Information Technology Landscape in

ESTONIA

                                    IT Labor Market

Success of any sector of a country's economy is highly dependent on the availability of the skilled work force. Thus, the ability of Estonia to produce and retain its IT specialists is an ever important issue for this increasingly IT focused country.

The Structure of Higher Education

Facts about Estonian Professional Labor Force

More that 20% of Estonian labor force have higher education. Consistency in governmental  R & D funding has resulted in a number of leading areas of science, such as molecular biology and genetic science, materials research, environmental science and marine science where Estonians with advanced degrees are employed. R&D expenditures of private sector too are increasing as both Estonian and foreign businesses have discovered the potential of Estonian scientists and engineers.

Fluency in English, Russian, Finnish, German and other languages is becoming the norm among people pursuing higher education and careers in prestigious industries.

In addition, the skills that Estonian university  graduates and specialists possess present a good value in terms of labor cost in Europe. The average Estonian salary is approximately EUR 300 a month -- only a fraction of that of the rest of Europe.

IT Labor Force

Two universities, a number of polytechnics and many training companies provide basic and specialized education in information technology. With the foundation of the IT College, the number of graduates in the sector will increase further. The average monthly income of a software professional hovers around USD1,500 - which is four times less than in the United States and three times less expensive than in Western Europe. 

According to Structural Demands for the Skills that are Needed by the IT Industry by Jaan Oruaas -- a chairman of the Estonian Information Technology Society -- the exists  sharp shortage of IT professionals in Estonia. Today, Estonian companies employ about 10,000 IT professionals with university degrees, and much more will be needed in the future taking into consideration an estimated 20% annual growth of the IT market. Derived from the EU statistics number shows that in 2002 the shortage of IT specialists in Estonia will reach 6,000. During that year, the country will demand about 12,000 computer specialists with university degrees, and Estonian universities and other higher education establishments will not be able to meet that number. Such establishments only graduate 2,500 needed specialists per year, which is considered to be highly insufficient given the fast pace of development of information technologies in the country.

As one of the measures aimed at increasing the supply of the needed IT labor force the government established a new IT College in September 2000 hoping to boost the number of computer programmers and IT specialists in the country.

Brain Drain Problem

Another problem that somewhat prevents Estonian education system to meet demand for IT workers is the brain drain problem. A part of this problem is that some reputable professors leave their respective schools to teach abroad because of big difference in salaries. In Estonia, professors often make less than their student do after graduation. Thus, the motivation to pursue academic careers is very low among students. In addition, Estonia has a relatively small population and it is hard to find a critical mass of teachers to cover all urgent fields.