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Ott Pärna, Postimees: An economy in a crisis is like a seriously wounded person, whose bleeding first has to be stopped, then a diagnosis made, followed by treatment to restore health. If reducing costs and cutting back operations can metaphorically be compared to giving first aid, a lasting recovery and a stronger emergence out of the crisis will require much more.

In his inauguration speech the new US president, Barack Obama, told the nation that "we must pick ourselves up, dust ourselves off and begin the work of rebuilding America."

The same suggestion was recently made by a British think-tank in their analysis ‘Attacking the Recession'. According to the analysts, we need a strategy to attack the recession (like a racing driver attacks the corner), not just respond to it. This is the only way to emerge from the recession as winners at corporate, private and national levels. "The more we can use the short-term crisis to address and accelerate our adjustment to longer-term challenges, the better," the analysts insist unanimously. Failure to implement strategic changes would create social and economic costs for decades to come. It has been underlined in the analysis that new growth in the short-term can be reached through building on existing strengths - but by applying them not necessarily in the same areas as before.

They suggest that the surplus entrepreneurial resources from the financial sector should be used to spread a germ of entrepreneurship into other sectors, e.g. green energy, environmental services, services offered to the aging population, life sciences, organisation of society and public administration.

Therefore a major focus is on streamlining the government, innovative public services and various initiatives at the grassroots level (the so-called ‘lets get it done' initiatives). They even talk about the need to channel a significant part of national venture capital funds into innovative social and public services projects besides start-up technology projects. The purpose of all this is to bring the country in line with the circumstances of the 21^st century and build up a capacity to face up to the impediments, such as the aging population, scarcity of energy and other resources, global competition and/or protectionism, etc.

Meanwhile, it does not mean that the government has to take care of everything. Rather, it has to show decisive leadership, provide a clear direction and resolve to carry out activities that underpin desired changes. It cannot be done without the state. However the government has to be focused and strategically foresee the future while supporting the means to arrive there.

It is at least equally important for Estonia to continuously and seriously commit to looking for future opportunities and realising these opportunities. We also have to make difficult administrative and organisational decisions that have been postponed so far as the crisis opens wide the window of opportunity that usually tends to be closed. And we must not forget the third factor. In difficult times society needs a clear direction or goal and a persuasive delivery of the message. If these components are in place, society can face difficulties. If these are not in place, even the customarily level-headed people become restless. We have recently seen it happen in quite a few nearby countries.

 If we want to bring the government and the decision-making power closer to the citizens and for example invest the EU funds more efficiently, we have to adapt local municipalities to the new millennium as regards their size and capacity (which has been widely discussed) and above all their capabilities (which tends to be not so widely discussed).

Since education policy is the best economic policy, the issue has to be addressed with utmost seriousness. We have to start by applying IT solutions, developing creativity and guaranteeing an overall quality of basic and secondary education as well as of higher education and science. We must aim at a university landscape that is heavily international and appropriate in a situation where jobs that will be taken up by present-day secondary school students when they graduate from the university do not even exist yet. We must be able to prepare people for jobs that are nonexistent today so that they would solve problems that we are currently unaware of. And all this happens in a situation where the volume of technical information doubles in two years' time and half of the knowledge that an engineering student obtains during his or her first year at the university will be outdated by his or her fourth year at the university.

Small and everyday improvements do not help here. For example, our northern neighbour recently merged the Helsinki University of Technology, the Helsinki School of Economics and the University of Art and Design into one study and research institution featuring problem-based units in place of traditional departments. The university was named after Alvar Aalto, one of the most widely known Finns on the international scene. Aalto's success lay mainly in the ability to break down walls between artistic people and engineers. Now we have to decide what we can do to match that. Or how we can march to the same beat.

Our southern neighbour Latvia has promised - at the request of the IMF and in an economic stalemate - to implement a number of significant changes. A catalyst for Estonia - which is to reveal our wisdom or lack thereof - will probably be our willingness (or refusal) to implement radical, yet necessary changes that go beyond a reduction in the budget in order to spur renewed growth on our own initiative and without being prescribed by the IMF. In Mario Puzo's "Godfather" this was referred to as making the move from strength, not weakness.

Nesta 2008, "Attacking the Recession: How Innovation Can Fight the Downturn." A video summary of the think tank's analysis can be downloaded here.