Why Estonia?

Roughly the same size as Switzerland, but with 6 times fewer people - just 1.3 million – Estonia has to compensate in other ways. Their superpowers? Digital society and an innovative mindset.

Named ‘the most advanced digital society in the world’ by Wired, ingenious Estonians are pathfinders, who have built an efficient, secure and transparent ecosystem that saves time and money. With 99% of Estonian public services online - you only need to get out of the house for real estate transactions or in order to get divorced - over 820 years of worktime is being saved.

This digital comfort together with the startup-friendly economic environment (1st in the world according to Index Venture) is what makes Estonia an innovation hotspot.

More unicorns per capita than any other country in the world! Skype, Playtech, Transferwise, and Bolt – Estonia is where unicorns are made!

Day 1: Information, Communication & Technology

Advantages:

3,300+ digital services available to citizens, business and foreigners
World leader in ICT based on its track record of investments, innovations and rankings
1st Globally in the area of entrepreneurial activity
1st in Europe in the Global Cybersecurity Index
First ever state to use blockchain from 2008

Estonia’s journey to becoming the world’s most digitally enabled nation began 25yrs ago when visionaries both from private and public sector committed to IT as a country strategy. Today, Estonia is a recognised leader in digital identity, cyber security and Blockchain and has produced numerous innovations in consumer, enterprise and government sectors. This progress stands on three important pillars – building a smart state with a smart economy by smart people.

IT is taught from primary school onwards, resulting Estonia to be among the best educated countries in math, science, ICT. The Estonian IT sector and ambitious startup community (known affectionately as the Estonian Mafia) dare to create innovative e-services that change the world – from Skype to e-Residency. In fact, Estonia is also a hotbed for startups, already claiming four unicorns and producing more startups per capita than any other country in Europe.

ITC contributes more than 7% of Estonian GDP, with products and services being exported to more than 120 countries worldwide. The main export markets for B2B (business-to-business) services and products are in Europe and the US, while B2G (business-to-government) keeps opening up doorways in Africa and the Middle East, where many countries are going through economic transitions similar to those that Estonia had to face in the 1990s. Estonians stand out in the global marketplace for their flexibility and tailor-made solutions and the ability to join forces in partnership for delivering the optimal result.

Our IT R&D ecosystem enjoys global proof of concept, being trusted by global organisations such as Kuehne+Nagel, NATO with cutting-edge cyber security R&D here, or NASDAQ conducting successful Blockchain trials. Estonia’s IT R&D ecosystem is enabled by modern digital infrastructure and a pro-business environment which is free of red tape, promoting accelerated innovation and launches.

With 99% state services accessible online and 99.8% of all banking transactions made, running an IT company in Estonia is easy. As digitalisation transforms life, business and government, Estonia’s combination of skills, experience and environment make it the ideal location for globally scalable IT R&D.

CLICK HERE to Learn More about the ITC Industry in Estonia

The first truly digital nation

The ICT sector in Estonia revolves around the success of e-governance and the booming startup scene, rooted in the scientific community’s forays into cybernetics and software development already in the 1980s. The following decade was tumultuous not only from a political perspective, but also from a technological angle, as public and private sectors alike had to lay the foundation and the technical infrastructure for running an efficient and innovative state. This can be described as the starting point for Estonia’s pursuit of being one step ahead and boldly doing things as they’ve never been done before.

Today Estonia is widely recognised as one of the leading digital nations in the world, aspiring to carry the flaming torch further and beyond. This vision stands on three important pillars – building a smart state with a smart economy by smart people. Information technology has greatly contributed towards building Estonia’s global presence with fame and glory, especially in the area of public service innovation with the e-residence program standing out as a prime example. But Estonia is also a hotbed for startups, already claiming four unicorns and producing more successful startups per capita than any other country in Europe.

Leading the way through guidance and assistance

Success in ICT is not achieved by merely pooling together talent and funding, as there needs to be a sustainable, innovative and open environment for fostering development. Technology is merely a tool for achieving results and it wouldn’t mean a thing without the ecosystem and legislation to support the development. Estonia’s ICT export advantage lies in the ability to lead throughout the entire process, owing to the high level of competence covering all nuances and technical details. Rather than just export e-services, Estonians aim to guide and assist and only then develop the necessary technology to match the client’s needs, be they public or private sector entities.

