Could you give us a brief historical background of Estonian Investment Agency and outline its main objectives?
We started in 1994 with the help of the EU. At first it was a small agency with 5 people and today we have 9 professionals plus technical staff working here. The objective of the agency is to assist the foreign investors who are interested in investing in Estonia and also to promote Estonia proactively to potential investors.
Through what means exactly do you achieve this promotion?
First of all we are specialized in producing good quality information about Estonia and the market situation in Baltic region. Also general and factual information and we distribute it via Internet and our partners and directly to the companies. First of all it is reliable and good quality information. Secondly we make direct contact with the companies who could be interested in Estonia and to whom we have to offer the available opportunities here. In practice we carefully select the sectors and specific opportunities in Estonia and then we target companies who could be interested. We propose the company managers to look more carefully at the opportunities to see if there is anything interesting for them. That is basically what we do.
Who are your partners? Are they from different institutions and from abroad as well?
There is a broad range of partners. We work very close to our embassies. In the US it is our Embassy in Washington. Also there are number of law offices with whom we can cooperate, or chambers of commerce or promotional organizations. Even in the cases of the US and Canada we have a large community of Estonians living there. Some of them are in very good positions in banks or companies. They are feeling good about Estonia and are willing to contribute to the success of Estonia. They are also very good cooperation partners.
Do you count a lot on expatriate Estonians?
Yes, especially in the US and Canada because before the WW II about 50.000 people left Estonia in 1944 before Russian occupation. Many of them left for the US and Canada, some for Australia and Sweden.
Regarding making direct contact with companies overseas, how do you evaluate which companies should be targeted and also could you give us an example of foreign companies which were targeted and who are now operating in Estonia?
First of all we select companies according to the sectors we have identified here, sectors which have opportunities. For example the wood industry. We have plenty of forest and it's not fully processed here. According to the opportunities we define the sectors. For example in Scandinavia there is a strong wood industry and based on our country resources we could establish industries. And then we look at which companies in Scandinavia are active in it, which are performing well, which are international. Then we contact directly the company. The question is the location and communication, good quality of people. We can go to the electronics companies. We are close here to Scandinavian telecommunication companies who have increased their production capacities when they considered coming here.
For example Elcoteq, was it directly targeted?
Elcoteq came a year earlier than we started. They saw the opportunities before the others. Companies that have come recently are Nolato - a Swedish manufacturer specialized in mobile phone cases. We work with them extensively to find the production location. The other example is Berifors, Swedish electronics manufacturer who is specialized in motor industry electronics. They looked into other markets to begin with - maybe Poland, maybe Latvia, Czech Republic and our message was that Estonia has well established infrastructure, well-trained labor and an open society. They looked at those various countries including Estonia and said there are 2 reasons to come here - firstly Estonia is close to Sweden; secondly that even though they got good proposals from each country but they came here and saw that the information presented by Estonia was all true. So they decided to come here. We target around 800 companies a year.
The Swedes and Finns are the number one and two investors in Estonia and Americans are number three only with 6%. What have to been done to attract more North American investments into Estonia?
In order to get more investments from more distant places we have set up 2 offices in Western Europe - in Germany and in London. Their task is to contact the companies and introduce the opportunities. 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. Our approach has been so far that we use our partners' network, the Embassy for making contacts. Sometimes we do the marketing campaigns. We contact the companies and investors. In the future there will be the possibility to open our office in the US. We are a governmental organization. We cannot take a bank loan to set up an office and pay back from the profit.
Does the Agency have any revenues at all?
We are a nonprofit company. Our task is similar
as for example as in a big company that produces
something. They definitely have a marketing department
which is responsible for promoting products. We
are a similar organization to the Estonian country.
Estonia as country that has a good investment climate
and excellent opportunities but not many managers
and companies know about that. What you need is
the marketing department for the country, to promote
the opportunities effectively. The Estonian Investment
Agency is the marketing department for the country
but we do not make an actual profit. The country
makes the profit. The country benefits, but we do
not benefit directly. If we had more companies and
got more investments that does not mean that our
budget will grow. All we can say to the government
is if you put some more resources into our activities
you will get more results. |
Could you give us a resume of what the Agency has concretely achieved to date?
