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COUNTRYPROFILE ESTONIA

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IMD World Competitiveness Yearbook, Talent & Digital 2020: summaries

WORLD COMPETITIVENESSRANKING 2020

All data are available from theWorld Competitiveness Online.

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BASIC FACTSCapital

Land area (square km '000) 452019

Exchange Rate (per $) 0.8932019

Population - market size (millions) 1.332019 60

Gross Domestic Product (GDP) (US$ billions) 31.42019 60

GDP (PPP) per capita (US$) 36,0262019 35

Real GDP growth (%) 4.32019 8

Consumer price inflation (%) 2.272019 38

Unemployment rate (%) 4.402019 26

Labor force (millions) 0.702019 60

Current account balance (% of GDP) 2.192019 28

Direct investment stocks inward ($bn) 24.32018 57

Direct investment flows inward (% of GDP) 9.232019 5

PEER GROUPS RANKINGSEUROPE - MIDDLE EAST - AFRICA (40 countries) POPULATIONS < 20 MILLION (34 countries)

COMPETITIVENESS TRENDS - OVERALL

ESTONIAOVERALL PERFORMANCE (63 countries) Rank

Tallinn

CHALLENGES IN 2020Ensure the functioning of the economy during and after Covid-19.

Boost productivity through innovation and digital transformation.

Estonian Institute of Economic Research (EKI)

COMPETITIVENESS LANDSCAPE

31 30 31 35 28

2016 2017 2018 2019 2020

3733

3936

23 2530

24

1520

28

37 39

18

26 28

35

44

28

17

Dom

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Eco

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Inte

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iona

l Tra

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Inte

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Empl

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Pric

es

Publ

ic F

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Tax

Polic

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Inst

itutio

nal F

ram

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k

Busi

ness

Leg

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tion

Soci

etal

Fra

mew

ork

Prod

uctiv

ity &

Effi

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Labo

r M

arke

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Fina

nce

Man

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ent

Prac

tices

Att

itude

s an

d V

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s

Basi

c In

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Tech

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l Inf

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Scie

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Hea

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Educ

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Economic Performance Government Efficiency Business Efficiency Infrastructure

19 18 19 22 18

2016 2017 2018 2019 2020

20 19 1921

18

2016 2017 2018 2019 2020

• Ensure the functioning of the economy during and after Covid-19.

• Boost productivity through innovation and digital transformation.

• Promote cooperation between business and research sector.• Stimulate balanced regional development.• Secure better access to skilled labor force.

Provided by:Estonian Institute of Economic Research (EKI)

IMPROVEMENTSWCY 2019

WCY 2020 DECLINES

WCY 2019

1.1.18 Gross fixed capital formation - real growth 3.35 13.10 3.2.14 Labor force long-term growth 3.93

4.1.07 Population - growth 0.15 0.38 1.4.04 Employment - long-term growth 6.27

4.4.23 Environment-related technologies 0.02 0.04 2.5.12 Unemployment rate - gender ratio 0.98

2.3.08 Exchange rate stability 0.046 0.005 3.4.11 Women in management 38.51

2.3.07 Foreign currency reserves per capita 573 1,075 1.2.18 Export concentration by product 35.1

1.4.09 Youth unemployment 19.93 11.10 2.1.11 Pension funding 3.33

2.1.02 Government budget surplus/deficit (%) -0.55 -0.32 4.4.26 Pollution problems 5.93

1.5.01 Consumer price inflation 3.41 2.27 1.2.09 Exports of goods (%) 56.15

1.4.08 Long-term unemployment 1.34 0.90 3.3.06 Banking and financial services 6.55

2.5.02 Homicide 3.20 2.21 2.4.07 Government subsidies 0.38

3.2.18 Skilled labor 2.50 3.27 1.1.19 Resilience of the economy 5.97

2.2.12 Real personal taxes 4.50 5.80 3.3.16 Credit 6.37

1.2.02 Current account balance 1.74 2.19 4.3.16 Patent applications per capita 21.66

3.2.09 Apprenticeships 4.47 5.63 1.2.25 Tourism receipts 6.12

4.3.18 Number of patents in force 55.3 68.8 1.2.08 Exports of goods ($bn) 17.01

COMPETITIVENESS EVOLUTION & ATTRACTIVENESS INDICATORS

ESTONIACOMPETITIVENESS EVOLUTION

1.98

39.3

2.97

5.37

51.37

6.00

0.40

5.80

The criteria below highlight the 15 biggest Improvements and the 15 biggest Declines in the overall performance of the economy. They are

determined by the largest percentage changes in the value of each criterion from one yearbook to the next.

