Estonian Human Development Report

References
1. Crossworks: R&D Investment, R&D Capacity, R&D Cooperation.
Final report of the project. Eindhoven 2008
2. Fostering the Urban Dimension. Analysis of the Operational Programmes
co-financed by the European Regional Development
Fund (2007–2013). European Commission. November 2008;
3. Florida, Richard, The Flight of the Creative Class. The New Global
Competition for Talent. New York, HarperCollins Publishers,2005
be formulated (the Crossworks survey showed clearly
that it occurs extremely differently in the urban regions
of different countries), how to connect these policies to
national innovation policies that are usually (at least in
regard to R&D) planned from the top down not from the
bottom up, etc. With respect to the above, there are also
doubts about how realistic the realization mechanisms
are for the innovation policies and other complexes at
the metropolitan region level. In other words, the city
declares (as does a country or private sector) that it considers
one or another development to be important and
tries to help it along. Yet to what extent it can support
this development with its own resources remains somewhat
up in the air, especially under conditions of economic
recession. However, we can state that Tallinn and
Tartu have taken certain steps to make their movement
in the direction of a knowledge city model more comprehensive.
We can hope that lessons can be learned from
this process and that future movement along this path
will occur in an even more informed manner.
4. Loova Tallinna visiooni kontseptsioon. (2008) Tallinn City
Government. http://www.tallinn.ee/est/g2402s39407
5. Acommodating Creative Knowledge – Competitiveness of
European Metropolitan Regions within the Enlarged Union –
ACRE, project funded under the Sixth Framework Programme
of the EU, http://www2.fmg.uva.nl/acre
6.6. Summary
• By comparing the objective indicators of the European
countries that characterize the different components
of well-being as well as the peoples’ assessment
of these components and the quality of their functioning,
we see that European countries can still be
divided into “two leagues” – into stronger and weaker
countries. Yet the division of the countries into these
two leagues depends only to a small extent on which
criteria are used for this classification. Estonia currently
clearly belongs to the second, weaker league,
not only based on an assessment of the general synthetic
human capital indicator, but also based on economic
wealth despite the booming economic growth
that has taken place in recent years. The only synthetic
component regarding which we can assert that Estonia
is about to cross the border between two leagues,
or at least is very close to it, is social capital – the institutional
quality and confidence in institutions with
regard to other people in general as well as state institutions.
However, it is characteristic of Estonia that people’s
subjective assessments of the majority of the evaluated
components are higher than the actual level of
the phenomenon being assessed. In comparison to
other countries, our satisfaction with our economic
situation is higher than our economic wealth; satisfaction
with education and health ranks higher than
the objective state of human capital, etc. It is possible
that such relative overvaluation has helped us develop
our economy faster, and it cannot be ruled out that it
has prompted us to over-consume or to significantly
underestimate important phenomena, such as health,
a level of stratification, etc. The question is how this
somewhat inflated self-evaluation will survive the setbacks
that will arrive with the economic recession and
whether the confidence in each other and our common
institutions will survive.
• Starting from the beginning of this decade, GDP
has increased in Estonia as have social expenditures,
while GDP growth has been significantly faster than
the increase in social expenditures (health care, education,
and social protection). This type of development
did guarantee a balanced budget and a surplus
(the latter is quite significant, considering that we have
entered a period of economic downturn). However, it
makes one cautious from the standpoint of the longterm
strengthening of human capital, which is also an
important prerequisite for future economic growth.
The economic recession threatens to lower a series of
social expenditures that are already at a critical level,
and to thereby inhibit the unleashing of a new vigorous
economic growth cycle upon emerging from the
crisis. A serious analysis should be made of the sustainability
of Estonia’s education model.
• In connection with increased unemployment related
to the economic recession, there has been a great deal
of discussion in Estonia about the need to make the
labour market more flexible. The new Employment
Contracts Act has already taken steps in this direction.
At the same time, Estonia’s labour market cannot be
considered rigid on an international basis. Although
the governmental regulations related to the labour
market have been relatively strict, this is compensated
by the weakness of the regulations that operate based
on agreements between social partners. Mobility of
jobs has been quite active and one can assume that
heretofore the restructuring of the Estonian economy
and emergence from the crisis will take place primarily
through the labour market, not through the government’s
macroeconomic measures.
Actually the problem in Estonia is that the systems that
should contribute to a flexible labour market (flexicurity
systems or secure flexibility systems), such as adult
education and active employment policy measures,
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