Study: “The Ida-Viru Startup Ecosystem: Looking Back and Ahead”

Startup Estonia implemented a three-year pilot program in Ida-Viru County that involved 23 organizations, including 14 long-term service providers and 8 local support organizations. The program actively engaged local partners and attracted more than 21,000 participants to events and programs, demonstrating growing interest in entrepreneurship and startups in the region.

Although the original target was to create 1 to 3 new startups, by March 2022 a total of 14 startups had been registered in Ida-Viru County, highlighting the region’s strong entrepreneurial potential. A follow-up project running from 2022 to 2025 focuses on supporting the local business environment through startup and business incubators, increasing community awareness, and promoting startup skills and mindset development. The goal is to establish at least 40 new startups in Ida-Viru County and strengthen collaboration with the creative industries.

The study aimed to assess the current state and key challenges of the Ida-Viru startup ecosystem and provide input for future ecosystem development activities. The analysis focused on three target groups:

• Target Group 1: Residents of Ida-Viru County
• Target Group 2: Startup support organizations, service providers, and founders of startups registered in Ida-Viru County
• Target Group 3: Participants in events and programs organized by startup support organizations and service providers in Ida-Viru County

The study examined public awareness, the role of support organizations, and startup founders’ perspectives on the regional ecosystem. The methodology included surveys, document analysis, two focus group discussions, and eleven in-depth interviews with startup support organizations, service providers, and startup representatives.

The full report is available HERE.

Demographic Background and Entrepreneurial Experience

The demographic profiles of Target Groups 1 and 3 differed significantly in terms of age, gender, language, education, and entrepreneurial experience.

Participants in Target Group 3 were generally younger, particularly under the age of 30, while Target Group 1 represented a broader age range, including more older residents. Target Group 3 also included a larger share of active entrepreneurs, former startup founders, and individuals considering launching a startup.

Compared to event participants, local residents showed lower interest in founding startups, working for startups, or investing in them. Residents generally preferred stable employment and lower-risk career paths, while event participants valued challenges, learning opportunities, and entrepreneurial activities.

Awareness of Startups

Survey results indicate that awareness of startups among local residents is relatively high. Approximately 70% of respondents understood what a startup is, while 30% were unfamiliar with the concept.

No major differences in awareness were found based on age, gender, education level, or previous entrepreneurial experience.

Most local residents (74.3%) had never considered working for a startup, compared to 63.6% among event participants. The most common reasons included a preference for stable work environments, risk aversion, and lack of interest in startup-related fields.

Attitudes toward startup investing also differed significantly. Event participants were more interested in supporting innovative ideas and recognized the potential for high returns, whereas local residents preferred more traditional investment options and were generally more risk-averse.

The Impact of Startups on the Economy and Innovation

The study found broad agreement among residents, service providers, and ecosystem stakeholders that startups can make a significant contribution to the economic development of Ida-Viru County.

Startup founders noted that regional impact remains limited when companies do not physically operate in the area. Nevertheless, startups contribute by creating jobs, attracting talent, and improving the region’s attractiveness.

Respondents highlighted innovation, entrepreneurial thinking, and the introduction of new solutions as key ways startups contribute to regional development. However, the economic impact of early-stage startups was generally seen as smaller until companies reach scale.

Access to talent remains one of the region’s most important challenges. Startup founders believe talent can be recruited globally, yet finding highly skilled professionals with innovative mindsets remains difficult. Education and skills development were frequently identified as critical factors for strengthening the talent pipeline.

A lack of understanding about startups and their potential was repeatedly identified as a major barrier, particularly among local residents. Additional challenges include:

• Limited awareness of startup business models
• Difficulty attracting qualified specialists
• Limited investor networks
• Language barriers
• An aging population
• Low interest in entrepreneurship among parts of the local community

Stakeholders consistently emphasized the importance of collaboration. Existing partnerships supported through the Just Transition Fund help connect startups with traditional industries. Startup founders also stressed the value of international cooperation, which helps companies enter foreign markets, attract talent, and access new investment opportunities.

Availability and Quality of Services

Survey respondents generally rated the availability of startup-related services in Ida-Viru County positively. However, perceptions of service quality and the value created by those services were less favorable.

Programs and events were considered successful in motivating teams, creating networks, and generating partnerships. They have also increased awareness of startup entrepreneurship in the region.

At the same time, more advanced startups reported declining interest in local programs because they often fail to provide sufficient value for growth-stage companies. Participation is also challenged by busy schedules and short notice periods.

Several service gaps were identified, including:

• Limited entrepreneurial education and awareness
• Insufficient support for mental wellbeing
• Lack of training and networking around sustainability and green transformation
• Weak conditions for early-stage startups
• Limited cooperation opportunities
• Challenges accessing legal, accounting, and business advisory services
• Language barriers, particularly related to English-language skills

Many respondents felt current entrepreneurial education and startup training opportunities are inadequate. Stakeholders expressed a need for structured startup development programs, more practical learning experiences, expanded mentorship opportunities, and additional educational content in both Russian and English.

Identifying Priority Areas and Services

Several priority areas for ecosystem development emerged from the study.

Support organizations emphasized the need for stronger collaboration with major industrial companies in the region to unlock unused potential and provide startups with better access to resources, partnerships, and market opportunities.

Startup founders highlighted the importance of improved communication and promotion of local programs and events. Greater visibility could strengthen community engagement and help startup founders feel more connected to the regional ecosystem.

Participants also proposed establishing a technology-focused university or research center specializing in science, advanced materials, and energy technologies. Such an institution could attract talent while providing educational and career opportunities for local youth.

Growth-stage startups expressed a need for stronger support in international expansion and greater awareness of available support measures and funding opportunities.

According to respondents from both resident and event participant groups, information technology (IT) should be the region’s primary focus area. Green technology was identified as the second-priority sector. While green energy was recognized as a major opportunity given the region’s industrial background, stakeholders also emphasized the importance of maintaining a diverse entrepreneurial landscape.

The most commonly used funding sources include Startup Estonia, the Ministry of Education and Research, and various national and international funding programs. However, obtaining funding is often considered a complex and time-consuming process that requires extensive documentation and reporting.

Respondents called for:

• Simplified funding procedures
• Lower co-financing requirements
• Better information about funding opportunities
• Greater investments in education and infrastructure
• Funding decisions aligned with regional development needs

Recommendations

The study recommends several actions to support the further development of the Ida-Viru startup ecosystem.

• Increase public awareness and interest in startup entrepreneurship through events, education programs, mentoring, and community-building initiatives.
• Improve young people’s understanding of entrepreneurship and startup opportunities.
• Expand English-language training to improve employability within startup companies.
• Promote startup investment opportunities among local residents and create platforms connecting investors and founders.
• Provide stronger support for existing and growth-stage startups.
• Invest in technology centers, incubators, and innovation infrastructure.
• Offer guidance to entrepreneurs applying for public support programs, helping them better understand funding requirements and risks.
• Strengthen cooperation between local and international partners to enable knowledge sharing and access to resources.
• Prioritize high-growth sectors such as ICT, health technology, green technology, and other advanced industries.

The full report can be accessed HERE.

The study “The Ida-Viru Startup Ecosystem: Looking Back and Ahead” was conducted by LevelLab OÜ on behalf of the Estonian Business and Innovation Agency (EIS).