Title: Challenges for R&I policy-making in Estonia
- Addressing the asymmetry between the public and the private R&I efforts. The Estonian science system follows very different specialisation from the business sector as it finances and supports mostly curiosity-driven basic research for which there is little immediate economic demand. Perhaps the most ambitious policy measure addressing this challenge is the Support for applied research in the areas of smart specialisation (NUTIKAS) as this measure explicitly encourages and supports companies to contact and collaborate with research institutions (the main applicant has to be a company). While initially the interest in this measure was quite low from the private sector, the number of applications has increased in 2017.
- Promoting private investment in R&I by addressing the low pace of technological upgrading in industry. Due to their contract manufacturing profile, most Estonian manufacturing companies are not very strong in design and development capacities, both in terms of in-house capabilities and networks they belong to, thus these companies have strong obstacles in climbing the value ladder. The Enterprise Development Programme is the main programme that aims to support well-thought-out company development, improved action planning, innovation implementation and product development. In the course of the development programme, each participating enterprise is supposed to launch new products and services that are more profitable than their predecessors.
- Decrease reliance on European Structural Funds in public R&I funding. Around 50% of government spending on research comes from European structural funds. As there is no certainty about structural funds in the next EU financial perspective (from 2020 onwards), Estonia should take steps to decrease its reliance on EU’s structural funding. While successive governments have been very supportive in rhetoric, actual funding increases have been quite modest. The only substantial change is the recent increase of basic funding for research institutions by 50% from 2014 to 2017.
- Insufficient supply of R&I human resources. Lack of qualified labour is one of the long standing challenges for the Estonian economy due to ageing population, outward migration and low attractiveness of research careers. In response, the Alien's Act was amended in 2015 to more easily allow foreign labour force to come in the country. Moreover, with а recent Act the government created a list of 339 start-up companies that can hire foreign (non-EU) workers according to less stringent criteria.