Last year the expenditures on research and development activities remained at the level of 2011

The remarkable growth of Estonia’s expenditures on research and development (R&D) in 2010 and 2011 was the result of considerable investments in new technology in the oil industry. Despite the sizeable cut in investments in the oil industry in 2012, the volume of R&D expenditures in Estonia was preserved. That was possible thanks to the 14% rise in R&D expenditures in non-profit institutional sectors (higher education, government and private non-profit sectors) and to the growth in several economic activities in the business enterprise sector. Thus, for example, R&D expenditures increased almost one and a half times in information and communication, and in professional, scientific and technical activities.

Although the ratio of research and development expenditures to the gross domestic product (GDP) fell from 2.37% in 2011 to 2.19%, the fall was partly due to the GDP growth, with the R&D expenditures unable to show a similar growth rate.

At the turn of the century, the share of government in the financing of R&D expenditures was 60%. Since then, the vigorous increase in funding by the business enterprise sector has reduced this share, which in 2012 remained at 38%. At the same time, the volume of government financing has shown constant growth and in 2012 increased by 20 million euros or 16%. It is worth mentioning here that the EU supports received through the state budget are classified as supports received from the state. The share of government financing in the business enterprise sector is less than one tenth of total R&D expenditures, but even there government financing grew 22% in 2012, from 16.5 million euros to 20.2 million euros, mainly due to the support for small enterprises and research centres financed by Enterprise Estonia.

Even more important is the fact that the share of government-financed R&D expenditures in total general government expenditure continues to rise (with the exception of the year 2009 during the economic crisis). This gives hope that Estonia will fulfil its aims in the R&D domain as stipulated in relevant strategy papers.