While the ICT sector contributes approximately 12% of Estonia’s GDP, produces the most value added per employee and pays the most labour tax into the state budget, its importance to the country’s economy lies in using innovative ICT solutions for helping other business sectors to advance higher in global value chains. The digitalisation of the entire economy is the focal point of joint endeavours by private enterprises and governmental institutions. Secure and trustworthy services developed by the public sector can find their way to everyday business as well, including industrial digitalisation.

ICT expertise travels beyond borders

All of this couldn’t be achieved without smart and creative people. World-class technical education is the cornerstone of ensuring qualified progeny. Estonia has introduced special education programs to incentivise young aspiring students to choose ICT as their profession, and also to attract talented and capable people from other industries to try their hand at programming. The pilot program “Choose ICT” aims to attract over 500 people by 2020 and already 2/3 of the graduates have switched careers to become junior software engineers.

Thankfully ICT expertise isn’t a heavy load to export and travels well beyond borders, extending Estonia’s export markets to well over 130 countries. The main export markets for B2B (business-to-business) services and products are in Europe and the US, while B2G (business-to-government) keeps opening up doorways in Africa and the Middle East, where many countries are going through economic transitions similar to those that Estonia had to face in the 1990s. Estonians stand out in the global marketplace for their flexibility and tailor-made solutions and the ability to join forces in partnership for delivering the optimal result.

Estonia’s unique talent pool, favourable business environment and a supportive ecosystem make it the perfect test site for launching new products and services or the perfect development hub for major ICT projects. A considerable share of the 30 thousand people employed in the ICT sector in Estonia help to develop and support well-known international companies such as Kühne+Nagel, Transferwise, Bolt, Playtech and Skype – the last four forming the alluring Estonian unicorns club.

What will the future hold?

There aren’t many other industries in such a constant development flux as ICT. Future limitations will not be restricted to machines and technology, but to the human users. Estonia will continue as a pathfinding pioneer in the quest for improving the usefulness of ICT without making the users feel threatened or unsafe. Questions of ethics, morality and legal boundaries are becoming more and more evident in the ever-increasing use of artificial intelligence, another sector where Estonia attempts to trail-blaze ahead of the game to find solutions to these exact issues.

Estonia will be able to rely on its solid reputation as an innovative digital nation, its smart people, world-class education system and welcoming business environment for dealing with future change and transformation. What matters the most is the mindset – that Estonia is open to innovation and new technologies and is not afraid to make mistakes, admit them and correct them.

Day 2: The Food Sector

Estonia has a sizeable food industry which benefits from ecological raw materials, skilled workers and modern production facilities. With an established export capability and growing application of food science and technology, Estonia is the ideal location for export and R&D oriented investment.

Advantages:

Modern facilities, automation and quality certification as standard.
Experience and supply chain to service overseas markets.
Growing R&D in areas such as nutrition, directed evolution and food technology.
Pristine environment providing high-quality, ecological raw materials.
711 companies (2018).
13,823 employees.
1,89 billion EUR annual turnover, 16% of total manufacturing industry.
Branches: dairy products (21%), meat products (17%), other food products (14%) and beverages (13%).
23% of Estonia’s agricultural lands are organic.
#4 place in urban air quality in the World.

Estonia is a compact Nordic country benefiting from a pristine natural environment. Raw material inputs are high-quality, often organic and sourced from clearly identifiable local origins.

Food production in Estonia, of which there are approximately 500 companies, is highly modernised and productive. Estonian workers are typically multilingual, possess higher or professional qualifications and are trained by world-class companies. Quality certification to stringent EU requirements is mandatory and modern equipment extensively utilised in production and packaging.

Supported by a pro-business environment which is free of red tape and an efficient supply chain, Estonia is increasingly a centre for exported oriented activity. Regional giants such as Orkla, Saarionen and Lantmännen export final product from Estonia to European markets. High quality Estonian raw materials are exported globally for use in food, beverage, health, animal feed and horticulture sectors.

Estonia has a long history of food science innovation, including supplying Soviet space missions as early as 1962. Today Lallemand operate a cutting-edge, global R&D hub for functional molecules and directed evolution in Estonia in collaboration with TalTech. Finnish dairy giant Valio conducts R&D into lactose-free and digestion improving foodstuffs.

