Scientist: Estonia’s economic woes spring from meaningless business

Photo: Heiki Rebane / BNS

People in Estonia live by 20 notches underneath what quality of human resourced would allow, the reason being the lack of substance in our enterprise, said economist Jüri Sepp at presentation of the fresh Human Development Report.

«Human resources plus economic environment created by the state is what helps Estonia along. At the same time, we are being held back by factors related to enterprise – concerning the substance, the essence of business,» said Prof Sepp.

He underlined that, looking at Estonia’s ranking in Human Development Index subunit of economic development and comparing it to charts on quality of human resources, freedom of enterprise and quality of governance, Estonia’s position is considerably better with the latter.

According to the scientist, a positive conclusion can be drawn: during the short period of regained independence, Estonia has just not had time to make use of the economic conditions created.

Regrettably, some indices serve to nullify the optimism – in all World Economic Forum business substance indexes, Estonia lags behind in comparison with its economic development. «Knowing this, it’s no wonder that we are unable to draw economic wellbeing from the human resource quality available,» said Prof Sepp.

Among other things, business substance indices serve to measure whether our competitive advantage is low prices or uniqueness of products; also if our companies generate real wealth or are rather positioned at low levels of the production chain, or in branding-marketing. It is also measured, how well-developed are the synergy-producing clusters, and to which degree control is exercised over international marketing networks.

Still, Jüri Sepp did not wish to reveal the recipe of overcoming the problem, saying that the choices are many and that the same task lies before Czech Republic, Slovakia and Slovenia, for instance. At the same time, he underlined that development policies depend on cooperation between state and private sector. «If public and private sectors don’t cooperate, there will be no development.»