Brain business jobs on the rise in Estonia ⋆ The Baltic Review

Estonia has experienced a much stronger growth in so-called brain business jobs over time, than any Nordic country.

Twice as many Estonian adults are employed in high-tech manufacturing as the European average.

Since 2014, the share of adults employed in brain business jobs in Estonia has increased by fully 40%. These are jobs in knowledge-intensive occupations, that are of essential importance in the modern economy. The rate of progress can be compared to 17% in Finland, 12% in Sweden, 7% in Norway, and 6% in Denmark as well as in Iceland.

The index by ECEPR, with support from Nordic Capital, measures the share of the working-age population across Europe employed in highly knowledge-intensive enterprises, in 31 countries and 277 regions.

“The brain business jobs of Europe are increasingly growing in Southern and Eastern Europe. The capital regions of Southern Europe, including France, have 600 000 more brain business jobs than the Western European capital regions. Eastern European capital regions have twice as many brain business jobs compared to the Nordic capital regions”, explains Nima Sanandaji, director of ECEPR.

Klas Tikkanen, chief operating officer at Nordic Capital Advisors, adds, “There is a general trend in Europe in which those countries that have experienced the strongest growth of brain business jobs, per capita, tend to be those that have lower tax levels as share of GDP. Just above a third of the variation of growth rate in these knowledge-intensive jobs can be explained in the variance in the tax level. Competitive taxes are a key ingredient in fostering knowledge-intensive jobs growth”.

ICT sector particularly strong in Estonia

Out of the working age population in Estonia, 1.9 percent are employed in the tech sector. Additionally, 3.5 percent work in IT and communications (ICT), while 1.3 percent are employed in advanced services and 1.2 percent in creative professions. In total 7.9 percent of adults in Estonia are employed in brain business jobs. This gives the country a thirteenth place in a European ranking.

Switzerland, Sweden, and Ireland are the top knowledge economies of Europe

The concentration of knowledge-intensive jobs is highest in Switzerland, where fully 10.7 percent of the population is employed in brain business jobs. Sweden climbs back to second place, after last year being surpassed by Ireland. Ireland has 10.0 percent of adults employed in brain business jobs, nearly the same as 10.1 percent in Sweden.

An important aspect of reducing regional unemployment

The index compares 277 European regions based on the share of adults that are employed in brain business jobs, manufacturing industries and professional services. In a region where 10 percentage points more of the population is employed in these high-value-creating sectors, the average unemployment is 2.1 percent lower, compared to the typical European region.

4 out of 10 top brain business jobs regions are found in Eastern Europe, 3 in Western, 2 in the Nordics, and 1 in Southern Europe

In all previous editions of this index, the Slovakian capital region of Bratislava has had the highest concentration of brain business jobs per capita. This year Budapest climbs to the number one spot, followed by Bratislava and Prague on third place. Oberbayern, Paris, Stockholm, the Oxford region (Berkshire, Buckinghamshire and Oxfordshire), Copenhagen, London, and Bucharest are the other top-10 regions. Four of the regions in the top-10 are found in Eastern Europe, three in Western Europe, two in the Nordics, and one in Southern Europe.

Twice as many Estonian adults are employed in high-tech manufacturing as the European average

Compared to the rest of Europe, Estonia has strengths in high-tech manufacturing, IT services, programming, and telecommunications. It lags the rest of Europe in pharmaceuticals, and research & development. The share of employment in high-tech manufacturing is twice the European average.