WCY 2020

16.12

KEY ATTRACTIVENESS INDICATORSFrom a list of 15 indicators, respondents of the Executive Opinion Survey were asked to select 5 that they perceived as the key

attractiveness factors of their economy. The chart shows the percentage of responses per indicator from the highest number of responses

to the lowest.

3.75

1.17

33.24

5.57

6.00

20.42

1.7%15.0%18.3%25.0%26.7%28.3%31.7%33.3%33.3%36.7%36.7%41.7%46.7%48.3%58.3%

0% 10% 20% 30% 40% 50% 60% 70%

Competency of governmentStrong R&D culture

Quality of corporate governanceAccess to financing

Effective labor relationsCost competitiveness

Open and positive attitudesPolicy stability & predictability

Reliable infrastructureDynamism of the economyEffective legal environment

Skilled workforceCompetitive tax regime

Business-friendly environmentHigh educational level

WORLD COMPETITIVENESSDIGITAL RANKING 2020

All data are available from theWorld Competitiveness Online.

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Alpha AlphaLabelBeta BetaLabel Gamma GammaLabel1 2 2 2 2 2 24 4 4 2 2

6.5 4 4 2 28.5 4 4 2 211 4 4 2 2

2016 2017 2018 2019 2020

27 26 25 29 21

30 28 29 30 23

17 19 20 22 23

26 26 26 30 20

OVERALL

Future readiness

PEER GROUPS RANKINGS

EUROPE - MIDDLE EAST - AFRICA (40 countries) POPULATIONS < 20 MILLION (34 countries)

COMPETITIVENESS & DIGITAL RANKINGS

Technology

DIGITAL TRENDS - OVERALL

ESTONIA

OVERALL PERFORMANCE (63 countries)

OVERALL & FACTORS - 5 years

Knowledge

27 26 2529

21

31 30 3135

28

2016 2017 2018 2019 2020

Digital

Competitiveness

17 17 16 1813

2016 2017 2018 2019 2020

17 17 17 1713

2016 2017 2018 2019 2020

23 31 3 47

23 30 29 1721

20 18 26 22

Knowledge Talent Training & education Scientific concentration

Technology Regulatory framework Capital Technological framework

Future readiness Adaptive attitudes Business agility IT integrationThe direction of the triangle indicates the performance change from the last year: improved or stabledeclined

Overall Factors Sub-Factors

N.B. This graph provides only a comparison of the country’s performance in the two rankings.

u Overall top strengths

w Overall top weaknesses

Subfactors 2016 2017 2018 2019 202046 40 34 37 31

3 2 17 10 3

38 38 39 46 47

Talent Rank Rank Rank

Educational assessment PISA - Math 7 u 5 26 International experience 45 8 29 Foreign highly-skilled personnel 29 29 19 Management of cities 36 16 w 60w Digital/Technological skills 47 14 30 Net flow of international students 34 10 20 w 50

Subfactors 2016 2017 2018 2019 202019 23 25 31 30

16 18 21 24 29

14 18 15 16 17

Regulatory framework Rank Rank Rank

Starting a business 7 - 20 Enforcing contracts 8 36 44w Immigration laws 59 38 u 4 Development & application of tech. 24 23 11 Scientific research legislation 42 18 29 Intellectual property rights 25 33 24

Subfactors 2016 2017 2018 2019 202028 31 24 26 18

20 19 29 43 26

25 25 22 26 22

Adaptive attitudes Rank Rank Rank

u E-Participation 1 29 u 3 Internet retailing 20 w 47 44u Tablet possession 7 9 16 Smartphone possession 31 37 30 Attitudes toward globalization 32 42 12

Training & education Scientific concentration

Talent

Robots in Education and R&D

IT integration

Business agility IT integration

Scientific concentration

Capital Technological framework

FACTORS BREAKDOWN - STRENGTHS AND WEAKNESSES

ESTONIA

FUTURE READINESS

TECHNOLOGY

Technological framework

Opportunities and threats E-GovernmentWorld robots distribution Public-private partnerships

