The beginning of the Estonian electronics industry dates back to 1907 when the first telephone factory was established in Tartu. Today, with about 230 companies and 12 000 employees, the electronics industry is one of the largest industrial sectors in Estonia and has demonstrated constant growth over the years. The success of the sector is attributed to its level of added value, efficient processes, highly responsive product development and participation in global value chains.
Today, the electronics industry in Estonia stands in a very powerful position, contributing nearly 2 billion euros annually to the country’s export and having the whole supply chain represented. World-class development acumen with great engineering skills have established a number of manufacturers in Estonia with a solid network of maintenance and after-sales enterprises to boot. Almost every imaginable component or consumable is already at hand here, thanks to the strong network of distributors present in Estonia.
Electronics manufacturing in Estonia is dominated by the local branches of international corporations managing large-scale production for exports. A number of these companies also have their own development teams in Estonia or use local engineering services. The manufacturing of electronic and electrical equipment in Estonia is divided into two sub-branches: the manufacturing of computers, electronic and optical equipment makes up about 75% of the sector’s turnover. Activities range from Electronics Manufacturing Services to producing telecommunications, industrial, medical and automotive equipment and components. The manufacturing of electrical equipment makes up the remaining 25% of the sector.
84% of the Estonian electronics industry’s output is exported. Main export destinations have traditionally been Sweden and Finland – their share is 40% of total exports due to the geographical proximity and strong links between foreign companies and their Estonian subsidiaries. Lately, however, Germany and the USA have emerged as key markets, particularly thanks to the smart postal delivery robots delivered to Walmart by Cleveron.
Such success stories wouldn’t exist without a supportive and inspirational educational system, as always. The curricula of Estonian vocational schools and universities specialising in electronics are under the close scrutiny of the entire industry in order to ensure compliance with the sector’s needs and standards, not to mention global trends. Not just training, but also design, assembly and production are organised in accordance with the strictest IPC standards. Interdisciplinary collaboration is the key to helping other sectors into the digital age, as everything will become increasingly more digital, that is electronic, in the future – the electronics industry in Estonia is determined to transform the Estonian economy to that of smart and connected products.
Estonia has become a hotbed for regional tech giants to settle down in, the country is home to some of the most significant Scandinavian electronics tycoons, including ABB, Ericsson, Eolane, Stoneridge, Enics and Incap to name a few. This has lead to a re-adjustment in the sector’s export volumes, as the production volume sold to locally-based integrators has increased at the expense of direct exports. However, the electronics industry in Estonia is not dominated only by major international players, as it boasts many companies of variable sizes in order to serve different clients and fulfil their general or specific demands.
Why has Estonia become such a lucrative destination for electronics companies? The answer is simple. It is really about the people. Estonians stand out for their trustworthiness, understanding deadlines, confidentiality and respect for intellectual property rights. Plus the country’s unique geographical location allows it to cover the whole of Nordics and the Baltics.
Estonian local companies offer engineering services and are eager to develop innovative products and technologies. Good skills, flexibility and a highly efficient business environment makes Estonian companies good cooperation partners. In general, companies established in Estonia benefit from simple tax and labour legislation combined with a conservative economic policy. Modern ICT solutions make operating a business extremely quick and convenient, saving time and money. For example, a company can be started within 15 minutes over the internet without leaving your desk. Local value chains work well, starting with the development of an idea and the manufacturing of prototypes up to the production of serial batches.
The electronics industry in Estonia is widely regarded as a trustworthy supplier to the most recognised names in the global supply chain, ranging from all major luxury car brands to jet airplanes. The future is shining bright for the Estonian smart electronics industry, as the share of electronic components is on the rise everywhere and Estonians have achieved a solid position internationally for their competence. Estonians are not afraid to tackle major projects with limited resources and are happy to take on incredibly versatile and challenging projects, because there is the constant need to learn and develop.
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