Digitalization and the Public Sector Workforce: Unbundling the Estonian Case

Abstract Estonia has emerged as a regional leader on several e-government metrics, outperforming its European counterparts. In recent years, the digitalization of public services has been a common agenda across Europe; however, the rate of adoption and the maturity of these services exhibit significant variations at the national, regional, and local levels. This chapter delves into the Estonian case, seeking to understand the interconnections between digital transformation and the organization of work within the public sector. Estonia is considered an intrinsic case of study due to its performance in digital government indicators and the country's unique socio-political and economic trajectory in recent decades. Prior research has theorized potential impacts of digitalization on the public sector workforce, including staff reduction or substitution, work reorganization, and the evolving configuration of the public encounter - the interaction between citizens and businesses with public administration officials. This chapter employs a qualitative approach by interviewing nine (9) subject matter experts with verified experience in the Estonian e-government system as private contractors, government employees, and elected officials in combination with the analysis of secondary sources as a methodological approach to explore the effects of advanced digitalization in the Estonian public sector workforce. In addition, this chapter adopts an institutional stance by considering the complex and multifaceted political, economic, and social configurations evidenced in the Estonian case. The intricate institutional and technical multilayered building blocks of the case are unbundled and discussed to understand the set of technologies in conjunction with regulatory and cultural factors that have facilitated this country’s level of digitalization. The Estonian configuration of public services has reached most features of a modern economy and society, including aspects such as tax collection, digitalized health services, and political participation via electronic voting. Digitalization has changed the way public services are rendered in Estonia, a complex array of institutional factors and very high adoption levels by the population has altered the traditional interaction among citizens, organizations, and the State. Also, it has transformed the functions and task content of street-level bureaucrats and other public sector workers and has led to the redesign of public sector front-office, back-office, and support services into a digitally enabled shared service model. This transformation not only signifies a shift in the mode of service delivery but also signals a fundamental change in the working dynamics of the public sector workforce. Two salient and seemingly reinforcing conditions inform the relationship between digitalization adoption and the public sector workforce: on one hand, the country’s historical labor and skill shortages, and on the other, the pursuit of austerity-driven, and technology-enabled redesign of public services. Keywords: digitalization, Estonia, public sector workforce, institutional factors, expert interviews, single case study, organization of work