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SWOT analysis for the upcoming year – What did Äriplaan 2018 predict for the economy of Estonia?
The beauty of entrepreneurship lies in being constantly active and making the right decisions. Making decisions based on your own viewpoint will not take the company very far.
Active EBS students had the opportunity to take part in Äripäev’s economy conference called “Äriplaan 2018”. What are the strengths, weaknesses, opportunities and threats for 2018? Can we expect an economic downfall or will the economy go up? How favourable will the year be for entrepreneurship?
Influential, prestigious and active Estonian big company owners share their expectations, fears, budgets and business plans for 2018.
STRENGTHS
“Economic growth has accelerated in almost all sectors and a strong growth cycle, that needs no added stimulation from the government, has appeared.” Ardo Hansson, the President of the Bank of Estonia predicts the economy to grow due to the unexpected speed of development to the foreign markets and the government expenditure. This is also expected to influence the upcoming year.
Jüri Ratas, Prime Minister of Estonia, also drew attention to the increase in the national budget, emphasising the free income tax reform, which will reduce the gap between wages and productivity. “Taxes are important, but not the most important,” he said.
WEAKNESSES
One of the basics of an enterprise is trust, not empty words. According to investor and founder of Ober-Haus Paul Oberschneider, the biggest threat is to become content and think that everything has already been done. It is important to continue innovation and to support businesses by developing technology.
“How can we expect good results if we keep on looking at the same things?” Paul Oberschneider leaves out the speculations, schedules and opinions to focus only on new and sustainable solutions instead of competing with others.
Arno Kütt admits the development of technology and growth of e-commerce as well. Unfortunately, the fact that the Estonian e-tiger is growing old and weak is very relevant.
OPPORTUNITIES
According to Jüri Ratas, increasing productivity will be the toughest challenge of the upcoming year. The private sector must become the leader of our economy, which will increase the percentage of investments. Arno Kütt, chairman of the board of directors of Cleveron, sees becoming the service provider instead of being the outsourcer country as an opportunity. By creating added value, we can ask for a higher price.
The founder and CEO of MarkIT sees success in developing competitive advantages and product innovation. There is a lot of work needed to be done, but in that way, we will not be conquered by international competitors.
Globalisation and global growth favours enterprises more and more. Foreign global enterprises make their way to the Estonian market and vice versa. Ahti Heinla, founder and investor of Starship Technologies, sees this as a good way to grow.
THREATS
Ardo Hansson sees the relationship between trading partners taking off. Our important partners are doing much better now. Hanson says that the market around Estonia is becoming increasingly richer.
The founder and owner of LHV Bank Rain Lõhmus is sceptical about the development of Estonia. The thesis is: Estonia progressed a lot during the 90s, but why? Radical decisions were made with the help of banks and investors. The growth back then was extensive. Nowadays, the only change has been the income tax reform – other than that things have settled down.
Economic growth, where the expectations at first are optimistically high and then lowered, is disappointing, says Lõhmus. According to the statistics, Estonia has turned to redistribution economy, where values are being distributed as subsidies.
Lõhmus sees the economy as a naturally progressing organ which is being killed by regulations.
Lõhmus encourages entrepreneurs to be smart, independent, daring and ambitious. Look at the bigger picture! The mind-set to grow profits faster than expenses is not characteristic to start-ups nor a sustainable country anymore.
The content of this article is based on the conference “Äriplaan 2018” and the leaflets issued there.
EBS Student Council is thankful to Äripäev for the successful cooperation.
