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Our citizens are going digital and global. If the state doesn't keep up it will become obsolete, The Telegraph

16.07.2017

By Kersti Kaljulaid

As the President of Estonia, I represent the only truly digital society which actually has a state. And this position has made me question whether the state as we know it today is fit for the 21st century.

Traditionally nations have harnessed taxpayers to their territory by making almost everything people need from society dependent on working in one country, every day of the week, all months of the year and for at least three decades to receive these social guarantees. In creating free movement of people, the web has only got more complex, but never disappeared. The same old story of where you live, where you work and where you are entitled to get the social benefits.

The world around all these political debates is radically changing, industrial jobs are disappearing. They will continue to disappear, because of the productivity gains that come from choosing to invest in machinery and automation over people. Thus, social models that were created to fit industrial and early service economies will no longer be viable. It is only in Alice in Wonderland that the cat can leave while the grin lingers. In the real world when the cat is gone, the grin vanishes with it. Put simply, as the industrial workforce shrinks – just as we once saw happen in agriculture – the social model founded on it will go, too.

My son, an IT specialist, works for several companies at a same time. In some of them he is an owner, in others an employee. When he travels to others states for months at a time for work, he normally rents out his home assets – a flat, a car, sometimes even his dog (a well-trained Labrador who can keep lonely older people company).

Another man I know, a talented craftsman making world class bows and arrows, lives in rural Estonia. He came from South Africa. He did not lose any of his clients, even if he now makes his products at least 100 kilometres from his nearest customer.

And, of course, we all know how some people make a living posting on YouTube and other global broadcasting networks.

There are more and more people who work totally independently from any one company, any one country or any singular social model.

Old jobs are disappearing. New ones are emerging. Some are truly new, products of the digital age. Others are reformulations of the old: the craftsman with his bows and the jester on YouTube, who gain leverage from the global digital space. 100 years ago, the craftsmen needed to travel local fairs to trade their goods. In the 20th century, deals with a souvenir shop or a big retailer were struck. Now, they are able to reach all their global clients cheaply, efficiently and at low cost.

Most new jobs created by global digital opportunities are making people more independent than they were before. Fewer and fewer people will work for one company at a time or in the same country all the time. More and more people work remotely across borders.

This poses difficult questions for our joint liberal, democratic societies, accustomed to guaranteeing our people education, healthcare, security, and so on.

Which country's social and education system has to provide for a global worker? Where must it provide it? How can states tax these free spirits, our citizens? We have not yet figured out how to regulate and tax multinational companies, how on earth will we manage with our citizens going individually global?

Yet manage we must. We must figure out how to offer people the security that makes them want to remain taxpayers. We must overcome geography and ingrown habits of offering regular social support for regular tax payments – usually coming from a company with a local address.

If we fail, we will lose the attention of our citizens. For example: traditionally, governments have held a monopoly over the provision of safe identification by issuing passports. Today, with national governments having been late to cyberspace, there are alternatives. Google now offers a digital time-stamped identification to its users. There are very few countries who can provide the same service (Estonia is one of them).

Similarly, if governments cling to the old industrial model of social guarantees for too long, someone else will step in. We might lose our universal systems of redistribution, thus making states in many ways obsolete. To avoid this fate, we must think how to offer our global citizens a safe harbour, an opportunity to teach their children, and receive social services and healthcare wherever they chose to live or work.

Thinking from this 21st century perspective, Brexit loses its relevance. We are still all in it together. We must respond to our citizens' changing opportunities and habits. It must all become rather more flexible than we know it in the current common market. Yes, we must have intermediate solutions for this and maybe the next decade. But if we get stuck in hammering out those short-term perspectives, we might find ourselves in the situation where most services traditionally provided by the sovereign state have moved elsewhere, leaving the state all but obsolete for the majority of its citizens.

Link to the original article.