Estonia a Hot Spot for New Technology

Estimated reading time: 2 minutes

If you’re in the electronics industry, odds are that you use Skype every day to connect with people from around the world. Did you know Skype was founded in Estonia? Most Westerners know very little about Estonia. A former Soviet Bloc country, Estonia has come a long way since restoring its independence in 1991. Electronics companies are thriving in this tiny EU member country, and capital city Tallinn has been called “Silicon Valley on the Baltic Sea.” During productronica, I met with Arno Kolk, general manager of the Estonian Electronics Industries Association, and we discussed the explosion of new technology in this “Baltic Tiger” country?

Andy Shaughnessy: Arno, nice to meet you here at productronica. Please begin with a little background about the association.

Arno Kolk: Well, it's a voluntary association. It’s quite typical, I would say. In this association, the companies work together to improve cooperation and have closer ties with universities, which are receptive of the solutions, and then we increase the productivity of all the members.

Shaughnessy: What is the manufacturing atmosphere like in Estonia, and what sort of industries are found there?

Kolk: In Estonia, the manufacturing industry plays a very important role. Our industry share of GDP is on par with the rest of Europe. I think most of Estonian exports, about 80% of exports, is manufacturing, and electronics is over 20% of Estonian exports. Being a small country, the local market is tiny, so we must export. It also means we must be competitive with exports. But then I guess your readers don't know that the Estonian industry goes back a century or more, and the electronics industry is as old as electronics. We had our first telephone factory back in 1907.

Shaughnessy: I’ll bet I’m not the only person who wouldn’t have guessed that. And the industry has continued to stay relevant since that time?

Kolk: Yes, we built radio sets in the ‘20s and it grew from there. Of course, we had at least 50 years of Soviet occupation where electronics was present and thriving, but it was behind Iron Curtain, which means it was really tailored to that market. When the wall came down, we were out in the cold, because that was our competitive market and we were not part of the global value chain. We perhaps used different processes and different approaches, so we had to learn—very fast.

So we had a complete industry overhaul in the ‘90s, and now I’d say we are world class, as our export figures show. We have large multinationals, the biggest of them being Ericsson, who has a large factory in Estonia, and American companies, FLIR, Amphenol there and others. Then we also have EMS companies, usually European middle-sized companies. And then we have an increasing number of engineering companies that are really growing. Some of them are exporting just engineering services, and others develop complete products while some companies launch their own products. So we have the whole value chain in place: design companies, several manufacturing companies, after-sales companies, and all the major distributors are present in Estonia, so the components can be bought locally. Likewise, all the machinery, all the materials, all we need for electronics manufacturing is there.

To read this entire article, which appeared in the March 2018 issue of Design007 Magazine, click here.