EST_IT@2018

Estonian Development Fund published recently a survey on what could be the role of IT in Estonian economics. This document most certainly deserves attention. Hopefully the Development Fund will translate it into english also, but here are some points about possible developments.


IT, communication and electronics technology industry itself will probably have a mediocre role in Estonian overall economy and exports. This is mostly due to the fact that at the moment serious ICT technological development demands huge resources and hundreds of specialists that we just don't have. But on the other hand our small size, flexibility and openness is a benefit as we can implement IT technology in other industries fast and they will be more efficient thanks to that. So the primary role of ICT in Estonian econoby will be using it in the most current and effective way.

Most of Estonian IT skills are in the field of finances and IT security. That is due to the fact that banks are our biggest IT buyers. Now we also have the NATO IT security center that most certainly helps to develop good IT security specialists.

In the near future the biggest social changes in Estonia, the Western Europe will be driven by the aging population, Peak Oil and environment (Global Warming). This in turn means that our societies need to rethink healthcare, education, industry, energy production and effectiveness, governing.
The only effective tool that we currently have for coping with these changes is ICT. So the challenge is bringing heavy ICT use into all these sectors.
So according to the study in Estonia we must change the ICT sectors priorities and build up strong skills besides finance and security also in eHealth, e-education, e-industry, e-energy and e-governing.

The next steps.
Development fund will finish the survey and publish it. The next concrete step will be that the our Ministry of Economics will have a 100 MEEK fund for giving the IT sector additional boost and they will use this survey as an input for the way of using this investment. The best option for spending this money is hiring some 6 world-class IT professors for a five year period for Tartu University and Tallinn Technical University. This will make the IT faculties more popular and also give a better and more openminded education to the students. I hope this will happen.

The primary reason for the current economic downturn

As you know the economic crisis we are currently having is one of the worst economic depressions that the world has seen for decades - probably the first one so global ever. Many are wondering what is the reason for such an event. I have one idea.

The primary reason for such a deep and such a global crisis is that there is no one person and no one institution whose job it is to keep the global economy on track. OK, this might seem strange, but the lack of a responsibility leads to many problems in any organization. It is one thing if the people responsible are not doing their job perfectly, but it is much worse if there isn't anybody appointed to be responsible. So in this global economy ee are just working and looking over our part of it. We try to make the best out of the system for us, but there is nobody looking over the big picture. It is like playing football without a referee. For some time everything might seem OK and the game goes on fine, but at some point the players might get into a fight and without a referee a football game might collapse into a fist-fight.
The last really big economic depression - the one on the thirties - was also due to the fact that there were no central banks and no systems taking care of the national economies. Luckily people were smart and created them afterwards and they have pretty much softened the national crisis afterwards. But now the economy has grown global and there is no global central bank who looks over the rules of global finance markets or puts cash from the global markets to reservers during good times and uses the reserves during bad times. Someone who could influence the global economy with taxes and financial reserve rules or interest rates.
Well you might say, that there are some institutions doing some work in this area like the IMF or World Bank or even the EU, but their role is far from what is needed.
So the commerce banks, the national banks, the multinational companies, the governments, the people...we just play in this global game of economics without the referee or even straight forward rules that everybody must obey. Sometimes we even don't recognize this situation and think that there is somebody who will bail us out when trouble comes. This was probably what the bankers of Iceland were thinking.

While Micro- and Macroeconomics are taught in every university program then the global economics is a rather new subject for only some MBA courses. The situation is so new that there is a lack of research, theories and best practices for the much needed Central Bank of the World.

But to comfort. :-) The thing that we have no institution taking care of the global economics is nothing compared to the fact that there is nobody who has the power or the responsibility to take care of Global Warming or Peak Oil. Or do you know somebody whose job description reads:
Save the world from the Arctic Meltdown and the extinction of species and while doing that also find a way to substitute Oil in peoples energy consumption.

The economic downturn is one thing, but this is nothing compared to half of Europe becoming part of the Atlantic ocean.

Buying software development from Belarus

We visited Belarus a week ago and made contacts with their software development companies. We are currently running a pilot project with one of them - ITransition and in creating software for one of our incubator's new e-services idea. "SLA calculator" will be an e-service that will allow (IT) service providers to generate automated reports for their customers with whom they have a Service Level Agreemeent.

Anyway, the Belarus software industry and the companies made quite an impression on us. It seems to be a serious industry there. They have even created a virtual Technology Park meaning less taxes and burecraucy for the members. The Technology Park will later become a physical one when in some 3-5 years time the required office buildings will be built. On the airport there are software development company's ad's instead of mobile operator's and beer ad-s like in Tallinn. Everybody we met, over ten salesmen and specialists, talked freely english. in my mind the most important was their will to do projects and to get foreign work, even mediocre sized projects were in their interest.

We are planning to have the specifications for our incubator e-services (http://inkubaator.microlink.ee) done in Tallinn and the coding in Minsk. (At least if the pilot goes well.)

In Minsk: the city is renovated, people are nice, roads are good, KGB seems to be present, but if you are a foreigner bringing in money that is just good as it keeps the small-time criminals away).

Don't stay in the Hotel Minsk. It is way too expensive for what you get and the personell is not that nice, especially the guy in the bar who wanted to cheat on us. :-)