Expenditure on research and development increased last year

According to Statistics Estonia, in 2017, the expenditure on research and development (R&D) in Estonia amounted to 304.3 million euros, which is 13% more than in 2016.

Estonia’s research and development expenditure has been under sharp focus in recent years. One of the reasons for this is the competitiveness goal in “Estonia 2020” to increase the share of R&D expenditure to 3% of gross domestic product (GDP) by 2020. The results of previous years have not reached the target threshold, but there is still time for that.

In 2016, R&D expenditure decreased compared to the previous year, but the 2017 results are much more positive – total expenditure on research and development increased by 13% compared to 2016. The growth in the non-profit institutional sector was 23% and in the business enterprise sector 3%.

In international comparison, the R&D intensity index – the ratio of expenditure on R&D to GDP – is a decisive indicator. In 2017, Estonia’s R&D intensity index was 1.29. Despite the increase in total R&D expenditure, the R&D intensity index did not improve significantly. One reason for this is that Statistics Estonia adjusted upwards the gross domestic product for 2014–2016. On the basis of preliminary results, in international comparison, Estonia retained its intermediate position among the EU Member States, which is a better result compared to Latvia and Lithuania, but still significantly behind Finland and Sweden.

In 2017, government funding of R&D expenditure amounted to 122 million euros, or 40%. In 2017, 72% of the research and development expenditure of the non-profit institutional sector and 4% of the business enterprise sector came from the state budget. It should be noted that the funds allocated for research and development through the state budget include finances granted under the Structural Funds, which are included in the state budget, and are therefore counted as government allocations. The share of R&D financing in general government expenditure was 1.32%. The share of foreign funds in research and development spending was 15% in 2017.

In 2017, slightly more than half of the total R&D expenditure was allocated to experimental development, the share of basic research was 28% and the share of applied research was 21%. By sectors, the distribution is different. In the higher education sector and public sector, contributions to basic research accounted for the largest share. In the business sector, however, putting knowledge into practice was preferred – 82% of research and development expenditure was related to experimental development. As in previous years, in 2017, labour costs accounted for the largest share (56%) in research and development expenditure and investments accounted for 11%. In the business sector, the share of labour costs in research and development expenditure was 60% and the share of investments was 14%.

In 2017, the number of full-time equivalent persons employed in R&D was 6,048, which is 5% more than the year before. Full-time equivalent researchers and engineers numbered 4,674, which is 8% more than in 2016. In 2017, as in 2016, women accounted for 45% of persons employed in R&D, and 41% of researchers and engineers.

Read more from Statistics Estonia

Airbnb to cooperate with tax authority

Online accommodation and hospitality marketplace Airbnb is to share user data with the Estonian Tax and Customs Board (MTA), according to the Baltic News Service (BNS).

An MTA spokesperson confirmed to the BNS that the cooperation is underway and that further details will be made public on Wednesday, at a press conference to be attended by MTA deputy director Rvio Reitmann and Airbnb head of public policy, Patrick Robinson.

The Estonian Association of Hotels and Restaurants (EHRL) had previously stated that Airbnb represents unfair competition and encourages a hidden economy in the sector. It demands that Airbnb income be taxed as is the case in neighbouring Finland.

The EHRL has also blasted plans for a one-euro-per-person-per-day tourist tax applicable in Tallinn only, as proposed by Tallinn city council chief Mihhail Kõlvart (Centre).

Since 2016, an individual submitting a tax return has been required to confirm receipt/non-receipt of rental income. Such income is subject to tax on a gross basis.

At press time, a quick search on the Airbnb site for accommodation for one adult in central Tallinn on the weekend of 7-9 December yielded over 200 results, ranging in price from €9 to over €100 per night. Searches in Tartu and Pärnu resulted in about 50 and 200 options respectively, in a similar price range.

Source: ERR News

Enterprise Estonia to open office on US east coast in 2019

Enterprise Estonia is to open an office on the east coast of the United States in 2019, offering cooperation between US partners in industry and technological development and businesses participating in its business and product development programs.

The exact location of the office has not yet been announced, though cooperation with partners in the state of South Carolina seems to have been the genesis of the move.

“If an Estonian enterprise finds a partner from South Carolina within the framework of this agreement, it will have the option of receiving support from the development program or product development aid to finance the project,” Tanel Rebane, director of the Trade Development Agency at Enterprise Estonia, said.

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Dubai company putting €100 million into Tallinn-Helsinki tunnel

Dubai engineering solutions giant ARJ Holding Ltd is investing €100 million in the Tallinn-Helsinki tunnel project, tunnel designer Peter Vesterbacka announced at a press conference on Monday.

Mr Vesterbacka, chief of FinEst Bay Area, the group behind the tunnel project, pointed out the total cost of the tunnel stands at €15 billion, with an investment period of 30 years; the tunnel itself has a projected life span of 120 years, he said.

Finest Bay Area Leader Vesterbacka said the total cost of the project is estimated at €15 billion. The investment period is 30 years and the tunnel should last 120 years.

Read more from ERR News