Windward flight 2025: no defence without a strong economy

Neither Europe nor Estonia has the money or the capacity to continue with the current social policies, to deal with defence capacity building and to implement a largely politically driven green turnaround. We have to choose one from here, stressed entrepreneurs at the Employers’ Economic Conference “Windward Flight 2025”. Without a strong economy, there is no defence.

Co-organiser of the conference, the Entrepreneurship and Innovation Foundation, which provides services and support to help entrepreneurs to implement innovative and research-intensive developments. Mart Toots, Head of the Applied Research Programme, took part in the innovation debate.

Are we asking too much of the economy?

“However much we want to change the external environment, it makes sense to focus on the factors over which we have influence. We must become a smart economy. It is within our reach, ” were the opening words of the President of the Republic Alar Karis. Most of the keys to productivity, he said, do not lie in the desk drawers of politicians or officials, but in the private sector.

“Estonia has a good opportunity to develop research-intensive businesses. The start-up boom gave many people the experience of growing an international business,” he explained.

The European economy cannot compete with the rest of the world

The economic downturn is not only in Estonia, but the last decade has been difficult for the whole of Europe. The gap with America has steadily widened and the region has become less attractive to investors.

Fredrik Persson, the head of BusinessEurope, which represents millions of European employers, blamed stifling bureaucracy, over-regulation, costly energy, long permit processing times and a shortage of skilled workers.

“The only way to compete with the rest of the world is to take decisions to increase the competitiveness of the economy,” he said, underlining his expectations for the new European Commission.

A free world needs focus and leadership

Priit Alamäe, founder and CEO of Nortal, sees the reason for Europe’s economic downturn as thelack of a meaningful leader for a long time. “Those who have been expected to take the initiative have tried to avoid it,” he explained.

“We are in a crisis situation in the EU. We need strong leadership and leadership, tough but important decisions. You can’t do everything at once – you have to decide what to do and what not to do.”

In Estonia’s case, too, one of the concerns is that we do not have the resources or the capacity to do it all at once – to continue with social policy and social spending, to deal with defence capabilities and to lead the political green turnaround.

“We have to choose one of them,” Alamäe was adamant.

Business confidence hit by volatility

Deputy Governor of Eesti Pank Ülo Kaasik said that the biggest lack of confidence among businesses at the moment is government policy, especially tax policy. “If the economic situation improves, confidence will certainly improve. In the current difficult economic situation it is very difficult to make confident investment decisions.”

In addition, the price of electricity and the green turn play a major role in the volatility of the sense of security. “One of the main issues for any new investor – both existing and foreign – is the availability and price of energy,” explained Erkki Keldo, Estonian Minister of Economy and Industry.

The situation in the country seems uncertain

“There are a lot of different signals and they are changing,” said Jüri Käo, chairman of NG Investeeringud, when it comes to energy and the green turnaround.

“We are in the process of setting up an ESG department within our group. The ESG audit process alone costs over €1 million. This kind of thing is tough for a company. Bureaucracy that imposes itself with a green twist is unsettling and a serious brake on economic development,” he mused.

“Many companies are moving their production to Asia or the US to escape restrictions. Europe accounts for only about 13% of global emissions and we have such tough rules here,” said Ain Hanschmidt, chairman of Infortar’s board and head of the Employers’ Confederation council.

Why are foreign investors afraid to invest in Estonia?

A stable and supportive tax environment and competitively priced energy are needed to attract investment to Estonia. Employment is high but productivity is low.

“We would like our wages to rise, but if we compare ourselves with Sweden, it is clear that future wage increases will require productivity gains. We are very close to Japan in innovation, which is good. My recommendation is to invest in energy infrastructure and bring more investment to Estonia,” explains Nerijus Mačiulis, Swedbank Group Chief Economist.

Investment is influenced by the activities of our eastern neighbours and government communication. “Estonian companies feel confident, but foreign companies do not. Rimi sold off a whole chain in the Baltics. Hassling and paperwork will not help. Look at Finland – no foreign investor is afraid to invest there, even though the border is longer than ours. Why? They give a clear message to investors. The government has to give clear messages to investors,” explained Jüri Käo.

Trust and transparent decisions lead the way

“An integral part of security is people’s trust in their country, which means that the country has to feel that way, be honest, be its own and be understood. Then the desire to defend one’s country and to pay as a citizen for defending the country is understandable,” Alar Karis discussed in his speech.

It was clear from his speech, as well as from several others, that restoring confidence in society is a priority. Only then can more courageous decisions by entrepreneurs and investors be taken.

“The evil that has reared its head in the world is testing the unity of our values. The rules-based world, the foundations of the security order and the agreements of the past are now more fragile in character and meaning. We must not wait for the wind to pick up, we must act ourselves,” the President of the Republic added in his speech.

The most influential economic conference of the year, “Windward Flight 2025”, organised by the Confederation of Estonian Employers, took place on 5 March and brought together renowned top executives and decision-makers in Estonian economic life. The event was co-organised by the Entrepreneurship and Innovation SA (EIS). Together, they looked for solutions on how to get the Estonian economy growing again – how to strengthen the economy’s competitiveness and attract foreign investors.

The next Tuulelohe Economic Conference will take place on 4.03.2026.

Until 31 March, you can register early to attend the Estonian Employers’ Confederation Economic Conference at the discounted price of 400 EUR + km and every fourth participant from the same organisation gets a free ticket!

Buy your ticket today and secure your place at the conference – https://onlineexpo.com/ee/tuulelohelend/

The summary of the economic conference was prepared by the EIS.