Archive - 2008

Mike Southon, Financial Times: Here is a suggestion to make the best of the current tough times: Why not move to Estonia?

I was there recently, explaining how to cope with the current recession. Last time the UK went through one, in 1991, the Estonians were preoccupied with gaining independence from the Soviet Union. The Estonians came through the process as a new nation, keen to share their skills with the outside world.

The country's mathematicians were able to leverage new internet technology without the archaic legacy systems, and the Estonian government resolved to make itself an e-country and put everything on the web.

Today, the Estonians have an entirely connected country, with a transparent legislature and everyone happy to submit their tax returns online.

Identity cards were seamlessly introduced, not just because of the population's experience of surveillance. The selling point was that they also worked as tickets on public transport.

Mobile phones are used for almost everything in Estonia, including a public parking system now being adopted by local authorities around the world.

Estonia's dynamic business environment was able to catalyse several international successes, including Skype, the internet-based voice service.

The country is also doing better in the recession than many other countries. It has suffered a slump in property prices, as a consequence of the previous boom, and many people have lost money. But the wise are biding their time, waiting for the market to recover.

Estonia is a very small country, with around 1.5m people, and so does not represent a big market for the major players. However, the country's size also provides one important advantage - you can get things done.

I had a very agreeable chat over a beer with Estonia's president Toomas Hendrik Ilves. He explained that Estonia had fared better in the recent crisis as its banks are owned by Swedish and Finnish institutions, which suffered back in 1991, and have consequently been much more risk-averse.

He gave me details of the country's low fixed rate of corporation tax and 100 per cent relief for companies that reinvest. He suggested that people from the UK might want to base their companies in Estonia as it is an EU member.

Healthcare, for example, is very well run. A recent report said the UK's National Health Service has fallen down the league table below Estonia, and highlighted concerns over the costs and problems with the £12bn patient record system currently under development.

I met an Estonian doctor, Madis Tiik, who has been looking at the same challenge in his country. Oblivious to suggestions that it was impossible to implement, he just got on and did it - the system is being rolled out next year.

The UK database is much larger, and there are many different data items - such as text-based records and X-rays. But Friends Reunited and Facebook seem to be managing with their large volumes of users. And with simple document and image standards and XML, you can put anything in a web browser.

Perhaps this is why many successful entrepreneurs move to islands or small countries. They remember the tribal atmosphere of the early days of their start-up, and having status in this community can make things happen, if you know the right people.

If this is the case, then would you not prefer to be in a small country such as Estonia, where you can get things done, and make a real difference?

mike@beermat.biz More columns at www.ft.com/mikesouthon

Inseneeria 7/2008 (8): The capacity of the new painting line launched at the Viljandi Window and Door is greater than the current state of production at the plant allows; and just the amount of paint conserved using the new technology alone saves the company a million kroons a year. The company was forced to make changes at the painting facility by the need to ensure the necessary production capacity. The company signed good contracts and had to continue on the new line, as it was not possible to produce such the quantity the old way. Thus they needed to invest in a line that would be more productive than manual spraying.

Inseneeria 7/2008 (8): The innovation centre INNOEUROPE, in cooperation with the Estonian Association of Engineers, organized the first annual engineering conference. The main theme was "Innovations in the work of engineers" and the conference was dedicated to the 20th anniversary of the re-establishing of the Estonian Association of Engineers.

The two-day conference was ushered in by an address by president of the Riigikogu, Ene Ergma. In his own remarks, Estonian Association of Engineers chairman Arvi Hamburg noted that the issues faced by engineering have not changed much over the years.

Even though the engineering profession in Estonia is practiced by about 55,000 people, there are only 323 certified engineers (as of 11 November 2008).

Graduates with natural sciences or technology degrees make up only 9.9% of all graduates from higher education institutions in Estonia. Currently there are 1,780 candidates for doctorate degrees, of whom 430 are at Tallinn University of Technology. The fact that engineers must be qualified and competent is illustrated by the fact, related by Hamburg, that if a doctor can accidentally kill one person, an engineer can be responsible for the death of a thousand.

On December 11, the Development Fund organises the EST_IT@2018 conference to discuss the future prospects (up to 2018) of using Estonian information and communication technologies (ICT).

The forum is to be held at the Swissôtel Tallinn conference centre and is expected to attract over 140 Estonian opinion leaders. The Development Fund introduces the outcome of the EST_IT@2018 foresight project and discussions focus on ICT prospects in the most relevant fields of use highlighted in the foresight project: education, medicine, industry, energy, financial services and ensuring the security of the ICT systems.

