Estonia has experienced economic recovery led by broad-based export growth and a boost in retail sales. Key success factors for Estonian export companies include flexibility in providing small, tailored solutions and speedy deliveries. Estonia's economy is also diversified across sectors and companies, with specialization occurring at the company level as they identify new niches. However, Estonia faces future challenges around a decreasing workforce that could lead to structural unemployment and wage pressure, making it important to invest in automation, moving up the value chain, and implementing scientific breakthroughs in business.

1. © Swedbank
Trends in Estonian Economy
Heiki Raadik
Head of Corporate Banking
Swedbank AS

2. © Swedbank
Success factors
• Economic recovery was lead by broad based export growth which was followed
by boost in retail sales
• Key success factor of Estonian export companies is flexibility – small
quantities allow tailor made solutions and speedy deliveries
• Concentration in economy (both on sector and companies level) is very low and
therefore risks are hedged. Estonia has not given preference to any industries.
• Specialization is taking place on companies’ level who constantly look for new
niches with product development and supply chain optimization. This ensures that
growth decisions are made on grass root level and not in ministries.
• Natural resources support Estonian strength in forestry, building materials,
furniture, energy (oil-shale mining and windmills) and food production sectors.
• Strong IT-brand (e-government, skype, busy start-up landscape, e-residency,
public e-services) and human capital support export of services
• Business environment is supportive and risks remain low – Nordic business
culture, mild regulations, low corruption level – challenge is to keep it this way!

3. © Swedbank
Future trends in Estonian economy
Business environment challenge: workforce will decrease by ca 50 000 people
(7%) in 5-10 years – structural unemployment and continuous wage pressure.
Changing environment creates urgency for:
– automatization in industries
– moving up in the value curve
To do that:
• Smart specialization is needed – investments into R&D should be made in areas
where Estonian companies are strong already .
• R&D has to be made to count – implementing the scientific breaktroughs into
business is crucial
• Industry 4.0
• Time for investments is today! Inputs are cheap
Long term goal needs to be sustainability. We need jobs of all kinds and different
specialization levels to be sustainable as a country and society

4. © Swedbank
Thank you!