Skype, Wise and Bolt thrive in the absence of tech giants
Bolt CEO Markus Villig speaks on stage at the Web Summit 2019 technology conference in Lisbon, Portugal.
Horacio Villalobos | Corbis via Getty Images
Estonian tech companies have been able to thrive in the absence of large multinationals like Facebook and Microsoft, the country’s president told CNBC.
Home to just over a million people, the Estonian founders created several multi-billion dollar tech companies. Skype, which was sold to eBay and then to Microsoft, is the best known, while others include the currency exchange app Wise and the mobility app Bolt, which is backed by the Silicon Valley heavyweight. VC Sequoia.
President Kersti Kaljulaid said multinationals have traditionally set up their headquarters abroad in countries with generous tax systems, adding that Estonia has never been a tax haven.
Facebook, Google and Apple all employ thousands of people at their European headquarters in Ireland, where corporate tax is 12.5%. In Estonia it is 20%. The tech giants also employ thousands of people in other European countries, including the UK and Switzerland, but they don’t have a significant presence in Estonia.
âEstonia is a country that has never offered any special offers or special treatment to any type of business,â Kaljulaid said in an exclusive interview last week. “When I was advising the Prime Minister 20 years ago, everyone always came and asked me what your special conditions were? We said none and I think it served us well.”
She added: “This is probably, perhaps, one of the reasons Estonia has so many local start-ups that you now see unicorns emerging from more often.”
Estonia has gained a reputation as one of the most tech-friendly countries in the world, with the government putting many processes online way ahead of other countries. It adopted online voting and digital IDs, for example, and free wi-fi is widely used across the country.
Kaljulaid said the country’s leaders want to ensure that Estonia’s legal space is safe but permissive for new technologies like the grocery delivery robots that were built by Starship Technologies, which was put into place by Skype co-founder Janus Friis.
Kaljulaid said entrepreneurs and coders across the country have educated politicians on technologies that are set to change the world.
For example, Skype co-founder Jaan Tallinn taught him and others all about artificial intelligence.
âIn Estonia, it [Tallinn] is well known as someone who warns us and informs us, “she said.” He is worried, but not needlessly.
Tallinn told CNBC he has a major concern when it comes to AI.
âAI is still quite domain specific and fragile,â he said. “The only big concern I have is that countries will start to apply more AI to a military context.”