Visiting Researcher's Guide - EURAXESS Estonia

2.8 Economy
Estonian economy is considered to be liberal
and innovative. Information technology
(IT) is one of the most popular areas
of business and also “the thing” to study.
Everybody know the internet telephone
skype, but only a small number of skypers
know that the software was and still is developed
in Estonia.
The use of IT has infiltrated services as well
as industry, and has thus greatly changed
the way things work nowadays. The main
trend is towards simplification, innovation
and customer friendliness.
The fact that companies do not have to pay
income tax for re-invested profits is considered
to be an effective method of enhancing
entrepreneurship and for the promotion of
innovation and new business solutions. Income
tax must be paid only on the profits
that are paid out to shareholders.
ESTONIA
Estonian GDP has grown constantly since
1997, dropping only slightly in the year 1999.
The growth of GDP in the year 2006 was 11.4%
being the second fastest in the European Union
and mostly influenced by the strong domestic
demand. As of spring 2007, the economic
growth is still fast but the growth rate
has somewhat decelerated compared to the
previous year. Estonia’s main business partners
are Finland, sweden and Germany.
The extremely fast economic growth in 2006
had also a great impact on labour market indicators.
The increasing demand for labour
spurred the employment growth to 6.4% and
brought unemployment rate down to 5.9%.
The decreasing supply of labour and the integration
of the labour market with the EU were
reflected in fast wage growth which accounted
for 16.2% in 2006.
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