In this article, we focus on the many attractions and benefits of doing business in the Baltics, including the region’s dynamic logistics and tech scene and the Baltics’ position on the European start-up map.
HMA Christopher Holtby, British Ambassador to Estonia, highlights why Estonia is a very smart place to do business.
I am very pleased to be asked to contribute to Make Europe Work! Estonia is a country which has an excellent British Chamber of Commerce, and I and the team in the Embassy are working ever more closely with the Chamber and some of its individual members in order to deliver effective support to UK-based companies looking to get into the Estonian and other markets in this region.
We are also working together in order to highlight the path to the UK for the best Estonian companies, looking to establish both subsidiaries and partnerships in the UK, and often then look to expand to global markets through the UK. We also both benefit from a close partnership with Enterprise Estonia, plus also the regional business development offices through the country, co-ordinating our planning and activity to maximise both impact and practical support to business. All these networks are accessible to UK companies, through the Embassy and the Chamber.
Why Estonia? Estonia is a small (slightly more than 1.3 million), but very smart place to do business. As repeated personal testimony from UK business people prove, it’s a perfect place for first-time UK exporters. Estonians are well educated – at the top of the global school results chart outside East Asia, usually scoring close to their close ethnic and cultural neighbours in Finland. In some age brackets, the Estonians also have the highest number of university graduates in Europe. English is spoken extremely widely, and Estonians rank consistently in the top 10 in the world for ability in English as a second language, often in the top 5. It also ranks 17th in the world for ease of doing business according to the World Bank, and is ranked by Transparency International as the least corrupt country among “new” EU member states, by some margin (and is much less corrupt than many “old” EU member states too).
UK exporters are consistently surprised by the honesty/directness of communications and even more by the speed of settling bills. All that is helped by the strength of digital business and government here (on which James Oates says more below), but is built on fundamentally “Nordic” ways of doing business, influenced also by centuries in the German business sphere. Visitors whose prior impression of Estonia is formed by news headlines of Estonia as an EU and NATO state on the border with Russia often expect something very different. They almost always then leave charmed by the place (the medieval capital city of Tallinn is a great place to visit), the people and even better by the benefit to their business.
And why this region? The UK Embassies in this region work together as an integrated Nordic-Baltic network, and the commercial teams from all 8 countries link together closely, with lead officers throughout the region in key economic sectors, sharing expertise and looking to cross-refer incoming business between them in knowledge of what the different markets have to offer. And, of course, it’s next to Russia. This isn’t simple, but it remains a real advantage. Russian is widely spoken in Estonia and many Russians operate businesses here, operating according to EU law. Many international companies run their logistics supply lines into Russia through Estonia, minimising the risks. It’s an additional reason to consider Estonia.
Want more information on the opportunities in Estonia, or to ask for help for your business? Email me on email@example.com or via Twitter at @HMAChrisHoltby. Look forward to seeing you in Estonia!
FROM WINDOW ON THE WEST TO WINDOW ON THE WEB
James Oates, Immediate past Chairman, British Estonian Chamber of Commerce (BECC), highlights how investment and innovation is transforming Estonia into a global player in both transit and technology.
For centuries the Baltic region has been a centre for commerce and trade, from the Hanseatic times of the middle ages right up until our own day, the harbours of Estonia have shipped goods to and from all corners of the globe. Many once local traditions – Christmas trees or marzipan – have spread across the world from the Baltic, for as Ernest Hemingway could tell you, in every other harbour of the world you will always find at least two Estonians.
Today large cargo operations make Tallinn the busiest harbour in the Baltic, and the Tallinn-Helsinki ferry route is the busiest passenger route in Europe. Oil from Siberia, coal from Mongolia and wood from Karelia join an array of different manufactured products, and the container port at Tallinn is one of the fastest growing in the world. The hinterland of the Port of Tallinn, once just confined to bringing Russian trade to Europe, is now expanding into central Asia, and with the advent of the “New Silk Road” project, even into China itself.
The determination of the Chinese to reduce the length of their logistics chain is bringing new activity into the Baltic ports. As a result, there are now advanced plans for major investment in new operations, especially in Tallinn. New Rail investment will open a high-speed line to connect to Berlin via Warsaw, and this may link with new lines being built across Russia by the Chinese. Tallinn is renewing its history as a major trade centre for the 21st century.
The exciting future for logistics is matched by the incredibly dynamic tech scene in Estonia. Most people know that Skype was developed in Estonia, but in the wake of the multi-billion dollar payout that came from the Microsoft investment in the world’s first Internet telco, has come a whole eco-system of new technology projects. The Tallinn tech scene has some claim to be in the top four or five in the world, and following Sir Richard Branson’s investment in Transferwise, it is clear that we can expect further growth in disruptive finance ideas from the creative minds in the Tallinn tech hub.
Estonia has been a first adopter in a huge variety of Internet delivered government services, and the advent of remote digital access to Estonian portals, the so-called “E-citizenship”, is handing a very powerful tool – trusted ID validation – to users from across the planet. This, combined with clear and efficient tax structures and simple regulation, is adding to the appeal of Estonia as a global logistics hub. Estonia and its EU partners are investing billions of public money in its physical infrastructure, and this is being matched by billions of private money invested in its IT infrastructure. The start-up scene and the dynamic use of technology in the delivery of government services have combined to make Estonia – or E-stonia – one of the most wired societies in the world, and a match even for Singapore in the wired world.
The combination of solid government foundations and the prospect of major investment both from the EU and from China is reinforcing Estonia’s traditional trading prowess, while the advent of spectacular digital innovation, from E-citizenship to the NATO cyber defence centre of excellence, is making the country a digital superpower. This virtuous circle of investment and innovation is set to transform the country from neo-Nordic periphery to Estonia as a global player in both transit and technology.
James Oates, Immediate past Chairman, British Estonian Chamber of Commerce (BECC).