Estonian Entrepreneurship Growth Strategy 2020
Flight plan Where We Stand Role of Entrepreneurship Growth Strategy Attracting FDI
Where We Stand
Our strenghts The Estonian economy is internationally integrated and dynamic Generally business friendly and innovative environment Sound public finances Simple and straight-forward tax code Well functioning structure to support the development of entrepreneurship
Our weaknesses (macro view) Lack of qualified labour, i.e. the skills offered by the education system do not always correspond to the needs of the labour market Demographic situation - ageing population combined with relatively high rate of emigration The productivity and added value created in Estonia are substantially lower than the European Union average
Our weaknesses (micro view) Companies often lack ambition The management capacity of companies is often average and planning perspectives short Innovation co-operation between Estonian companies and universities is weak Exports and marketing co-operation between Estonian companies is relatively limited The choice of target markets is narrow and volumes exported small
Our challenges Raising productivity Encouraging innovation, cooperation, adopting innovative business models Closing the skills gap Updating science courses in schools, enhancing the quality of engineering education, linking studies with practical training, updating the vocational and continuous training system, placing more emphasis on e-skills Employment measures Active labour market policies, improving e-skills, facilitating the employment of foreign experts Maintaining and improving the entrepreneurial environment Reducing administrative burden, maintaining the simplicity and universality of the tax code
The Role of Entrepreneurship Growth Strategy
What impact? Primary goal: Raise productivity to 80% EU average Subgoals: Increase business sector R&D investments Increase the volume and quality of Estonian exports Encourage ambitious business models
Focus of the strategy Smart Specialisation Areas Focus on global challenges and demand ICT supporting other sectors Health technologies and services Resource efficiency Target Groups Focus on high-impact entreprises, return on investment
Target Groups Locomotives export turn-over > 30 MEUR Key clients export turn-over > 1,25 MEUR, value-added > 25k EUR/per Growth enterprises sales turn-over > 200 000 EUR + yearly growth 20%
Implementing the strategy I Enterprise Development Programme Diagnostic of current situation and future prospects 2-3 year development contract between the company and Enterprise Estonia Support and services according to the development needs; monitoring and coaching Pilot programme launched, full-scale launch in 2015
Implementing the strategy II Cooperation programmes (focussing on smart specialisation areas) updated cluster programme updated competence centre programme Export development info, awareness, skills new business opportunities (facilitating contacts) on-site support for Estonian exporters in foreign markets loans and guarantees by KredEx
Implementing the strategy III Entrepreneurship promotion Promoting entrepreneurship as a carreer choice and raising general awareness on entrepreneurship Improving skills necessary for entrepreneurship (trainings on starting an enterprise, business model development, innovation) Starting grant and consulting
Implementing the strategy IV Start-up Estonia programme Promoting the creation and growth of enterprises with global ambition Activities Idea validation and investment readiness Early stage investment program Promoting investor networks Training program for founders and angel investors Marketing Estonia as a start-up destination
Implementing the strategy V Venture capital: Fund-of-funds ~120 MEUR (incl 60 MEUR public money): Venture Capital Expansion Capital Business-angel Co-Investment Fund Baltic Innovation Fund (EE, LT, LV) ~200 MEUR (incl 100MEUR publ. money) Later stage and bigger investments
Budget 2014-2020 Entrepreneursh ip awareness; 48,75 FDI promotion; 29,3 Entreprise development programme; 85 Venture capital; 60 Smart specialisation; 77 Loans and guarantees; 85,5 Total budget 385,5 MEUR
Attracting FDI
FDI - challenges We are losing low cost work force advantage and have to move towards attracting higher value added FDI Growing wages and small labour pool is a disadvantage compared to our competitors/neighbours Limited tools for attracting FDI Better sales force and more coordinated approach towards attracting FDI is needed
FDI - solutions Unified message and value proposals for investors in different sectors in cooperation with universities and development centers with a focus on networks in the smart specialization areas Tools for attracting higher value added FDI compensating costs for training, R&D, salary to a certain extent) and tools for moving/bringing the manager level specialist and development teams to Estonia Consistent client management - supporting investors by EAS client management stronger emphasis on aftercare, client management Team Estonia - more efficient cooperation better coordination between different agencies, specific targets and better service
Improving the environment Talent Attraction Integration programme based on the country of origin: basic information about Estonian working environment, culture and society Changing Aliens Act to make it easier for highly skilled specialist to move to Estonia. Promoting Estonia as an attractive place to work and live in
Thank you! kasvustrateegia.mkm.ee/