Innovation Europe > News > Innovation EU Vol1-1 > Estonia

To a large extent the crisis is a natural spill-over from the global recession, but to some extent the situation contains some Estonia-specific elements. In response to the worsening situation, the government announced in February a further 6.8% cut in the budget. So far, the innovation sector as a whole seems to have escaped big cuts, although the Tiger Leap Foundation, which promotes ICT education in schools, will experience cuts reaching almost 30% and the Estonian Development Fund faces reductions in excess of 68%. However, this is partially a budgetary measure, because the surplus from the previous year is not included. The Estonian economy stands on the doorstep of the next transition phase – moving towards an innovation-based economy, while at the same time undergoing industrial restructuring. To ensure long-term economic success, it needs to make its production and service base internationally competitive. Special attention needs to be paid to specialisation, concentration of resources, the quality of R&D and innovation competence, and the encouragement of infrastructure for business and innovation activities.

Main innovation challenges

• Supporting specialisation in technology fields.
• Encouraging a favourable springboard to establish and develop highgrowth- orientated companies’ increased number of spin-offs.
• Building competences and developing innovation management.

Action

While there are various types of challenges relevant to Estonian innovation policy, there are only a few opportunities for Estonia to become internationally competitive over the longer term. The country has to be targeted to final export markets, which means it must become more creative and RDI-oriented. The period covering 2007 and 2008 has been decisive in strategic terms: two umbrella documents – the NSRF for 2007-2013 and the new Lisbon strategy – were approved by the Estonian government and by the European Commission. However, the administration capacity seems hardly sufficient to implement the current programmes and to launch mid-term evaluations, while also working out new programmes on the policy agenda. At some point, it will be necessary to focus on ongoing activities and not to take on new tasks.

In terms of policy governance, the concentration of activities in one or two main bodies may create higher efficiency in the governance system of RTDI policy in Estonia. Concentrating resources and accumulating knowledge require the availability of proper financing sources. Currently, the Estonian Development Fund is aiming to become such a body in the system, which could result in sufficient concentration of competence for supporting strategic policy-making in Estonia.