Estonia Feels the Pinch of Moscow’s Pique

By Eric Jansson Special to The Wall Street Journal

Most of the world has long forgotten Estonia’s dispute with Russia one year ago, which saw the Baltic nation’s oil supplies cut and its high-tech economy hit by a massive cyberattack. Not Endel Siff.

A leading Estonian businessman, Mr. Siff made a fortune shipping Russian fuel through the Milstrand Oil Terminal, a well-maintained 14-hectare terminal on the coast of the Baltic Sea, and through other sites. With oil prices setting records world-wide, business should be good. But Milstrand, where Mr. Siff is chairman of the supervisory board, has filed papers to transform itself into an upscale shopping …

Read more: Eric Jansson Online
Source: The Wall Street Journal


Innovativeness of industrial enterprises is steadily growing

According to Statistics Estonia, the fast economic growth in the last years has supported the increase in the share of enterprises with innovative activities in Estonian industrial sector.

According to Enterprises’ Innovation Survey, 55% of industrial enterprises and 40% of service enterprises were innovative in 2006. An enterprise was innovative if during last three years it had introduced to market a new or significantly improved product, implemented a new or significantly improved process, or had expenditure on activities specifically undertaken to develop and/or implement a product or process innovation. By comparison, it should be emphasised that in 2004 the level of innovativeness of industrial enterprises exceeded 55% only in five European Union Member States, and was lower than that in Sweden and Finland.

Since 2000 there has been a steady growth of innovativeness in industry sector, but one can see a noticeable comedown in services in 2006 compared with 2004. As a result, the overall innovativeness of Estonian enterprises remained in 2006 on the level of 2004. To be more exact, a marginal change in the number of innovative enterprises from 48.7% (2004) to 48.1% (2006) took place.

The fall in the innovativeness of service sector was connected with the situation in wholesale trade, where active innovative activities took place during 2002–2004 in connection with Estonia’s accession to the European Union. Later on, these activities fell back. As a matter of fact, the innovativeness of service enterprises was exceptionally higher than that of industrial enterprises in 2004. A similar trend was observed in the same year only in Greece, Latvia and Portugal.

The share of innovative enterprises, 2000, 2004, 2006.

As before, the survey demonstrated that innovativeness in Estonia like in the European Union is higher for enterprises belonging to concerns (even in the case of national concern — 60% in 2006), having foreign equity or employing more employees. The presence of export did not seriously affect innovativeness in 2006 either. Consequently, the national market is not less demanding towards innovations than the markets over the border.

Among various indicators, the survey measured the implementation of non-technological (marketing and organisational) innovations. 70% of innovative enterprises, but only 29% of the non-innovative ones, had implemented that kind of innovations in 2004–2006. The fact demonstrates a close relationship between technological and non-technological innovations.

The data is based on the results of Community Innovation Survey regularly carried out by statistical organisations of all European Union Member States on the basis of harmonised methodology. The Innovation Survey does not cover the sectors as a whole and deals with enterprises with at least 10 persons employed. In the case of industry, only the construction activity is excluded. As for services, the following activities are included: wholesale trade and commission trade, transport, storage and communications, financial intermediation, computer and related activities, architectural and engineering activities, technical testing and analysis. In 2006, the frame of the survey consisted of 2,185 industrial and 1,839 service enterprises.

Source: Statistics Estonia