Estonia’s four Research, Development, Innovation, and Entrepreneurship (RDIE) grant programmes support the innovation capacity and long-term competitiveness of enterprises through applied research, product development, business model transformation, and the digital and green transitions. The schemes are centrally managed by the Estonian Business and Innovation Agency (EIS), which acts as a single point of contact, while applications, assessments and follow-up are handled through the e-Toetus portal. Together, the programmes represent a budget of EUR 138.3 million and are expected to support close to 500 firms, mainly companies with at least EUR 200 000 in annual turnover. The Estonian model highlights the value of combining a one-stop-shop delivery structure, a unified digital application system and differentiated grant instruments to reduce fragmentation, lower administrative burden and support firms with different innovation needs.
Estonia’s technology adoption grants in the national RDIE Strategy
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Introduction
The Estonian RDIE (Research, Development, Innovation, and Entrepreneurship) Strategy 2021-2035 outlines the nation's long-term approach to fostering a robust innovation ecosystem.1 Grants play an important role in this strategy by contributing to three main objectives:
Boosting knowledge transfer by ensuring that research results are more effectively applied in businesses and society, to address firms’ low RDI intensity.
Supporting innovation and entrepreneurship by improving access to capital for start-ups and scale-ups, as well as creating commercialisation opportunities for applied research.
Addressing national and global needs by aligning grants to the objectives of Estonia's Smart Specialisation Strategy.2
The focus of this profile is on four schemes which are more specifically targeted at SMEs.
Applied research programme: This programme supports the development of enhanced technologies, processes, products or services and consists of business advice and other forms of project support. Grant financing is in the range of 20-75% of the overall project costs.
Business digital transformation programme: This programme aims to further automation and the adoption of digital technologies and robots and, in doing so, to strengthen the technological intensity, productivity, sustainability and international competitiveness of SMEs. The programme is meant for companies whose average sales revenue over the two financial years preceding the application is at least EUR 200 000. The maximum project duration is 18 months.
Business model transformation in manufacturing: This programme helps industrial companies to become greener through the use of an external consultant. With a few exceptions, all industrial activities are covered. Funding comes in the form of EUR 10 000 for a green audit and up to EUR 200 000 for the development and implementation of a green roadmap at firm level.
Product development support programme: This programme provides funding for companies seeking to advance their technological capabilities, improve product quality, and enhance market competitiveness. The support covers activities such as prototype creation, technical testing, and product validation. Eligible companies must have minimum average sales revenue of EUR 200 000 over the past two financial years. Grants can cover up to 45% of total project costs, depending on company size and project scope. The maximum project duration is 36 months, with funding capped at EUR 500 000.
Delivery arrangements
All four programmes are implemented by the Estonian Business and Innovation Agency (EIS, Ettevõtluse ja Innovatsiooni Sihtasutus) (see Box 1), under the strategic direction of the Ministry of Economic Affairs and Communications. EU funding is the main source of funding, although this is often supplemented by national resources.
The Estonian Business and Innovation Agency (EIS) plays a key role in advancing the growth and competitiveness of Estonian businesses. Established in 2022 through the merger of the Credit and Export Guarantee Fund (KREDEX) and Enterprise Estonia (EAS), EIS administers a wide range of grants and financial services that promote business innovation, business internationalisation and entrepreneurship.
It operates in line with the strategic goals of several ministries, including the Ministry of Economic Affairs and Communications, the Ministry of Climate, the Ministry of Culture, and the Ministry of Foreign Affairs. EIS programmes are funded through a mix of state budget allocations and external resources, mostly coming from the European Commission. Beyond grants, EIS offers an extensive suite of business support services, such as consultancy, international marketing, loans, venture capital, credit insurance, and guarantees. In addition to business support, EIS is also committed to improving housing conditions.
Source: https://kredex.ee/en
The e-Toetus portal (https://etoetus.rtk.ee) is the official online platform for submitting funding applications to Estonian public authorities, including the programmes discussed in this profile. The portal is managed by the State Shared Services Centre (Riigi Tugiteenuste Keskus) and is the main interface for the submission of applications, progress tracking, and communication between the state and the businesses. The portal is integrated into the Estonian e-government system, which allows forms to be pre-filled with information about the applicant, as well as the use of standardised reporting tools. The widespread use of this portal across different government schemes also enhances the familiarity of the web interface with the final users.
Specific delivery arrangements slightly change, depending on the specific programme:
Applied research programme: Applicants must go through a compulsory preliminary consultation before the formal application. This initial step involves submitting a short description of the company, the project idea, and the core technologies involved in the project. The consultation assesses the project’s alignment with the programme’s criteria, including its innovation potential, feasibility, and strategic relevance. Approved projects move on to the full application online.
Business digital transformation programme: This programme also requires applicants to complete a digital diagnostics assessment prior to accessing the full application.
