Postimees: India offers the next train for Estonia to jump on
When Estonian businesspeople look towards Asia, they usually think first of China. However, that country has many suitors and there is little interest in newcomers; there are better hopes for Estonian companies in India.
According to forecasts, India’s economy should grow to become the fifth largest in the world by 2025, thereby becoming larger than Germany’s, for example.
According to Citibank, by 2050 India may even be the largest economy in the world. Therefore, now is the right time to see how we can establish closer relations with India. “In the case of India, there has been a favourable coincidence of circumstances.
The Indian government developed an interest towards Estonia,” said Siim Sikkut, the head of the Development Fund’s Estonia-India foresight project.
He added that, in the case of India, Estonian companies are more interested in getting acquainted, while the Indian side is already ready to start conducting business. Sikkut observed that the goal is not only to have Estonian companies enter the Indian market but also to cooperate in the fields of science and education.
Interested in Estonia’s IT experience
In the scientific sphere, Estonia has some fields of activity in which we are world leaders. “The most drum-beating occurs in the field of cyber security and this has also been heard in India.
A large younger generation is growing up in there, with very few good schools to go to. They are increasingly interested in going abroad. Families are also becoming richer and they can afford this,” Sikkut said about the opportunities for educational cooperation. Indian companies are also interested in IT-related cooperation, since Estonia has specific experience of interest to India.
“The most basic opportunities are in the field of e-governance solutions. Although Estonia and India are not comparable in size, their people have come here to become acquainted with e-governance. We cannot write code for them, but just providing them with specific consulting can be sufficiently good business for our companies.” “India is a large country, and we are looking for cooperation opportunities in very different fields of activity.
Estonia has a good standing in the fields of software, energy, waste management and sustainable energy,” Aladiyan Manickam, India’s Ambassador in Estonia and Finland noted. “We are planning a series of seminars in Tallinn, in order to convince Indian companies to establish offices in Estonia,” Manickam added.
Sikkut confirms that Tallinn could be a good anchor location for Indian companies that want to expand their activities in the Baltic Sea Region and the rest of Europe. Naturally, Estonia is not the only one hatching such ideas.
In the autumn, The Economist also noted that the British, unashamedly, are welcoming back the former subjects of their empire as bosses and business owners. Some Estonian companies have already made their first movements towards India.
The main products moving from Estonia to India include electrical machinery and equipment, paper pulp and wastes, ferrous metals, and high-precision equipment. In 2010, 97 companies from Estonia exported to India. The lion’s share of the export turnover was provided by companies that have historical ties with India, such as ArcelorMittal, or Horizon Pulp and Paper, whose owner has Indian roots.
However, there are also local companies who have turned their gaze towards India. For instance, Viisnurk’s export relations with India date back to 1998. However, between 2003 and 2008, relations were very timid because production volumes were only sufficient for the domestic and near-by markets.
“In 2008, we began actively searching for partners from farther away again, and one of the places we focused on was India. Since we already knew how our products could be utilised in this market, it was not complicated for us to find the right contacts,” Anu Krimm, Viisnurk’s sales director said. Viisnurk is yet to sign any long-term contracts, as each transaction is handled separately.
“Since India is very price sensitive, it is not possible to make long-term contracts because the cost of maritime transport is constantly fluctuating, and there are many competitive offers from other European manufacturers,” Krimm said.
Viisnurk sells fibreboard panels to India for use in construction and the manufacture of bulletin boards. “We mostly operate through agents who have experience of international trade; know English; and also know the local conditions and business practices,” Krimm said.
Information exchange is fast
Asper Biotech, which provides gene tests, has also tried to establish itself in India in the last three to four years. “We cooperate with scientific research institutions in India. We do not have any powerful partners or large clients, but have some smaller clients.
However, all business is important and we have gained certain experience. But the country is large and there is significant room for development,” noted production manager Eva-Maria Lass.
