Eero RaunWhat is the situation of the creative industries in Estonia?

Eero Raun – Advisor at the Entrepreneurship and Innovation Centre at Enterprise Estonia

Estonia is the only country in Europe, where the current state of creative industries has already been mapped three times (2005, 2009 and 2013) on the basis of statistical data from 2003, 2007 and 2011 respectively.

Table 1. Key characteristics of Estonian creative industries on the basis of three surveys

Year 2003 2007 2011
Number of Employees 19 891 27 951 29 200
   % Of employed 3.4% 4.3% 4.8% 
Number of Enterprises and Organisations 2 307 4 921 7 066
   % Of enterprises 6.3% 9.4% 11.4% 
Total Income (€millions) 608 1 143 1 067
   % Of GDP 2.8% 2.9% 2.7% 

Throughout these surveys the linear growth has continued in absolute numbers (in the case of creative industries e.g. number of employees, proportion of all employed and number of enterprises), hence the success story seems indisputable. However, when we compare with the previous study, we must also consider the context within which the total revenue of the sector has decreased slightly. The years of the economic crisis were between these last two surveys, during which the fate of the creative sphere in terms of funding from the public and private sector, was often ‘last in, first out’.

Nevertheless, the effects of the economic recession on the subfields of creative industries varied considerably in some cases. The involvement of public sector financing, last mapped in 2011, has had a significant impact and offered a leg up for many. On the other hand, this was cut for a while to even lower rates than the previous mapping exercise (2007). Libraries (all over Estonia), broadcasting (especially Estonian Public Broadcasting), performing arts (theatres in Estonia) and museums have received the largest share of public funds for their regular maintenance, and music and film have received less. It is important to note how much of the total income from the example of performing arts does not originate from the public sector, but from their own earnings and private sponsorship. To sum up, the upkeep of the creative industries is not solely dependent on government funds, due to the continuous rise of the role of the private sector and revenue generated from within the organisations themselves. Estonian theatres for instance have been very efficient and inventive with marketing and earning corporate revenue, thereby being role-models for much more profitable industrial companies.

The enterprises and organisations of the creative industries sector are too small and their activities fragmented, which counteracts investments and growth in export potential. The period of recession during the economic crisis was thus more serious in the creative industries than other sectors of the economy in terms of revenue and the number of employees in enterprises. On the other hand, they have come out of the crisis standing tall, and employment in the creative industries now plays a role equal to the forestry and wood sectors in Estonia, which are undoubtedly important – there are almost 30 000 workers in each of these sectors (as of 2011).

Before expanding to foreign markets, it is crucial to become more competitive at home. To that end, the state is compelled to discontinue supporting the entry of additional enterprises to the market (which will continue nonetheless, but will become secondary) in guiding the development of the sector, and must primarily pursue closer cooperation between existing businesses ranging from single projects to actual mergers. Therefore, reinforcing cooperation should be carried out on three levels: internally in the subfields of the creative industries (e.g. architecture), between different subfields (e.g. music and entertainment software) and across sectors (e.g. manufacturing and design).

If creative industries were a short-term trend, they would already be showing signs of decline. The life cycle of trends in our information-overloaded world is, after all, just a couple of years. However, creative industries are considered equal among other economic sectors and are associated with expectations of growth. Firstly, there is a desire to find new sources of expansion for Estonian entrepreneurship under the circumstances of the structural changes taking place in the global economy. Secondly, we should establish and introduce Estonia as a developed country, which offers production-related creative services (product development, engineering, design, marketing). The third aim is to achieve a more profitable position in value chains. An awareness of the right way forward to achieve our goals will require considerable communicative engagement. In order to plan our actions, it is central that the state has thus far developed the sector in the right order. First and foremost, basic research, and then developing a strategy for realising further undertakings.