‘Estonia is not a location for cheap labour any longer, but rather its attraction comes from the technological added value. Estonian precision work is valued’
Riina Leminsky Talking about economic ties – there is no obligation for German companies to tell the embassy if they are doing business in Estonia, but I wonder what has been the development in the last few years in terms of business? CE: ‘This interest of German companies is very tangible. Here are some observations of how it has developed over the last years. Just recently, more than 40 German companies came to the sTARTUp Day in Tartu, from young one-man startups to Edeka, a supermarket chain with more than 360 000 employees in Germany. They took a close look at digital methods for production and retail of groceries. Audi, Bosch, Siemens, Bertelsmann, all these large companies have been here at the highest board member level, to establish business contacts with Estonian companies. Daimler has joint ventures with Starship and Bolt (former Taxify – ed.). Kühne und Nagel has grown their IT operations in Tallinn from 100 to 350 jobs. Arvato, the subsidiary of Bertelsmann, one of the largest publishing houses worldwide has just moved to new, larger premises in Telliskivi. The business ties are not a one-way street. Estonian Skeleton Technologies has opened a factory in Dresden, many Estonian startups are in Berlin (Ampler bikes). Nortal has opened an office in Germany to be closer to its customers: large municipal utilities service providers.’
What is the main reason for German companies to do business in Estonia? CE: ‘For sure, Estonia is not a location for cheap labour any longer as it used to be in the early 1990s, but rather its attraction comes from the technological added value. Estonian precision work is valued. A key factor is the cultural fit. Estonians and Germans have a similar mentality – we exchange ideas, we shake hands and this is valid. I do hear from many companies that this is a decisive factor when looking at a shortlist of locations.’ The ties go well beyond business. ‘We have worked systematically to include universities in all the visits and talks – both TalTech as well as the University of Tartu. Visitors have always been impressed by the wide cooperation opportunities and the intersectoral mix that is possible. The embassy has initiated a conference “Industry 4.0 in Practice” together with the Estonian ICT association, now also in partnership with TalTech,’ says the ambassador. The Germans are the third largest group of Estonian e-residents. This brings income.
Director of Business Development in Germany, Austria and Switzerland at the Estonian Investment Agency Since the days of the Hanseatic League – a confederation of the cities on the Baltic Sea – Germany and Estonia have engaged in close co-operation. In recent years, the cities of these two countries have developed increasingly close startup ties, and they continue to look for joint opportunities. Over 50 German entrepreneurs travelled to the Hanseatic city of Tartu in late January to participate in sTARTUp Day – one of the most important business festivals in the founder and startup scene of Estonia and Northern Europe. The festival’s slogan “From Zero to Hero” refers to the goal to inspire early stage startups on their journey. Naturally, the founders of Hamburg’s Disruptive Lounge event were present, spreading good cheer the evening before the conference. Speakers from Germany included representatives from Airbus, Philips Health Innovation Port, Edeka, IKS Hamburg and Ströer, and the startups Blockchain Solutions and Aiconix made pitches. Furthermore, business promotion agencies from Hamburg and Schleswig-Holstein and Tutech Innovation from Hamburg visited Estonia with a business delegation and held their own presentations at the conference. Some companies are already taking concrete steps in the wake of the conference, including founding companies, establishing a networking hub between Estonia, Germany and Israel, starting joint cooperation projects, extending invitations for return visits, and so on. Many participants are already planning their next trip to Estonia, either on their own or to the Latitude59 conference, which is held in Tallinn in May. We’ll keep you updated!
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