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International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 14:19

Growth of Estonian startups impaired by shortage of skilled labor, capital

BC, Tallinn, 08.02.2016.Print version
Estonian startups' satisfaction with national government is almost three times higher than the global average, but a growing shortage of talent and capital are seen as the biggest drawbacks, it appears from an international startup ecosystem study, informs LETA/BNS.

The report on Estonia prepared by Compass in cooperation with Startup Estonia highlights initiatives such as e-government, e-residency and digitization of public agency processes. Accordingly, 66% of Estonian startups are satisfied with the national government compared to the global average of 25%.

 

The report points at the limited supply of talent as a problem. Although Estonian startups have relatively big numbers of employees with previous startup experience – 41% compared to the European average of 39% – the country trails the strongest European ecosystems by several indicators.

 

Of startup founders in Estonia, 15% have experience of work in hyper-growth companies, above the European average of 13% but below the London average of 23%. Furthermore, Estonian startups have only 24% of foreign employees versus 53% in London.

 

The study also highlights difficulties with raising seed and growth funding. Foreign investors prefer to place money in an environment they are familiar with and whose regulations are simple and friendly, but Estonia is not seen as such today and therefore Estonian startups are often forced to raise money through a legal entity abroad. Early-phase investment in Estonian startups averages 450,000 euros compared to the European average of 620,000 euros.






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