The conference also offers insights into global ICT trends and developments in Estonia together with an overview of our sectoral opportunities and threats. The participants will also contribute to creating an IT vision for Estonia.

According to Marek Tiits, Economy Expert of the Development Fund, the number of computers and Internet connections compared to other countries served as a gauge for IT success in the 1990s. Today, it is much more relevant to ask how IT could further support Estonia's social and economic development.

"The key is simple! The biggest changes in Estonia are expected to occur in education, medicine, energy and industry. Meanwhile IT enables to make things much more comfortable in these areas both here and elsewhere in the world. Why not do it?" Tiits said.

The main speaker, Associate Editor and economic commentator at the British newspaper The Independent, Hamish McRae, is to introduce global trends in the ICT area.

Tiits will also speak about the outcome of the EST_IT@2018 foresight project. The second part of the conference has been earmarked for discussions in six workshops where experts reveal future visions for the fields of IT use.

 1. Education: Janar Holm, Secretary-General, Estonian Ministry of Education and Research; Ene Tammeoru, Head of Estonian e-Learning Development Centre

2. Health care: Madis Tiik, Estonian eHealth Foundation, Member of the Management Board; Kristjan Port, Tallinn University, Institute of Health Sciences and Sports, Director

3. Industry: Jüri Riives, Federation of Estonian Engineering Industry, Chairman of the Board; Kalle Kuusik, Enics Estonia, Chairman of the Board

4. Energetics: Tarmo Mere, Eesti Energia, Distribution network, Director; Jaan Järvik, Tallinn University of Technology, Professor of Power Engineering

5. Financial services: Andrus Alber, NASDAQ OMX Tallinn Stock Exchange, Chairman of the Management Board; Tõnu Grünberg, EMT, Executive Vice President in charge of Development and Technology

6. ICT security: Ülo Jaaksoo, Cybernetica AS, Chairman of the Board and Margus Vaino, Santa Monica Networks AS, Member of the Board

The objective of the workshops is to identify potential sectoral development visions and resultant risks and opportunities for the Estonian information and communication technology sector.

Additional information about the conference can be seen on the Development Fund Events webpage here.

The EST_IT@2018 foresight project can be seen here.

Further information:

Ott Pärna, CEO, Estonian Development Fund, Tel: 616 1100
info[A]arengufond.ee 

Kristjan Rebane, Information Society Expert, Estonian Development Fund Tel: 616 1063 kristjan.rebane[A]arengufond.ee

HEI 6(15): The most innovative product of the year 2008 is the Dr Hellus Omega-3 yoghurt range produced by AS Tere, and the most innovative person of the year 2008 is Rainer Nõlvak, the initiator and main organiser of the rubbish clearance campaign, "Teeme ära 2008", which was initiated throughout Estonia.

In addition to AS Tere, the competitors for the product/service category prize, as announced at INNOESTONIA 2008, the Third Estonian Annual Innovation Conference, included the Yoga Intelligent Building System, houses with combined walls manufactured by AS Ritsu, and the team game called Spiooni Akadeemia (Spy Academy) which was created by Ozoon.ee. The candidates for the title of the most innovative person were Mare Reiman, the product development specialist for AS Tere who developed the Omega-3 yoghurt range, and Urmas Varblane, a professor of international business. The candidates were nominated by the readers and customers of InnoNews, the newsletter which is issued by the InnoEurope innovation centre which was the competition's organiser.

For the second time in two years the InnoEurope innovation centre was able to select the most innovative product or service; last year, the category's winner was EMT MOBILEID. The most innovative person category was new for this year. 

HEI 6(15): Over the course of eight months, Enterprise Estonia has provided export marketing grants to 55 projects to a total amount of over 66 million Estonian kroons. The companies that have received the grant now plan to increase their export sales in the coming years by more than one billion Estonian kroons.

According to Allar Korjas, the Director of the Export Division of Enterprise Estonia, 115 applications for grants have been received since the export marketing support program was launched this February. "Most of the applicants estimate that, with the help of the grant, they will be able to increase their export turnover by ten to thirty million Estonian kroons in the next two to three years, but there are also a number of enterprises who have the true potential to increase their export turnover by 100 million Estonian kroons or more in the coming years," Korjas said.

This year, through the export marketing support program, Enterprise Estonia has mostly funded the manufacture of wood, wooden houses, construction materials, and furniture (on a total of 22 occasions). Seventeen of those export projects that have received the grant belong to the software sector or to other technological product or service sectors. Grants have been given to four export projects in the metal industry, four projects in the textile and clothing industry, three projects in both the sectors for the production of medical equipment and the chemical industry, and to two export projects in the food industry.

