The recently published Global Startup Ecosystem Report 2021 ranks Estonia as the world's sixth emerging startup ecosystem.
The report, covering 275 startup ecosystems from around the world, has highlighted Estonia's market reach as its strongest feature.
Minister of Foreign Trade and IT Andres Sutt (Reform) attributes the high ranking to the proactive attitude of Estonia's booming startup community. "Tapping into growth potential is an integral feature of startups. Estonia is large enough for testing the viability of business ideas, but also small enough for venturing out beyond the local market," Sutt said.
The minister added that being recognized among the world's top startup ecosystems is sure to accelerate bring more innovative and research-intensive businesses to Estonia. "Today, revenue from labour taxes alone brings in €100 million to the state budget, and this figure is sure to increase in the future," Sutt noted.
The report, compiled by Startup Genome and the Global Entrepreneurship Network (GEN), indicates that half of the top ten emerging startup ecosystems are in Europe. While other European top performers were commended for their success in attracting international talent, that aspect was identified as Estonia's biggest challenge.
According to Lauri Haav, Managing Director of the Estonian e-Residency Programme, the scheme continues to support the growth of Estonian startup ecosystem. "International experience is the key to achieving global reach, and that's exactly what e-residents bring to the table. In addition, they greatly enrich the local startup scene and constitute a strong presence, accounting for nearly a third of all Estonian startups. This demonstrates that people from around the world see Estonia as a thriving innovation hub for launching novel business ventures," Haav said.
He added that e-residents also help boost the country's international competitiveness. "Majority of the companies established by e-residents focus on business software development and FinTech solutions, helping spread the message about Estonia's e-governance system far beyond our borders," Haav noted, adding that e-residents seem to appreciate Estonia's overall business environment and its transparency, along with a simple tax system.
He said opening the country to foreigners is well served by high rankings in international surveys. "There are not many areas where Estonia is ranked among the world's absolute best, but startups are one of them. Our e-residents invigorate the local startup community, constituting an invaluable resource," the e-residence specialist said.
Eve Peeterson, head of Startup Estonia, believes that decisiveness is the keyword that best describes the local entrepreneurial ecosystem. In 2017, Estonia launched its startup visa program, allowing non-EU citizens not only to be employed by local startups, but also to relocate or set up their own businesses in Estonia.
"Today, one in five Estonian startups is established as a result of this visa program, and one in ten companies have used it to attract international talent. We launched the program four years ago and today all the major startup hubs in the world are following our lead by adopting similar schemes," Peeterson said.
Editor: Kristjan Kallaste