first Deep Tech Deep Talk in English. Alois, you're here again. But who else is here? Yeah, we have a special guest from Estonia today. Great that you are here. Andres Sutt from Tallinn just flew over this morning. Maybe Andres, you can just explain what was your role in Estonian government and what are you excited about when it comes to technology.

Yeah, thank you and very happy and of course, honored to be first English speaker in a podcast. So back in a day in Kaya Kala's first government, which started in right during the COVID in 2021, I was minister in charge for entrepreneurship and IT and that really gave me a very, very strong push into the tech world because my background before politics and I'm a young politician, I only entered in 2018.

was mostly in the world of finance, in the central banking, was also in Luxembourg at the European Stability Mechanism, which is famous and infamous in Germany. And I was also working in the management of the largest energy utility in Estonia. But technology for me, as I have now seen and interacted very much with the community, the startup world, universities, but also the companies of different size, maturity and business field.

technologies everywhere and it's going to be even more. When I hear that you were a Minister for Entrepreneurship and IT in my ears, this sounds very progressive. So at least for German standards. Alice, what do we have? Do we have something similar? So yeah, but we have it more about separated. So that's maybe a difference. So I also think that this was a quite a clever combination of the two topics. Maybe just unless to you, was it originally

planned to think it's like an entrepreneurial way of combining these both roles? Well, I would be of course very happy to say that it was perfectly planned. But in my humble life experience, many things happen unplanned and actually great things happen. Not that there was a very strict and precise plan going forward for the next five to ten years and then everything went according to a plan. So no, it

necessarily planned that way, but I agree. was in retrospect, I would say it was really great to combine the two because in Estonia is well known for its digital society, which is again, a big ecosystem. So that's why you can't really copy it, but you can obviously see what works and what doesn't. And at the end, think also if for me, the startup scene was really time travel back to

Not in terms of how people behave or what they wear, but more in terms of a mindset. So it was with Scandu, with a risk appetite, global ambition, the mindset that there is no limit. And this is really the cool part of it. It sounds awesome. the density of unicorns, like companies worth more than a billion euros in our case per citizen in Estonia. Like you have, I think, 1 .3 million people.

something like that. It's really high. I think one of the highest worldwide, right? It is. I would of course be even more happy if we would be number one in absolute terms. But that is a little walk to make. But it's true. But this again, for me, many things have been a journey. I think, well, I don't know if most people still know or remember a company called Skype.

But back in the day, it was really great facilitator in making possible to people to communicate, to have later also with sort of corporate use. For Estonia, Skype basically was the beginning of a startup world. I think most people just don't know that Skype is actually established in Estonia and number one solution back in the days when COVID hit in was one of them were Skype.

This point of time was already Microsoft, think. But this is again, people are asking, so was it planned? I think these things do happen if the right circumstances are in place. So I have sometimes said that Skype was a winning lottery ticket. But in order to somebody have a winning lottery ticket, somebody needs to run a lottery. And then sort of a lottery in that context is the environment where you can experiment.

can test different solutions. And then of course, as you know here, the startup mindset is something that really is kind of unique and also importantly, you need founders and you need financing. Skype was sort of like this original snowball which started to grow and then that has created a number of successful rounds of entrepreneurs with startup mindset.

And once we started, it was very much on a software like space. But we are now increasingly more also moving to deep tech to hardware part, which I think for me, and I'm not a tech guy, so I'm just a regular user, one of a few billions in the world. But for me, this is also a sign of sort of reaching to a next stage of development. Would you consider like the approach and the scale

The success story of Skype as like a wake up call, like a change of awareness in the government structure as well. Well, back in the day, I think the mindset in general in Estonia was we had nothing to lose, everything to gain. And that gives you a freedom. It gives you a freedom to look forward and not backward, not to be afraid of, if I go with the path, maybe I will lose what I have achieved so far.

which oftentimes is one of the biggest obstacles on the way that you are just too much attached to what you have, to the legacy. I legacy is not necessarily a negative thing always. It could also be a positive legacy, but when you are a bit afraid, how does it all work out? And this is, I think, linked also or correlated to a level of wealth or development of a society. So the richer you become, the more risk averse you become.

I would like to dive a bit deeper into the topic of e -government solutions as we, like many of us know already, it is like a pioneering approach you did with Estonia. So I think 99 % of the services of the governmental services are digital by design. So how did you reach this kind of pioneering status throughout the world? Because there were so many digitization initiatives, I think you know.

all of them. So why was Estonia so successful on driving it so far? I think we were in the right spot, in the right time, with the right people in the leadership positions. Because if I compare with the present, the AI is going to massively transform how we arrange our daily lives in private or in business. You turn a clock backwards to late 1990s, it was basically the

So we somehow landed on the right trend, with the right attitude and importantly, with a very open door for private -public partnership. So that was, it wasn't really government designed solution, but it was government created playing crowd or rules of a game, which was then sort of wisely and efficiently utilized by the private sector. And again,

Telcos played important part, banks played very important part. I think once people, and that's when people ask, so what is number one thing what you need to do? Again, as I'm not a tech guy, so I don't know how it precisely works under the belly, but on a front end, I want that my life is because of the digital services, more convenient, more easy. And this is exactly what they provide. mean, if again, in a traditional way.

