Madis Müller: the crisis years favoured small and flexible companies
In his talk at today's Gasell Kongress, organised by the newspaper Äripäev, Eesti Pank deputy-governor Madis Müller said that Estonia's competitiveness held up well during the years of the economic crisis and that exports grew fast with demand from target markets.
Müller highlighted the strong position of Estonian exports, which have survived even during the difficult years. "Estonian exports have seen growth continue in recent years in most types of products, and although the circumstances vary in different target countries, the outlook for the future is promising. Confidence has returned to an extent in Estonia's main trading partners and an acceleration in economic growth is forecast in various regions of the world" he said. He added that the areas with fastest growth are far from Estonia, and that companies looking for rapid growth in demand in the next few years should look beyond Europe.
The financial crisis is clearly not yet over and the readiness of companies for change will be very important in planning for the future. The Estonian economic environment is very open to foreign trade, and this means that all changes impact on companies here very quickly. "Estonian companies are small in international terms, which means they can be flexible and can adapt quickly to changing circumstances. Given the great importance of foreign trade in our economy, there really is no alternative to adapting rapidly. Estonia's experience of the crisis shows clearly that it is possible to gain market share even in the toughest times", Müller said, underlining the strength of Estonian companies.
He emphasised that a changing environment favours companies that have low fixed costs. "Companies that are starting up and rapidly growing are able to take particular advantage of their low fixed costs. It is inevitable that wages will continue to rise, given the shortage of labour in Estonia, but it is important to make sure that wages do not increase faster than productivity. This means that we need to be able to develop our small workforce and make it as efficient as possible".
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