Future wealth of Estonia could come from 10x growth and export of Estonian startup and tech companies.
Estonia is leading the growth trend of founding new tech startups in Europe. For last 5 years, Estonian startup sector have grown 30% YoY, either by measuring revenues, created jobs or fundraising.
During 2020 Estonian startups did 1 billion in sales, which is similar ballpark to Estonian agriculture industry. Both are important industries, but the difference in growth speed. GPD of agriculture sector has been stable for years, while startup sector was several times smaller only few years back.
The unique aspect of tech sector, that few, but smart and well paid jobs could create significant additional value. Our current 6300 jobs, just 1% of Estonian working population already create 2-3% of Estonian GDP. This would be a perfect growth engine for small country, that is lacking talent and valuable raw materials. So the faster and with least people we are able to create more balanced wealth for the whole country, the better.
It's important that Estonian startups are not only relying on investor funding. In 2020 our startups raised a record funding of 450 million Euros, but its only half of the total 1 billion of actual revenues, paid by customers around the world for actual value of provided products and services.We are expecting exponential growth
By continuing our current growth of tech sector, in 5 years we would have few tens of thousands and in 10 years it will be over 50,000 jobs created. It's just 10% of Estonian total working population in 2030. It would mean revenues of 10 billion Euros, or ca 30% of Estonian GDP. This could be our dream of export economy where knowledge, technology and science create majority of the value.
What is the value to Estonia as a country?
Research of global technology clusters by economist Enrico Moretti have shown, that 1 well paid and export oriented job will significantly contribute to 5 other service related jobs in their physical neighborhood. So every new software engineer, designer, data analyst or product manager, would create new jobs in restaurants, fitness clubs, hair salons, dairy farms, taxi companies, law firms or real-estate.
10 billion euros of export revenues in 2030 would also contribute billions in various taxes to Estonian state budget, which enables to finance our future teachers, doctors, police, pensions and military.As a conclusion, Estonian founders have shown already today, that we sincerely care about our home country Estonia, which has helped us to grow our dreams of tech companies. Millions of the outcome has already been given back to Estonian education, environment and other charity projects.