According to Sikkut, business becomes profitable when a branch is established in India, and subcontractors are also found there. In 2007, MS Balti Trafo, which operates in Vändra and produces small transformers and inductive components, decided to open its own factory in India. They sell a small amount in India, but most of the goods are shipped to Europe.
According to Jaanus Luberg, the managing director of the company, there is room for improvement in the Indian business environment. For instance, the laws are complicated; protectionism and over-regulation are prevalent; the laws differ by state; and, as a result of all this, corruption is rampant.
“Information exchange and achieving agreements with Indian businesspeople goes quickly; purchasing decisions are made relatively promptly – be they positive or negative,” said Krimm.
Business will definitely get a boost when Estonia opens its embassy in New Delhi in the autumn. However, there are also counter-opinions. Instead of the Far East or South America, Estonian companies should focus their attention on the untapped opportunities in Europe, thinks Taavi Laur, the head of the Estonian branch of UniCredit.
“It seems to me that when speaking about potential export markets, too much attention is paid to the Far East or South America, while there are countries closer to home where opportunities have yet to be utilised,” Laur opines.
This article appeared in daily newspaper Postimees on 16 January 2012.
FinanceEstonia hakkab edendama finantsteenuste eksporti
Täna asutatud avaliku – ja erasektori huve ühendav koostööprojekt FinanceEstonia, mille eesmärgiks on ühiselt edendada finantsteenuste, sellega seotud tugiteenuste ja tehnoloogiate eksporti Eestis.
FinanceEstonia ühe asutajaliikme, Arengufondi juhi Ott Pärna sõnul tegutsetakse selle nimel, et Eesti oleks tulevikus regiooni usaldusväärseim ja Euroopa Liidu jurisdiktsiooni piires innovatiivseim ärikeskkond rahvusvahelistel turgudel tegutsevatele finantsteenuste ning tugiteenuste ettevõtetele. “FinanceEstonia laiemaks ambitsiooniks on Eesti ärikeskkonna senisest sihipärasem ja aktiivsem turundamine rahvusvaheliste väike- ja suurettevõtete peakorteritele,” lisas Pärna.
FinanceEstonia asutajad, keda on kokku 19, lähtuvad arusaamast, et finants- ja sellega seotud äriteenuste rahvusvahelisemaks muutumine Eestis on eelduseks majanduse rahvusvahelistumisele tervikuna. Tugev ja rahvusvaheliselt sidus finantssektor tõstab Eesti ärikeskkonna konkurentsivõimet, toetab majanduse teiste teadmismahukate valdkondade arengut ning suurendab kokkuvõttes Eesti elanikkonna elatustaset.
Idee üks eestvedaja, Teenusmajanduse Koda, näeb Eesti finantsteenuste ekspordis ühte majanduskasvu vedurit. Teenusmajanduse Koja juhatuse esimehe Viljar Arakase arvates on Eestile heaks eeskujuks meie rikkamad, Skandinaavia naabrid. „Peame Skandinaaviamaade kõrval ise oma konkurentsieelised välja töötama ja me arvame, et Eestil on oluliselt rohkem potentsiaali kui olla lihtne allhankemaa. Finantsteenuste järele on järjest suurenev vajadus ja Eesti võiks olla üks vajaduse tagaja."
MTÜ-l FinanceEstonia on 19 asutajaliiget: Teenusmajanduse Koda, Eesti Arengufond, Eesti Fondihaldurite Liit, AS BaltCap, Cofi AS, Advokaadibüroo GLIMSTEDT OÜ, Aktsiaselts KIT Finance Europe, KPMG Baltics OÜ, NASDAQ OMX Tallinn Aktsiaselts, Optilogo OÜ, PricewaterhouseCoopers, Raidla Lejins & Norcous Advokaadibüroo OÜ, Rimess OÜ,
Advokaadibüroo SORAINEN, Advokaadibüroo VARUL AS, Ernst & Young Baltic AS, Advokaadibüroo Tamme Otsmann Ruus Vabamets OÜ, UniCredit Bank Eesti, Itella Info AS
MTÜ on avatud ka toetajaliikmetele, kes jagavad FinanceEstonia visiooni ja soovivad selle realiseerimisse panuse anda.
