Entrepreneurs: a strong economy is the lifeblood of Estonia, let's focus on it now

Business federations call on companies and the state to prioritise the competitiveness of the economy and take the necessary steps to achieve this. Economic development is the only solution that will also help to alleviate the chronic shortage of public money.

"The basis of the vitality and sustainability of the Estonian state is a competitive economy. If the economy does not grow, it will not be possible to meet the growing needs and expectations of society," stresses Ivo Suursoo, Vice-Chairman of the Employers' Confederation.

More than 80% of national tax revenues come from taxes on wages and consumption, and thus the competitiveness of the economy depends on the country's ability to make the necessary investments in areas such as security, education, health and other public services.

However, a competitive business environment does not happen overnight and does not last by itself, and requires decisive action from both businesses and economic policy makers. "Therefore, we should set the development of a higher value-added economy as a priority for the next decade," explains Arto Aas, CEO of the Confederation of Estonian Employers. "This is not just a task for the state, but a societal agreement, where ambition is set by both the private and public sector and everyone takes the next step."


The business associations formulated these steps in the form of an economic pact for the state and businesses (similar to the research pact signed in 2018), which they invite businesses and their associations as well as policymakers to join. The signatories take responsibility for driving change, working together and maintaining focus to achieve the goals.


Thestep for companies is to invest in innovation and innovative product services, and to increase export volumes and the number of export destinations, as well as to digitalise and automate, and improve the quality of management.


Thecountry's step is to maintain a competitive business environment and support the structural transformation of the economy towards value added growth.


This will be achieved by maintaining a stable and competitive tax environment, ensuring a labour market with the right skills and affordable energy. It will also decisively cut red tape, increase the efficiency of the public sector and implement the green turnaround in a way that boosts business competitiveness. In addition, the state will invest in innovation and research and development, ensure the necessary measures for the export of higher value-added goods and services, and ensure access to capital.


Suursoo stresses that the main objective is not to sign the agreement, but to take the parties to the next step. "The ambition to develop a competitive, exporting and sustainable economy is a choice."


Accompanying the steps of the agreement are metrics to help assess progress towards the targets. The ultimate goal is to move towards an increase in the productivity of the Estonian economy to 110% of the European average by 2035, and to rank Estonia in the top 10 in global competitiveness, from 26th today.


To date, 13 business organisations have signed up to the EPA initiative.