Estonia has risen to sixth place among the world's emerging startup ecosystems, having climbed as much as eight notches in just one year, it appears from "Global Startup Ecosystem Report 2021," the world's largest startup ecosystem report.
The study, which covers 275 startup ecosystems around the world, highlights wide scope as the strongest aspect of the Estonian market.
Andres Sutt, minister of entrepreneurship and information technology, attributed Estonia's high ranking to the high activity of its fast-growing startup community. He said that while seeking growth potential is an integral part of the nature of startups, Estonia is big enough to validate the viability of a business idea, but small enough not to limit oneself to the local market when offering one's products or services.
"Emerging as one of the best breeding grounds for startups will help us accelerate the transition to the future economy and create innovative and research-intensive companies in Estonia. Already today, startups are bringing 100 million euros to the state in labor taxes alone, and this figure is definitely on the rise," Sutt was quoted by spokespeople as saying.
The report drawn up by Startup Genome shows that half of the top ten startup ecosystems are located in Europe. At a time when other European hubs thrived on new talent, finding it was one of the biggest challenges for Estonia, according to the survey.
Lauri Haav, CEO of the Estonian e-residency program, said that the e-residency program also plays a role in providing necessary impetus, as global reach can only be achieved with the global experience that e-residents offer.
"In addition, Estonian e-residents significantly enrich our startup scene and set the tone on it, as nearly a third of Estonian startup companies have been founded by them. This proves that foreigners see Estonia as an innovation hub where ideas can be put into practice," Haav said.
Haav added that e-residents provide leverage to Estonia's messages and strengthen our position in international competition. The largest numbers of businesses established by e-residents are active in business software development and fintech solutions, which allows the message about Estonia's e-state to spread to ever more distant places.
"Our e-residents value the low level of red-tape, simple tax system and transparency of the Estonian business environment. As a thank you they contribute to the Estonian economy with new knowledge, skills and experience," Haav said.
He noted that this is a symbiosis where Estonia's openness is rewarded by high rankings in international surveys.
"There are few areas where Estonia is at the absolute top globally, but startups are one of them. E-residents are an additional boost to the Estonian startup community and a very valuable resource," Haav added.
Eve Peeterson, the head of Startup Estonia, described bold decision-making as being characteristic of the Estonian startup ecosystem. This includes the startup visa program incepted in 2017, which allows citizens of non-EU countries to work for Estonian startups, relocate their startups here or establish new ones in Estonia.
"At present, one in five startups in Estonia is founded thanks to the visa and one in ten startups has brought in talent with its help. This extensive process of inclusion started four years ago, and today we can see that all the major startup hubs in the world are taking such steps," Peeterson said.
Startup Estonia is a national program for the development of the Estonian startup ecosystem, which gives impetus to the emergence of startups and international success stories. The Startup Estonia program is implemented by Kredex, and it is funded by the European Regional Development Fund.
The Estonian e-residency program was launched in December 2014 with the aim of providing foreign nationals with safe access to e-services offered within the Estonian e-governance ecosystem. Since the launch of the e-residency program, Estonia has welcomed almost 85,000 e-residents who have gone on to establish more than 18,000 companies in Estonia. In addition to indirect economic impact, resulting primarily from growth among and investments into Estonian companies offering services to e-residents, the e-residency program has generated direct revenue for the Estonian economy in an amount exceeding 70 million euros.
Source: LETA