Estonia is also emerging as a centre of expertise in food technology thanks to close collaboration with its world-class IT industry. Blockchain technologies, which will assure global supply chains, have been used on a daily basis in Estonia since 2008.
With a strong track record of successful investment and innovation supported by a highly competitive business environment and digital capability, Estonia is the ideal location for export and R&D oriented investment.

CLICK HERE to Learn More about Estonia and the Food Industry

Fresh air. Clean water. Pure food.

Estonia is set to provide organic and “smart” food to the world

The long-standing traditions of the Estonian food sector are rooted in dairy and alcohol – after all, these products established the wealth of Estonians in the by-gone days as the main output of manor houses. Estonian bacon, butter and eggs became the largest export articles of Estonia already in the 1930s, while the oldest Estonian bakery Leibur goes back at least 250 years. And no Estonian can go without traditional black rye bread for longer than absolutely necessary.

Today, Estonian food products are renowned for hailing from the country with the cleanest air in the world, so naturally the emphasis is on ecologically fresh products. The modern era for Estonian food producers started with the country’s accession to the European Union in 2004, giving a new lease on life to the entire industry with increased focus on quality and product development. The food industry today employs approximately 15 thousand people and contributes 14% of the processing industry, exporting 10% of the overall volume of the said industry.

Borrowing from the heydays of past times, the beverages industry continues to push export volumes, as drinks withstand export better than most other commodities due to their longer expiration periods. Increasingly it is the dairy industry that thrives on export, as innovation is driven further through collaboration with scientific institutions on developing new products that provide healthier benefits.

A clean environment produces healthier food

The quality of Estonian food relies on the clean resources available in the country owing to favourable climatic conditions, as Estonia is not plagued by either flooding nor droughts. This in turn diminishes the use of pesticides or other plant protection products, allowing Estonia to be the second largest organic farming country in Europe. The Food and Agriculture Organisation of United Nations has rated Estonian food as the second cleanest in the world.

As consumer habits are changing around the world, Estonian food processors are quick to react to these adjustments thanks to their relatively small size and innovative approach to scientific advancements. The global trend is increasingly moving towards healthier food that provides consumers with extra benefits, such as more protein. This is one area where Estonians truly stand out for their innovation and product development.

Estonian food products can be found on over 100 export markets around the globe, while the TOP 5 markets still remain nearby. While access to lucrative new markets may sometimes even be challenging to Estonian food producers, their products have found their way to markets as far as even the Seychelles. What matters the most is that Estonian food products are safe and certified and this is why Estonians have been able to find their favourite dishes and products on the shelves of supermarkets in Finland, Latvia, Lithuania, Sweden, Denmark and beyond.

Quality and sustainability with a drive for innovation

The future of the Estonian food industry is clearly driven by an onslaught of micro-producers, while exports still remain within the realm of the larger enterprises. 100 of the largest enterprises contribute 85% of the sector’s turnover and use 95% of the workforce. The global trend is very much in favour of products with reduced salt and sugar content and using better quality fats, producing clean-label products.

The outlook for Estonian food products is positive, thanks to the established quality standards and the drive for sustainability. The export volumes of organic products and aquaculture are on the rise and Estonia takes the ethical treatment of animals and fish very seriously, cementing the country’s commitment to environmentally-friendly solutions across the entire food value chain.

Day 3: Healthcare, Life Sciences and BioTech

Patient records in Estonia are digitised and secured by the Blockchain, providing a single immutable data source for healthcare professionals. With a unique digital platform and collaborative ecosystem, Estonia is positioned to lead on preventative medicine, patient self-treatment and industry efficiency.

Estonia has a collaborative healthcare cluster spanning government, academia, competence centres, production and IT companies.

Estonian healthtech and wellness startups Viveo Health and Synctuition are building a global presence.

A pioneer in e-health for 25 years, today over 95% of data generated by hospitals and doctors is digitised. A person’s unified health record and x-rays are available on-demand throughout Estonia, allowing health professionals to make informed decisions. Blockchain technology assures system integrity while patients access their data and prescriptions using Estonia’s secure e-ID solutions.

Estonia has an active biotech cluster comprising over 70 companies who, in conjunction with the University of Tartu, research, clinically test and develop innovative science. Areas of expertise include genetics, molecular- and biomarker based testing.

In pharma, Estonia has a niche production capability for GMP certified pharmaceuticals and life science products such as antibodies, peptides, proteins, enzymes and reagents.

