Estonia world's 31st most competitive economy
The Swiss-based IMD World Competitiveness Center has announced its latest annual World Competitiveness Ranking, published since 1989. Estonia has fallen by one place and for the first time, the country's Baltic ally Lithuania has overtaken it.
As part of its ranking of 61 economies for 2015, the IMD World Competitiveness Center looks at several aspects of each country as a place to conduct business.
The ranking measures how well countries manage all their resources and competencies to facilitate long-term value creation. The overall ranking reflects more than 300 criteria, approximately two-thirds of which are based on statistical indicators and one-third on an exclusive IMD survey of 6,234 international executives.
Estonia (30 to 31) and Latvia (35 to 43) rank lower than last year, but Lithuania gained in the ranking (34 to 28). Elsewhere in the Central and Eastern Europe, Poland (36 to 33), the Czech Republic (33 to 29) and Slovenia (55 to 49) also moved up, while the current events in Russia (38 to 45) and Ukraine (49 to 60) highlight the negative impact that armed conflict and the accompanying higher market volatility have on competitiveness in an increasingly interconnected international economy.
The USA remains at the top of the ranking as a result of its strong business efficiency and financial sector, its innovation drive and the effectiveness of its infrastructure, IMD said. Hong Kong (2) and Singapore (3) moved up, overtaking Switzerland, which dropped to fourth place. Canada (5), Norway (7), Denmark (8), Sweden (9) and Germany (10) remain in the top 10 and Luxembourg moved to the top (6) from 11th place in 2014.
Nine countries from the top 10 are also listed in the top 10 of the business efficiency factor, which focuses on the extent to which the national environment encourages enterprises to perform in an innovative, profitable and responsible manner. It is assessed through indicators related to productivity such as the labor market, finance, management practices and the attitudes and values that characterize the business environment.
"Simply put, business efficiency requires greater productivity and the competitiveness of countries is greatly linked to the ability of enterprises to remain profitable over time," the report said, adding that for example, Germany's slight drop (6 to 10) is a reflection of its fall in business efficiency (9 to 16).
Estonia's unemployment rate 6.6%, labor participation highest in years
According to Statistics Estonia, the unemployment rate in the first quarter of 2015 was 6.6 percent and the employment rate 63.3 percent. Compared to the first quarters of the previous years, the labor force participation rate was at the highest level of the last 15 years.
In the first quarter of 2015, the unemployment rate increased by 0.3 percentage points compared to the fourth quarter of 2014. Hence, the growth was not very remarkable and can largely be explained by seasonal effects – several economic activities require less labor force in the winter months. An estimated 44,000 people were unemployed and 623,000 were in employment.
Whereas in recent years there has been a decrease in the number of active persons in the labor market, mainly due to population decline and the smaller birth cohorts reaching working age, the labor force participation rate – the share of the labor force among the population aged 15–74 – was at the highest level of the last 15 years in the first quarter of 2015.
The increased economic activity of the working-age population has been strongly influenced by the greater labor force participation of the elderly, but also by the generation born during the Singing Revolution (1988-1991) having entered the labor market.
Men are more engaged in the labor market – 67 percent against women's 60 percent – but the indicator increased slightly more for females than for males.
By age group, young people aged 15–24 had the lowest employment rate and the highest unemployment rate in the first quarter, but 13.8 percent more youngsters were employed than last year in the same time.
The unemployment rate of Estonians was 5.8 percent and that of non-Estonians 8.6 percent.
Share your favorite epic adventure in Estonia with Tourism Board
From May 11-20, Enterprise Estonia is collecting ideas for quirky, unconventional tourist attractions in Estonia.
"Take an ostrich ride, a run in the forest with the prime minister, night in a submarine or pancake morning with a Seto granny, for example. We welcome ideas from everybody, including tourism and catering companies, designers, and event organizers, as well as from people with no relation to the tourism industry," said Katrina Sokk, Enterprise Estonia's campaign manager for Scandinavia.
