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Analysis of the FICE 2024 conference: Challenges and opportunities for foreign companies in Estonia

On April 17th, representatives from CAdFE attended the FICE conference titled "Do Foreign Companies Want to Stay in Estonia?" The conference focused on the findings of FICE's executive survey, which is based on responses from a large number of foreign investors and FICE members. The survey aimed to provide an overview of investment trends in Estonia for the year 2023, including growth, salaries, as well as insights into future investment plans and concerns regarding Estonia's economic growth.

The FICE Executive Report 2024 sheds light on both the promises and challenges facing Estonia's economy. Based on the insights of business leaders, the report provides a comprehensive snapshot of current sentiments, revealing a mix of optimism and apprehension.

Positive Outlook:

Despite looming uncertainties, a significant portion of respondents (38%) anticipates economic expansion over the next year. Encouragingly, 54% foresee an increase in their revenue during the same period, with the tech and IT sectors expected to spearhead this growth in the coming years.

Challenges Ahead:

However, amid these optimistic projections, several hurdles threaten to impede Estonia's progress. Rising inflation has eroded the competitiveness of businesses against major trading partners, affecting nearly half of the respondents (47%). Despite escalating labor costs and shortages posing significant challenges, 28% plan to increase their workforce in the next 6 months. 

Policy Uncertainty:

One of the most pressing issues highlighted by the survey is the increasing unpredictability of policymaking. The lack of regulatory stability and inadequate public-private sector dialogue have exacerbated uncertainties for businesses. Nearly half of the respondents (47.8%) expressed dissatisfaction with the responsiveness of the Estonian government to their concerns, particularly regarding recent tax increases and corporation tax reforms.

Regional Disparities and Education System:

Another critical challenge outlined in the report is the pronounced regional economic disparities within Estonia. While the capital region flourishes, other areas lag behind, exacerbating socio-economic divides. Additionally, inadequate investment in research and development (R&D) and shortcomings in the education system further hinder Estonia's growth potential.

Recommendations for Growth:

In light of these challenges, the survey offers several recommendations for policymakers to foster sustainable economic growth:

  • Enhanced Vocational Education: Emphasise vocational education and strengthen connections between industries to address skills shortages effectively.

  • Skilled Labor Attraction: Relax visa regulations and quotas to attract skilled labour, reduce labour shortages and promote innovation.

  • Improved Dialogue: Foster improved dialogue between the public and private sectors to ensure responsive policymaking and regulatory stability.

  • Increased R&D Spending: Prioritise investments in R&D to stimulate innovation and transition towards higher value-added sectors, enhancing Estonia's competitiveness on the global stage.


While Estonia's economy exhibits resilience and potential for growth, addressing the challenges highlighted in the FICE Executive Report is crucial for long-term prosperity. By heeding these recommendations and fostering collaboration between stakeholders, Estonia can navigate uncertainties and chart a course towards sustainable and inclusive economic development

2. First Panel : Do Foreign Companies Want to Stay in Estonia?

The conference was followed by a panel discussion, the first of which took up the title of the executive survey and looked at the lessons to be learned from it.

Moderated by Kris Leinatamm, the panel featured insights from Tiit Riisalo, Minister of Economic Affairs and Information Technology; Sirli Männiksaar, Ericsson Estonia Country Manager and Chairman of the Board; Karsten Staehr, Professor of Macroeconomics at TalTech; and Dr. Scott Levy, CEO of BlueMount Capital (UK) Ltd.

Navigating Economic Challenges:

One of the primary concerns raised during the panel was the challenge posed by high inflation rates, particularly in the manufacturing sector. Energy and electricity prices doubling have led to a sense of uncertainty and a depressed economic forecast. Karsten Staehr emphasised the need for a reasonable taxation policy, advocating for a relatively flat tax system and progressive taxation of income. He highlighted the potential for redistribution that remains untapped and urged a careful balance between expenditure and taxation.

Communication and Governance:

Dr. Scott Levy emphasised the importance of effective communication between the government and businesses. He underscored that businesses are focused on doing business, not lobbying, and called for a pragmatic approach to politics. Estonia's accessible political landscape, characterised by a small public service, was highlighted as a positive aspect facilitating communication between policymakers and businesses.

