Analysis of the Estonian ICT Sector Innovation System



Societal inclination towards a fast acquisition of modern technologies, willingness to experiment with new solutions and internationally success- ful promotional campaigns have introduced Estonia on the international arena as a rapidly evolving information society. Indeed, the broad picture seems to confirm this concept, as figures and early growth rates are in some cases remarkable (particularly in the category of consumer goods and exports), and several initiatives that have been undertaken by either government or corporate agents are remarkable, inspiring other countries to imitate Estonian practices.

Still, the present report aspires to look behind the figures, to get down to the core issues that lie at the heart of Estonian information and tele- communications technology (hereafter ICT) sector competitiveness. The report concludes that many of the developments are generally misinter- preted when considering the innovation aspect and are driven to a large extent by attempts to brand Estonia internationally as an ICT state and an information society. In reality very limited resources are being put into real (new) knowledge production and often the developments occurring elsewhere are being imitated instead.

Nonetheless, Estonia has defined her research and development (R&D) strategy in a document entitled ‘Knowledge-based Estonia. Estonian Research and Development Strategy 2001–2006’ in which Estonia is seen as a place where research, orientated towards new knowledge, application of skills and knowledge and development of human resources, all combined in balance, are a source of economic and labour competi- tiveness and quality of life. The strategy also defines information society technologies (IST) as one of the three key areas for R&D in Estonia.



Estonia, however, is not an exception in giving priority to ICT. Camarero and Magnatti (2000, pp 99-100) report in their cross-country study of the technological sectors on which EU Member States are focusing their innovation policies that information society technologies appear as a focal sector in 27% of cases, and that almost every country has at least one measure targeted to this sector.

In order to develop an appropriate Estonian innovation policy, there has to be general understanding of the core problems of the Estonian ICT Sector Innovation System. The current study thus takes a closer look at the fol- lowing issues:

  • What are the elements of the Estonian ICT cluster, how is it perform- ing, and how is the cluster functioning inside and with other sectors of the Estonian and international economy?
  • What are the elements of the ICT Sector Innovation System and how can their interaction be described?
  • What is the level of innovation in the ICT sector and what is the major reasoning to perform R&D?