Market report - Estonia

Anne Iravani, business development director with Fyvie-based market research and telemarketing consultants Business Plus-Scotland Ltd, travelled to Estonia earlier this year to carry out a market evaluation.

The visit was undertaken with the help of a 50% travel and accommodation grant award facilitated by Business Gateway International North East Scotland under Scottish Enterprise Grampian's internationalisation programme.

It was Anne's first visit to this part of the New Europe , and, although she was primarily looking at the tourism market, she recorded the following personal insights for the benefit of any North East exporters with an eye on the Baltic market.

"One of the really exciting things about going to Estonia is to become a first-hand witness to a former Soviet colony managing to transform itself at remarkable speed into a modern Nordic economy.

So the first thing you must do is banish any old preconceptions about a poor, depressed East European nation. Estonians are hugely optimistic about their future, and are already relishing the benefits of the new EU funding that has started flowing into their economic development.

Estonia , I found, is determined to shed many of its negative Russian influences (although one-third of the people are still of Russian origin). So, as new and enthusiastic EU members, they are keen to build new trading and cultural links with nearby economies like Finland (which has already invested heavily in this new market) - and, I am pleased to report, Scotland !

It is imperative that any Scottish exporter views Estonia in this new, Nordic context.

Although wage levels are still appreciably lower than in Western Europe , Estonians do have a significant disposable income. One of my prime objectives was to survey Estonian tour operators to see if there was potential for tourism packages into Scotland , particularly the North East, which there most definitely is.

At present, visitors would probably have to travel via Prague (Czech airlines has a direct link into Scotland ) or try the new KLM link from Tallinn to Amsterdam and then Amsterdam/Aberdeen.

Like the Scandinavians, Scottish businesses have the distinct advantage of ancient cultural and trading links with Estonia . Both nations were trading partners in the old Hanseatic League as far back as the 13 th and 14 th centuries, and right up to about 100 years ago there was still a regular trade in timber and other commodities between the two companies. So there is a long-established and deep-rooted trust of Scottish businesses.

In the fourteen years since independence, Estonia has made huge strides, most notably in education and technology. As a result, Estonian workers are highly-skilled, well-educated and invariably proud English speakers. They have come from nowhere to embrace the new computer technologies, and are highly computer-literate.

But further opportunities undoubtedly exist for further skills and customer-handling training, in retail and service industries, for example. With the widespread familiarity in English, I believe Scottish training providers could make substantial inroads into this market.

Contacts

I found no evidence during my trip of any potential for oil and gas services activity in Estonia at this stage in its development. The country still imports most of its oil by train from Russia , and one of its first energy priorities appears to be rehabilitation of the widespread damage done to the environment by the old, Soviet-run shale extraction.

There are at least two Scottish-based contacts I have made who may be of direct use to any North East business thinking of trying to break into the Estonian market.

The first is John McGlyn, director of the Air Link Group, who recently established an office in Tallin called Scotland House. Scotland House helped put me in touch with some local customers when I undertook my research, and also has links with Enterprise Estonia , the commercial section of the British Embassy, and other useful organisations.

The second is Iain Lawson, the Honorary Consul for the Republic of Estonia in Scotland , contact tel. (44 141) 889 5113, e-mail: Estonianconsulatescotland@pestprotect.freeserve.co.uk

So, to sum up, a few first-hand notes on Estonia 's potential as a future trading partner with Scotland :

• Progressive, English-speaking country

• Ancient links with Scotland

• EU funding helping to re-shape the economy

• Potential in tourism (in both directions)

• Potential for property development (both industrial and residential)

• Potential for assisting companies with a wide range of skills training

• Manageable size of market for Scottish firms, with less competition than in larger European markets

Anne Iravani can be contacted as follows:

T: 01651 891790

E: bpscotland@btopenworld.com

W: www.businessplus-scotland.com