The role of innovations in providing economic security: The Estonian case

Abstract

Innovation process management has become a core component of the national and regional policies of many countries, international competitiveness and long-term balanced development. Estonia is a good example of a purposeful transformation of the public system resulting from implementation of the geotransformation function of the innovation process by the national government. The article considers the main stages of the country’s progress toward building the information society and the state starting from the 1990s until the present day. The most important political and economic reasons that determined the need for these transformational changes in the Estonian national social system after leaving the USSR are discussed here. The study determines the significant role of information and communication technologies in the economic, political and social development of the country. Estonia’s experience of an e-government based on the platforms, security, and customer-orientation is analyzed. The study reveals the gap between digital economy technologies and the digital government of Estonia at the current stage and the need for deeper integration of the two systems in order to strengthen economic security. It is concluded that potential threats to Estonia’s national security are caused by the innovation and virtualization of the most important socio-economic and political processes in the context of the transition to an information state. The main negative consequences for Estonia that are likely to occur are: the growing need for financial and human resources to support the effective functioning of the state’s electronic systems against the background of their growing vulnerability to cyber-terrorism; the imbalance of international technological exchange; the gap between the spheres of public administration and entrepreneurship in terms of digitalization; the stagnation of the real economy sector; and the image of a grey economy state.