You have opening hours for different government services, but in Estonia you can do almost everything 24 7, 365, 365, because you can access the services digitally. And many of them actually are just happening on the background anyway. So you don't have to interact that much. think Estonia is already serving as a role model for a lot of states or in Germany, federal states, but nevertheless.

States like bigger countries are always good in finding excuses why they cannot implement stuff as fast or because whatever complexity as Estonia. So how do you see that? of course, people see you like you're very innovative. You're for a lot of people think Estonia is a perfect lab. But on the other hand, lot of the bigger countries have a lot of this, maybe in 10 years or whatever. Like, what is your point of view on that topic?

Size maybe matters, but I don't think this is like the most important factor. Germany, Estonia, I think in your case, having two layers or three layers of a governance starting from a federal level and then the state level, I think that makes additional layer of complexity. And I don't have a good recipe, what's the right way of doing it in Germany. When I have been asked, I have been

recommending that, why don't you try at a state level with something or a service what people use, like not too infrequently and maybe not also the one which is like most critical because if it doesn't work out, then your project is failed, that is politically failed. And then once people see that, look, okay, this is actually a good thing. It makes my life better.

my life easier, then you can start building on it. Because it was the same thing in Estonia. If we take one service on a standalone basis, that doesn't really do the trick. But once you start to build the integrated ecosystem, then you see the huge value in it. I mean, it's quite interesting that you have built and set up so many, from a technical point of view, building blocks for special functions like identification of, for example, services, people.

and so on. So I'm always telling, for example, the use cases from your X -road architecture, that is like your, you can say a backbone of all the services and also decentral data sources. And then again, the question, because I think it's quite impressive to see how many of these needed building blocks are already there. They're just like completed and you can just build on top, for example, AI solutions and so on. So who was behind this kind of

genius plan to set it up all in the manner that you can really build it layer -wise, service -wise and so on. I think it was again this sort of combined wisdom of a state and the private sector actors so that you didn't from a state and really to pre -define that, you need to structure it or build it in this particular order.

But I think always sort of starting from integrity, security, because I mean, back in the day, we, I think, were much less concerned about, for example, privacy when people are presently. So I think it's also fair to say that if we were to start today from zero, not sure how far and how fast we could get. But back in the day, it was a different world, different worries. And it was sort of possible

to do it in Estonian way in Estonia. So that's why I'm saying it's not that you can copy it because each country is different, the culture is different, history is different. So unique personal identifier in Estonia works perfectly well, but it doesn't work as all in Germany because of a historic reason. So that's why you sort of, can't really impose on it. But it was also the idea that we shouldn't really build one single mega database what handles it all.

but rather to have something that is interoperable. And in retrospect, it was really a smart way of approaching. Yeah, mean, you exported X -Rode towards other countries. So other governments were convinced that this is a good kind of architecture for having something like a country operating system, really like modular and future -oriented. What comes always in my mind is, I mean, you come so far along right now.

How do you remain innovative? So you've reached like this 99 % of digitization of your services. You have a broad acceptance throughout the country in terms of technology adoption. So how do you remain this kind of being awake and still hungry for development and also implementation of new tech? I think this is one of the greatest challenges really to stay innovative and stay hungry because

Once you have reached like to the highest position in a podium, oftentimes varies with, okay, now I can relax. But then that's actually the last thing what you should do. So good thing is that citizens are demanding. So they are really pushing to have a, I think the focus today is maybe shift or has shifted more on this consumer user journey and the user friendliness of a different.

applications. And this for me is really important because it should work as well with a private sector service provider. So this user experience part, I think is important. And then what is pushing, I think as well is everything what relates to the technology itself. I mean, it is advancing very rapidly. I I mentioned AI at one point, but it's also the cybersecurity part of my entire journey. So you need to, you really need to stay fit in order

to keep the system up and running. To stay ahead of the curve. You have programs like when I'm an entrepreneur, can, what I heard, I didn't try it yet myself, but I can found a company in 50 minutes. You have transparent standard when it comes to taxation and all that. So what does it need for more Europeans or internationals to open up companies in Estonia? Because actually for me, it sounds super attractive. Okay, when you know the game in Germany, it's easy as well, but you have to go into this game

started like two, three companies and then you have a clue how it works. But it's complex when you do it the first time, it's annoying, it takes time, it's transparent. But how can you make your service, your ideas more popular? do you think? We are actually attracting quite well for indirect investment. We have an e -residency program, which is basically, you will have stages of electronic resident, if I would put it that way, which basically gives you an access.

to all the same digital services what the state is providing. So if you don't necessarily, I mean, if you incorporate a company in Estonia, you love Four Seasons, you spend all of Four Seasons in Estonia, all good. If you don't love Four Seasons or you have a different preferences, when do you want to have a summer? mean, your business doesn't prevent you from doing work from somewhere else or doing your corporate affairs, which again proved extremely useful during the COVID times.

