Labour productivity is half the average of the upper half of OECD countries and has decelerated since the global financial crisis. Strengthening vocational training and adult education would increase the share of workers with useful skills and make growth more inclusive. Reforms to enhance the effectiveness of innovation policies and addressing infrastructure bottlenecks would also raise productivity.
- Strengthen incentives for employers to offer apprenticeships and improve access to vocational education.
- Strengthen the monitoring of training course to improve effectiveness of adult education.
- Establish an independent body to advise on policies to raise productivity.
- Give more weight to co-operation with the private sector when allocating funds to public R&D institutions.
- Implement plans to expand access to European transport networks and improve inter-modal transport connections.
- Remove barriers to entrepreneurship by shortening corporate insolvency procedures.
Source: OECD May 2017 Economic Outlook database
Kappeler, A. (2015), "Estonia: Raising Productivity and Benefitting more from Openness", OECD Economics Department Working Papers, No. 1215, OECD Publishing, Paris.
The University of Tartu is conducting a research project “Structural change as the factor of productivity growth in the case of catching up economies” which has yielded numerous publications.
Productivity - enhancing institutions
Ministry of Economic Affairs and Communications: Formulates policies on entrepreneurship and industrial structure as well as on promotion of SMEs and information technologies.
Ministry of Education and Research: formulates policies on R&D and innovation as well as on skills.
National Audit Office: An independent institution that scrutinises the effectiveness and efficiency of public resource allocation.
Enterprises Estonia: Government organisation launched in 2000 aimed at increasing the competitiveness of Estonian business.
Estonia Development Fund: A state-run investment fund launched in 2007 aimed to support entrepreneurship.