Estonia’s research and development intensity is average among the European Union member states

Rita Raudjärv, Tiina Pärson

Estonia’s research and development intensity indicator was 1.28 in 2016, placing Estonia 13th in the ranking of the European Union countries. Estonia is significantly ahead of Lithuania and Latvia, but still lags far behind Finland.

R&D intensity, which measures the proportion of R&D expenditure in the country's gross domestic product, is regarded as an important indicator in country comparisons. The indicator is also one of the indicators of sustainable development. In 2016, R&D expenditure in Estonia amounted to 270.3 million euros. R&D is a very resource-intensive activity, which requires, in addition to own resources, strong support from the government. The government has been funding a substantial share of R&D spending. Of the funds allocated for R&D, state budget allocations constituted 49% in 2014 and 46% in 2015. The funds allocated from the state budget for R&D also include Structural Funds support, which is included in the state budget and is, therefore, considered government funding. In 2016, the government contribution decreased slightly compared to the previous years, falling to 37%. This was due to the fact that one of the Structural Funds funding periods had just ended, but the new one had not started yet.

Ratio of research and development expenditure to GDP in the European Union, 2016

The business enterprise sector is an important player in R&D. In 2016, the business enterprise sector contributed 139 million euros to R&D, which accounted for 52% of the total R&D expenditure. The share of R&D expenditure in the business enterprise sector has remained broadly unchanged over the last three years. 7 million euros were allocated from the state budget for the business enterprise sector R&D activities and 11 million euros came from foreign sources. 62% of the R&D expenditure in the business enterprise sector was labour costs. The share of investments in expenditure was 13%.

Expenditure on research and development, 2004‒2016

R&D expenditure in the non-profit institutional sector (higher education, government and private non-profit sectors) amounted to 131 million euros in 2016, of which nearly three quarters was in the higher education sector. Of the non-profit institutional sector's R&D costs, 73% were financed by the government and 20% came from foreign sources. Similarly to the business enterprise sector, labour costs had the largest share (59%) in the non-profit institutional sector’s R&D spending, the share of investments was 3%.

In 2016, the number of persons employed in R&D calculated in full-time equivalents was 5,772, of whom 68% worked in the non-profit sectors. The number of researchers and engineers calculated in full-time equivalents was 4,338, which is 3.6% more than in 2015. The increase in the number of full-time researchers and engineers was due to the business enterprise sector, where this figure increased 14% compared to 2015. In the non-profit institutional sectors, their number declined by 0.5% year on year.

In 2016, females accounted for 45% of the persons employed in R&D and for 41% of researchers and engineers. The share of female researchers was highest in the higher education sector – 55%. In both the government and business enterprise sector, the share of women was 21%.

The number of female researchers and engineers with doctoral degrees in the non-profit institutional sector was 55%, whereas 33% had a Master’s degree in 2016. In the business enterprise sector, 9% of R&D staff had a doctoral degree and 35% had a Master’s degree in 2016.

In 2016, there were 402 foreign researchers working in Estonia: 112 females and 290 males. The researchers came from 57 different countries. The most researchers were from Germany (50), Russia (37), Italy (27) and Finland (27).

(R&D) is a systematic activity based on the creative freedom of the individual, aiming at the acquisition of new knowledge about humans, nature and society and their interactions through scientific research. Its further aim is the application of the gained knowledge in the production of new materials, products and equipment and introduction or substantial improvement of processes, systems and services. R&D includes basic and applied research and experimental development, which may partially overlap.