Predictability and Investment Climate:

Sirli Männiksaar stressed the importance of predictability for businesses operating in Estonia. Despite concerns, she highlighted the significant investment in research and development, with a target to double the economy within ten years. She emphasised the easiness of entrepreneurship in Estonia, citing low bureaucracy and a supportive environment.

Attractiveness of Estonia:

Minister Riisalo challenged perceptions of economic stagnation, pointing to tangible growth and development in various sectors. He acknowledged existing challenges but remained optimistic about Estonia's investment potential. Sirli Männiksaar echoed this sentiment, citing Ericsson's substantial investment in research and development in Estonia and the attractiveness of the country's quality of life.

Addressing Skills Gap:

Karsten Staehr highlighted the need to address the skills gap within Estonia, advocating for training programs and improvements in the educational system. Dr. Scott Levy praised Estonia's pool of young, educated talent proficient in English, positioning it as a competitive advantage over other countries. However, he also emphasised the importance of bridging the gap between the educational system and the needs of businesses through internships and practical training.

3. Chamber of the Year Award 2024

On this occasion, FICE presented the Chamber of the Year 2024 award on the basis of each chamber's involvement in the survey in proportion to its size. Thanks to the unfailing commitment of its members, CAdFE was elected Chamber of the Year 2024, the fruit of a 2-year commitment by its members and board! A significant award for the future French Chamber of Commerce and Industry in Estonia. Violaine Champetier de Ribes was presented with the award by Peter Thomsen, President of FICE.  

4.  "What do foreign companies need to flourish in Estonia?"

The second-panel discussion focused on the vital  and provoking question: "What do foreign companies need to flourish in Estonia?" With a distinguished lineup of speakers and insightful exchanges, the session offered valuable insights into the challenges and opportunities shaping the Estonian business landscape. The second panel, featured speakers Lenno Uusküla, Chief Economist at Luminor Estonia and Associate Professor in Macroeconomics at the University of Tartu, David Clark, Venture Partner at Tera Ventures, and Edmund Smolarek, Executive of Möhring Group and CEO of Balti Spoon OÜ, will discuss "What do foreign companies in Estonia need to flourish?" with Bart Cosijn, Secretary of FICE and founder of the Estonian Dialogue Academy, moderating the discussion.

Lenno Uusküla, highlighted a pressing issue: the shortage of qualified personnel, emphasising that amidst various challenges, this aspect often goes overlooked. 

Edmund Smolarek, echoed a sentiment of resilience, underlining the need to overcome obstacles. He illustrated his point with the struggle to find electricians despite employing 296 individuals, necessitating recruitment from other regions. 

David Clark, praised Estonia's low bureaucracy and advocated for increased investment in both startups and manufacturing. 

Mr Smolarek emphasised the significance of maintaining a balance between startups and manufacturing sectors.

However, Lenno Uusküla cautioned against complacency, noting that rising prices were prompting some to leave Estonia. The discussion also underscored the significance of manufacturing, with Edmund Smolarek emphasising that it contributes approximately 15% to Estonia's GDP, with two-thirds of its output directed towards exports. Moreover, the manufacturing sector employed 120 000 people !. 

 The panellists collectively emphasised the importance of collaboration, sustainability, and innovation in driving the success of foreign companies in Estonia, offering a multifaceted perspective on navigating the evolving business landscape.

Conclusion : 

The FICE conference delved into Estonia's economic landscape, highlighting both opportunities and challenges. Insights from the FICE Executive Survey Report emphasised the need to address issues like rising inflation, policy uncertainty, and regional disparities. Panel discussions further underscored the importance of collaboration, innovation, and addressing the skills gap for sustainable growth. Overall, the conference provided valuable insights and strategies to navigate Estonia's evolving business environment. At this occasion, it's worth noting that CAdFE received the prestigious award for the best chamber of the year. If you're looking to engage with the leading foreign chamber of commerce in Estonia, join us! Explore the activities and opportunities offered by CAdFE, the recognized beacon of excellence in fostering international business relations in Estonia.

Florent Angibaud - Intern in charge of communications at CAdFE



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