Most of the companies that have received the export marketing grant have been from Tallinn and Harju County, or from the counties of Tartu, Pärnu, and Ida-Viru.

 "For the most part, the entrepreneurs plan to target their exports at Finland, Sweden, Germany, Russia and Norway but companies are also thinking about starting to export to Denmark, France, the USA, Saudi Arabia, Kazakhstan, and the Ukraine as well, among other countries," said Allar Korjas.The total volume of the export marketing support program for the years 2007-2013, cofinanced by the European Regional Development Fund, exceeds 400 million Estonian kroons. The maximum amount of the grant to be applied for is 1.5 million Estonian kroons for each project. The grant can constitute up to fifty per cent of the total expenses, while the rest needs to be financed by the entrepreneurs themselves.

The industry forum held at the Swissôtel Tallinn conference centre in the context of the Development Fund's foresight project ‘Industry Engines 2018' ended with the conclusion that the industry showing the largest growth potential in a 10-year perspective represented environmental and energy products as well as health and welfare products.

According to the Development Fund Economy Expert, Siim Sikkut, development opportunities can be found in almost all industries. "But the areas with the greatest probability of fast growth represent environment and energy as well as health and welfare products. Meanwhile, it is possible to operate successfully in nearly all areas, if we manage to move on from today's production-based industry," Sikkut said. The forum concluded that there are currently three principal ways of increasing the value within the industry:

• Moving from simple production towards product development services 
• Manufacturing products with higher value added 
• Striving towards becoming a brand holder

Ära märgiti ka sihtturgude olulisus, kus eristub samuti kolm keskset võimalust:

• Saturated but rich markets in ‘old' Europe 
• Fast-growing Eastern European and CIS markets 
• Far away and currently exotic markets with large growth potential

"Companies that advance towards increased value added, particularly in faster-growing business areas, can become industry engines. Meanwhile, brand holders, product developers and subcontractors have equally good opportunities. We also have to contemplate which markets would be the best for our value added products. Such markets are mostly unknown to us today," Siim Sikkut explained the opportunities for creating industry engines.

The Industry Forum videocasts can be downloaded here and presentation material and discussions can be downloaded here siit.

Some 150 shapers of the future of Estonia's industry representing both the business and the public sector took part in the industry forum. Presentations were made by Richard K. Lester, Professor of Massachusetts Institute of Technology (MIT) and one of the leading industry development researchers, Antti Herlin, Chairman of the Board of Directors of KONE Corporation, a major Finnish company, Joe Harford, head of a high-level working group that advised the Irish government, and Siim Sikkut, Economy Expert at the Development Fund.

"Industry Engines 2018" is a foresight project focusing on the future of the manufacturing industry in Estonia. The objectives of the project include identifying the growth possibilities for Estonia's industry in the globalising world in the next 10 years and defining the steps needed to utilise these possibilities within the next 3-5 years. In other words, the Development Fund is looking for engines that could drive Estonia's industry into the future and in the future.

A final report will be produced in February 2009 providing guidelines for exploiting the growth opportunities of Estonia's industry in the global context.

Further information:

Siim Sikkut
Economy Expert, Estonian Development Fund,
Tel: 616 1065,
siim.sikkut[A]arengufond.ee

Inseneeria 6/2008 (7): When it set a course toward regaining independence in the late 1980s, Estonia needed the joint efforts of idealists with a technical mindset as well to help rebuild the country. On 10 December 1988, in the auditorium of the Tallinn University of Technology, the 543 delegates to the Estonian Association of Engineers founding conference expressed their intent, consistent with engineering ethics, to participate with resolve in social changes, the Association's president Arvi Hamburg recalls. The mission of the Association is to unite science, R&D and enterprise in striving toward a common goal, introducing technology culture to a common cultural space and promoting technology education and the engineering profession. The Association's strategic goal in the next decade will be to give society's values a nudge in the direction of science, including placing greater importance on innovations that drive the development of technology education. 

Inseneeria 6/2008 (7): Since the beginning of the certification programme in 1998 up to October of this year, the Estonian Transport and Roads Association prepared, and the relevant professional committees awarded, engineering certificates to 139 specialists. But a total of about 3500 engineers are employed in the transport and roads sector in Estonia, which means that the work done over 10 years to create a body of certified engineers and make the Estonian economy and engineering activity more relevant has not borne the hoped-for fruit in the transport system, states Kalju Peterson, member of the management board of the Estonian Transport and Roads Association.