VKG shuts down two oil factories in Estonia

  • 2014-12-03
  • Staff and wire reports

TALLINN - According to Statistics Estonia, in 2013 the expenditure on research and development (R&D) in Estonia equalled 326 million euros, which is 14 percent less than in 2012.

Despite the negative nature of this piece of news, there is no reason to raise the alarm, Statistics Estonia said. The peculiarity of the statistics of a small country lies in the fact that the start or termination of a single large-scale project can significantly influence a concrete statistical indicator. In 2010–2012 substantial investments in new technology were made in the Estonian oil industry, which boosted Estonia’s R&D expenditure to a significantly higher level than before. In 2013 the pilot factory reached the production phase and the resultant decrease in new investments was the cause of the downward trend in R&D expenditure.

The ratio of R&D expenditure to the gross domestic product (GDP), also known as R&D intensity, declined from 2.16 percent in 2012 to 1.74 percent in 2013. This was the biggest drop – 19 percent – among the EU member states, as the decrease in R&D expenditure was amplified by the 6% increase in the GDP. Nevertheless, Estonia was placed just outside the top ten in the R&D intensity ranking of the member states.

The diagram shows clearly that, in the shadow of the intermediary boom caused by the oil industry, the long-term trend for Estonia has not changed and the convergence to the EU mean is continuing. In 2002 the Estonian R&D expenditure per inhabitant amounted to just 11 percent of the EU mean, whereas in 2013 it reached already 46 percent.
47 percent of Estonia’s R&D expenditure was financed by the government in 2013 and this financing increased by 6 percent compared to 2012. The share of R&D financing in the general government expenditure was higher than ever – 2.13 percent.