Estonian Entrepreneurial Spirit Dampened by Economic Uncertainty
Tallinn, Estonia – A recent survey paints a sobering picture of the Estonian mindset towards starting new businesses. Conducted by SEB, the study revealed that over half of Estonian residents have no immediate plans to launch their own ventures, marking the lowest entrepreneurial ambition in the Baltic region.
This hesitation is largely tied to the current economic climate. A quarter of the survey respondents cited unfavorable economic conditions as the primary deterrent to entrepreneurship, while others pointed to a lack of available capital.
"Estonia’s economic situation seems to have started to have a direct impact on the attractiveness of the sector that creates value in the economy, ie entrepreneurship," said Ainar Leppänen, head of SEB’s retail banking division and board member.
This sentiment is a stark change from previous surveys, where a lack of knowledge, insufficient funding, or weak business ideas were identified as the main barriers to entrepreneurial pursuits.
The study also highlighted the significant need for support among aspiring entrepreneurs. Almost 40% expressed a need for start-up capital, while nearly 30% desired assistance in acquiring the necessary skills and knowledge. Despite numerous entrepreneurship programs offered in Estonia, the scarcity of funding remains a significant hurdle.
Adding to these challenges are concerns about recent tax increases planned in Estonia. Leppänen stated, “It is understandable that the financial situation of the state must be improved and that the budget deficit cannot be solved without incurring losses. At the same time, it is necessary to be aware that some of the measures that the state is planning, including the introduced profit tax, could be a sign that the start and making business in Estonia is now more difficult – at least that’s what the survey says. However, we hope that the perception of such a situation will be temporary, that the feeling of confidence will improve and the desire to start a business will slowly recover in Estonia as well.”
The SEB Estonia survey on aspiring entrepreneurs was conducted in September 2024 in collaboration with Norstat. The study encompassed 1,000 participants aged 18-74 from Estonia, Latvia, and Lithuania.
( The survey was conducted by SEB Estonia in cooperation with Norstat in September 2024. )
The decreasing entrepreneurial spirit in Estonia mirrors a broader trend of caution in global markets facing economic uncertainty. While Estonian entrepreneurs are facing particular challenges, their situation echoes concerns felt by aspiring business owners worldwide.
## Estonian Entrepreneurial Spirit Wanes Amid Economic Uncertainty: Experts Weigh In
Tallinn,Estonia – A recent survey has revealed a dampening of the typically robust Estonian entrepreneurial spirit,raising concerns about the nation’s future economic growth. Conducted by SEB,the study found that over 50% of Estonians have no immediate plans to start their own businesses,marking the lowest entrepreneurial ambition in the Baltic region. This shift is attributed primarily to the current economic climate, with many citing unfavorable conditions and a lack of capital as key deterrents.
To better understand the implications of this trend, we spoke with **Ainar Leppänen**, head of SEB’s retail banking division and board member, and **Krista Pihlak**, founder and CEO of Startup Estonia, a government-backed initiative dedicated to fostering entrepreneurship in the country.Their insights shed light on the challenges facing Estonian entrepreneurs and potential solutions to reignite the nation’s entrepreneurial drive.
### The Impact of Economic Uncertainty
**World Today News:** mr. Leppänen, the SEB survey highlights a steep decline in entrepreneurial ambition. What do you attribute this to?
**Ainar Leppänen:** “the current economic climate is undeniably playing a major role.
Global uncertainty, inflation, and fears of recession have a chilling effect on risk-taking.Starting a business inherently involves risk, and when economic times are tough, individuals naturally become more cautious.”
**World Today News:** Ms. Pihlak, Startup Estonia works closely with entrepreneurs across the country. Have you noticed a similar trend?
**Krista pihlak:** Absolutely.We’ve observed a definite shift in mindset. While Estonian entrepreneurs are known for their resilience and innovation, the current economic surroundings is making them hesitant to take the leap. Access to funding is becoming increasingly challenging, and investors are more cautious.
### The Need for Support
**World Today News:** The survey revealed a significant need for support amongst aspiring entrepreneurs. What kind of support is most crucial, and how can it be delivered effectively?
**Krista Pihlak:** Access to capital is paramount.We need to explore creative financing solutions, such as government grants, micro-loans, and angel investor networks tailored to the needs of early-stage startups.
**Ainar Leppänen:** It’s not just about financial capital; knowledge and mentorship are equally important. Incubators, accelerators, and mentorship programs can provide invaluable support to aspiring entrepreneurs, helping them navigate the complexities of starting and scaling a business.
### Tax Concerns and future Outlook
**World Today News:** The survey mentions concerns about recent tax increases planned in Estonia. How might thes impact future entrepreneurial activity?
**Ainar Leppänen:** “While necessary to address the budget deficit, the timing of these tax increases is unfortunate. Increased taxation can make starting and running a business in Estonia less attractive, especially compared to our neighbors. it’s vital that the government works closely with the entrepreneur community to ensure these measures don’t stifle innovation and growth.”
**World Today News:** What can be done to reignite the entrepreneurial spirit in Estonia?
**Krista Pihlak:** “We need a multifaceted approach. Fostering a culture of entrepreneurship through education, promoting success stories, and creating a supportive ecosystem are crucial. We must make it easier for entrepreneurs to access funding, mentorship, and resources.
“Estonia has a strong track record of innovation. we need to leverage that legacy and create an environment where entrepreneurs feel confident and supported in pursuing their dreams.”
### Looking Ahead
The decline in entrepreneurial ambition in estonia is a worrying trend. The COVID-19 pandemic and the current economic uncertainty have undoubtedly taken a toll on confidence. However, Estonia’s past success stories demonstrate the country’s potential for groundbreaking innovation. By addressing the challenges faced by entrepreneurs, promoting a supportive environment, and fostering a culture of risk-taking, Estonia can reignite its entrepreneurial spirit and continue to be a leader in the global tech landscape.
**What are your thoughts on the future of entrepreneurship in Estonia? Share your insights in the comments below.
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* [Estonia’s Thriving Startup Scene: A Beacon of Innovation?] (link to a relevant article)
* [Navigating Economic Uncertainty: Tips for Aspiring Entrepreneurs] (link to a relevant article)