The Estonian Genome Center is a biobank holding data on over 5% of Estonia’s adult population. As e-Health and Big Data analytics advance Estonia will emerge as a leader in diagnostic and preventative medicine, with patients empowered to self-service when and where is convenient.

Through the application of medtech and e-health solutions Estonia aims to lead the world in societal wellbeing and the efficient use of resources.

Day 4: Electronics, IoT & Mechatronics

Estonia has a sizable and growing Mechatronics industry thanks to its ability to integrate world-class expertise in mechanical engineering, electronics, and IT. The country’s capability developed over the last 70 years and today includes R&D, prototyping, precision production, and assembly of PCBs, supercapacitors, transformers, and semiconductors.

Advantages:

One of the largest electronics sectors in Europe per capita.
High added-value, efficiency, and adaptability of product development processes.
Excellent hub for both in-house and outsourced production and distribution.
Full value chain of R&D, prototyping, precision manufacture, assembly, and service.
Modern technology, automated and environment-friendly manufacturing processes.

Ericsson and ABB trust Estonia to produce complex telecommunications, power, and industrial solutions; and other leading European firms like Enics, PKC Group, and Stoneridge provide cost-effective, on-time solutions to their global client base directly from Estonia.

In the field of mechanical engineering, Estonia has a 25-year track record of high-value production, testing, and assembly for global markets. A significant contract manufacturing sector is experienced and certified to provide intricate components and complex systems to space, transportation, and offshore sectors.

Estonia’s world-class IT capability ensures that technologies are seamlessly integrated. Historic skills in industrial automation and cybersecurity are augmented by developments in data analytics, connected networks, and the Blockchain. Estonia is at the cutting edge of sensor, control software, and location technology R&D for autonomous vehicles.

Homegrown innovations are increasingly attracting global clients, awards, and funding. Starship Technologies is a strategic partner to Daimler AG in their smart van-robotic delivery solutions. Cleveron parcel delivery solutions are used globally by the likes of Walmart, and software apps allow clients to personalize service and provide real-time data to businesses on performance and customer preferences.

CLICK HERE to Learn More about the Electronics Industry in Estonia

Electronics companies taking the Estonian economy into the future

The beginning of the Estonian electronics industry dates back to 1907 when the first telephone factory was established in Tartu. Today, with about 230 companies and 12 000 employees, the electronics industry is one of the largest industrial sectors in Estonia and has demonstrated constant growth over the years. The success of the sector is attributed to its level of added value, efficient processes, highly responsive product development and participation in global value chains.

Today, the electronics industry in Estonia stands in a very powerful position, contributing nearly 2 billion euros annually to the country’s export and having the whole supply chain represented. World-class development acumen with great engineering skills have established a number of manufacturers in Estonia with a solid network of maintenance and after-sales enterprises to boot. Almost every imaginable component or consumable is already at hand here, thanks to the strong network of distributors present in Estonia.

Export-oriented manufacturing

Electronics manufacturing in Estonia is dominated by the local branches of international corporations managing large-scale production for exports. A number of these companies also have their own development teams in Estonia or use local engineering services. The manufacturing of electronic and electrical equipment in Estonia is divided into two sub-branches: the manufacturing of computers, electronic and optical equipment makes up about 75% of the sector’s turnover. Activities range from Electronics Manufacturing Services to producing telecommunications, industrial, medical and automotive equipment and components. The manufacturing of electrical equipment makes up the remaining 25% of the sector.

84% of the Estonian electronics industry’s output is exported. Main export destinations have traditionally been Sweden and Finland – their share is 40% of total exports due to the geographical proximity and strong links between foreign companies and their Estonian subsidiaries. Lately, however, Germany and the USA have emerged as key markets, particularly thanks to the smart postal delivery robots delivered to Walmart by Cleveron.

Transforming the Estonian economy

Such success stories wouldn’t exist without a supportive and inspirational educational system, as always. The curricula of Estonian vocational schools and universities specialising in electronics are under the close scrutiny of the entire industry in order to ensure compliance with the sector’s needs and standards, not to mention global trends. Not just training, but also design, assembly and production are organised in accordance with the strictest IPC standards. Interdisciplinary collaboration is the key to helping other sectors into the digital age, as everything will become increasingly more digital, that is electronic, in the future – the electronics industry in Estonia is determined to transform the Estonian economy to that of smart and connected products.

