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Norwegian companies in Madis Rausi Innovation [email protected] Estonia at a Glance

Population: 1.36 million Area: 45,000 km² Language: Estonian Currency: EUR 1 = EEK 15.65 GDP: € 8.78 billion (2004*) € 5952 per capita (2004*) GDP growth: 6.2 % (2004) Export: 55 % of GDP (2004*)

2 GDP growth and inflation 1995-2004 15 30,0 GDP growth Inflation 25,0

10.6 10 20,0

7.3 7.2 15,0 6.4 6,2 5.1 4.7 5 4.3 4.0 10,0

5,0 -0.6 0 0,0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 -5,0

-5 -10,0

Source: Statistical Office of Estonia 3 Estonian Exports by Country, 2004

Others 28,4% 23,3%

Sweden Norway 15,4% 3,3% UK 8,4% 3,6% 7,8% 5,7% 4,1%

Source: Statistical Office of Estonia, 4 special trade method Estonian Exports by Commodity Groups, 2004

Other Machinery and 22.4% appliances 27.5%

Chemical products 4.7%

Transport equipment 6.1% Wood and articles of wood 13.1% Metals and articles of Other industrial goods metal 7.8% Textile products 9.4% 9.0%

Source: Statistical Office of Estonia, special trade method 5 Innovation Norway

• Innovation Norway is the official agency of Norway created to promote Internationalisation and Innovation. • Innovation Norway has replaced Norwegian Trade Council, Norwegian Tourist Board, the Regional Development Fund, and the Government Consultative Office for Inventors.

Main services of the IN office in Tallinn: • Market development (market research, identification of importers and customers) • Identification of suppliers (finished products, subcontracting) • Assistance in identification of investment opportunities and corporate establishment

6 Visions vs. reality

We are an outpost of the Norwegian national development Visions:

• Certain priority industries in Norway: ICT, Maritime, Marine, Oil&Gas, etc

• Other priorities: internationalisation, entrepreneurs, SME-s, etc

Reality:

• Need to meet concreete demand for assistance

• Demand may not always coincide with the priorities (potential conflict)

• Need to meet revenue targets

7 Ballace - enterprise developer vs. consultant

• Anything we do contributes to the internationalisation

• Special subsidised products for entrepreneurs and SME-s

• Internal funding for business development in priority sectors (identification of new opportunities and promoting them to Norwegian companies)

• Being consultants and meeting the demand

• Assisting the companies in increasing their competitiveness and revenues

8 Trade between Norway and Estonia in million NOK, 1992-2004

0 500 1000 1500 10 1992 58

281 1999 646 408 2000 847 Export 476 2001 Import 1048 472 2002 1217 446 2003 1281 487 2004 1499

Source: Statistics Norway 9 Norwegian exports to Estonia,2004

Chemicals Other 7,2% 4,9% Misc. Fish Manufactures 29,4% 12,1%

Semi- Engineering manufactures products 20,3% 26,1%

Source: Statistisk Sentralbyrå

10 Norwegian imports from Estonia,2004

Other Prefabs 17,6% 19,7%

Semi-man. Textiles 3,7% Wood 18,6%

Wood products 7,7% Engineering products Furniture Clothing 13,9% 7,9% 10,8%

Source: Statistisk Sentralbyrå 11 200 Norwegian establishments in Estonia

12 Stock of Norwegian investments NOK 1.62 bln (31.12.04) Why have they established?

• Market opportunities

• Cost advantages

• Raw materials (wood)

• Well-educated labour force and special competencies

13 Enterprise development in Estonia

• Deep-rooted belief into liberal (the almighty invisible hand)

• Deep-rooted dislike of planning

• If there is a vision, it is not converted into planning and implementation phases (see first two points)

• Substantial funds started to flow into enterprise development only after the EU-accession

• Implementation mainly through – a governmental enterprise development vehicle (www.eas.ee)

14 Support schemes to Estonia EU-support • € 386 million: ERDF, ESF, EAGGF, FIFG • € 311 million: Cohesion Fund • € 173 million: CAP + rural development • € 69 million: Schengen Facility • € 20 million: Transition Facility Total: € 959 million (2004 – 2006) Norwegian and EEA financial mechanisms •Priority areas including- Human resources development, health and child care, implementation of Schengen acquis, regional policy and cross border activities •NOK 55 million annually

Source: Ministry of of Estonia

15 Thank you and welcome to Estonia !

16