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Estonian business environment Kaupo Sempelson Enterprise Division Ministry of Economic Affairs and Communications May 17 Valmiera, 2013 About Estonia General Information Population: Area: Language: Currency: GDP: GDP growth: Exports: 1.29 million 45 000 km² Estonian EUR EUR 13 172 per capita (2012) 3.2% (2012) 92.5% of GDP (2012) 4 Entrepreneurship • 52 acting enterprises for 1000 inhabitant • Survival rate of enterprises 73,7% (3 years old enterprises) • Share in world trade 0,099% • 11 281 exporting enterprises • Productivity of EU 27 – 68% • Approximately 19 000 new enterprises in 2012 • 43% want to be entrepreneurs (8,3% are) 5 Taxes in Estonia GDP by Economic Activity, 2012 Source: Statistical Office of Estonia FDI inflow by countries and activity, stock as of 31.09.2012 Sweden 27,3% Finland 22,9% Netherlands 10,6% Norway Financial and insurance activities 25,7% Manufacturing 16,9% 5,1% Real estate activities 14,1% Russia 4,2% Wholesale and retail trade 13,1% Lithuania 3,2% Cyprus 3,0% Professional, scientific, technical activities 9,1% Denmark 2,5% Transportation and storage 5,5% USA 2,4% Information and communication 3,1% Other 12,5% Germany 2,3% Other 16,5% Source: Bank of Estonia Exports of Manufacturing Industry by technological intensity 2012 Source: Statistical Office of Estonia Average gross wages by economic activity Source: Statistical Office of Estonia State roll KredEx Enterprise Estonia AS KredEx Krediidikindlustus County development centres (15) Foreign representatives (10) 12 Existing pieces @2009-2010 Pre-seed Seed Series-A Series-B Concept/Alpha Beta, business model, market test Launch, production Scale! Business competition: Ajujaht Incubation programs, accelerators Subordinated loans Export grants Start-up grants, guarantees R&D grants Knowledge transfer VC funding: Estonian Development Fund VC funding: Baltic Innovation Fund Bits and pieces are there but few of them with really global growth company ambition Estonian Start-up Scene • Largest number of start-ups per capita • Accelerators • • Start-up Wise Guys Gamefounders • The 2008 financial crisis was an extra boost • Key focus in the near future – make them grow fast • Brain Hunt • ENTRUM • Garage 48 Start-up Estonia – „umbrella“ program for high-growth start-ups Pre-seed phase Generation of biz ideas, developing biz cases, providing entrepreneurial challenges for students Seed phase Start-up phase Validating the biz concept Accelerating the most promising companies Building the prototypes Internationalization For example: • “Start-up academy”, intensive mentorshipacceleration program For example: • business accelerators (like Vigo) Work with university’s intellectual property For example: • Biz competitions for wider audience • Entrepreneurial, inspirational lectures • bootcamps, etc • Incubation programs • Lectures and training on specific topics • International networking projects • Biz missions to target markets Business incubators Technology incubators in science parks: • Tallinn - Tehnopol • Tartu - Tartu Biotechnology Park, Tartu Science Park Creative Industries Incubators: • Tallinn - ESA Creative Incubator • Tartu - Tartu Centre for Creative Industries • Viljandi - Viljandi Creative Incubators Foundation Other incubators: • Tallinn - ESA incubator in Ülemiste, ESA incubator in Kopli • Narva – Business Incubator Eagle Nest 16 Example: Innovation vouchers • Target group: SMEs (only once per SME) • Activities: buying services from HEIs and R&D institutions, patent offices and certified labs; 3200EUR per SME • Option for cooperative projects between up to 5 SMEs; 15% of all projects, increasing trend • Technology transfer offices have had a major role in promoting vouchers and university services to SMEs Information Enterprise Estonia • http://www.eas.ee/en KredEx • http://www.kredex.ee/en/ County Development Centres • http://www.eas.ee/et/eas/kontakt/maako ndlikud-arenduskeskused Starting a business Company Registration Portal 20 Company Registration • Step 1: The entrepreneur logs onto the portal using an ID card • Step 2: He or she fills in the necessary information • Step 3: The founder or founders electronically sign the documents • Step 4: Fees and share capital are transferred through the Internet • Step 5: The entrepreneur sends the application with just one click All of the information is automatically sent to the courts and the Central Commercial Register, and a confirmation is received a few minutes later. • Cross-borders • Thanks to the introduction of cross-border digital signatures, Portuguese, Finnish, Belgian and Lithuanian citizens can also register their companies in Estonia and vice-versa. Potential users are up to 20 million. 21 All you have to have: Computer Internet access ID-card ID-card reader Valid PIN passwords 22 E-business register data exchange 23 e-Business Register Centre of Registers and Information Systems It works! We can use this knowledge in any Internet portal World record Know-how Free license Supporting single market Co-operation Efficient 24 First in EU Innovative 18 min 3,5 sec Cost saving Proof of concept Secure Saves time Single points of contact Co-operation Improves Estonian business environment Use of ICT •E-government •E-Tax Board •E-elections, •Digital signature •E-billing •Mobile parking, •Mobile payments •Online company creation •Digital prescription •90% electronic transactions, 88% of the population using Internet banking • Submittance of annual reports electronically in Commercial register • Census 2011, more than 60% of population counted electronically Information ICT demo centre • http://e-estonia.com/ Centre of Registers and Information Systems • http://www.rik.ee/en 26 Opportunities for 2014-2020 Smart specialisation … • ICT supporting other sectors • Health technologies and services • Resource efficiency … and 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% Main fields Competitive position Business model Smart specialisation Sales & marketing Development & production 30 What do we offer our target groups? • Support against comprehensive business-plan • Long-term client management • Exports in focus • Increase of financial instruments Estonia-Latvia cooperation • • • • Tourism between countries has been risen last years. INTERREG programs Cooperation between local governments Estonian export to Latvia – food and drinks, machineryequipments, minerals • Latvian export to Estonia - mineral fuels, food and drinks, machinery-equipments, chemistry products • Latvia is 4th trade partner to Estonia • BIF Thank you! [email protected] www.investinestonia.com www.tradewithestonia.com