Toetajaliikmeks hakkamise soovi on juba avaldanud Eesti Pangaliit.
FinanceEstonia tekkimisele on pinnast ette valmistanud Teenusmajanduse Koja, riigiasutuste, Tallinna linna ja Targa Eesti Mõttekoja initsiatiivid ning Arengufonid seire Finantsteenused 2018.
Imre Mürk Arengufondi teenusemajanduse ekspert tel 5690 7627 email@example.com
The Estonian Development Fund calls on entrepreneurs, decision-makers and universities to discover business opportunities in India
The Estonian Development Fund and the Embassy of India in Helsinki have launched a background study to find out Estonian-Indian business opportunities and develop a contact network that could facilitate further cooperation between public and private organizations of the two countries.
The ascent of Asia in world economy is apparent. However, the meaning of this megatrend for Estonia has not been fully acknowledged. The aim of the yearlong foresight project is to generate India-related knowledge and create a discussion-platform through relevant forums and seminars for Estonian entrepreneurs, decision-makers and experts from public sector that would help them to gain deeper insight into Indian economy.
Mrs Kitty Kubo, the Head of Foresight Division of the Estonian Development Fund: “In Estonia, knowledge about the development of the Indian economy and the opportunities it offers is random and fragmented. I am certain that India holds considerably more to agile Estonian entrepreneurs, than has been realized today. In order to take part in the growth opportunities that distant markets with high growth present, it is about time to learn more about them.”
The project also works the other way around by building the rationale for Indian businesses to choose Estonia as a partner and investment opportunity in Europe. “Indian growing investments in Nordic IT-companies indicate that Indian global firms have a pretty good understanding of the region. Now we also need to place Estonia in that picture,” Kitty Kubo explained the importance of the project.
Hence, the Development Fund calls on those who are interested to discover new opportunities in India, or who already have an experience with doing business in India, to let us know. The Estonian-Indian background study also contributes to achieving the Estonian government’s Asia-related goals.
The official Estonian exports and foreign investments action plan - Made in Estonia – points to the necessity to gain and develop more expertise concerning rapidly growing Asian economies. In the same vein, the Ministry of Economic Affairs and Communications is working on a long-term Asia strategy.
The current foresight project should also provide decision-makers in foreign ministry and Enterprise Estonia with arguments to make decisions on representing Estonia’s economic interests in India.
Estonian Development Fund, Head of Foresight Division, Kitty Kubo, phone +372 6161 100, firstname.lastname@example.org
Indian Embassy in Helsinki: Ambassador Shri Aladiyan Manickam, email@example.com
The export of health care services as one cure for Estonian economy
To build up a credible and able system for exporting health care and wellness services, Estonia should start with specializing and proceed to developing a high level medical hub of the region, advices the foresight report of Development Fund. The future and possibilities to form the export of health care and wellness services into new growth field for Estonia was the theme of the Development Fund's forum "Health Care Services 2018" ("Tervishoiuteenused 2018"), where the deciders and agents of the field participated.
The sector of exporting health care services has so far been marginal in Estonia, but could through skilful mixing of world trends and Estonian strengths become one of the fields of new growth of Estonian economy. By the words of Ain Aviksoo, the member of board of the centre of political research Praxis, who studied the state of and attitude towards health care services export, the income from this export is now scarce 350 million EEK, but in middle term perspective could rise to 1-2 billion EEK. "This is comparable to the flow in IT sector exports," placed Aaviksoo the expectations into broader context.
Critics bring out some problems springing from the pushing of the health service export topic, but the international experience shows that with skilled planning the export could bring additional assets to health care system and raise the quality of the whole health care services, both for local and foreign clients. 68% of head of Estonian hospitals and health care businesses questioned for the research believed in the positive effect.
