Download Start-up Estonia

Why good things happen
in Estonia?
Piret Treiberg
Head of Enterprise Division
Economic Development Department
2015 Nov 16th Minsk
(Map
& location)
At the
Heart of the Baltic Sea
• Area: 45 227 km2
• Population: 1,3 million
• GDP: 14 860 € (per capita 2014)
• GDP growth: 2.1% (2014)
• Exports: 85% of GDP (2014)
• Member of EU, Eurozone,
OECD, NATO and Schengen
• Credit ratings: Fitch A+; S&P AA; Moody’s A1
Basic principles of economic policy
Macroeconomic framework
• Liberal trade and price policy
• No restrictions to the free movement of capital
• Balanced budget of central government (also the
lowest public sector debt in Europe)
• Conservative foreign borrowing policy
• Simple and proportional tax system, no tax on
reinvested capital
Reforms 1991 
I the reforms were comprehensive, encompassing both
micro- and macroeconomic policies.
II the reformers went further than anywhere else in the
world by implementing the free market principles.
III the most important policies of the whole reform package
were implemented in a very short time-frame between
1992 and 1994.
The most important aspects of these reforms took place in
the areas of monetary, fiscal and trade policies, as well as
in the rule of law– particularly the rules governing property
rights.
Role of foreign direct investments
 The role of foreign investments was particularly crucial
in the process of privatization of companies
 There are no restrictions for the foreign investors,
importers and other foreign firms to invest in Estonia.
 Foreign investors have always been treated equally
with domestic investors in Estonia
  In the beginning of 2000’s, Estonian economy was
growing fast, showing numbers in double digits.
2008
In the beginning of 2000’s, Estonian economy was
growing fast, showing numbers in double digits.
What happened in 2008 was that significant export
markets disappeared and the domestic housing
bubble deflated.
The GDP shrank by 3.6 percent in 2008 and 13.9
percent in 2009 in Estonia
It was the third-deepest recession in the EU.
The unemployment rate reached almost 20 percent
in spring of 2010.
World economic crises 2008-2010
Significant export markets disappeared and the domestic housing
bubble deflated.
The GDP shrank by 3.6 percent in 2008 and 13.9 percent in 2009 in
Estonia
It was the third-deepest recession in the EU.
The unemployment rate reached almost 20 percent in spring of 2010.
Estonia had kept the public sector debt low during the boom
years. The Estonian governments fiscal policies have always been
conservative – even today public debt of Estonia remains at around
10.4 percent of GDP (2014) - one of the lowest in the world.
Throughout the boom years the government had run constant
budget surpluses and built up emergency reserves.That also
helped to respond to the crisis without any external assistance.
Throughout the crisis Estonian government still had more reserves
than debt. The reserves were 11, 6 % of GDP in 2009 and 12 % of
GDP in 2010.
Recovery from economic crisis
According to OECD Economic Survey, strong recovery from the
crisis has benefited from structural strengths of the Estonian
economy:
flexible labor force,
business friendly regulation,
well capitalized financial institutions,
a successful transition from the currency board to euro area
membership,
and sustained credibility of fiscal policy
Estonia is one of the most successful
countries in in the world in attracting FDI
Enterprise
policy in Estonia
Evolution of Estonian enterprise policy
Enterprise infrastructure
and staff training
2004-2006
Machinery and
equipment; technological
innovaton
2007-2013
People
Smart entrepreneurship
New business models
2014-2020
Targets of Enterprise Growth Strategy
2020
R&D
Private sector
R&D expenses
2% GDP
(currently 0,86)
BUSINESS
MODEL
(Share of young
innovative
enterprises,
early phase
investments)
VALUE ADDED
Productivity per
employee 80% EU
average (currently 72)
ENVIRONM
ENT (Doing
Business 15)
EXPORT
Estonian share in
world trade 0,11%
(currently 0,096)
Key areas
Product development
Productivity
Export
Diagnostics
+ councelling
Financial
instruments
New businesses
Grants
Skills and knowledge
Financial instruments
Opportunities for enterprises:
•
•
•
•
guarantees with state guarantee
loans
venture capital
credit insurance
The
compa
ny
applies
Diagnosti
cs
EAS is
taking
contact
Prelimenary
diagnostics
Prelimenary
diagnostics
Up to 2 week
Coachi
ng
Trainin
g
Long term action
plan
Development plan program
Services
Grants
Guarantee
s
Loans
Creating the action plan
Execution
Up to 6 month
Up to 3 years
Export
Trainings
Advisory services
Business opportunities
Export plan
Inquiries
„Sourcing“ service
Market research
Market information
Trade missions
How to find clients
Export readiness
Matchmaking events
E-marketing
Market overviews
Export partner search
Export of the
services
Export advisers in our
foreign offices
National stands on
International trade fairs
Market specific
seminars
Associated export
advisers abroad*
Target markets
100 km
Neighboring markets
1 000 km
The next circle
10 000 km
Distant markets
Finland
Sweden
China
Russia
Norwey
Japan
Danmark
Nederland
Germany
France
UK
Technological development centres
 R & D activities based on the wishes and needs of
entrepreneurs
 R & D of technological development centres and development
activities of the organization of technological development
centres, marketing activities of technological development
centres, etc.
Clusters
 Carrying out development activities of cluster to contribute to
the increasing of production effectiveness, development or
improvement of products, services and processes, and thus
achieving higher added value.
 Carrying out joint marketing activities with a wider networking of
the cluster and involvement of new partners.
Start-up Estonia
 Training and development programs introduced in prestart-up stages:
 ​Programs for developing start-up skills and knowledge
 Programs for establishing start-ups and achieving investor
readiness
 ​Support of accelerators in start-up stages
E-Estonia
Business Register
e-Banking
Tax and Customs
Board
ID-Ticket
Customer Self Service Portals
e-Invoice
e-School
e-Pension Account
Digital Signature
e-Police
State Portal
i-Voting
Land Register
e-Health
Good example: e-annual year report
Full electronic procedure 2010
To reduce administrative burdens and
provide simple and transparent business
environment
Administrative burden was reduced 29,7%
(4.6 mln EUR)
World Summit Award 2013
Future
10 mln e-Estonians for 2025
ID-card with digital signature for foreigners
Possibility to use Estonian e-services
globally
Data Embassy
Real time economy
Additional information
• Estonian Entrepreneurship Growth Strategy 2014-2020
http://kasvustrateegia.mkm.ee/index_eng.html
• Estonian Ministry of Economic Affairs and Communicatoin
http://www.mkm.ee/en/objectives-activities/economicdevelopment/entrepreneurship-and-innovation
E- Estonia
https://e-estonia.com/
Thank You!
Piret Treiberg
[email protected]