Despite growth in the economy, spending on research and development declined by 1 percent in real terms last year, to 380.7 million euros.
As a share of GDP, the figure decreased to 2.19 percent in 2012, down from 2.37 percent in 2011, according to findings by Statistics Estonia.
The Estonian government had aimed in its 2011 coalition agreement to raise R&D to 3 percent of GDP.
The agreement also aimed to increase the private sector's contribution in R&D investment to at least two-thirds of total investments. Last year, public sector R&D spending - at 145.8 million euros - accounted for 38 percent of all investments, down from 60 percent at the turn of the century.
"At the same time, state financing [including EU support] is constantly growing and it increased last year as well, by 20 million euros, or 16 percent," the Statistics Estonia report said.