Information Technology Landscape in

ESTONIA

                              IT Impact on Businesses

Taking into consideration everything that was covered in this project, one might see that Estonia has gone a long way to become a competitive country when it comes to attracting attention of the world's community and especially businesses. Even though there is still a number of issues to work out, Estonia should appear on the list of many businesses looking to expand and looking for a "landing strip" in Eastern Europe. 

Impact on the non-IT business

Local and international enterprises that plan to open or expand their operations in Estonia relying on IT technologies as being an enabler will have no difficulties doing so from the technical perspective. Estonian IT industry overall is highly competitive thanks to extensive deregulation and stimulation of competition. Therefore, prices for various IT services are acceptable. Wireless network is very well-developed, covers the entire country, and is built according to European standards. In addition, Estonia banking system is the most developed one in the Baltic region and a very well developed one when compared to the rest of the world. Moreover, E-banking has taken off quite well and is supported by the number of Estonian banks.

Also, there is a number of software and hardware companies, local and foreign, that can develop software packages, design web pages, and set up the infrastructure for businesses on order and at competitive prices. Workforce to support the IT function in the company is also available (even though there is officially considered to be a shortage) at rates less expensive than in Europe and US.

Thus, a new company will not have problems setting up IT support for its business. However, before going into business in Estonia, a company  has to take into consideration the fact that IT enabled business is still a novelty for a greater part of the country. For example, if this company plans to sell goods over the Internet, it has to know that Estonians are still very cautious to buy anything over the Net, and that they do not find such shopping to be too much fun. Moreover, for security purposes and because of rather low credit card penetration companies must use COD method of payment for the merchandise ordered via the Internet. Also, the location and a very small size of the country might create some difficulties.

The bottom line is that IT is not a problem in Estonia today -- the deciding factor for success will be a viable business plan.

Impact on the IT Business

For an established IT company, Estonia might be a good place to locate its R&D center focused on the Baltic Region, Scandinavian countries, and Western Russia. This center can be a either a software development/customization or a new hardware concept development center alike. Well-developed IT infrastructure and availability of highly skilled labor at competitive prices would make such centers worthwhile. 

As for a new start-up IT company, especially the one developing software, a major problem to deal with in Estonia would be software piracy. Even though the government is stepping up the measures against counterfeit software manufacturers and its exporters/importers, and Estonian software companies have been doing much better lately because of that, the problem still remains. 

Another problem might be a difficulty of obtaining venture capital in case if the company's project is a rather small one. Fortunately, it seems like the situation on that front is getting brighter with big investment funds beginning to pay attention to and support smaller projects.