Index Venture, an international venture capital company, evaluated the business policies of different world countries and found that Estonia’s economic environment is the best in terms of start-up friendliness. The risk of failure of starting companies is the lowest here and Estonia is seen as a very attractive place of business due to its reasonable business policy.
“Estonia has often been highlighted as a country with an open economy with innovation considered as the norm. We lack huge riches and extensive mineral resources, so we have to be smart to survive, and this also manifests itself in intense business activity and the search for new niches in the global market. For Estonia, this predominantly means engagement in new technologies,” explained Rene Tammist, Minister of Entrepreneurship and Information Technology.
“Estonia is a country that welcomes foreign talents. We also have a unique and successful e-Residency programme, which became four years of age this Friday. An important advantage of Estonia is the positive involvement of the private sector in the state’s policy-making and legislation. Start-ups have functioning cooperation forms with the state, and the companies themselves interact with each other closely. It raises awareness and also provides a decent base for supporting business activities both in the initiation phase and later on. Business environment must be transparent, provide the necessary space for innovation, strengthen investment security and increase added value,” said Tammist.
Small and medium-sized high-tech start-ups have a potentially high economic impact. According to an OECD analyses, high-tech start-ups will create 25–50% of the new high-paying jobs once they reach the growth phase. The example of Estonian start-ups indicates that start-ups create five times more jobs with two times higher salaries (labour taxes per employee) than traditional companies of the same age.
At the same time, however, Estonian start-ups are facing problems that are similar across the world. In the start phase, very few of them are able to succeed and reach the growth phase due to limited capital. “The higher failure percent of high-tech start-ups is offset by higher added value of breakthrough companies,” Minister Tammist added.
Although we may face similar problems as other European countries, we as a state have been able to move forward with new ideas and give innovation an economic environment where new solutions – such as sharing economy – can be successful side by side with traditional solutions. “We already have good cooperation in the technology sector, so we should use this advantage to initiate new and ambitious projects. Now is the time to gear up and find the next great ideas where Estonia can be a pioneer similarly to the e-Residency programme,” the minister noted.
“Europe is only beginning to develop its artificial intelligence, quantum computing and electric transport technologies, while China is determined to become the world’s leading power in these extremely influential technology sectors already by 2025. The ambition of Estonian and European business policy needs to be directed towards shaping the future – this has also been emphasised by the 30 most successful European start-up companies,” Minister Tammist said.
The news item with the letter to the European Commission from the best start-up companies of European countries for improving the start-up friendliness of business policies is available here: https://techcrunch.com/2018/11/27/30-european-startup-ceos-call-for-bett...
Source: Ministry of Economic Affairs and Communications