Estonia has become a hotbed for regional tech giants to settle down in, the country is home to some of the most significant Scandinavian electronics tycoons, including ABB, Ericsson, Eolane, Stoneridge, Enics and Incap to name a few. This has lead to a re-adjustment in the sector’s export volumes, as the production volume sold to locally-based integrators has increased at the expense of direct exports. However, the electronics industry in Estonia is not dominated only by major international players, as it boasts many companies of variable sizes in order to serve different clients and fulfil their general or specific demands.

Why has Estonia become such a lucrative destination for electronics companies? The answer is simple. It is really about the people. Estonians stand out for their trustworthiness, understanding deadlines, confidentiality and respect for intellectual property rights. Plus the country’s unique geographical location allows it to cover the whole of Nordics and the Baltics.

Not just manufacturing

Estonian local companies offer engineering services and are eager to develop innovative products and technologies. Good skills, flexibility and a highly efficient business environment makes Estonian companies good cooperation partners. In general, companies established in Estonia benefit from simple tax and labour legislation combined with a conservative economic policy. Modern ICT solutions make operating a business extremely quick and convenient, saving time and money. For example, a company can be started within 15 minutes over the internet without leaving your desk. Local value chains work well, starting with the development of an idea and the manufacturing of prototypes up to the production of serial batches.

The electronics industry in Estonia is widely regarded as a trustworthy supplier to the most recognised names in the global supply chain, ranging from all major luxury car brands to jet airplanes. The future is shining bright for the Estonian smart electronics industry, as the share of electronic components is on the rise everywhere and Estonians have achieved a solid position internationally for their competence. Estonians are not afraid to tackle major projects with limited resources and are happy to take on incredibly versatile and challenging projects, because there is the constant need to learn and develop.

Snapshot of Estonia:

Trade Mission to Estonia - International Trade Council

Located in Northern Europe, Estonia borders the Baltic Sea and Gulf of Finland and covers an area of 45,227 square kilometres with 1.3 million inhabitants (2017). Situated on the north-eastern edge of the Baltic Sea, Estonia borders Latvia to the south and the Russian Federation to the east.

Capital City: Tallinn (pop. 398 500)

Other Cities:

Tartu (101 190)
Narva (67 752)
Kohtla-Jarve (46 765)
Parnu (44 781)
Viljandi (20 509)

Exports

In 2019, the top exports of Estonia were machinery, electronics and communication equipment (€3.41B), refined petroleum products (€1.69B), wood and wood products (€1.51B), information and communication (€1.16B), furniture and furniture accessories (€1.12B) and cars (€1.04B).

Export Destinations

In 2019, the top export destinations of Estonia were Finland (€2.34B), Sweden (€1.51B), Latvia (€1.31B), United States of America (€974M), and Germany (€907M).

Imports

In 2019, the top imports to Estonia were machinery, electronics and communication equipment (€3.66B) refined petroleum products (€2.04B), cars (€1.83B), oils and other products of coal tar (€1.44B), food products (€879M), and plastic products (€851M).

Import Origins

In 2019, the top countries of consignment for imports were Finland (€2.04B), Lithuania (€1.65B), Germany (€1.64B), Sweden (€1.51B), and Russian Federation (€1.31B).

Why Estonia?

A European Union Member Nation located at the cross-roads of the Nordic and Baltic regions with a market of 177 million persons located at its doorstep.

Direct access to Finland, Sweden, Denmark, Norway, Latvia, Lithuania, Russia, Poland and Germany. (An average of 2.5 hours flight time the rest of Europe).

A reliable and stable financial system thanks to transparent government policy and regulations.

Companies registered in Estonia do not have to pay income tax for re-invested profits.

Estonia is also among the top 20 countries in the World Bank Ease of Doing Business.

Foreign and domestic investments in Estonia are treated equally under the law.

Public services are simple, efficient and almost everything can be conducted online.

Europe’s number 1 most entrepreneurial country with over 1000 startups.

Estonia is the first country to offer e-Residency – a transnational digital identity available to anyone in the world interested in administering a location-independent business online.

Estonia has an extremely attractive and low-cost start-up visa program with routes to permanent residency for new startup investors and their families.

Estonia is perfectly situated for trade between Russia, Asia and Europe.

Startups raised €267m in 2019 and after the US and Israel, Estonia is the #3 destination for venture funding in the world. (Per capita. The king of all comparisons.)