Quick, think of the most digital-friendly government in the world?

If Estonia's didn't immediately pop into your head, then listen up. The tiny European nation was the first country to permit online voting more than a decade ago, and it has consistently led the way in digital signatures and online transactions.

But Estonia didn't become a global leader of e-governance because the country is some sort of "digital Narnia," says Andres Kütt, the architect and adviser of the Estonian Information Security Authority. The country's tech transformation was born out of necessity, he says.

"We cannot afford the country without the benefits that digital governance brings,” Kütt said, speaking Thursday at the Center for Strategic and International Studies in Washington, D.C., at an event on the evolution of the Estonian digital ecosystem.

Tech planners in Estonia also can't afford to be spendthrifts. They're working with budgets just a fraction of what the U.S. spends. The Internal Revenue Service lost $5.2 billion to identity theft in 2013, Kütt pointed out -- more than his agency's entire budget.

“When we started out, we had nothing,” Kütt said. “Estonia had no technical infrastructure, no legal basis. We still had to build our regulations, and everything was in flux.”

Still, some government ingenuity, combined with “Nordic cynicism” and a very practically minded population, resulted in a wave of technological innovation, he said. For example, every Estonian is given a personal identification code, which they can use for everything from getting into bank records to accessing government services.

Even when Estonian government computer systems were hit by a massive Russian cyberattack in 2007, the Estonian government pivoted, designing new innovative security and privacy systems.

The Estonian government funds projects that move innovation forward, Kütt said. And it denies funding for those deemed unnecessary. For example, if two agencies apply for funding, and their projects have a lot of overlap, the government won’t give them the go ahead, Kütt said.

“We don’t approve funding unless they actually talk to each other and come up with a something like a joint proposal,” he said.

The country’s reliance on the digital world has become extremely strong over the past decade.

“When the technology is not there, we don’t know how to do things," Kütt said.

One area for improvement? Estonian government’s main weaknesses is that it hasn't embraced mobile technology as much as it could, according to Kütt.

(Image via Oleksiy Mark / Shutterstock.com)