Why is it smart to do business in Tallinn?

Winter is coming and the Northerners get to enjoy the Autumn colors while, slowly but surely, the year 2016 is nearing its finale. How do you see yourself and your company next year at this very same time? Wise decisions are valuable and important as is the location of your company. Ever had any thoughts that business functions do not go smoothly enough, the digital environment is ancient and progress seems to move at snail’s pace? But future is now, so all that must be frustrating. We should know since we (authors) are located in Tallinn, one of the most, or maybe even the most digitally developed country in the world.

What is it then that makes Estonia so advanced, tech-savvy and business friendly? The tiny North European country has learned hard lessons from its neighbors, the economy has not suffered from Brexit and the important indicators, such as GDP and unemployment rate, among many others are rather splendid compared to most of Europe. Actually Brexit has so far meant great success for Estonia’s interests and business world, for example, citizenship applications from Britain to Estonia increased tenfold compared to the previous year. This is the result of the unique system where anyone can apply for a digital e-citizenship of Estonia, even if they have never been anywhere near the country. With the e-residency, people all over the world are able to use Estonia’s digital services, which cover for example bank services. Most of Europe is feeling the heat about the recent Brexit vote and watching the island kingdom with binoculars wondering, waiting what will happen next, while Estonia keeps being one step ahead in the digitalization race.

Trendiest word ever, digitalization, has been repeated as the most essential development in the future, for example, in Finland, but still, the reactions have been far from the theories. Estonia, on the other hand, has been taking big steps and going forward much faster than any of its neighbors. This makes sense in a way because Tallinn has been a hub for business and start-ups since as early as the Hanseatic period, for hundreds of years. The banal Soviet decades are long gone but not forgotten.

Here is the thing: there really is no magic behind of the Estonian success. That is why it is time to make a short list of the key points why business is booming in Estonia and what to expect when trying to make a living in the Pearl of Baltics.

1) Strength in innovativeness

One can be surprised to see how well new things are being adapted in Estonia. It is as if there is no middle man slowing things down like in many other Western countries. Yes, Estonia is an Ex-Soviet satellite state but surpassing that fact they have been able to balance themselves without mental devastation, instead thriving with adaptability and resilience. These abilities are in high demand everywhere nowadays. Comparing present day Estonia to the 90’s version can help you to realize that change is always possible, and also inevitable. It is all about how we adapt to it and take our chances.

There are those who stick to the old and do not want to believe that the world is changing. Well, it never stopped changing but the nature of things is now faster than perhaps ever. Global market and the total adolescence of the concept of work might be a nightmare to those who fear regeneration and future itself. In Estonia, the future has been seen as it should be: full of opportunities waiting to be seized.

For example, the digitalization innovations, such as e-residency, do not get any faster and easier for you for doing real business in Estonia! There is already over ten thousand e-residents and a lot of them have never even touched the Estonian soil. The system is globally unique. You see, this is the innovativeness; Estonian companies get more customers and grow faster than ever because of this and all the other amazing digital applications. The next level of internationalization has already seen daylight in the most advanced digital society in the world. Others might want to take a leaf out of their book and follow.

2) Cost-effectiveness

Seriously though, where else do you get to see things running so smoothly as in Estonia? They started from the bottom 25 years ago when entering the world of independent and free nations. Celebrating its 25th year of complete freedom it is a must to raise a toast for Estonia at this point – Terviseks!

Since 1991 the economy has been steadily growing with praise from the economic world. A liberal economy policy is one key to growth, not to mention the low-tax system and the 1/3 labor costs that companies face here compared to those of, for example, Finland or Sweden. This has not been unrecognized by the world’s biggest trading and banking organizations, such as the World Band and the World Economic Forum, that praise Estonia as an astonishingly great place for business. The small country has made its mark and showed to the giants that the nation in white, black and blue is the one to look up to.