The project aims to find the boldest, most unique experiences that make people see Estonia in a new light. "Best recommendation one could get, is a shared personal experience. We're looking to provide our guests with memories that would put a sparkle in their eyes for years to come," Sokk explained.
The campaign is directed foremost to the Scandinavian market, especially Sweden. If ten years ago the Swedes made up 8 percent of all foreign tourists visiting Estonia, their share has now dropped to just 4 percent.
Director of Estonian Tourist Board Tarmo Mutso said the Scandinavian market is a logical alternative and target to make up for the fall in Finnish and Russian tourists. "We have excellent transport connections with Sweden, we offer food and cultural experiences, and high-level services," he said, adding that this, however, is not enough. "We also need unique activities to charm the demanding Scandinavians with."
If you have an epic experience or a fond memory of something special in Estonia, you can share it here until May 20.
Estonia launches e-Residency application portal
Estonia today launched its e-Residency application portal at e-resident.gov.ee, enabling anyone in the world to participate in the public beta of the world's first government-backed transnational digital identity program.
The e-Residency initiative, which debuted in December 1, 2014, does not confer citizenship, tax residency, residence or right of entry to Estonia or to the European Union, but Estonian e-residents can register a company online, perform online banking transactions, access international payment service providers, declare taxes online and digitally sign documents and contracts. The physical part of the program is a smart ID-card, which contains a microchip with two security certificates: one for authentication and another for digital signing.
From the economical point of view, it is hoped that the scheme will attract global entrepreneurs needing an investment account in the European Union. It would give them the opportunity to create a company and open a bank account in the EU in just one day, as setting up a company in Estonia is simple.
“We created e-residency to grow the digital economy, attract new investment, and connect with new businesses. The digital residency provides enormous advantages in convenience and flexibility for anyone who has an existing business or other connection to Estonia. But it also provides anyone, not just those connected to Estonia, with the tools and systems to own and operate their own business. In creating this program, Estonia hopes to unleash the world's entrepreneurial potential,” Kaspar Korjus, e-Residency program director, said.
From the national aspect, it is expected that by having a large number of people associated with Estonia, it would raise the country's profile around the world and so offer an additional security guarantee – millions of people, rather than 1.3 million, would find themselves annoyed at any potential threat against Estonia.
Prospective e-residents from around the globe can expect the entire application process to take one month. Starting with online application, paying a nominal fee and completing a background check, e-Residents need to visit an Estonian embassy or police station to receive their e-Resident digi-ID. Currently, it is possible to pick up the digi-ID in one of 34 countries around the world where Estonia maintains an embassy or a consulate, or at a Police and Border Guard Board service point in Estonia.
So far, over 1,500 people from 73 countries have become e-residents. Over half of them are from Estonia’s neighboring countries: Finland (34 percent), Russia (15 percent), Ukraine (6 percent), Latvia (6 percent), closely followed by the US, Germany, the UK, Lithuania and Italy. Over 18,000 prospective e-residents worldwide have subscribed to the program's newsletter.
Many prominent foreigners have also become e-residents, among them the Japanese Prime Minister Shinzō Abe and editor of The Economist Edward Lucas. A former Skype executive Michael Jackson will be given the digital residency at Latitude59 tech conference on Thursday.
The initiators emphasize that the e-Residency program is like a governmental startup and therefore certain elements are still in development - such as establishing an Estonian company online or opening a bank account, which currently require a trip to Estonia, but can later be conducted from abroad.
Economy grew in first quarter
The latest statistics shows that Estonia's gross domestic product (GDP) increased by 1.2 percent in the 1st quarter of 2015 compared to the 1st quarter of 2014.
According to Statistics Estonia, manufacturing was the main contributor to the GDP growth, mainly due to the increase in the manufacture of electronic equipment, mineral products and wood products.
Manufacturing success is dependent on exports which grew 3 percent in the 1st quarter, mainly due to the increase in the export of electronic equipment and mineral products. At the same time, import grew 1 percent.
The trade deficit in the 1st quarter was 325 million euros - a decrease compared to the 412 million euros in the same period in 2014.