Again, I think in terms of attractiveness, you mentioned already taxation, but I think I put in a broad umbrella of a high quality of life. This is what we can offer. And we are offering in Estonia. We are about the same size as in the Netherlands, but we have a population of 1 .3 million You have space. Exactly. We have about 16 times more square meters or square kilometers per capita than the Dutch. and in certain...

spaces, it actually makes a big difference. For example, if we talk about renewable energy, offshore wind farms, they need also servicing area, construction area in the ports. Established ports, I believe also in Hamburg, don't have lots of empty land around them. But this is very different in Estonia. There is a lot of space to build and develop. And also for talent traction, think startup community is really vibrant.

So you mentioned in the beginning about unicorns per capita. This is a place where things do happen. Is that the e -residency thing? Is that why the talents come to Estonia? That's the one thing, but the other side of the metal is how do you attract so much capital? How do you actually enable an infrastructure that there are enough venture capitalists or family office or whatever providing investments and startups?

Well, startups are actually a great example of availability of capital. We had 21 and 22 sort of COVID year and then first year after COVID were the best ever for startups in fundraising. And also the last year actually was fourth best on the record compared starting from 2006. And we spoke about Skype and then everything what sort of followed thereafter. are a number, significant number

entrepreneurs, founders who are actually willing and financially capable to fund the next seed rounds. And then of course we attract also a lot of external capital. But I think particularly during COVID and even more so post -COVID, capital and investment moves where the talent is. And if talent likes a place with a quality of life, clean nature, ease of doing business, what do you offer when capital is just following? I mean, it's not

complicated. the density is pretty high, right? When you have successful entrepreneurs in one spot and not too many like Tallinn or Tartu or the big cities, then it's easier to meet them, right? That is, and this is maybe the size advantage because people really do know each other. And the second related point, Estonia as a society is very flat. The hierarchy is not really something what is part of our DNA, which equally means

that the government and public offices are very easily accessible. So if you don't know directly somebody, then you for sure know somebody who knows somebody directly. That gives you a lot of advantages. You mentioned Thailand, you mentioned Tartu. I would add also Pärnu, which is in the west of Estonia, which has actually very, very vibrant gaming industry ecosystem with full cycle gaming academy in it. And sort of we...

This tech field is really... It's a triangle. It's a triangle. Andres, I would like to speak about the data and AI strategy in Estonia, because I'm quite often visiting Estonia. And over the past years, I was watching what kind of AI initiatives and also data, open data initiatives and things like that happened. Can you just reflect on that? Because I think you are right now in the third AI strategy layer already.

And it's also something exciting that you also, you can say, anticipated a lot of AI advancements worldwide. So you came up with a good implementation strategy, right? Yeah, think we somehow, maybe there was also a bit of luck. We got it right. Indeed, as you mentioned, we have in a public sector in particular, has been a number of initiatives and the strategies to really make use of AI, just to give a few examples.

in unemployment insurance funds. The AI is used to match those who have lost the job and are seeking a new job with vacancies or for a training what they would need so that it would fit their profile, making their profile to fit for the demand on a labor market. And when I asked the question, so, okay, fine, this is all looks, sounds very cool. What about the hit rate or how accurate this prediction is? And then to

very positive surprise. The answer was that it is like 95, 96 percent accuracy. It actually helps to connect right people with the right jobs or to provide the right training to these people. Or for in traffic accidents and police sort of where do they need to put more patrols or other safety measures in place. And again, when basically substituting

Or freeing up, I think that's much better way of saying it. Freeing up people's time where a machine or technology can do it faster and more accurately. Even in the parliament, actually the minutes are taken by a robot. And of course, if a person speaks clearly, which doesn't happen all the time, not because of articulation, but the lack of clear message, then it's a bit more messy. But if it is clear, then the transcription is really accurate.