Depending on the level of ambition to develop the health care service export Estonia can choose between different strategies or combine them together. The choices include specializing, health care travel and medical care, high-level medical hub and complex solutions in the demand fields. One of the authors of the report, Development Fund's expert on service industry Imre Mürk said that the growth possibilities to be achieved fastest are in the synergy of health care, wellness and tourist sector, while the more ambitious strategic choice would lead to creation of regional medical hub. Latter anticipates the prolong readiness to invest with goal orientation and in the sector of medical services and affiliated fields.
The forum debated deeper on the possibilities to give a boost to Estonian export through health care travelling. As the outer factors (e.g. aging of population in Europe) are favourable and the importance of creating a common strategy for health care has been recognised by some agents in the field, the main question raised was the leading of the changing attitude, especially from the public sector.
Who should give the initial signal to start join effort – this question needs answering in the future.
In the view of the experience of the successful states and also considering the Estonian start position, the development of health care service export needs long-term cooperation from private and public sector. Hence the report proposes for further discussions the concrete idea of establishing the agency of health care export. “The agency should not be a real institution, but a virtual cooperation agreement to draw together the interested sides for acting under a common, divisible strategy and for helping to achieve a breakthrough on the international market,” said Imre Mürk.
In addition to the presentations of Estonian experts the participants of the forum heard direct experiences from Keith Pollard, the author of several publications on the health care traveling in Europe; plastic surgeon Janis Zarzeckis, one of the leaders of Latvian health care service export alliance Baltic Care and Richard Petho, the founder of the most successful dental service exporter in Europe, Hungarian firm VitalEurope.
Both the report and the forum are part of Development Fund’s service industry foresight.
Imre Mürk, the expert of service industry, Development Fund
Estonian growth opportunities in healthcare services
Estonian Development Fund revealed in October 2010 a study “Healthcare services 2018” which is part of a wider foresight project on Estonia’s service economy initiated in 2008. The study analyses opportunities for Estonia’s export of health and wellness services in the next decade, outlines choices for strategy, and makes recommendations for action.
The study tested a hypothesis that Estonia has a potential for exporting healthcare services. The hypothesis was based on three assumptions:
After considering different modes of exports and Estonian capacities, it was concluded that the opportunities to increase Estonia’s export of health services may be primarily sought in health tourism, and therefore the report focuses mainly on this topic.
The quest for a better service quality, lower prices and shorter queues are driving healthcare tourism at the level of individuals as well as at the level of national health systems (insurers). It is important to mention that in spite of the risks that critics of health tourism point out, international experience allows to conclude that smartly planned it would bring additional resources into the system while simultaneously improving the quality of healthcare services in its entirety.
According to the survey conducted in the course of this study, 68% of managers of Estonian healthcare institutions and businesses reached the same conclusions. European countries protect their internal healthcare markets very diligently, but at the same time the pressure to open markets continues. The European Union directive on the free movement of patients, which will adjust rules and compel member states to abolish barriers to cross-border healthcare, mainly caused by the lack of information, will most probably be adopted in December 2010.
When European consumers become aware of it, preconditions will be created for the formation of a common market for healthcare service provision and more active movement of services between member states. The better market position will go to the countries that are ready for this new situation sooner.
More than half of all Europeans would be willing to consume healthcare services abroad according to the survey conducted in the European Union in 2007. But only 4% (c. 17 million adults!) have actually experienced cross-border health services within a year. For future oriented strategies, it is important to notice that younger and more educated people are more likely to use and already use services outside their home country more often.
The general set-up of Estonian healthcare system provides good conditions for exports of health services. A sufficient supply of state-of-art technological resources together with high-quality expertise and price advantages for some time to come, are the strengths of Estonia. The analysis of the current situation of Estonia’s exports of health services showed that Estonian healthcare providers are familiar with healthcare exports (primarily by serving foreign patients).
