At a time when Estonia is celebrating the 35th anniversary of the restoration of its independence, we must acknowledge that the world around us is very different from what it was in 1991 or even just a decade ago. Fundamental changes have taken place in recent years in geopolitics, the economy and technology alike.

In geopolitics, the era of soft security, dominated by various hybrid threats aimed at indirectly influencing societies and public attitudes, is giving way to the imperatives of hard security. The latter involve a direct military threat to border states such as Estonia.

In economics, neoliberalism — an ideology advocating a minimal state that Estonia enthusiastically embraced in the 1990s — has by now largely fallen out of fashion in Europe. In technology, there is already talk of a fourth, artificial intelligence-driven industrial revolution. Estonia's e-state success story largely belonged to the era of the third industrial revolution.

Of these three shifts, the change in security policy paradigms is probably the greatest challenge for Estonia. From 1991 onward, we adapted extremely well to the U.S.-led liberal world order, in which countries that belonged to the relevant clubs, such as NATO and the European Union, and adhered to the principles of liberal democracy seemed to have their security automatically guaranteed.

That world order is crumbling and in the worst case it could be replaced by geopolitics based on pragmatic deals and spheres of influence. Estonia's elite still lacks a clear strategy for how to operate in the face of such a possible development.

From now on, we can no longer afford the luxury of focusing primarily on soft security threats, in which Russia seeks to influence our society's attitudes and our economy largely through indirect means. The threat of a direct military invasion has increased.

Hard security, which requires direct investment in defense through purchases of drones, artillery and ammunition, is considerably more expensive than soft security. Well-funded intelligence and security services were capable of handling the latter effectively. Unfortunately, it is already apparent that the Estonian public is not particularly willing to foot the bill for hard security in the form of a higher tax burden.

This brings us to the second major epochal shift, in the economy. For the past several decades, one economic ideology has dominated in Estonia: neoliberalism, the belief that markets are always more efficient than the state, taxes should be low, government should be lean and people should generally fend for themselves rather than rely on the state.

It is now becoming increasingly clear, however, that it is difficult to reconcile low taxes with the need for sharply higher military spending without eventually sending the country into a debt spiral, while also keeping the public satisfied that the tax burden is being distributed fairly. Sooner or later, this will mean either a significant shift in our tax policy or severe cuts in government spending.

Economists are increasingly talking about a post-neoliberal era in which governments take a much larger role in strategically directing economic development, invest more heavily in education and human capital and show determination in supporting the defense industry and the energy transition. A focus on free markets is giving way to a softer form of state capitalism.

Several countries that Estonia has tended to look down on, such as Lithuania, Romania and Croatia, appear to have adapted much better to the post-neoliberal era and have been outpacing us in economic development in recent years. This, too, should prompt us to think seriously about whether our successful economic policy model, which worked well 20 to 30 years ago, can also help us meet the challenges of today's world.

Third, another major shift is looming on the technological front. For decades, Estonia was proud of its e-state. Unfortunately, all of that belonged to the era of the third industrial revolution when small countries and small-scale developers really could accomplish great things if they correctly identified where technology was headed.

We are now in the midst of the fourth industrial revolution, whose defining feature is artificial intelligence. Its development is in the hands of technology giants and major powers at the forefront of technological development. It is much harder for small countries and small languages to stand out in this new competitive environment.

Estonia's problem is that we were too good in the context of past eras: exemplary at ensuring our own security under the liberal world order, among Eastern Europe's most exemplary students of neoliberalism and among the most enthusiastic adopters of new technologies.

There is a term in history and economic history: first-mover advantage. Countries that are best at recognizing the challenges and demands of a particular era can achieve great success by acting quickly and intelligently. That was Estonia in the 1990s and 2000s.

The tragedy of successful first movers, however, is that over time, various attitudes, ways of doing things and institutions become entrenched around the myth of their success. By the time they finally realize that the world has fundamentally changed in the meantime, generating a new sense of momentum in society is extremely difficult.

Looking at developments in Estonian society, it increasingly seems that Estonia is becoming a victim of its own past success. There is too much nostalgia for the successful models of decades past and too little willingness to take risks or engage in open debate about the challenges of a new era. Isamaa Chair Urmas Reinsalu summed up the prevailing mood in society perfectly at the latest Opinion Festival: "No experiments." Unfortunately, the world around us will not wait. It is racing ahead at full speed.

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