The trade of high-tech goods is showing a declining trend

In 2008 the share of exports of HT goods in the total exports of Estonia was 4% and in imports 6%. For comparison: in 2004, when Estonia was acceded to the European Union, the share of HT goods in exports was 10% and in imports 13%. Thus, during the years of rapid growth in economy, the trade in HT goods started to decline significantly. Compared to 2004, exports of HT goods decreased 39% and imports 29% in 2008. At the same period the total exports of Estonia has increased 78% and imports 62%. The decline in the trade of HT goods has been influenced by the fact that a big share of the HT goods industry was orientated to processing goods under contract. Accession to the EU was followed by rapid increase in labour costs and many enterprises based on foreign capital forwarded their production outside Estonia. The development of local enterprises of this industrial branch is impeded by the need to make big investments in research and development and partly the lack of qualified labour force.

The foreign trade of Estonia’s HT goods is characterised by a large trade deficit. In 2008, imports of HT goods exceeded exports by 5.2 billion kroons. The trade deficit shows that the local production cannot meet the needs of internal market and a big share of the goods must be imported.

In exports of HT goods the main countries of destination were Finland (30% of the total exports of HT goods), Sweden (17%) and Russia (12%). In imports the main partner countries were also Finland (15% of the total imports of HT goods), Sweden (13%) and Germany (12%). The trade balance was negative with most of the partner countries. In 2008 the trade balance of HT goods was the biggest with Germany, Sweden, United Kingdom and China. The surplus was the biggest with Russia.

In 2008, electronics and telecommunications equipment accounted for the biggest share of HT goods in Estonia’s exports — around a half. Scientific instruments, electrical machinery and computers and office machines ranked second. In imports electronics and telecommunication equipment accounted for 41%, followed by computers, office machines and scientific instruments.

In 2008, Germany, France and Netherlands were the biggest exporters and importers of HT goods among the European Union countries. Among the Eastern European countries the major exporters were Hungary and Czech Republic. Estonia was the third from the behind among the EU Member States in exports of HT goods in 2008, leaving behind only Latvia and Cyprus.

If in the EU as a whole the share of HT goods in total exports in 2008 was 10% and in total imports 9%, then in Estonia the respective indicators remain significantly lower than the EU average. At the same time in the EU the share of HT goods in exports is higher in small countries (Malta, Luxembourg, Cyprus). Specialising in the producing of HT goods would be also promising for a country like Estonia, as it does not demand natural resources or heavy industry. At the same time the advantages of Estonia are educated people and scientific potential.

Share of HT goods in country's (Union's) total exports and imports, 2008

Source: Statistics Estonia, Eurostat.

Goods are called high-technological if the producing of them requires the most advanced technology known. HT goods are defined according to the expenditures on research and development. The present analysis has used the OECD methodology in classifying HT goods. According to this methodology, HT goods are divided as follows: aerospace; computers and office machines; electronics and telecommunications; pharmacy; scientific instruments; electrical machinery; non-electrical machinery; chemistry; armament. The concept of HT goods changes in time — if the technology is taken widely into use and expenditures on research and development decrease, the product loses its high-tech characteristics.
The analysis has used the calculations in current prices, which means that the influence in the change of prices has not been taken into account in this period.
A more thorough overview of the exchange of HT goods in Estonia in 2004–2008 has been published on 30 September in the bulletin Eesti Statistika Kvartalikiri. 3/09. Quarterly Bulletin of Statistics Estonia /uudised/31382