Sunday, 21 July 2013

Entrepreneurial Estonia

Tallinn is not exactly on the list of major cities in the world, yet it is a word being repeated in the technological startup community. As the capital of Estonia, Tallinn continues to offer entrepreneurs quick and easy access to beginning their business with an easy to use online bureaucracy. For example, it takes only about five minutes to register one's company.

Skype is probably the greatest example of Tallinn technological success, and some reports have stated that Estonia has the most start-ups per person not only in Europe, but the world. This is quite the bold statement for a country of 1.3 million people. Other companies in the region are Zerply (a professsional networking service for creative minds), ZeroTurnaround (tools for Java programmers) or GrabCAD (a service meant for mechanical engineers). Start-up competitions such as Garage48 offer hackathons to encourage continual development.

This information was inspired by Forbes.
















Estonia has constantly been invaded since the Middle Ages. Geographically, it is a gateway between the West and Eastern countries and acts as an important port. Once the property of the Germanic order of Teutonic Knights who bought the property from the Danish, the country declared freedom in the 1920s, only to be invaded by the Soviet empire, then the Nazi's, and then the Soviets again. Unfortunately, the Soviet occupation resulted in thousands of Estonians being sent to Gulags, or leaving their own country because of the occupation. However, in 1988 the country declared independence.

As a result, the Estonian government had to reinvent their bureaucracy cheaply and decided to us information technology. The decision along with support for free higher education has resulted in a more educated technology savvy society. With tax existing for corporations only on their dividends, and the governmental fee to corporate can be paid at a later date, more start-ups are attracted to the country. In additional, a strong community of start-up organizations such as the Estonian Development Fund offer to support to entrepreneurs. At Tallinn University a start-up hub entitled Technopol houses 150 companies while accelerator programs like Gamefounders exist.

Unfortunately, size does matter for companies, as the population of 1.3 million means companies must immediately think international when looking for customers. Additionally, once companies grow they usually have to look abroad for new talent.

However, Estonia is a healthy example of a country that once was under the Iron Curtain in to a capitalistic success story. The international community should take notice of the more efficient utilizing of IT by the bureaucracy of Estonia, and apply the example. As the last Russian troops left in 1994, Estonia has quickly created a strong unique technological niche that hopefully will continue to remain successful.  

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