There is a little bit of adjustments back and forth, but I think there is a huge scope space also in private sector. And like Ari, you always are representing here. We have your sister organization, Aira in Estonia, and I'm in advisory board of Aira, which is AI and robotics Estonia. And we see a lot of companies from different industries, different size, different maturity who are really seeing that there is an opportunity.

to use AI in very, very practical terms. Like for example, in a quality control, in a food manufacturing, you need to make sure that every packaged food has best before date properly in the window. Because if a print is shifted so that one number is missing, that the entire patch is recalled, which is expensive and bad for environment. Human eye has a limit. Sometimes it gets tired and so on and so forth. But if you can combine

computer vision and AI, can actually make a major advance in improving the quality control. And this was just one small practical example. Did you manage to implement something like standards for data accessibility? Like, the stuff that I know is like that the data is not digital or it's not in the white form or standard, which can actually convert it into whatever. This is where we have space for

improvement and development because indeed, I mean, in very simple terms, you can sort of send the reports or you can send data fields what are used to generate the reports. We are kind of in between. So very certainly a space to become more data fields reporting driven rather than sending the reports. And this is also something we are working so that to get

to this concept of a real -time economy that you can use much more of machine -readable data to reduce the bureaucracy or reporting burden, but also sort of make wider use of this data. And importantly, I think with data, whatever state has access to or collects, we have something what is like a data observer or a feature in what you, if you log into your government portal, you can see who has actually accessed.

your data. And that I think is really important because people own the data and they need to know who and for what reason has access to the data to give a confidence and trust into the system. When it comes to dual use, this is right now also in the tech community, especially at the last latitude, you're like one of the most famous events, tech events and gatherings in Tallinn.

There were a lot of topics in terms of deep tech striving this dual use cases. Do you see it right now, especially in this geopolitical situation as an innovation driver and enabler? And what is your vision towards the deep tech ecosystem in Estonia? Yeah, it was a full scale war of Russia and Ukraine, but dual use really has become a very, very topical, relevant and very fast growing domain.

So we have a number of companies in the field of defense with autonomous platforms, what can be used for military purposes, but also for fighting a forest fire or observing the situation. There is a very active drone ecosystem also in Conocerns and Intel. So all these fields, I think, have received additional push from the war. And you asked about

Deep tech in general, I think for obvious reasons, starting from software is faster, it is less capital intensive, which means it is cheaper. This was a path we started and today I think there is far bigger recognition that deep tech is something where we need to enter, be it in the health tech field or QLUs or if we just again, one example, G -scan.

which is using the space field spectrum to do the scanning. So you are not using X -ray, but the space rays to scan the quality of, or physical quality of buildings or bridges. But equally you can check what is in transit containers or in any other equipments, which actually is precise and with far bigger field of application. Or if we talk about skeleton,

which is also a stonem company with pretty significant footprint in Germany, in Saxony, and in Turing for developing super capacitors which are really essential for electric vehicles or automobile industry at a large scale. So these kind of positive developments are underway and I think there is more in the pipeline on that front. There's also an interesting public -private

partnership kind of dual use fund that was just announced on the Latitude 59, the last time I was there. What is behind this kind of concept? So it's backed by state government money, backed by private investors, or how does it? It's precisely how it has been structured. is, we have a government investment vehicle called SmartCap, which always co -invests together with private monies. Dual use fund is also meant

be complemented by the private money, at least by the same amount. So we government share or initial investment is 50 million. So it should be at least 100 total to go ahead. And, and of course, there is no obstacle to raise more on the private side. And again, linking back to this startup and founders community, they have expressed very, very strong interest in dual use. then, and that's why I think this will give another, another boost to

to the development in the dual use and deep tech industry. What is dual use exactly? Because we talk about like a commodity, but I think the one or other might not understand it. The dual use is essentially all the technologies that can be used in the battlefield, but are equally fitting to a civil life. I mean, as we know from the history, defense investment and innovation has been often, if not always,

behind of many applications that have been taken into the civil world. Yeah, the one or other listener might not be so great in Geographics, but the Russian border is quite next to you. Yeah, we are bordering with Russia as does Finland or as does Japan for that matter. One last question. Having achieved so much breakthroughs in terms of tech adoption, number of unicorns and so on, and looking back at the past years,

What would you see as a big challenge for the future and combined with a wish, could be also personal one, that you have still something you want to head towards? I think this is now time for all of us in Europe, which of course includes Germany, includes Estonia and all other countries in the union, whether we make the use in a positive sense of this major technological breakthrough, what

and other related innovations will bring to lift the living standards and to be really at a technological age globally. that Europe is a place where technological innovation happens. We don't have to copy anybody. So let's Europe to Europe. That sounds awesome. I think we're at the end of this episode, our first English one. Thank you a lot for the insights.

So this was Deep Tech, Deep Talk episode number three, think. first. yeah, we hope you like it and share it, like it, whatever. We see each other soon. Or hear each other soon. Bye.