The survey conducted in the course of this study in 2009 revealed that 30% of all providers have dealt with it and there are businesses in Estonia whose lion’s share of turnover derives from such exports (medical SPA’s mainly).
It is very difficult to calculate total health services export turnover, but a rough estimate at the moment could be 16–23 million Euros. Most of the business managers believed that exports of healthcare services would increase in the near future, although the majority of them did not make any active efforts to achieve this kind of growth. In the short term, the shortage of staff and in some cases facilities that do not meet the standards needed for exports may become inhibiting factors.
The managers of institutions polled consider Estonian healthcare services very good, but missing the attractive, foreigner-oriented marketing and sale that would bring customers into Estonia. A relatively large flow of tourists to Estonia will provide an important starting point to create sound conditions for building the confidence of potential healthcare clients from abroad.
Health tourism appears to be a logical way to continue developing tourism, because it would be much easier to offer value-added healthcare services to people who have already been to Estonia as tourists. The tourism sector is seeking possibilities to highlight the safety and uniqueness of the destination country; tourists increasingly prefer trips based on specific interests.
To increase the potential of healthcare export, the study recommends starting with the fields of healthcare services that already have primary export capacity, including providers’ higher capabilities and desire to invest, and where potential target markets have experienced relatively high and fast-growing demand. Good results could also be achieved in other fields when choosing an appropriate strategy, but would take longer.
A possible model for Estonia to systematically develop healthcare export would be the use of a public-private partnership platform (e.g. the establishment of healthcare export agency) which would develop export capacities and cooperation between different actors; and among other things would through presenting early wins increase support from the wider healthcare community and within the wider society in general.
Besides developing export capabilities of health services, related fields such as ICT, biotechnology, medical education should be integrated into a common export strategy from the very beginning. Such an approach would generate a multiplier effect and have a greater impact on all the parties of a country’s economy. The creation of a successful regional medical centre would amplify export potentials in the related fields; and high-quality research and development would in its turn add reliability for Estonia as the possible destination for international patients.
Deciding to develop healthcare export, Estonia can choose between different strategies or mix them. The fastest growth in exports of healthcare services could be achieved by taking full advantage of the synergy of tourism, wellness and health services. Somewhat more ambitious strategy could involve specialising in the fields where Estonian healthcare providers already have experience in export and which is supported by a high and fast-growing market demand in adjacent countries. But the opportunity may also be hidden in focussing on the major health related challenges of neighbouring countries (e.g. alcoholism, obesity, elderly related care etc) and providing innovative service packages there. The goal of the most ambitious strategy option could be the establishment of a high-level international medical hub in Estonia. Despite strategy choice, all of them would require a willingness to make targeted and long-term investments in Estonian medical services and its related fields.
In order to stand out among other healthcare service exporters, it would be wise to make best use of related strength, for example to integrate ICT-based solutions into a value chain of export services. Considering Estonia’s capability in technology, promising areas of export in the future would probably involve the introduction of innovative ICT-based service and business models and also, through ICT, the incorporation of cross-border components as parts of services. At the same time, this would require additional strategic efforts and will be more difficult to reach, being like the apple at the top of the tree.
When selecting target markets, there are no countries where Estonia could export its healthcare services with little effort and fast profit. Also, international experience shows that usually it is more likely to be successful in neighbouring countries’ markets. For Estonia, the Finnish market might have the greatest potential, because it is easier to enter than other markets, but its size is not so large when compared to Sweden or Norway that both have higher barriers to entry. Northwest Russia, where poor healthcare outcomes leave great problems for the local population, certainly has growing potential. So have Latvia, Germany, United Kingdom, etc., but in these countries there are different negative factors to consider: limited market and purchasing power in the case of Latvia; and in Germany and Great Britain, Estonia is relatively unknown and the distances are greater.
Aging and the development of technology force societies to adapt to unknown conditions. In this context, healthcare systems everywhere face inevitable needs for changes. Estonia can take an active stand in this situation and exploit the opportunities that this transformation is creating. The export of healthcare services would not be easy to start, but if started could in mid to long term bring remarkable benefits for both - the Estonia’s healthcare system and economic development in general.
