The Riigikogu discussed the future of the economy as a matter of significant national importance
At today’s sitting, the Riigikogu discussed the future of the Estonian economy as a matter of significant national importance initiated by the Estonian Reform Party Group.
Presentations were made by the representative of the Estonian Reform Party Parliamentary Group Maris Lauri, Minister of Economy and Industry Erkki Keldo, President of Estonian Founders Society Allan Martinson, and Member of the Management Board of the Estonian Business and Innovation Agency and Managing Director of e-Residency and external marketing Liina Vahtras.
Maris Lauri, who represented the Reform Party, underlined in her presentation that the future of Estonia’s economy depended on building strong foundations and being permanently ready for change. “We have entered a period of general instability where it is becoming increasingly difficult to speak of stable development and predictable events,” Lauri said.
According to Lauri, the cornerstones of Estonia’s competitiveness are natural resources, labour, capital, as well as knowledge and entrepreneurship. “We must ask ourselves how much we are able to refine and sell the products derived from our natural advantages,” she said, giving as an example the need to move from exporting raw materials towards products with a higher added value.
She also stressed that the rising cost of labour was a natural process that made companies constantly seek technological advancements and innovation. “Innovation and progress are inevitable processes – if we do not embrace them, our standard of living will remain many times lower,” said Lauri.
In her presentation, Maris Lauri emphasised the need to strengthen domestic capital, giving as an example the negative impact of changes to the pension system: “It was very unwise to slow down the accumulation of domestic capital. We need to have our own capital, which does not leave as easily as foreign capital”.
As the fourth pillar, she mentioned knowledge and entrepreneurship, stressing that the Estonian economy must become more knowledge-based. “If we stop striving forward, then we will actually stop growth and development,” said Lauri.
Maris Lauri concluded by urging to strengthen all four pillars of Estonia’s economic competitiveness: “If we do not manage the use of labour, natural resources, and capital wisely, there will be no sustainable economic development. It is important that all four of these pillars are strong.”
In his presentation, Minister of Economy and Industry Erkki Keldo placed the focus of economic development on security, export ambitions, speeding up investments, and increasing productivity.
According to Keldo, security is the foundation of economic growth. He pointed out that at least 5% of GDP was allocated to defence spending in the 2026 state budget – a level that would be maintained in the coming years.
He said that very specific targets had been set for export – to increase export from 30 billion to 43 billion euros over the next four years.
He also emphasised the role of the state as the creator of a favourable business environment. “The state does not, and should not, manage the economy,” Keldo said.
As regards productivity, Minister of Economy and Industry established a clear target: “We have set a major goal for Estonia’s labour productivity to reach 110% of the European Union average by 2035.”
Regarding investments, he highlighted the launch of several new factories and major projects amounting to 400 million euros in green hydrogen, a gas-fired power plant, and kraft paper production. He also indicated a shift from direct payments toward loans, sureties, and guarantees, as well as the acceleration of planning processes.
Minister of Economy and Industry called on society to support these developments – the arrival of new enterprises in different regions should be viewed as an opportunity rather than a threat.
At the end of his presentation, Keldo also stressed the importance of the general attitude: “One important component of economic growth, in addition to everything mentioned earlier, is optimism. If we do not find it within ourselves and constantly paint everything darker, the recipe for growth simply will not work that well. Our long-term success also depends on our hunger for innovation and our willingness to step out of our comfort zone. If we want a wealthier society and better salaries in the future, we must be hungrier and dare to take more risks.”
In his presentation, Allan Martinson, President of Estonian Founders Society, gave an overview of the contribution of start-up entrepreneurship to the Estonian economy. According to Martinson, this sector has become a driving force of the economy: approximately 1900 companies operate in Estonia’s start-up sector, employing 17,000 people and contributing an estimated 4.5% to GDP. “Looking at turnover, this year we expect Estonian start-ups to reach approximately 5.5 billion euros, which is around 1 billion euros higher than last year,” Martinson noted.
He described the four components driving start-up growth (founders, talent, capital, markets) and pointed out current trends: a decline in the founding of start-ups and the stabilisation of employment, while fundraising had normalised following the boom in 2021. “We are currently in a fairly normal place. And this is the place where, in fact, most countries of the world have always operated. But we are still number one in Europe in many parameters – even after having fallen four times,” Martinson said.
Martinson emphasised the need to shift towards a more intensive growth, using AI tools to rapidly increase productivity. “It is possible to achieve productivity per person amounting to hundreds of thousands euros, or even millions, with the help of AI,” said Martinson.
He identified defence technology as one of Estonia’s fastest-growing niches and called on the state and the defence forces to act as partners in terms of product development. “The defence industry has only one client, and that is the state – or states.”
At the end of his presentation, Martinson emphasised that a stable tax and economic environment was what the enterprises most of all expected from the state: “First and foremost, don’t mess around with taxes!”
The final speaker was Liina Vahtras, Member of the Management Board of the Estonian Business and Innovation Agency. In her presentation, she focused on the contribution of the e-Residency programme to the Estonian economy.
“Over the past decade, Estonia’s greatest achievement as a digital state is that we have created something no other country has – e-Residency, a digital identity that provides access to Estonian services worldwide.” In her presentation, Vahtras noted that over the past ten years, more than 130,000 people from 185 countries have joined the program, creating over 37,000 Estonian enterprises.
In ten years, e-Residency has brought 370 million euros in direct revenue to the state treasury. “This programme has been exceptionally profitable for the state, as, in recent years, every euro spent on maintaining the programme has returned eight or nine euros,” Vahtras said. According to her, in addition to the direct tax revenue, e-residents also contribute to the development of the service economy ecosystem by creating jobs and increasing export.
Vahtras stressed that e-Residency served as a quality mark of Estonia’s business environment, which was based on trust and transparency. To ensure security, regular risk management and background checks are carried out, resulting in the share of rejected applicants increasing from 2% to 11%. “In cooperation with supervisory authorities, e-Residency has done everything possible to ensure that only law-abiding foreigners with honest intentions can become e-residents,” Vahtras said.
The programme`s next big step is a fully digital solution based on biometric personal identification, which will enable to create enterprises much faster than before. “We would like to shorten this time so that, in the future, the process from making an application to starting business operations would take up to two weeks instead of two months,” Vahtras said. Each day saved in the issuance process is expected to result in the creation of 20 new enterprises per year.
According to Liina Vahtras, e-Residency requires political support and a stable tax environment to maintain Estonia’s competitive advantage and credibility. “The future of Estonia’s economy therefore largely depends on two factors – digital innovation and trust.”
During the debate, Õnne Pillak (Reform Party), Jaak Aab (Social Democratic Party), Marek Reinaas (Estonia 200), and Urmas Reinsalu (Isamaa) took the floor on behalf of their parliamentary groups.
The sitting ended at 13.06 p.m.
Verbatim record of the sitting (in Estonian)
Photos Erik Peinar / Chancellery of the Riigikogu)
Video recording is available on the Riigikogu YouTube channel.
Riigikogu Press Service
Maiki Vaikla
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