 Investing in the nordic country |
The alternative way of securing the future has been Estonia's integration with its northern neighbors. The so-called Nordic group of countries: Finland, Sweden and Norway, have the highest growth rates among European countries, comparable to the growth of the US. Together with the whole Baltic Sea region, including Germany, parts of Russia and Poland, it forms a market with population close to 90 million. Like the Estonian capital, Tallinn, the cities on the Baltic Sea already formed a successful trade network in medieval times. It was called the Hansa League. Today, Internet, e-commerce and m-commerce (business over cellular phones) are the main growth engines for the Nordic economies.
"Being a Nordic country" is a challenge advertised heavily by the Estonian Investment Agency, a non-profit company, whose objective is to assist the foreign investors who are interested in investing in Estonia and also to promote Estonia proactively to potential investors. In other words, this is the marketing department for Estonia as a country.
Swedes and Finns are number one and two investors
in Estonia, having 30% and 25% of the investment
respectively. Americans are number three with only
6%. In order to get more investments from more distant
places the agency has set up 2 offices in Western
Europe- in Germany and in London, says Agu
Remmelg,
the director of the agency. "We have not set
up an office in the US. We are thinking about it,
but it is a very big country, we are very small
and to set up a foreign office requires lots of
resources. So far we have not had the financial
possibilities, but we have been considering this
issue." |
Remmelg has had a lot of feedback from foreign investors. And according to this, there are some things that are not fixed yet. For example applying for the business visa should be quicker and there should be less documents needed, custom proceedings take too much time etc.
Positive feedback is that the country is small, it is open. Estonians are mentioned positively- friendly, speak good English, Western minded, good training skills and people know what a market economy is. The infrastructure is mentioned positively- high penetration of mobile phones and Internet. If the Internet connections per capita were divided by GDP per capita, having Internet by GDP, Estonia would be number one in the world. "The vision of ourselves is a high-tech country with a modern infrastructure," tells Remmelg.
One of the biggest investments has been Elcoteq, the so-called Nordic Microsoft. It is the largest electronics plant in Central and Eastern Europe, with headquarters in Finland. Both Nokia and Ericsson mobile phones are produced there. It sounds weird, but these competing companies actually operate in the same factory, which is divided into two. Most of the advanced phones are made in Estonia.
Elcoteq started in Estonia in 1993 with 30-40 employees, today the number has jumped to 3000. Elcoteq has been the largest exporter since 1994 and it has 12% of Estonian exports, making millions of mobile phones every year.
Elcoteq Tallinn CEO Ilmar Petersen has been with the company from the beginning. "We have been able to find well-educated people," says Petersen as one of the advantages the company has in Estonia. This year Elcoteq established an engineering center in Tallinn, mainly to offer services to customers worldwide. Elcoteq believes that Tallinn can still provide an engineer, which is not that easy anymore in Scandinavia, tells Petersen.
Petersen sees Estonia as a back up for Russian operations and a training place. "It might be an idea to establish operations here and then use it as a jumping ground from Estonia to Russia." |