3) Digitalization

Want to open a bank account in Estonia without actually being there physically? Possible, and so is visiting Estonian library to read today’s paper among many other benefits when you get yourself an e-residency. Voting is also possible online and this e-Voting concept has been estimated to be 16 times cheaper compared to the traditional way of voting.

While the vast majority of the nations are still considering the possibilities and the hazards of digitalization, in Estonia it is a whole different story. You can never become successful if your way of surviving is all about imitating the ones you look up to. By the time you get to their level they will already have moved on to bigger things. Hard work, research, and can-do-attitude will eventually play out fine for you. A point has been reached where Estonia is the forerunner in the digitalization. Identity, health, education, social services, you name it. What will you be a forerunner in?

This digitalization aspect is also the key point when considering a country to do business in. Things actually work with digital solutions and less paperwork means more action and time to concentrate on whatever you consider relevant. Fast, reliable, digital, paperless and less bureaucracy. Is this not the way you have always wanted to see the world go round since the first days of the internet?

Brazil Before and After the 2016 Olympic Games

Brazil 2016 – Giant at its Watershed

First of all: Happy Independence day to Brazil! One of the biggest economies in the world has been in the limelight this year for multiple reasons. Football-crazy nation sacked its sitting president and held the biggest event in the world. Many legends were born, many golds were won and many tears were shed during the Rio Olympics. We salute all the great athletes out there! There can be a success only when you work hard, every day.

Millions of people in Brazil long for better education and infrastructure while they witnessed from the distance how the multi-billion dollar construction work was conducted strictly for the Olympics, a sports event for the whole world, and in this entertainment business, it really does not matter how big the domestic issues from poverty to pollution might be. But has it all been good for business? What kind of reputation is left for South America’s biggest player? Investment-wise the Olympics must have been thought to do good for the economy by the ones who fought to get the competition there.

Brazil in numbers:

The 2016 Olympics were expected to boost Brazil’s economy. However, within 2016, it is expected that the real GDP growth of Brazil will stay below zero and might even hit -4%. It has also been pointed out that the 10th largest economy and the leader in South America and Latin America is mired in deep recession. Its GDP growth is notably lower than that of the world’s average and Latin American countries’ average due to depressed commodity prices and tighter regional monetary conditions. During 2016 and 2017, there can be seen a sharp recovery in Brazil’s GDP as consequence of temporary boost from the mega-event, Olympics. But it will not last long as it is projected that during 2017-2018 growth will be less than 1%.

Disbursed debt accounts for 3.8 billion dollars. While Brazil is mired in recession, the amount of debt combined with the low employment rate (only 54,4%) affects negatively the economic situation. A further deterioration in growth prospects for key commodity exporting EMDEs would negatively affect regional trading partners. For instance, a one percentage point decline in growth in Brazil or in Russia could reduce growth in neighboring countries by up to 0,5% on average within two years (World Bank 2016).

After the Olympics, the question arises what to make of all the costly constructions. There are some rumors about re-purposing the Rio 2016 structures; Temporary structures will be torn down and used for building schools. Athletes’ Village will be turned into luxury apartment complexes. Everyone is now waiting for the actual work to start.

Hard work, big rewards – Big risk, great possibilities?

Case: Brazil shows that Olympics might be bigger than life itself but numbers do not lie. Reaching a goal is always essential and the end game is yet to reveal its form. People around the planet saw how great measures can be taken in Brazil. This alone can create the feeling that everything is possible in the Portuguese-speaking giant but in the end, all this has been possible because of hard work and a lot of consistent planning. The saga continues when the aftermath is being calculated. Hard work, professionalism and the ability to see the future opportunities are good elements in the business world. Success is possible only if you agree that in life, as well as in business, the school actually never ends.

Will this Olympic hegemony eventually boost the economy, that is hard to tell at this point. More importantly, is the brand of Brazil and the chair in global councils more important than the opinion of the people who built it all, from the coast of Ipanema to jungles of Amazonia? Today we hope Brazil as a nation can celebrate at its finest. Get your Samba on, Saúde!