What Are The Biggest Industries In Estonia?
Estonia is a northern European country bordering the Gulf of Finland and the Baltic Sea. Formerly part of the Soviet Union, the country has a unique terrain made up of rocky beaches, forests, many lakes, and islands. The number of islands and islets in Estonia is 2,222. According to Wired, Estonia is the most advanced digital society in the world. Furthermore, it also possesses a very high literacy rate of 99.8%. The country is among Europe’s least densely populated states with a population of 1.3 million people inhabiting its land area of 45,227 square kilometers resulting in a population density of 28.4 people for every square kilometer.
Estonia is categorized as a high-income economy by the European Union. Its GDP is USD 25.92 billion with its economy characterized by flat-rate income tax, the low public debt of 6.7%, free trade regime, balanced state budget, competitive commercial banking sector, and mobile-based services among other features.
Energy Sector: The Oil Shale Industry
Estonia locally produces almost all of its electricity consumption using the locally mined oil shale. In fact, the oil shale industry in Estonia is among the most developed in the world with 80% of oil shale used in the world extracted from Estonia. The major oil shale power plant in the country is the Narva power plant which is owned by Eesti Energia. This plant provides over 90% of the country’s electricity. Every year 9-13 million tonnes of oil shale is delivered to the Narva power plant. It is estimated that the oil shale reserves in Estonia are capable of producing 20 million tonnes per year when operations are at full capacity. In 2012, the oil shale sector employed 6,500 people. The alternative energy sources used in Estonia are wood, biomass, peat, and renewable wind energy. The oil shale sector constitutes 4% of the country’s GDP.
Industry Sector
The industry sector in Estonia deals in the production of chemical products, textiles, machinery, equipment, electronics, oil shale energy, and timber. Shipbuilding is also part of the industries in Estonia. The companies in the shipbuilding sector engage in the manufacture of boats and ships which are used for both recreational and commercial purposes. In 2015, the total turnover for the commercial shipbuilding companies was £29.09 million. The metal industry in Estonia involves the construction of machinery and equipment. It employs over 14,000 workers in over 1,300 companies that operate in the industry. The metal industry is concentrated in areas such as Tartu, Ida-Viru, and Tallinn and its vicinity.
Services Sector
The services sector in Estonia is the largest industry in terms of its contribution to the country’s GDP. It mainly consists of transportation, telecommunications, and banking sub-sectors. The transportation sector comprises of favorable infrastructure that has resulted in improved trading operations in Estonia. For instance, the country holds relatively high shares in the transit trade that operates in the Baltic Sea. The sea provides fast crossings for both passengers and freight. The two important ports in the country are Muuga and Sillamäe. Muuga port is the most advanced port in the region. It is a deepwater port and is located within the free zone. On the other hand, Sillamäe is popular for being the easternmost port within the European Union. It is a multifunctional port which can handle all cargo groups including oil products, dry bulk cargo, and containerized cargos. Just like Muuga port, Sillamäe is also within the free zone. Regarding air transport, Tartu airport provides frequent international flights from Estonia to several world destinations.
The Banking services in Estonia are modern and efficient. The sector also boasts of having one of the best-regulated banks in the region as well as a highly advanced internet banking system. There are 7 banking companies registered to operate in Estonia. The rest of the banks are branches of banks located in Sweden and Denmark with 90% of the banks operating in Estonia being under the Scandinavian ownership. The banks are very well capitalized meaning that the customers’ monies are well protected and that there are minimal bankruptcy risks.
The telecommunications sector in Estonia has attracted huge foreign investments especially from Nordic countries that have invested in high technology and communication networks. Estonia telecommunications are the most developed in Eastern and Central Europe. The country’s broadband DSL access is the leading among the countries located in Eastern Europe. Estonia possesses over 1,006 free Wi-Fi zones in the country as well as a large network of mobile phone networks.