The most concrete achievements are the projects including Nolato and other companies which we have helped. On an annual basis we are able to influence 9-10 investments coming to Estonia with our 9 members of staff. For more we should need more resources. That is half of our work. What is also important is what kind of message we are carrying out to the world and how we present it. We distribute the updated information packages to the world and we also have the Internet page established, which is an effective way to provide information. We have 2.000 hits per month, some 100 hits per day and half of them are from abroad.
There are also other activities that we do here in Estonia. When we sell Estonia and we get a response if something is wrong, maybe working permits or the visa system and if we do not tell that to the policy makers or government then we have a continuous problem. Our role is also to communicate with other programs, identify what should be changed and do it effectively. We helped to establish, for example, the business visas for the businessmen who want to work here. There are some other things where we can be of help.
What has been the feedback from foreign investors?
We question the investors every year. General attitude is that there are no big problems in Estonia. We are country which is open. But there are some minor 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. Not big issues. This is the feedback we have received.
Positive feedback is that though the country is small, it is open. Estonians are mentioned positively - friendly, speak good English, Western minded, good training skills, people know what the market economy is. The infrastructure is mentioned very positively - we have 3 mobile phone operators, lots of Internet connections - some 20% of people are connected. For example 70% of Hansabank corporate clients use the Internet banking. In some field we have very excellent and modern service and people think that this is the normal way of living. The reason is that we started our development recently, 10 years ago and before that we did not have any modern banking. Starting so late we were able to introduce the latest technology. When you are long established you have history on your shoulders and it's not so easy to change. That makes Estonia different.
What is the future, is this something you have set deadlines for or is it something what is going to be open and long term?
We are considering trying to build up the country according to the modern technology needs, to upgrade the industry from low label cost industry to high capital cost industry. We are looking for trustees, connections for example with Scandinavia. Elcoteq and Ericsson are growing so rapidly so why shouldn't we grow with them. Try to link our investors to the growing Scandinavian ones. We have raw materials available as a good resource so why shouldn't we upgrade to the highest possible limits. Why not combine industries - one who producing saw mill products, the other is using saw mill residues or producing wooden panels etc. We are looking into new technologies. As we have a good infrastructure already we should prepare people who are able to use it, able to produce something valuable through that infrastructure. We have established a specific IT College to prepare people who are able to take advantage of IT, to make business and money based on Internet. We have to make our existing banks grow. And also look at future opportunities
If you analyze the former Soviet education system and compare it for example to the US system then you find out that the basic education of former SU was on a good level. Though the socialism and the country didn't perform very well and there were problems with the economy, but the education system produced specialists, military technology people, quite a lot was invested into the education system. Basic education was traditionally very good. So we have traditionally well-educated people here with whom we can develop modern technology. High tech is an area in which Estonia is quite good. We have excellent scientists and technologists.
That is the field we can develop. As a country we do not see ourselves as a low cost, poor and struggling country. The vision of ourselves is a high-tech country with a modern infrastructure. Estonia is open, building up its economy, with a good infrastructure, good conditions and educated people.
On a more personal level what has been your greatest success since you have been in the Agency?
The greatest success is the Agency being established 5-6 years ago and I helped to write the statutes. We gradually built up the organization starting from very simple things like investor service, image building, then moved in to investment generation activities, then we started to service programs to already established companies. The organization itself and the knowledge which is here is the value of Estonia. Very few people have left our organization during the 6 years of operation. We have stable and trained staff with knowledge in context.
What is your final message to our readers?
Estonia is generally not known, it is very often associated with Russia or Chechnya or places like that. In reality it is important to understand that you do not always have to be big to succeed. There are some examples of small countries growing fast and who are modern and developing. You can find some positive things about them you never expected. Estonia is that kind of country that can surprise positively. |
