Walking through the fairy-tale streets of Estonia's capital Tallinn, it may seem hard to believe that this tiny nation is home to one of the most advanced e-governance systems in the world.

Key points: Estonia was one of the first countries to declare internet access to be a human right

Estonia was one of the first countries to declare internet access to be a human right 99 per cent of government services are available online 24/7

99 per cent of government services are available online 24/7 50 new AI applications are set to go online within the public sector by 2020

Even amid the trendy cafes and refurbished buildings of the city's modest downtown area, there are few signs of a thriving high-tech private sector — aside from the occasional Mars-rover-style delivery robot wandering by.

But in less than 30 years, Estonia has made the transformation from a struggling post-Soviet state to one of the most digitalised nations in the world.

Starship robots deliver takeaway, groceries and packages in Estonia, the UK and the US. ( ABC News: Tracey Shelton )

It has digitally streamlined an unprecedented number of public services, with 50 new government Artificial Intelligence (AI) projects set to come online by next year.

A thriving IT start-up culture has also produced robot bartenders and delivery robots as well as multiple tech giants including Bolt, Playtech, TransferWise and Skype — later sold to Microsoft.

In 2001, Estonia became one of the first countries to declare internet access to be a human right, and in 2014 they launched the world's first e-residency system, allowing digital residents to open and manage an Estonian business from anywhere in the world entirely online.

"It's an exciting country," professor Toby Walsh, a leading researcher in AI at the University of New South Wales, told the ABC.

"In terms of their digital connectivity and their platforms they are one of the top nations on the planet."

So how did a nation of just 1.3 million inhabitants become a tech giant, and how does Australia measure up to their success?

A positive attitude towards technology helped Estonia's rapid transformation. ( ABC News: Graphics by Jarrod Fankhauser )

Fall of Soviet Union opens 'window of opportunity'

After 51 years of occupation, Estonia gained independence from the Soviet Union in 1991.

Before the collapse, Estonia had experienced a period of hyperinflation, and basic items like bread and sugar had been rationed, explained Tarmo Jüristo, chairman of the board for Estonian thinktank Praxis.

The new independent government faced a monumental task of rebuilding crumbling infrastructure and restructuring the economy and social services in a country with limited resources.

Estonia gained independence from the Soviet Union in 1991. ( Supplied: Wikimedia )

But starting from zero, while often seen as a negative, was seized upon as a unique "window of opportunity".

"Estonia did not have the issue of legacy systems," Mr Jüristo said.

"Pretty much everything had to be built from scratch and in many ways, this is a lot easier than having to work with lots of existing systems."

Mr Jüristo added the main factors that aided Estonia's rapid transformation were a small population, a positive attitude towards technology and a "relatively high level of trust towards state and public sector".

The young emerging government set out to capitalise on this and build a digital society, and by the mid-90s embarked on a series of fast-track reforms to modernise the economy, also joining both the European Union and NATO in 2004.

A thriving IT start up culture has inspired multiple tech giants including Bolt, Playtech, TransferWise and Skype. ( ABC News: Graphics by Jarrod Fankhauser )

Today, while Estonia still falls below Western Europe in living standards, its education system was ranked the best in Europe and third in the world in the latest Program for International Student Assessment (PISA) report.

Queues for government services are a thing of the past with 99 per cent available online 24/7, including voting and automated tax returns, which take an average of 3-5 minutes.

Ott Jalakas, co-founder of AI adaptive learning platform Lingvist, said efficiency has become a normality.

He described with annoyance and humour the one time he was forced to physically visit a government office to register his newborn daughter's name — which can only be done online for married couples.

"I'm still talking about it after two years so obviously it was super annoying," he said, adding that the process took about 10 minutes.

"But this shows how we become so used to this system."

Estonian national Kristjan Lorentson was surprised by the inefficiency of some government services when he spent two years living in Australia.

"The way you guys were doing tax returns was like nuclear physics," Mr Lorentson said.

But while young Estonians have come to expect everything to be "quick and easy", he said digitalisation has been more of a challenge for the older generation.

'Eliminate the human element': Estonia becomes e-Estonia

Chipped and encrypted ID cards allow citizens to access government services. ( ABC News: Graphics by Jarrod Fankhauser )

Professor Walsh said Estonia has become "the poster child" for nations like Australia in both connecting government services and gaining public trust.

"From a country that came out of the communist era where everyone was watching everyone and there was a lot of distrust in government, they have turned that around 360 degrees," he said.

While Australia, the UK and elsewhere are experiencing a "tech backlash" — where the public are largely distrustful of how government handle data — Estonia have built a system of data transparency, he added.

Long before the emergence of block chain, Estonia built their government records around a similar principle called X-Road, which is now used by NATO, the US Department of Defence, and throughout the EU "to ensure cybersecurity", according to the e-Estonia Briefing Centre.

