Latvian Tech Companies Invest in Their Country

  • 2024-05-30
  • Cybersecurity and Digital Policy Expert, “StartSchool” Co-founder Ieva Ilvesa

Our country has all the opportunities and necessary prerequisites to become a major player in the technology industry, significantly impacting both the overall economy and the individual well-being of each citizen. The question is – will we seize these opportunities, and how? Currently, we are in a good starting position, considering both the digital skills of the population and the digital infrastructure. However, we cannot stop here. We must seek solutions to continue development, including nurturing new talent with both technological and business skills.

Looking at the development of the tech sector in Latvia, we can say that we are at a certain midpoint – the start has been good. Historically, we have had people with high-quality education in mathematics and physics, and our internet infrastructure has also developed well (according to Central Statistical Bureau data, 91.4% of Latvian residents use the internet regularly). While there are occasional criticisms of the state's digitalization efforts, we have outpaced other countries in digitalizing public services. Several companies have successfully used digitalization for growth and IT companies working globally. Now we must answer the question – how do we use these opportunities to take the next steps in development while addressing the issues that hold us back?

Invest in Technology: Building Skills Over Screen Time

One thing we can change is our mindset and attitude towards technology. We are used to seeing major tech companies being founded in large economies like the USA or China, not fully believing such opportunities exist for us as well. The success of tech companies is based on talent, skills, and education. Infrastructure provides opportunities to train and apply this knowledge in practice, but entrepreneurs and skilled human resources are needed to convert this infrastructure into success. Using technology wisely to improve our well-being means investing time to learn new skills rather than just spending time on screens. Today, as artificial intelligence opens new horizons in the tech sector, these skills and talents are the growth capital for entrepreneurs. That's why I was delighted to get involved in founding “StartSchool” – to encourage more people in Latvia to invest their time in technology, not waste it.

Latvia and Estonia: Similarities and Differences

A well-formed and implemented state policy accelerates the development of the technology business. Why has Estonia had several unicorns for a long time? Because in the 1990s, when Estonia equipped every school with a computer lab, it was a significant investment in human resources development. These people went on to create the first unicorns after 5 or 10 years. Technology skills, knowledge, and talents must be supported by political backing for the sector's development.

The first pioneers in Estonia's tech sector, such as the company "Skype," inspired and nurtured a generation that continued their path of building tech companies. Estonia's digital success story grew like a snowball – the most successful companies, having worked and achieved success globally, returned and chose to invest in their country's human capital – education. At the same time, international companies increasingly invested in Estonia's renowned IT sector. Success bred success – through effective state policies, leader motivation, and concrete financial support. This is exactly what all the Latvian tech companies that joined “StartSchool” are now committed to doing – investing in their country, increasing human capital, knowledge, practical skills, and ultimately, success.

Taking Initiative: Thriving Without State Support

Having learned from Estonia's experience over the years, I have often compared the tech sector situation in both countries. It's clear that we cannot wait and rely solely on state support; we must act independently. The state can provide initial capital (to varying degrees), encourage taking the first steps to receive initial support ("seed money"), and ensure favourable regulatory frameworks or tax incentives. However, the most important thing is knowledgeable and motivated people ready to start their own startups or work in existing companies.

We don't need to reinvent the wheel, just improve it to suit our needs and goals. There are various proven educational programs worldwide that specifically address the human resource shortage in the IT sector. One such school is "Qwasar," widely recognized and successful in Silicon Valley, USA. This school serves as the foundation for our new educational program in Latvia. Thanks to the involvement of local entrepreneurs, it will be tailored to the Latvian business environment, providing the opportunity to learn both technology and business skills. The goal is to learn to program and solve problems using IT knowledge and to turn these abilities into profitable businesses – attracting investments, building brands and their recognition, choosing niches, understanding the market, and gaining many other necessary entrepreneurial skills.

State resources are limited in providing support to everyone. In today's situation, where society and business are still grappling with the aftermath of COVID-19, the primary task of the state is to support those in the greatest need. Equally critical is to aid the Ukrainian people fighting for our collective freedom. I am very pleased that right now, local tech companies have united their efforts to invest in their country – taking responsibility and contributing to a more prosperous Latvia in the future.