Business model transformation in manufacturing programme: In this case, a two-staged approach is followed. First, a green audit evaluates the environmental performance of the company, including the current energy and resource efficiency situation. Second, an implementation roadmap is prepared, which lays out how the recommendations from the audit will be followed up.
Product development support programme: this programme requires applicants to detail their planned development activities – such as prototyping, technical testing, and certification – in the initial application. Although preliminary consultation is not mandatory, the application must clearly demonstrate the project’s feasibility, innovation potential, and expected market impact. Proposals are reviewed by technical experts and an evaluation committee.
Budget
Table 1 provides information about the total budget and funding source of all four programmes. This represents the total budget for the duration of the programmes which run from 2021 to 2025, with the exception of the Product development support programme which runs from 2021 to 2027.
Outreach
The EIS markets itself as the one-stop shop for domestic companies and maintains a close collaboration with a wide network of actors, including the Estonian Employers’ Confederation, universities and research institutions, as well as special groups such as “AI & Robotics Estonia” (Technopol) and the Innovation Leaders Club. In doing so, it ensures a broad-based outreach.
For the four grant programmes discussed in this profile, outreach is further structured around targeted information-sharing and applicant support tools. This includes info days and webinars for each project call, where companies are briefed on the programme’s objectives, eligibility criteria, funding structure, and practical steps for application. These sessions often feature Q&A sessions and are made available online. All materials (e.g. programme guidelines, application forms, budget templates, and evaluation guidelines) are made accessible via the eis.ee website and the e-Toetus portal.
Table 2 summarises information about number of participants in each of the four programmes and main targeted beneficiaries.3
The instruments presented so far are new and, as such, have not been subject to formal impact evaluation. However, some of these programmes represent a continuation of previous initiatives, and Estonian policymakers have drawn on existing evaluation evidence to inform their design. Three evaluation exercises are highlighted here.
First, a recent study assessed the impact of two R&D&I grant support measures funded by EU Cohesion Policy on the productivity, employment, and export intensity of SMEs in Estonia over the 2014-2020 period.4 The “Research and development activity grant” is an entry-level instrument, which is ideal for firms testing R&D for the first time, with low funding amounts and easy compliance requirements. The “R&D and technology cluster support” is closer in nature to some of the four schemes described earlier, particularly the Applied Research Programme, although this programme only supported collaborative R&D projects.
A common feature of both programmes was that labour productivity gains were significant and already apparent within 2-3 years of the start of support, at 30-35% productivity increases and 48-51% gains for the “Research and development activity grant” and the “R&D and technology cluster support”, respectively.
The employment effects were positive but more modest and the export outcomes mixed. The weaker impact may be explained by the fact that such effects often require a longer time to materialise than the evaluation period of 2-3 years.
The evaluation also showed that companies with stronger internal capacities, in terms not only of higher employment and turnover but also prior experience with EU funding, were more likely to benefit from the grant support schemes. This reflects a non-random selection process, whereby such firms are not only more likely to apply, but also more likely to succeed in securing support.
Second, the Estonian RDI system underwent a peer review process in 2019 which helped shape the 2021-2035 RDI Strategy, including the abovementioned grant support schemes.5 While the evaluation report does not assess the four abovementioned grant schemes directly, since these were introduced later, it identified systemic gaps that these instruments were designed to address.
The lack of activation instruments targeting firms with low R&D maturity, for example, was noted as a weakness. At that time, there was limited bottom-up, grant-based support for enterprises taking their first steps into RDI activities. Some of the schemes presented earlier directly address this weakness by incorporating diagnostic tools (such as digital and green audits) and structured, phased assistance to help firms build internal capacities before moving on to more complex R&D activities. This is also reflected in the grant parameters, which range up to EUR 100 000, EUR 200 000, or EUR 500 000 depending on the programme, with no lower threshold, indicating accessibility for smaller-scale projects and firms.
In addition, the peer review also emphasised the need to strengthen the implementation quality and delivery mechanisms of innovation support. It observed that Estonia’s existing instruments were often insufficiently differentiated and lacked clear targeting. The four programmes presented in the first part of the profile address this issue, as they are clearly differentiated by objective, target group, and delivery model. Features such as the pre-consultation steps, structured assessments, and staged support models are meant to improve programme implementation.
A third relevant evaluation exercise concerns an impact assessment of entrepreneurship and innovation support measures implemented under the Cohesion Policy Funds during the 2014-2020 programming period by the Ministry of Finance.6 The assessment highlighted that complex application and reporting procedures created barriers, especially for smaller and less experienced firms. Administrative burden and a lack of clear guidance reduced accessibility and uptake of support. The four programmes under review appear to respond to this challenge by making sure to provide enough guidance material that is presented in an accessible manner, a point of contact to ask questions, and a phased application procedure when possible.