To sum up, the study showed that for Estonia it is possible to increase the export of healthcare services, but it will require serious efforts: clear strategy focus, cooperation between different parties and willingness to make longer-term commitment.
For further details:
Expert of Foresight Division, phone +372 616 1064, firstname.lastname@example.org
WEF: Estonia is the leader of new EU memberstates by the competitevenes ability
Estonia rose two places in the Global Competitiveness Report of World Economic Forum (WEF). In the newly published report Estonia ranks 33.
The TOP10 states are the same as last year. The most competitive state in the world is still Switzerland, while US has fallen even more and ranks fourth now. The only Asian state in the TOP10, Singapore has preserved the third ranking they achieved last year. Last years fourth Sweden has jumped to the second place.
In the class of new members of European Union Estonia has regained the leader position lost last year. "Our rising is foremost based on the improvement of macroeconomic stability and on the cost of losing our position among the innovation-based economies,“ commented the head of Foresight Division of Development Fund Kitty Kubo. The biggest assets in regard of the position changed were the government’s efforts to improve the budgetary stance and the change in the labour market act. ´The fall from the class of rich innovation-based economies back to the class of developing economies lifted the importance of basic criteria and lessened the importance of additional value criteria as innovation and business sophistication in general result.
„Estonian result shows that the decisions made by the Government have brought success and in some parts we have regained the competitiveness lost. But no more. In the more sophisticated criteria needed for the new economic growth we have given ground compared to other states. In other words, we have not been able to use the crisis to create important structural change and to bring our economic competitiveness to the new, stable and beneficial grounds" she added.
Estonia has lost more ground in the business sophistication, which has been a problem also before, especially in the criteria of the control of international purveyance links, the development of clusters, the existence of local supplier, quality etc. In the criteria of technological readiness, usage of technologies by the enterprises and in general access to the technology which all used to be Estonia’s stronger sides, the ground has also been given in. As a primary result of the financial crisis are the fall in the criteria of the financial market development (accessibility of loans, liquidity of stock market, state of banks) and the market size.
„If this trend continues, it will be difficult for Estonia to compete for the substantial knoweleddgeable foreign investments essential for restructuring the economy. We compete for the investments, market and workforce mainly wwith the Central and East European states and thus Poland, who has been preforming well for several year, and Lithuania, who has well amended their position, catching up with us,“ commented Estonian expectations the economy expert of Development Fund Heido Vitsur.
WEF presented the Global Competitteveness Report for the 31st time. The report is on of the most representatives of the world. It is based on the disqusition of competitevness abilites of famous scientists Jeffrey Sachs and Michael Porter (USA). Current report covers 139 states and gives an overview of a time when global economy continues to be characterized by sigbificant uncertainty, although growth has resumed.
Estonian Development Fund is official partner of WEF in Estonia and supports the gathering of data from enterprises and organises the presentation of results.
Kitty Kubo, head of Foresight Division
tel 616 1061
With information technology support towards pupil-centered school
Learning in the school of 21st century must be exiting and consider the pupil’s individual interests and abilities better than it does today. For achieving the result the possibilities offered by the information technology (ICT) must be used to enrich the teaching process with sound, video and other multimedia solutions. The learning will become more effective, interactive and playful. To get the change moving on one hand the leader must be found both in state and in schools and on the other hand the initiatives coming from teachers and pupils must be supported.
The head of the Development Fund Ott Pärna marked that the computers are present in schools, now there is need to start using them properly. “We stand on the brink of the era when the technology is broadening the understanding of traditional lesson, allowing to bond different subjects and problems of everyday life,” said Pärna.
The report on usage of ICT in education, presented today by the Development Fund, presents a roadmap enabling Estonia to reform education system from class-centred into pupil-centred style. The Minister of Education and Science Tõnis Lukas marked on the possibility of drawing together better the worlds of pupils and teachers through the use of ICT.
