Study: Six Technology Fields Could Become the Engine of Estonia’s Economy

Commissioned by the joint organization of Enterprise Estonia (EAS) and KredEx and carried out in collaboration with leading experts, a new study identifies six DeepTech fields where Estonia has the strongest potential in both research and development and industrial production.

Madis Raukas, Head of the Applied Research Programme at EAS and KredEx, explained that the study “Alternative Development Pathways of Deep Technologies and Their Significance for Estonia” evaluated technologies based on their development, manufacturing, and commercialization potential, as well as their broader societal impact.

“The greatest DeepTech potential for Estonia lies primarily in research and development activities. At the same time, significant opportunities also exist in manufacturing, particularly in hydrogen technologies and biorefining,” said Raukas.

According to the study, the most promising DeepTech fields for Estonia are artificial intelligence and machine learning, embedded systems and semiconductor technologies, hydrogen technologies, alternative meat production, biorefining, and strain engineering.

The authors note that Estonia’s opportunities are constrained by the need for very large investments and the country’s relatively small domestic market. Other challenges include limited cooperation between researchers and businesses, underfunding of scientific research, low levels of private-sector R&D investment, and shortages of skilled specialists.

At the same time, the study highlights significant untapped value in expanding the use of intellectual property protection and patenting. Patent-related expertise has increasingly shifted from universities to science parks and research support organizations, creating opportunities for stronger commercialization of research results.

Vaido Mikheim, Head of DeepTech at Startup Estonia, emphasized that DeepTech is widely seen as a key driver of future economic growth and that fully unlocking Estonia’s potential in these fields is strategically important.

“Estonia is internationally recognized both as a launchpad for successful startups and as an early adopter and developer of new technologies. This provides a strong foundation for deep technology entrepreneurship. However, we must also address the bottlenecks that currently limit faster development. This study offers valuable input and food for thought for all stakeholders,” said Mikheim.

The report stresses that DeepTech innovations play a critical role in solving major economic and societal challenges, but their positive impact is not automatic and must be consciously directed.

“For example, artificial intelligence reduces environmental impact only if it is applied to improve energy efficiency. Otherwise, the growing computational power required by AI may increase society’s overall environmental footprint. Likewise, advances in AI are likely to accelerate labor market transformation, reducing demand for lower-skilled jobs and potentially increasing income inequality,” explained Kaupo Koppel, Lead Expert of the study from Civitta Estonia.

The study “Alternative Development Pathways of Deep Technologies and Their Significance for Estonia” was carried out by Civitta Estonia on behalf of EAS and KredEx. Researchers and experts from the Foresight Centre, https://www.tlu.ee/en target=”_blank” rel=”noopener noreferrer”>Tallinn University, and https://taltech.ee/en contributed to the research.

The full report can be read and downloaded here:

Alternative Development Pathways of Deep Technologies and Their Significance for Estonia – Final Report (July 2023)

Short reports covering the technologies analyzed in the study are available here:

https://startupestonia.ee/blog/suvatehnoloogia-arengutrajektooride-raportid

Startup Estonia connects and supports Estonia’s startup community. Startup Estonia is a national programme dedicated to developing the Estonian startup ecosystem, fostering the creation of new startups and supporting their growth into international success stories. The Startup Estonia programme (project EU50651) is funded by the European Regional Development Fund.