IT sector in focus: Estonia

In the first of a new series drawing on the original analysis and data collected by Emerging Europe as part of our Future of IT report, we look at the region’s most competitive IT sector: digital pioneer Estonia. 

Known for its digital innovation and advanced infrastructure, Estonia has over the past two decades built a reputation as one of the most digitally advanced countries in the world. Emerging Europe’s Future of IT report highlights the country’s performance across various metrics, including talent, IT infrastructure, economic impact, and business environment, underscoring its leading role in the region’s IT landscape. 

Indeed, the country ranked first on Emerging Europe’s IT Competitiveness Index in both 2023 and 2024. 

Talent: A digitally skilled workforce 

Besides ranking first overall, Estonia also places first in the Talent subcategory, with a score of 20.92, reflecting the country’s focus on building a digitally proficient workforce. 

Estonia’s education system places a strong emphasis on digital literacy from an early age, with coding introduced in schools as early as primary levels. Estonia’s universities and technical institutes are well-regarded for producing highly skilled IT professionals who are sought after globally. 

The government has also supported continuous training and upskilling programmes to ensure that the country’s workforce remains competitive in the ever-evolving IT landscape. 

Estonia’s talent pool is bolstered by its e-residency programme, which has attracted digital entrepreneurs from around the world, further expanding the country’s influence in the global tech sector. 

IT infrastructure: A model for digital transformation 

Estonia ranks second in IT infrastructure, with a score of 14.28. The country is widely regarded as a global leader in digital infrastructure, and it has implemented cutting-edge solutions that facilitate e-governance, online voting, and digital public services.  

Estonia’s digital society is built on a secure and efficient IT infrastructure, which supports everything from e-residency to seamless cross-border digital services. 

The country’s broadband penetration and high-speed internet coverage are among the best in Europe, and Estonia continues to lead the way in areas such as digital identity, blockchain technology, and cybersecurity.  

Its digital transformation efforts have made Estonia a case study for other countries seeking to implement similar initiatives. 

Economic impact: A major contributor to growth 

Estonia ranks third in the Economic Impact category, with a score of 11.56. The country’s IT sector plays a significant role in its economy, driven by a strong export market for IT services and innovative start-ups.  

Estonia’s digital services are not only integral to the country’s internal operations but also widely used across Europe, generating substantial revenue. 

Estonia’s start-up scene is particularly notable, with companies like Skype, Wise (formerly TransferWise), and Bolt originating from the country. The government has supported innovation and entrepreneurship, providing tax incentives and a favourable regulatory environment that encourages both local and foreign investment. 

Business environment: A thriving hub for innovation 

Estonia ranks second in the Business Environment category, with a score of 17.06, reflecting its status as one of the most favourable places for IT businesses to operate.  

The country’s e-governance infrastructure has simplified bureaucracy, making it easy to set up and run a business digitally. Estonia’s business environment is characterised by transparency, strong cybersecurity measures, and a supportive regulatory framework. 

The Estonian government has created a digital ecosystem that is particularly attractive to start-ups and digital nomads, fostering an innovation-friendly environment that has led to the development of numerous tech unicorns.  

Estonia’s commitment to intellectual property protection and data security has also made it a trusted destination for IT investments. 

A look ahead 

Estonia’s consistently good performance in the IT Competitiveness Index demonstrates its commitment to remaining at the forefront of the global digital economy.  

The country’s focus on talent development, digital infrastructure, and a supportive business environment positions Estonia as a leader in the European IT landscape. 

As Estonia continues to innovate and expand its digital services, the country is set to maintain its status as a hub for IT businesses, start-ups, and tech entrepreneurs.  

With its digital-first approach and forward-thinking policies, Estonia is well-prepared to continue innovating and will remain a global digital pioneer.

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