Of the problems standing before educational system ICT presents solutions to taking into better account the individuality of a pupil, to altering the teaching into more creative and problem-based process and to secure to every pupil the possibility of learning from the best materials and from highly valued teachers.
To achieve the goals presented in the report the vital role is played by the leader, foreperson or organisation, who would attend to the coordination of learning materials, to the elating of school directors and teachers and to the including of the pupils. The forward-looking school directors must be credited and supported. For endorsing the initiative of teachers the Innovation Fund has to be established, to enable the start of pilot projects for testing ITK solutions and spread the experience. Sensible would be to start the introduction of ITK solutions from science classes as the interest of pupils to participate in these is the lowest while the need of the society for future specialist is the highest.
The current report is a follow-up to the report EST_IT@2018
Expert of IT Society
Rolling Estonians Return
If we want to achieve new growth, making things a little better is not enough. Neither will introducing euro nor a few supplementary programmes suffice. Our whole society needs to take a long leap forward!
The post-crisis GDP level we are slipping to is the doping-free (read: loan-free) ceiling of our current collective capacity - as entrepreneurs, politicians, officials, education leaders and media managers, as well as the entire society. "We need to wake up and do something fundamentally different," the recognised IT management professor Carlota Perez said once so pertinently when commenting on the success options of the countries battling with the crisis.
In order to move forward, we need a Big Plan - a shared long-sighted vision for the practical future of the Estonian economy and a coherent action plan for its implementation.
The successful Estonia of the future will definitely be creative, appreciative of knowledge and exporting much more sophisticated products and services than today, and doing so on a larger scale. But what kind of knowledge are we talking about, who will be the buyer and where and at which capacity will the products and services be produced, etc? The crisis is the time for a new kind of beginning for both entrepreneurs and the state.
We need to do our best for Estonia could be perceived as a small and smart Scandinavian country that has decided, by acting wisely, to exit the crisis among frontrunners. So that The Economist wouldn't ironically describe us and the other Baltic countries now in slump as suffering from the Baltic blues.
We are not starting out from scratch. Firstly, the percentage of resourceful people in Estonia is close to that of the Scandinavian countries, higher than in the countries sharing the same fate, and also higher than in the southern Europe. Secondly, the Development Fund has carried out a number of foresight projects during its slightly more than two years of existence. These have helped us to gain in-depth insight into the problems of the Estonian economy, perceive global trends and thus identify growth potential in different sectors.
Over a thousand entrepreneurs, decision-makers and thinkers from Estonia and elsewhere have been involved in analysing Estonia's options. About a hundred brainstorming sessions have been held. As a strategic initiative, we have started the Estonian IT Academy project, aimed at taking Estonia's higher IT education to an international level, and launched the Estonian Private Equity and Venture Capital Association together with 25 market players.
Within 14 months five venture capital investments have been made. Four new investments are being prepared while five new ambitious projects are maturing in our international business incubator SeedBooster.
All this has given us enough reason and the certainty to initiate the Estonia's Growth Vision 2018 project, which would give rise to clearly targeted coherent growth programmes to be collectively and effectively implemented. If a small country wants to be in the global picture in certain niches, it has no other option than to specialise.
Therefore, I call on you, just as I proposed in my speech to the Riigikogu (Estonian Parliament), to jointly draft the Growth Vision for Estonia 2018 and set out in that direction. In fact, we have no other choice. Also in search of a new growth story are the pragmatic Singapore, the welfare state Finland, as well as Ireland, once a role model for many, let alone larger countries.
I am appealing to all Estonian leaders: by the next summer, let us discuss the choices that Estonia has and establish a new meaningful landmark. Then we can collectively put it to practice. This is the only way that gives us grounds to expect a new sustainable success story for Estonia that will bring well-being to our people. And so one day The Economist could be inspired to write laudatory feature stories - The Rolling Estonians are back and stronger than ever!