Another key weakness in this evaluation report was the uneven distribution of support, which was largely concentrated in the two main cities of the country (Tallinn and Tartu). It is unclear whether the four grant programmes target enterprises outside of these regions, but the RDI strategy that guides support programmes acknowledges the disparities between urban areas and peripheral regions and the need to rebalance.
The third takeaway from the evaluation concerns the fragmented support landscape, with limited co-ordination between schemes, which used to make it difficult for firms to identify the most appropriate type of support. In this regard, the Estonian Business and Innovation Agency (EIS) now acts as the single point of contact for a wide range of enterprise and innovation support schemes and is able to refer applicants to other relevant instruments within its portfolio. This enables a more co-ordinated delivery model. In addition, the e-Toetus portal provides a unified digital platform.
First, there is clear value in aligning individual support measures with a long-term innovation strategy. Past evaluations had pointed to fragmentation and lack of continuity across programmes. In contrast, the current generation of instruments is more clearly anchored in the strategic goals set out in Estonia’s RDIE Strategy 2021-2035.
Second, another strength is the deliberate effort of tackling persistent structural weaknesses in Estonia’s innovation system, notably the low R&D engagement of SMEs. Evaluation exercises had highlighted a lack of support for firms with limited prior innovation experience. In response, several new programmes have been designed to lower the participation threshold.
Third, a positive feature is the use of the e-Toetus portal, which plays a central role in ensuring structured and accessible delivery. The portal acts as a single digital interface for application submission, communication with programme officers, and progress reporting. It supports phased procedures, such as pre-consultation and preliminary assessment, and enables the integration of diagnostic tools like digital and green audits. In doing so, it helps reduce the administrative burden and lower the entry threshold.
Fourth, the current grant framework has developed clearly distinct programmes, each with a specific objective, target group, and delivery approach. This directly addresses earlier concerns about the lack of differentiation in Estonia’s innovation support system.
Fifth, another lesson from past evaluations is that grant support has been especially effective in enhancing firm-level productivity, with more modest effects observed for employment and exports.
Finally, past evaluations show that grant beneficiaries tend to be concentrated in specific regions and among firms with greater internal capabilities. This means that well-intentioned, broad-based schemes may still disproportionately benefit stronger firms and regions. Policymakers should take this into account when designing and operating grant programmes, especially if the main objective is innovation diffusion.
Estonia’s RDIE-aligned grant suite illustrates how a single delivery agency with a single digital portal can reduce fragmentation and administrative burden while offering clearly differentiated instruments for adoption and innovation. The Estonian Business and Innovation Agency (EIS) acts as a one-stop shop, and the e-Toetus portal standardises applications, communication and reporting, using pre-consultation, digital diagnostics and green audits to lower entry thresholds for firms with limited prior RDI experience.
The portfolio shows calibrated instrument sizing and targeting: a total envelope of EUR 138.3 million (2021-2025) reaching around 500 firms (average grant around EUR 275 000), with programme caps ranging from EUR 10 000 green audits up to EUR 2 million for applied research (and EUR 400 000 for digital transformation; EUR 500 000 for product development), generally aimed at companies with at least EUR 200 000 in recent annual sales. Evaluation evidence referenced in the case highlights rapid productivity gains, more modest short-term effects on employment/exports, and risks of concentration in stronger firms/regions, underscoring the value of guidance, staged procedures and a co-ordinated entry point when the goal is broad diffusion.
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← 1. Ministry of Education and Research (2021). Estonian Education and Research Strategy 2021-2035. https://www.hm.ee/sites/default/files/documents/2022-10/taie_arengukava_kinnitatud_15.07.2021_211109a_en_final.pdf
← 2. Smart Specialisation (S3) is aconcept developed by the European Union. It encourages countries and regions to identify and build on their unique strengths and competitive advantages. The idea is to focus research and innovation activities on areas with the most potential for economic growth and societal impact. Estonia identified health technologies and services, digital solutions and sustainable economy as the areas to develop.
← 3. The estimated number of beneficiaries is based on a ‘back of the envelope’ calculation dividing the total budget by the estimated average grant size.
← 4. Ferraro, S., Männasoo, K., & Tasane, H. (2022). How the EU Cohesion Policy Targeted at R&D and Innovation Impacts the Productivity, Employment and Exports of SMEs in Estonia. Department of Economics and Finance, Tallinn University of Technology. https://doi.org/10.1016/j.evalprogplan.2022.102221
← 5. European Commission. (2019). Peer Review of the Estonian Research and Innovation System: Final Report. Directorate-General for Research and Innovation, https://projects.research-and-innovation.ec.europa.eu/sites/default/files/rio/report/PR%20Estonia%20-%20Final%20report.pdf
← 6. Estonian Ministry of Finance. (2025). Assessment of the impact of entrepreneurship and innovation support measures 2014-2020: Final results presentation. Tallinn: Ministry of Finance of the Republic of Estonia, https://www.fin.ee/sites/default/files/documents/2025-01/Lopptulemuste%20esitlus.pdf
