What brings bread to the table in Estonia?

​The Estonian economy has relied, as far back as memory goes, on the country’s favourable location at the Baltic Sea, the Mediterranean of the North. In the Middle Ages, Estonian cities, the northernmost members of the Hanseatic League, were said to be ‘built on salt’ – a major commodity in the transit trade between Western Europe and Russia. Even though such local exports as smoke-dried grain – renowned for its storage life – or beeswax have long lost the importance they once enjoyed, the Estonian economy still belongs to the closely interwoven Northern European network. Ice-free deep-water ports along an important trade route between East and West remain an asset in the 21st century.

​Overall though, most Estonians earn their daily bread working in a small or medium enterprise or in the public sector. Small is flexible – and agility has proven to be the best survival strategy for a small nation with limited natural resources. There are no real industrial giants in Estonia – the only exception being the energy company that employs 7000 people in the industrial Northeast of the country. Two major power stations, relying on the extensive deposits of oil shale, make a vital contribution to Estonia’s energy-independence, but need to be substituted for more sustainable alternatives in the near future.

​Since the restoration of independence, Estonia has persistently applied a model of an open economy that is versatile and free of undue bureaucracy. The country has acquired fame for its bold adoption of innovative IT solutions, both in the private and public sector. Several technical solutions that the Estonians are already accustomed to, such as e-banking, web-based tax declarations or even voting at local and parliamentary elections using a digital ID card, have become articles of export.

​​While the images of stalwart fishermen and tenacious farmers as archetypal symbols of Estonianness persist in the minds of many Estonians, as of today, the share of people employed in agriculture and fisheries has dropped below the European Union average. The new generation in the sparsely populated rural areas has to apply its wits to combining tradition and innovation, be it furthering nature tourism or producing ready-to-assemble log houses.

Tallinn and its surroundings that contain about a third of the nation’s population provide 60 per cent of Estonia’s economic output. Here lie the country’s most important airport, railway station and one of the biggest merchant ports on the Baltic Sea. Tallinn acts as the gateway for most foreign visitors to Estonia; its mediaeval Old Town is the country’s foremost tourist attraction. The business life of Tartu, also an old Hanseatic town, mostly centres around its university, which was founded in 1632 by the Swedish king Gustav II Adolf. Estonia’s leading international centre of research and innovation, the University of Tartu epitomises the main asset Estonians have in the increasingly open world – an excellent education and staunch traditions of scientific studies.

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