The system allows data to be stored in a connected series of networks rather than one all-encompassing program.

While it allows all government departments easy access to data collected by other departments, it also allows Estonian citizens to see exactly who has accessed that data and challenge any suspicious behaviour.

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Chipped and encrypted ID cards also allow citizens to do everything from accessing government services and public transport to picking up medical prescriptions with any applicable discounts automatically applied, explained Ott Velsberg, chief data officer for the Ministry of Economic Affairs and Communications.

"We have a grand idea of making the government seamless or work in the background — eliminate the human element," Mr Velsberg told the ABC.

Citizen information is collected once and then used everywhere, he said, giving the example of birth registries.

"Why should the parent have to go and register that child for a kindergarten or apply for childcare funding and so on. All of this is done automatically."

Mr Velsberg said 50 new AI government projects are scheduled to come online by next year, including satellite litter detection that will send automated messages to relative clean-up crews, and a robot judge that will further automate the small claims court system.

Satellites are already being used to monitor farming projects, legal and illegal logging and ice detection in the Baltic Sea, which saves the Government over 1 million Euros ($1.6 million) and shipping companies 2 million ($3.3 million) per year.

'We already have a 5G network and self-driving cars'

Many Estonian students are introduced to computer programming in primary school. ( Reuters: Ints Kalnins )

Early technology classes for the young have helped nurture innovation and a technology-centric workforce.

Birgy Lorenz, cybersecurity scientist at Tallinn University of Technology, was instrumental in developing teaching strategies and curriculum for primary students.

Technology and coding were first introduced as extracurricular activities beginning in the first grade in 2012, but have since expanded to mainstream classrooms in many schools, she said.

"Around 150 schools are active in implementing a lot of new technologies from drones to virtual/augmented reality to coding to whatever," Ms Lorenz told the ABC from the CyberOlympics, an annual event she co-organises in Tallinn.

Young Estonians have come to expect everything to be "quick and easy". ( Reuters: Ints Kalnins )

The goal is to expand the program to all Estonian schools by next year, further encouraging a flourishing private sector.

"We already have 5G network, self-driving cars and ships and some interesting learning analytics," Ms Lorenz said.

Mr Jalakas, from AI adaptive learning platform Lingvist, said Estonia's small size forces start-up companies like his to think big.

The usual process in a country like Australia is to start domestic, but adjusting to the international market can be a struggle and many companies fail, he said, whereas in Estonian the "first version" is a global design.

Lingvist uses algorithms to adjust language classes to the students' abilities and interests. ( ABC News: Tracey Shelton )

"The domestic market is basically non-existent so you need to build a scalable product [for an international market]," he said.

"This disadvantage turns into an advantage because our mindset right away is international."

Mr Jalakas' own company Lingvist, which uses AI algorithms to personalise language learning, does not include the Estonian language but instead launched in English and several European and Asian languages, and the algorithms themselves have been developed with plans to expand to other areas of learning such as mathematics and physics.

This first design principle has also been behind much of Estonia's success.

Mr Jalakas said databases and technology in many countries including the UK are still based on architecture from the 1980s.

But everything in Estonia began in the mid-1990s, skipping these early models and creating a more advanced technology base.

Mr Jalakas, whose background is in finance, gave the example of bank cheques which never existed in Estonia.

"We had nothing and then we had internet banking," he said.

At the turn of the century, while the rest of the world reeled in panic about the Y2K bug, Mr Jalakas said "we were laughing and drinking Champaign".

Australia has the technology but lacks implementation

Australia has been world robot football champions five times and Sydney will host this year's competition in July. ( Supplied: The RoboCup Federation )

Professor Walsh said Australia also have a lot to brag about when it comes to AI and technology.

"We punch above our weight," he said, adding that Australia is among the top 10 in the world for AI technology.

Australia has the longest train robot on the planet, some of the most automated ports and mines in the world, and five world titles in robot football.

So why are Australians still standing in line at Centrelink and regularly providing the same data to different parts of the government?

Privacy concerns have been one cause of resistance to public service digitalisation efforts.

"The e-health government records is a classic example," Professor Walsh said.

"That has great potential to improve our health, stop mistakes being made when you are admitted to hospital, and yet it was miscommunicated, mis-sold, poorly applied."

Another concern for many Australians is the potential job loss, but Professor Walsh said there are a lot of misconceptions around figures that don't account for jobs created.

"One thing that is really clear is that there's going to be a big period of disruption," he said.

"Whatever new jobs get created will be vastly different from the old jobs that get destroyed."

But Mr Velberg said in Estonia the idea is "not just to replace people but to give them time to work on more valuable things".

"To be honest, if you are able to automate these jobs then they shouldn't exist," he said.