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Developing IP Economies: Estonia

  

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Like its neighbor and fellow “Baltic Tiger” Lithuania, Estonia was among the fastest growing economies in Europe in the last decade.  The recession hit particularly hard in Estonia in 2008, but recovery is under way, driven by exports to nearby countries. Estonia boasts the highest “ease of doing business” ranking of any post-Soviet country, and is known for its strong IT sector.  But how does its IP fare?

Trends

Since Estonia’s EU accession in 2004, patenting by the country's residents has been on the rise, both at home and abroad.  Overall invention activity is still modest by the standards of larger countries, but the numbers indicate steady rises year-on-year in both resident 
categories (home and abroad), even throughout the recession.  Between 2005 and 2010 those categories roughly quadrupled in activity.  This is to say that the country’s indigenous innovation is healthy and growing.

The largest share of patents went to the fields of biotechnology, pharmaceuticals, and medical technology.

Quality IP Protection

Inventors in Estonia already benefit from an efficient Estonian Patent Office.  The Estonian Patent Office is part of one of the world’s most advanced e-Governments, which has provided a model for much larger countries like the U.S.  Like the country’s inventing activity, its score in IP rights protection (IPR) has risen steadily over the past five years, according to the International Property Rights Index.  The 2011 score of 5.8 in IPR earned Estonia a rank of 45th in the world by that measure.  This shows that Estonia still has plenty of room for improvement, but it is nonetheless impressive for a post-Soviet economy, and well above the regional average. 

Conclusion

Estonia appears to hold domestic inventing as a major contributor to its future economic success.  Accounts show steady increases in activity and in the quality of protection of new inventions.  Most importantly, these gains are driven by indigenous innovation, rather than by foreign entities, meaning that a culture of inventing should prosper once Estonia is able to resume serious economic growth.