Report: Estonia among fastest growing technology centres in the world

According to the “Global Startup Ecosystem Report 2023”, one of the largest startup-focused reports in the world, Estonia rose to 10th place in the ranking of emerging ecosystems, rising as many as 28 places, while the report also named the country third among fast-growing technology centres, with only Turkey and Spain ahead of Estonia.

Signe Reinumägi, a project manager at Startup Estonia, a state-initiated organisation that brings together and supports Estonian startup entrepreneurs, said the third place in the ranking of strong starters strengthens Estonia’s reputation as a rapidly growing technology centre.

“The study points out favourable opportunities for global growth as the strength of the Estonian startup ecosystem. Among the growing technology centres, the growth of early-stage funding, which exceeded the figure of 2021 by almost half last year, gave us a strong boost,” Reinumägi said.

Markus Villig, the CEO of Bolt, one of Estonia’s successful startups, in front of the company’s offices in Tallinn. Picture by Bolt.

Europe’s biggest startup centres are London, Berlin, Amsterdam, Paris and Stockholm. The report points out that despite the difficult geopolitical and economic situation, the past year was the second fastest in terms of growth for the European technology sector after 2021.

Local adaption programmes important

In the global ecosystem ranking, Silicon Valley, New York and London hold the first places. At the same time, the report points out that Silicon Valley, which has held the leader position in the ranking since 2020, did not manage to escape a decline. Among the major global ecosystems, China’s growth is also slowing as the country has suffered from severe restrictions and China’s growth today is slower than before the pandemic. 

At the same time, India is making strides, having recently become the most populous where a lot is also done by the state to support the startup ecosystem, including investments in infrastructure and policies and reforms aimed at growth and investment.

The International House in Tallinn, Estonia. Photo by Tõnu Tunnel.

The authors of the report point out that several European countries implemented measures in 2022 to support startups and attract talent to their country. Local adaptation programmes also play an increasingly important role. The report highlights the Work in Estonia portal as Estonia’s strength, which, in addition to dealing with visa-related issues, also mediates job offers and information necessary for settling in, supporting the adaptation of families from abroad.

Deep technology the main driver of ecosystem growth

Markets are recovering despite volatility and technology entrepreneurs reacting to the situation and looking for innovative solutions play an important role in this.

“Looking back in history also gives reason to believe that an economic downturn can boost new ventures. Capital and talent are concentrated in companies that create value and are more competitive,” Reinumägi added.

The report emphasises that deep technology has become the main driver of ecosystem growth, which in turn leads to new expectations for support programmes. The development and investment cycles of deep technology startups are significantly longer and higher expertise in technical knowledge plays an important role in the new support programmes. Programmes focused on a specific field of activity, such as bioscience or agriculture, show higher numbers of participants and better results.

The Estonian-founded deeptech company Skeleton’s first production facility in Großröhrsdorf, Germany. Photo by Skeleton Technologies.

The “Global Startup Ecosystem Report 2023” report examined 3.5 million companies and nearly 300 ecosystems around the world. The authors of the report have conducted more than a hundred interviews with experts in the field and more than 10,000 respondents have answered the annual survey every year. In addition, the report includes data from three leading venture capital databases.

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