The State Took First Steps Towards Industrial Policy
The state has, together with the Chamber of Commerce and other industrial sector organisations prepared the Green Paper on Industrial Policy, which sets out the problems in the industrial sector and offers potential solutions. This is the first industrial policy base document in Estonia.
The main aim of the Green Paper on Industrial Policy is to increase Estonian industry’s competitiveness. The aim in figures is to increase additional value per employee from the current 54 percent to at least 100 percent of the European Union average by the year 2030.
In order to achieve the goal, the Green Paper focuses on the following areas: digitalisation of the industry, research and development, availability of finances, labour force, infrastructure, natural resources and regulative environment.
In order to improve the industrial sector’s competitiveness, one of the solutions proposed by the Green Paper is broader introduction of digital technologies in the industrial sector. For that purpose, the state is planning to establish a support programme for the digitalisation and automatization of the industry, promote cooperation between entrepreneurs and increase awareness of entrepreneurs in terms of the positive impact of digitalisation.
In order to increase additional value, more investments should be allocated to research and development activities. Among other things, the Green Paper proposes that for the purposes of increasing investments, state’s funding for the research and development activities should be reorganised, a research and development program for product development should be created and cooperation between industrial companies and technology-based start-ups should be increased.
In order to do make investments, industrial companies need long-term financing opportunities. To improve availability of finances, the state is planning to offer, for example, long-term loans for industrial companies and insuring large-scale export transactions.
One of the challenges of the industrial sector is also to find suitable labour force. The Green Paper contains several recommendations that help to alleviate labour need: popularising specialities necessary for the industry via national grants and information activities, simplification of involving foreign labour and ensuring flexibility of the education system in order to respond to the changing labour needs.
Several recommendations have also been made in relation to natural resources and infrastructure. For example, in order to establish environmental charges, an optimum model should be established and differentiation of electricity prices for large consumers should start.
According to the Green Paper, carrying out changes on the political level must be integral and a better cooperation should be established between sectoral policies and those that have an impact on the industry. This means that the changes in the tax, education and research policies require more coordinated management than before.
The development of the bases for the Estonian industrial policy was not based on supporting a specific company or industrial sector, instead, the target was to support the overall economic environment and improve the industry’s competitiveness without giving preference to any industrial sector.
The Green Paper on Industrial Policy is an input for developing specific programmes and new strategies. This means that now the state, in cooperation with the private sector, must think how the ideas in the Green Paper could be specifically realised.
Read more on the Green Paper on Industrial Policy here (in Estonian):