Research and development in Estonia is driven by business sector

Central Tallinn skyline.
Central Tallinn skyline. Source: Siim Lõvi /ERR

In 2019, the expenditures on research and development (R&D) in Estonia amounted to €453 million, which is 24 percent more than in 2018, data from Statistics Estonia shows. The share of R&D expenditures in the gross domestic product was 1.61 percent, making it the highest share in the last five years.

Leading analyst at Statistics Estonia Tiina Pärson said the expenditures on research and development had already shown significant growth in the two preceding years, but the level reached in 2019 is unprecedented.

"More than half of the R&D expenditures can be attributed to the business enterprise sector where these expenditures increased by 56 percent year on year. The last time that the business sector spent this much on R&D was in 2011 when there were major investments in the oil industry," she said.

The biggest amounts on R&D were spent by information and communication enterprises with a total of €100 million. They were followed by manufacturing enterprises with €66 million and enterprises engaged in professional, scientific and technical activities with €20 million.

In the government sector, R&D expenditures grew by 11 percent and totaled €46 million. There was a decrease in R&D expenditures in the higher education sector and in the private non-profit sector.

In the last three years, the share of investments in R&D expenditures has increased. In 2019, their volume increased by 70 percent compared to 2018. Investments grew significantly in both the government sector and the business enterprise sector but showed a decrease in the higher education sector. Labor costs, which account for more than half of R&D expenditures, grew by 25 percent compared to 2018, amounting to €241 million.

Research and development expenditures by type of expenditure, 2011-2019. Source: Statistics Estonia.

37 percent of the R&D expenditures came from the state budget. The majority of the state budget allocations went to the higher education sector and the government sector. In the business sector, allocations from the state budget accounted for 8% of R&D expenditures.

Nearly half of the R&D expenditures were spent on experimental development. Basic research accounted for 24 percent and applied research for 29 percent of total R&D expenditures. Compared to the preceding years, there was an increase in the share of applied research in nearly all subsectors.

In 2019, the number of employees in R&D in full-time equivalents was 6,448; there were a total of 4,992 researchers and engineers. The share of women has fallen by a few percent both among the entire R&D personnel and among researchers and engineers.

See also the dedicated section on research and development.

More detailed data have been published in the statistical database.


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Editor: Roberta Vaino

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