A brake on Estonian wellbeing is timidity in realising ideas and insufficient readiness for lifelong learning. Endlessly, we may toil at our simple jobs – never enough to break the widespread low wage curse.
As compared to other European nations, Estonia strikes the eye with poor productivity. «What do you mean my work isn’t productive?» asks the working man, labouring from dawn to dusk to hopefully make ends meet.
«The economy (thus also salaries – A. A.) will grow according to increase of labour force or capital in the economy, or increase of the productivity and capital,» explained research centre Praxis economy programme head Katrin Pihor. She added that, thanks to inflow of extra capital into Estonia both as foreign investments and EU support, our capital/workforce ratio has increased and thus made our work more productive as well.
«It’s a vital difference whether to dig a ditch with spade or excavator,» said Ms Pihor. «In agriculture, such producers do better as have invested PRIA support into new technologies and, therefore, are less dependent on wage pressure. Meanwhile, the economy cannot endlessly grow by inflow of capital – increasingly, we will need to do smart work.»
«The other side is innovation and technological development – how we will engage our labour force, whether there are two or ten people at the line, whether we do bookkeeping ourselves or outsource it from a specialised company. Or how we develop out services and goods, how we produce them and how skilful we are at selling them,» she added. «Estonia’s problem is we have too little of such smart work, we are too occupied with fulfilling the demands of others, and let others reap the cream of our work.»
Mentality change needed
A lot is being said about the shrinking labour force in the short, and even more so in the long perspective. With few children being born, and no great leap possible with large child benefits – the generations are small – it is the more important to look at the people that we do have.
Nearly third of working people in Estonia lack vocational education and for a large part of these basic school is all they have under their belt. With the older folks, the problem may be that the vocational education once obtained does not correspond to today’s needs. Also, Estonia has about 16,000 unemployed youth, the half of whom have not learned any professions.
The Praxis analysts also underline that even with those that are educated, employers are not satisfied with their skills. Meaning: not only lacking vocational training, people come short in communication skills and problem-solving, and cannot do teamwork.
According to Ms Pihor, lack of knowledge is not limited to workers, but also plagues executives. «The basis for enterprises to draw knowhow from is very limited in Estonia,» mentioned the analyst. «Thinking about the educational system, this is an issue of developing creativity, initiative and openness – in addition to excelling at PISA tests, we must ask how our children think, do they have a seeker’s spirit, willing to try things out, be oriented towards the new,» she said. The situation may never change without fundamental changes in education.
Ms Pihor added that curricula give schools great liberty in how and by which means to achieve the ends set therein. «The issue is: will the teachers and headmasters go along with it, how innovative-minded our schools are,» she said.
Change of mentality is a key, even in the broader sense. «Beholding the IT-sector success story, this is developing fast but the success isn’t engaged enough in other sectors. We have parallel worlds, as if: IT-sector and the rest of production,» said Ms Pihor.
Meanwhile, the analyst also pointed out Estonia’s strong points: here, it is easy to execute new ideas; development of start-ups is fast. Nevertheless, we are unable to go on from there, shaping sustainable business, turn good ideas into enterprises with stable growth.
«This is lack of sales skills, low level of cooperation, the ability to design, probably also the issue of financing, how enterprises are supported in the more mature phase,» said Ms Pihor.
Own experience imported
In international context, Estonia stands out by our fear to fail in business. This, says the analyst, is also related to the level of education – entrepreneurs tend to be the more highly educated. «The low paid have not thought about doing something themselves,» she said.
According to Ms Pihor, people need help in lowering the risks, removing the fears: no big deal if nothing happens, if the company goes bankrupt – it’s worth trying.
This all leads us back to education, additional training and retraining. As an excellent example of that, Ms Pihor mentioned Ireland – one key if the Irish success having been investments into people via additional training and retraining. «In Estonia, retraining has been directed towards the unemployed, but we must also think how to bring the low-wage people back to education, help them develop their knowledge and skills – today, they still have work, but they are definitely a risk group,» she said.
According to Ms Pihor, Ireland is also successful in having been able to lure the Irish back from the whole wide world. This would also be an opportunity for Estonia.
The tens of thousands of people from Estonia who have departed to seek better wages and better lives and are doing hard work abroad – often not corresponding to their education level – are among the industrious and courageous. Their experience, contacts, and boldness in face of changes would be pure gold back home, said the analyst.