Basic concepts of economics
Added value describes the value created in the course of a particular economic activity or process. This is the difference between the revenue from the sale of productsor services and the purchase price of the inputs (e.g. raw materials, subcontracting) necessary for the productionor provision of the service.
Value added = operating profit+ depreciation+ labour costs
Value added per employee = (operating profit+ depreciation+ labour costs) / Number of employees
The productivity of the Estonian economy as a ratio of the European Union average per person employed shows GDP per employee compared to the European Union average,
Gross domestic product (GDP) aggregates the value added created in the entire economy of a country by measuring the market value of all finished products and services over a certain period of time. Thus, it can be said that GDP is the sum of the added value created by all sectors of the economy.
The state of the Estonian economy today and the goals for 2035
| Key economic indicators | Year | Level | 2035 goal | Media coverage of the economic agreement |
|---|---|---|---|---|
| Productivity of the Estonian economy | 2022 | 80.8% | 110% | Estonia 2035 strategy |
| IMD Global Competitiveness Ranking | 2022 | 26th place | TOP15 | IMD World Competitiveness Ranking |
| European Innovation Scoreboard rankings | 2022 | moderate innovator | Innovation leader | European Innovation Scoreboard |
| Level of innovation capacity | >3 | Assessment of innovation capacity - innotrepp.ee | ||
| Estonian export volume | 2022 | 86% | 100% | |
| Number of R&D staff in the private sector | 2022 | 2.23 employees per 1000 inhabitants | 4.53 employees per 1000 inhabitants | TAIE Development Plan |
| OECD Talent Attraction Index | 2023 | 21st place / 38 countries | TOP10 | OECD Talent attractiveness index |
| Tax burden | 2023 | 34 | 34 | |
| TAX Foundation tax system international competitiveness ranking | 2023 | First place | First place | International Tax Competitiveness Index |
| Foreign Direct Investment Attractiveness Index | 2022 | 8th place | 6th place | Eurostat Inward FDI stocks in % of GDP |
| Results of the European Central Bank's Capital Access Survey | 2023 | 18% of entrepreneurs think that getting external funding is not a problem | At least 50% of entrepreneurs estimate that getting external funding is not a problem | Survey on the Access to Finance of Enterprises (SAFE) |
| Public R&D support incentives for the private sector | 2020 | 0.06% of GDP | 0.2% of GDP | OECD Tax incentives for R&D and innovation |
| State R&D and innovation policy investments | 2023 | 0.78% of GDP | 1.5% of GDP | Estonia 2035 strategy |
| Private sector R&D and innovation policy investments | 2022 | 1% of turnover | 2% of turnover | Estonia 2035 strategy |
Average value added per employee in different sectors of Estonia
| Sector | Year | Value added per employee | The target for 2024 could be 10% increase in value added |
|---|---|---|---|
| Estonian average | 2022 | 45 474 € | 50 021 € |
| Estonian manufacturing industry | 2022 | 41 200 € | 45 320 € |
| It | 2022 | 50 177 € | 55 195 € |
| Printing industry | 2022 | 32 909 € | 36 200 € |
| Electronics industry | 2022 | 38 336 € | 41 170 € |
| Food and beverage industry | 2022 | 33 175 € | 36 500 € |
| Woodworking industry | 2022 | 58 800 € | 64 680€ |
| Hotels and restaurants | 2022 | 20 513 € | 22 564 € |
Media coverage of the economic agreement
+ Entrepreneurs: the economy is nobody's business
+ Ivo Suursoo: Setting lax targets is dangerous
+ Jüri Käo: let's not ridicule ourselves for a richer future
+ Electronics industry backs economic deal
+ Entrepreneurs: a strong economy is the source of Estonia's vitality, let's develop it now
+ Ivo Suursoo: Estonia needs a new common focus
+ Business unions put together an economic pact to boost Estonia's competitiveness.
+ We need to get out of the Nordic wedge.
+ Entrepreneurs on the economic plan: let's hope that the momentum will not falter and that we will get down to real action
Innovation Start-up Chamber of the Estonian Employers' Confederation employers@employers.ee