IT & media stock market capitalization Communications technology

Regulatory framework

Capital

KNOWLEDGE

Entrepreneurial fear of failure

Agility of companies Cyber securityUse of big data and analytics Software piracyKnowledge transfer

Adaptive attitudes

Business agility

Venture capital Internet bandwidth speedInvestment in Telecommunications High-tech exports (%)

Funding for technological development Mobile Broadband subscribersBanking and financial services Wireless broadbandCountry credit rating Internet users

Training & education

Employee training Total expenditure on R&D (%)Total public expenditure on education Total R&D personnel per capitaHigher education achievement Female researchersPupil-teacher ratio (tertiary education) R&D productivity by publicationGraduates in Sciences Scientific and technical employmentWomen with degrees High-tech patent grants

WORLD TALENTRANKING 2020

All data are available from theWorld Competitiveness Online.

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Alpha AlphaLabel Beta BetaLabel Gamma GammaLabel1 2 2 2 2 2 24 4 4 2 2

Value

6.2 % 8 6,850 US$ 26 13.15 ratio 21 12.66 ratio 35 5.63 Survey [0..10] 20u 7.32 Survey [0..10] 5u 48.62 % 6 6.50 Survey [0..10] 29

Value

69.40 index 14u 8.13 Survey [0..10] 3 6.33 Survey [0..10] 20 4.53 Survey [0..10] 40 6.88 Survey [0..10] 34 5.67 Survey [0..10] 29 15,532 US$ 38w 101,547 US$ 47 12.95 % 22 7.23 Survey [0..10] 21u 6.84 micrograms 6

Value

w 0.14 % 45w 3.27 Survey [0..10] 58w 5.10 Survey [0..10] 55 5.17 Survey [0..10] 45w 3.80 Survey [0..10] 57 7.87 Survey [0..10] 12 27.73 % 18 7.43 Survey [0..10] 20 6.95 Survey [0..10] 24 7.53 Survey [0..10] 21 3.32 number 25u 526 Average 4

Investment & Development 2020 Rank

Health infrastructure meets the needs of society

2020 Rank

Total public expenditure on education Percentage of GDP

ApprenticeshipsEmployee training is a high priority in companies

Readiness 2020 Rank

Educational assessment - PISA PISA survey of 15-year olds

Appeal

Exposure to particle pollution Mean population exposure to PM2.5, Micrograms per cubic metre

Labor force growth Percentage change

Index of a basket of goods & services in the main city, including housing (New York City = 100)

Skilled labor is readily available

Cost-of-living index

Female labor force Percentage of total labor force

Pupil-teacher ratio (secondary education) Ratio of students to teaching staff

are sufficiently implemented

Total public exp. on education per student Spending per enrolled pupil/student, all levels

Pupil-teacher ratio (primary education) Ratio of students to teaching staff

Management education meets the needs of the business community

Language skills are meeting the needs of enterprises

Student mobility inbound Foreign tertiary-level students per 1000 inhabitants

Primary and secondary education meets the needs of a competitive economy

Graduates in Sciences % of graduates in ICT, Engineering, Math & Natural Sciences

University education meets the needs of a competitive economy

Finance skills are readily available

International experience of senior managers is generally significant

Competent senior managers are readily available

Justice is fairly administered

Gross annual income including supplements such as bonuses, US$

Remuneration of management Total base salary plus bonuses and long-term incentives, US$

Effective personal income tax rate Percentage of an income equal to GDP per capita

Attracting and retaining talents is a priority in companies

Worker motivation in companies is high

Brain drain (well-educated and skilled people) does not hinder competitiveness in your economy

Quality of life is high

Foreign highly-skilled personnel are attracted to your country's business environment

Remuneration in services professions

OVERALL PERFORMANCE (63 countries)

IMD World Talent Ranking 2020

ESTONIA

26

2928

27

19

1314

16

21

10

35

38

33

23

19

3435

31

35

32

2016 2017 2018 2019 2020

Overall

Investment &Development

Appeal

Readiness

10

1919

32

Investment & Development

Appeal

Readiness

The direction of the triangle indicates the performance change from the last year: improved or stabledeclined

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IMD WORLDTALENTRANKING 2020

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