Kenyan journalists at a breakfast meeting with the Estonian Defence Minister in 2016
Image: HANDOUT

Now turning to the substance of your visit, what can you tell us about the meetings you had with Kenyan officials and the outcomes of those meetings?

We had very good and productive meetings with different government officials, with the civil society, local youth groups, academia and private sector partners. We agreed to enhance cooperation related to e-governance, education, distance learning and digital skills, bringing closer together Estonian and Kenyan startups and supporting entrepreneurship skills. It is also important to further enhance academic cooperation. 

As one who has visited your country not once but twice, I know only too well the Estonian prowess in all things relating to ICT. That is a field in which Kenya could learn a lot from Estonia.

Have you already been able to share your advanced Estonian ICT expertise with Kenya or are you still at the planning stages?

Thank you for your kind words. Indeed, Estonia is perhaps most known on the African continent for its good e-services and great e-governance practices. We started the digital transformation journey at the beginning of the 90s, when Estonia regained its independence after 50 years of occupation.

Today, 99 per cent of all the government and private sector services are online. The compulsory digital ID was introduced in 2002, electronic voting in 2005, electronic medical records in 2008. It takes only a few minutes to declare taxes, and it is possible to create a company within a few hours — the list continues.

This was developed in close public-private partnership, commercial banks and telcos, which ensured a wide uptake and rapid growth of services. The digital ID enables secure identification of users and is based on the X-road infrastructure, which means all service providers have access to the digital identification but do not store personal data of users.

Anything more on the advantages of e-governance?

Digital governance helps to improve the transparency of the society and reduce corruption. Estonians constantly seek and develop new digital solutions that allow things to get done faster, better and cheaper. However, it is important to stress that it is not so much about technology but the right mindset. The solutions that have created the biggest leap in Estonia are not the ones technologically most advanced but rather those that are well tested and user friendly.  

There has been a lot of exchange and experience sharing between Kenya and Estonia related to digital transformation and e-governance. Kenya has already achieved a lot, I believe everyone in the world knows that M-pesa comes from Kenya! Covid-19 has forced us all to accelerate digital transformation, and, therefore, we are happy to continue the good cooperation also with Kenya.  

We agreed to enhance cooperation related to e-governance, education, distance learning and digital skills, bringing closer together Estonian and Kenyan startups and supporting entrepreneurship skills
Kadi Metsandi

In Kenya, we worry a lot about our large numbers of well-educated and yet unemployed youth. Do you have any programmes or projects which could help us in job creation?

We will definitely focus on job creation and entrepreneurship, empowering youth is a priority. I have noticed during my couple of visits to Kenya that innovation and thinking “out-of-the-box” is the common denominator between Kenya and Estonia. Youth will pave the path to Africa’s and Kenya’s future. The same principle helped Estonia to develop from one of the poorest countries in Europe in the 90s into the most digitised country today.

We have already had cool projects. For example, in December 2020, Estonia initiated and organised Garage 48, a Europe-Africa Hackathon, together with other European partners, the African Union and Smart Africa to find solutions to socioeconomic problems caused by Covid-19.

This was a great success! More than 93 countries, including Kenya, were represented among the 315 teams and ideas. It was a great success and currently, Estonia is implementing a follow-up mentoring project to ensure the best solutions will be market and export-ready.

I am well aware that hackathons and other competitive events in the world of IT grab all the headlines. But what about the practical possibilities that will create real jobs and help grow the economy?

We know from the Estonian experience that small and medium-sized enterprises drive the economy. Good education and the right digital skills are other important aspects Estonia focuses on. NGO Mondo’s ICT innovation and practical digital skills programme will bring innovation into education programmes.

Another important topic is the fight against climate change. Africa has a unique opportunity to leapfrog Europe. We would like to focus together with Kenyan partners on green transition, which presents an enormous opportunity to create jobs, reduce inequalities, improve health and create sustainable livelihoods.

If all goes well, where do you see Estonia-Kenya relations in another five years? Ten years?

I truly hope that Estonia will be able to open an Embassy in Nairobi, and this diplomatic presence will definitely help to enhance the bilateral cooperation.

In five years, Kenya is the e-governance model for the whole African continent. Our startup communities have developed together many innovative solutions and in Kenya, several unicorns are born.

Our cultural exchange is blooming, some joint Kenya-Estonia fashion shows and music festivals have taken place. The schools in Kenya have all distance learning possibilities, and digital skills programmes are an integral part of education programmes.

In 10 years, Kenya is the model for Europe and the whole African continent in green transition; many jobs have been created and the economy is driven by many SMEs. There is extensive economic cooperation between Kenya and Europe, including Estonia.

One final comment: I think that we, Estonians, have learned from Kenyans, that despite the difficulties, we should smile more and take life a bit easier, hakuna matata.

Edited by T Jalio