Estonian enterprise offers opportunities for business

IAN Briggs visits the Baltic country of Estonia and discovers opportunities for Yorkshire businesses to succeed in the home of Skype.

ROBIN Gurney may have moved to Estonia for love but he has discovered much more than that since his arrival.

The Englishman runs Altex Internet Marketing from an office in the country’s capital, Tallinn.

Mr Gurney claims the business is Estonia’s first internet marketing agency, offering services including website creation, search engine marketing and online advertising.

He has helped develop the strategy for VisitEstonia.com, a website promoting the country, and he is part of a wave of innovative people becoming aware of the opportunites Estonia presents.

With 97% of the country’s population of around 1.34m people on the internet, UK companies are being urged to take advantage of its growing digital expertise.

Skype, the software application that allows users to make voice calls over the internet, was created by three Estonian developers and although the company that operates Skype is now headquartered in Luxembourg, the innovation has given the country a reputation of being ahead of the game when it comes to mobile, computer and digital advances, including e-commerce.

Estonia, which sits in Northern Europe and is bordered by the Gulf of Finland, the Baltic Sea, Latvia and Russia, regained its independence from the Soviet Union in 1991 since when it has embarked on a rapid programme of social and economic reform.

However, Peter Carter, British Ambassador to Estonia, believes the country is still “untapped” and is ripe for opportunities for ambitious and forward thinking UK companies.

“It’s a also a haven of peace and tranquility which in my experience is unique in Europe,” Mr Carter says.

Mr Carter said Estonia’s geographic position between East and West is a perfect gateway for UK organisations wanting to try to gain a foothold in Russia and other territories further afield.

A member of the European Union, Estonia’s “priority” is to join the Euro he said, which is to become effective from January 1 next year.

He said Estonia has one of the strongest economies of the new member states of the European Union, with low public debt, a balanced budget and although GDP has shrunk recently it is expected to remain flat this year.

As well as a strong telecommunications sector, other key sectors of the economy – which is 20% manufacturing led with the remainder services focused – include textiles, banking, chemical products and food and fishing and money is being spent by its government on innovation. It mainly exports machinery, wood and paper.

Indrek Pallo, regional trade manager for the Baltics at UK Trade & Investment, said opportunities were being developed to help UK companies export more to Estonia as well as encouraging companies in the country to invest in the UK.

Mr Pallo said opportunities existed for niche products, R&D outsourcing and innovation; that the country was a test market for exporters as well as being a stepping stone to Russia; and that the weak pound had opened windows into the country.

He said the Baltic region, which includes Estonia, Latvia and Lithuania, were good markets for SMEs and companies new to exporting because of its relatively small size and because the region is presently receiving £9.5bn in EU Structural Funds until 2013 which will be invested into areas including infrastructure, entrepreneurship and human resources.

All UK companies are eligible to bid for the projects.

One venture which has found success in Estonia is Unique Hotels, which is run by Paul Taylor and Michael Pilkington.

The pair have launched several hotels in Tallinn and the surrounding area which they said are proving popular. Some of the venues, including the Von Stackelberg Tallinn Hotel and Uniquestay Mihkli Hotel, include conference facilities.

Unique Hotels is also planning on launching hotels further afield to take advantage of Estonia’s popularity as a tourist spot because of its breathtaking scenery and national parks.

Opportunities are also being offered thanks to increased flights to Tallinn, led by airline Lufthansa. Lufthansa flew more than 220,000 passengers to the Baltic States in 2009, up from 190,000 the previous year. More than 67,000 passengers flew to Tallinn, up 16% on 2008.

Lufthansa flies from Manchester and Birmingham airports to Tallinn via Munich and Frankfurt. The airline has increased its capacity and launched a new daily flight from Tallinn to Munich.

There are now 14 weekly flights in total (two per day) between Tallinn and Germany and vice versa.

Matthias Hinze, Lufthansa’s country manager for the Baltic States, said Lufthansa had been present in Tallinn since 1992 and said the service between Estonia and and UK was a positive one for the airline, with the business community, immigrants and friends and family travelling economy return from £162.

For business class travellers (fares from Birmingham and Manchester are from around £800) stopping off from the UK at Munich and Frankfurt, Lufthansa has introduced a ‘beer garden’ at Munich as well as a first class lounge, and a Senator Lounge for Senator status passengers at Frankfurt which includes improved facilities.

Travel Facts / Key Information

Lufthansa flies between London Heathrow, Birmingham and Manchester airports and Tallinn, via Frankfurt and Munich – www.lufthansa.com

Ian stayed at the Swissotel Tallinn – www.tallinn.swissotel.com

British Embassy Tallinn – www.UKinEstonia.fco.gov.uk

City of Tallinn City Enterprise Board (tourist office) – www.tourism.tallinn.ee

British Estonian Chambers of Commerce – www.becc.ee