10 Ideas Regarding the Estonian Economy
The development of economy in Estonia during the last two decades has brought us among the developed countries, but future economic progress will not take place by itself. In order to achieve that, we need structural changes in business sector, and political decisions to support those changes. The article highlights ten activities that might speed up the development of Estonia. Five of them concern business, and five are related to government.
First, it is necessary to focus on increasing productivity in the whole society, treating it as an economic policy imperative. Second, it is important to pay special attention to the development of processing industry, which gives the main export revenue and to a great extent ensures the development of the service sector that is connected with it. Third, we have to support the concentration of capital and knowledge, which would contribute to the growth of the competitiveness of our extremely fragmented business landscape, in particular on foreign markets. Fourth, we should look for ways for leaving behind the mainly subcontracting-centred business model and start making final products that are sold under their own brands. Fifth, accelerated salary growth should be seen as an additional stimulator for boosting productivity and export capacity, and not as just an increase of costs.
As regards the national business policy, it is necessary to focus on overcoming specific shortcomings instead of attaching importance to places in various internationally compiled ranking tables. Second, we should not be afraid of specific decisions, if necessary, also for solving the problems of particular (large) companies. Third, considerably more attention should be paid to supporting research and education and increasing of intellectual property, especially in regard to processing industry. Fourth, the government should focus more on developing the education system in a balanced way that takes into account the real needs of the market economy. And finally, in order to speed up economic development, first of all to develop the necessary infrastructure that supports business, we should not be afraid to use loans.
Estonia needs bolder decisions for reaching the next level of development.