Kati Rostfeldt: The opportunity for Estonian entrepreneurship lies in innovation leadership
All successful companies have one thing in common – they make conscious choices, invest systematically in developing innovation capacity and constantly create new value, explains Kati Rostfeldt, Innovation Advisor at the Confederation of Employers, in the opinion columns of Äripäev. Effective innovation management could help Estonian companies strengthen their positions in global competition.
Innovation is not a random burst of inspiration or a single success story in bringing a new product to market. To drive continuous productivity, innovation must be a strategic process that requires systemic leadership, the right culture and the ability to collaborate inside and outside the company.
Innovation expert and Nordic Science Investments partner Mart Maasik, who spoke at the employers’ conference “Tuulelohe Lend 2025”, stressed that innovation management is comparable to financial management – it is one of the basic skills of a future-proof company. But the perception that innovation management skills are essential is not yet widespread.
According to Maasik, Estonia’s long-term success starts with people with experience in creating international and research-intensive businesses. According to him, in our small country, strengthening skills in intellectual property development, the application of maturing technologies and strategic cooperation is crucial to increasing impact and value. Such competences will help boost our capacity to innovate and provide a solid basis for quality leadership and international competitiveness. Ambitious, well-managed companies also bring global talent to Estonia to help build the next level of value.
The experience of Estonian companies: there is room for improvement, and plenty of it
How does the practice of Estonian companies respond to this theory? The innotrepp, an innovation capability assessment tool created by experts here, allows companies to assess their dynamic capabilities in a 5-point system and in six different categories. The tool has been used by almost 140 companies operating in Estonia to assess their innovative capacity, allowing us to make some initial observations.
Estonian companies have rated their innovation ambition and strategic management capability at an average level of 1.7, and their value differentiation at 1.8. These indicators suggest an appetite for innovation, but still a moderate innovation capability.
Most companies’ current product, service or business model is not very different from that of their competitors. Too few companies are making long term plans with strategic business objectives, and there could be more interest in exporting. Strengthening the capacity of companies to innovate strategically and systematically is needed to improve the quality of management and ambition.
Moving up the innovation ladder means continuous development for a company – from spotting opportunities to creating a new value proposition and bringing it to market. At the same time, for many companies, idea generation is haphazard and product development is limited. This suggests that the principles of strategic innovation management are not yet widely implemented and that innovation is mainly project-driven and driven by immediate demand.
Innovation leadership is essential
The innovation management standard ISO 56001:2024 describes a system to help companies structure and optimise their innovation processes. The aim is to ensure that innovation is not an accidental process, but a consciously directed and managed process that creates value both within the company and for customers.
Systematic management of innovation is important because it:
- Reduces uncertainty and risk – innovation always brings uncertainty, but systemic innovation management helps manage risk and find the most effective solutions.
- Ensures strategic direction – innovation must be linked to the company’s long-term objectives, not just individual projects.
- Creates opportunities for collaboration – successful companies seek and build partnerships with research institutions, start-ups and other businesses.
- Improves business adaptability – In a fast-changing world, businesses need to be able to adapt quickly and to spot and seize new opportunities.
According to Mart Maasik, the greatest untapped potential of the Estonian economy lies in professional and systematic innovation management. Rather than looking for quick and risk-free solutions, a clearly managed innovation portfolio should also be designed. Such an approach requires thoughtful action, recognising that the success of a few high-risk but high-impact initiatives may compensate for the failure of others. Success requires a systematic approach, honest self-reflection and a willingness to learn from both successes and setbacks.
The article was published in the opinion columns of Äripäev newspaper.