Ott Pärna, CEO of the Estonian Development Fund
The Estonian IT Academy is the umbrella name given to a joint initiative aimed at elevating Estonia’s higher education in the field of information and communication technology (ICT) to a new level so that it would be capable of an international breakthrough.
This entails world-class higher ICT education, which would:
When pursuing the objective, Estonia will benefit from its international reputation as a successful IT country capable of implementing and developing new information and communication technologies. This is a foundation which makes it significantly easier to resume building up reliability as a significant provider of higher ICT education.
This initiative stemmed from the conclusions of the Estonian Development Fund’s EST_IT@2018 foresight project. ICT implementation has contributed to almost 50% of the productivity growth witnessed by the Western economies. Estonia possesses sufficient untapped potential for benefiting even more from ICT.
Regrettably, the shortage of thousands of ICT specialists does not enable to utilise the ICT potential in Estonia. Therefore, ICT companies find it impossible to expand their business activities in Estonia. The current economic crisis and an overall increase in unemployment have not brought any relief: according to employment agencies, there is a persistently high demand for ICT specialists and every tenth available job is being offered namely to computer specialists.
Problems are deepening in the medium-long term: the supply of highly qualified IT specialists will decrease further in the coming years due to unfavourable demographic trends persisting in Estonia. In 2014, the number of high school graduates will plummet by nearly a half from the current 12,000. The ensuing relevance to higher ICT education would be a decline to just five hundred students enrolled in computer sciences programmes compared to the one thousand students currently commencing their studies in this area. Should the efficiency of the education process remain unchanged, the number of ICT graduates would drop from some 350 today to just 190 a year.
Considering the deepening shortage of ICT specialists, the common goal of the signatories is to make sure that – regardless of the unfavourable demographics – the number of students commencing studies in the field of ICT in Estonia would remain AT LEAST at the current level and that most of the students would complete their studies on schedule.
A possible solution is to become significantly more active in bringing foreign students and lecturers to Estonia. In order to achieve that, needless duplication in Estonia's higher ICT education must be avoided and all efforts should be pooled towards co-operation outside Estonia. A purposeful engagement of foreign students from target countries relevant to us will also underpin the efforts of Estonian companies seeking to operate in these markets and increase their export revenues.
Within the framework of the co-operation agreement, we have decided to prepare a business plan by spring 2010 at the latest. We will try out different possibilities, agree on necessary steps and then mobilise resources into carrying out the vision.
We hope that the experience drawn from this pilot project will be of use in a broader context and contribute to finding effective and fast ways of making Estonia's higher education international.
We are inviting all interested parties to contribute to the success of the Estonian IT Academy!
The memorandum has been signed digitally by:
Taavi Kotka from the Estonian Association of Information Technology and Telecommunications, Peep Sürje from Tallinn University of Technology, Alar Karis from University of Tartu, Rein Raud from Tallinn University, Kalle Tammemäe from the Estonian Information Technology College, Ott Pärna from the Estonian Development Fund.
Background slides by Ott Pärna on the cooperation agreement as the basis for the Estonian IT academy (pdf 2 mb)
Read also the EST_IT@2018 foresight conclusions.
Vitsur: We overdramatize euro
BBN: So far it’s not even known whether we met Maastricht criteria last year, not mentioning this year, Heido Vitsur, an economy expert at the Estonian Development Fund told ERR News.
“When last year’s gross domestic product is reviewed 0.5 pct smaller then we haven’t met the criteria. We overdramatize things. We must understand that getting euro is likely process, not certain arithmetical game where everyone knows what happens,” Vitsur said.
He said that nothing will happen if we fail to join euro next year.
“We live on just the same. Currently it’s hoped that euro brings more investments. If it is so then our efforts are justified,” he said.
Vitsur said that analysts and investors have different interests and principles, which is why no one knows whether euro will bring big investments at once.
“Euro is beneficial for one, not other,” he said.