No. 30




What will the Estonian Bioeconomy Be Like in 2050?

06 June 2022


RiTo No. 30, 2014

The direct impact of the biotechnology applications already visible today could amount to 2–4 trillion euro (c. 5% of the global GDP) in the coming 10–20 years, according to the estimation of McKinsey.

Bioeconomy has a significant potential to increase also the welfare of Estonia and to raise living standard. At the same time, we do not know yet what the future of global trade will be like in the coming decades, how rapidly biotechnology will be taken into use and what the international agreements on climate neutrality, protection of biodiversity, etc. will be like.

The scenario analysis of the long-term development opportunities of Estonian bioeconomy helps prepare for very different possible future developments. We analyse what opportunities for development the Estonian bioeconomy will have in a more open and in a more self-centred international situation. We will discuss how to embrace the entirely new technological and socio-economic opportunities associated with the bio-revolution, how to compete in export markets and keep pace with technology, and what to do if, for one reason or another, promising new opportunities offered by biosciences and biotechnology do not materialise.

The first scenario, bioeconomy that ensures secure self-reliance, is characterised by global economic uncertainty and the need to ensure self-sufficiency in essential products. In the second, globalised and traditional bioeconomy scenario, open trade and movement of capital offer opportunities for the Estonian bioeconomy to seek a better place in the global division of labour. In the third scenario, a global economy shaken by bio-revolution, biotechnology is changing the existing ways of using biomass to a large extent, leading to entirely new areas, products and services in bioeconomy. In the fourth scenario, environmentally-conscious and community-based adaptation to bio-revolution, Europe is seeking a balance between the implementation of novel biotechnology and the preservation of traditional eco- and food systems.

Keeping in mind the uncertain external environment, it would be wrong to try to decide which scenario we would prefer in the first place. However, we highlight the main strategic breakthroughs trends that will enable the Estonian bioeconomy to grow successfully in any scenario.

For the productivity of workforce and the standard of living in Estonia to approach that of the Nordic countries or Germany, the share of more sophisticated products has to increase in Estonia’s exports. In the context of Estonian bioeconomy, this is expected to require investments reaching billions of euros in the development of chemical processing of wood, (bio)pharmaceuticals industry and ICT solutions supporting bioeconomy.

As an absolute minimum, the Estonian research and higher education must follow what is happening on the forefront of biosciences and biotechnologies, and develop the capability to rapidly adopt and further develop technologies created elsewhere.

For Estonia, maintaining and developing effective cooperation with the Nordic Countries and with Germany, Poland and the Baltic States is vital from the point of view of ensuring mutual access to markets, security of supply for (bio)economy, energy security and investment protection.