1. EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Estonian Machine Building, Metal Working, and Apparatus Industry on the Threshold of European Union
Dr. Jüri Riives

2. Estonia from the Outside
EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Estonia from the Outside
2003 World Economic Freedom Index
1. Hong Kong
2. Singapore
3. New Zealand
6. Estonia
6. United States
9. United Kingdom
11. Finland
19. Germany
29. Lithuania
33. Latvia
35. Czech Republic
44. Hungary
The Global Competitiveness Report
1. United States
2. Finland
3. Taiwan
4. Singapore
5. Sweden
26. Estonia
28. Slovenia
29. Hungary
36. Lithuania
40. Czech Republic
44. Latvia
51. Poland

3. Foreign Trade Characteristics
EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Foreign Trade Characteristics
Estonian Foreign Trade , special trade method (billion EUR)
Export
Of which re-export after inward processing %
Import
Of which importation for inward processing
1995
1.2
0.28
23.2
1.8
0.27
15.6
1996
1.4
0.31
23.0
2.2
0.30
13.5
1997
1.9
0.50
26.7
3.1
0.47
15.1
1998
0.72
31.8
3.5
0.65
18.5
1999
0.73
32.6
3.2
0.70
21.6
2000
3.4
1.51
43.8
4.6
1.43
31.0
2001
3.7
1.41
38.0
4.8
1.19
24.8
Export (by country, %)
Import (by country, %)
Country of destination
2000 (%)
2001(%)
1. Finland
32.4
33.9
2. Sweden
20.5
14.0
3. Latvia
7.0
6.9
4. Germany
8.5
5. United Kingdom
4.4
4.2
6. Denmark
3.4
3.5
7. Lithuania
2.8
3.0
8. Norway
2.4
9. Netherlands
2.5
10. Russia
Country of destination
2000 (%)
2001(%)
1. Finland
27.5
18.1
2. Germany
9.6
11.0
3. Sweden
9.9
9.2
4. China
3.6
´8.7
5. Russia
8.5
8.1
6. Japan
6.1
4.5
7. Italy
2.9
3.3
8. Lithuania
1.6
2.6
9. Denmark
2.5
10. Netherlands
2.1
Source: Statistical Office of Estonia (

4. Competitiveness of Engineering Industries
EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Competitiveness of Engineering Industries
Export percentages in engineering industries by activity fields in
Activity field
Export importance, 2000
Export importance, 2001 IV Quarter
Chemistry
11.3%
6.8%
Production of building materials
3.6%
2.7%
Production of foodstuffs, drinks, tobacco
12.8%
12.0%
Wood processing, production of furniture and paper
29.1%
27.3%
Textile industry
13.0%
18.1%
Machine and apparatus building
24.2%
24.3%
Other activities
4.7%
8.8%
Source: Statistical Office of Estonia

5. EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
General Description of Machine Building, Metal Working, and Apparatus Industry Sector
22.3%
Sector importance in engineering industries
26%
Export importance in the sector
1200
Number of companies in the sector
20 000
Number of employees in the sector
670 mln Euro
Turnover per year
tons
Steel supply required per year

6. Distribution of Activities by Location
EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Distribution of Activities by Location
Tallinn and North-Estonia 55%
Nord-East Estonia 7%
Central-Estonia 10%
West-Estonia 11%
South-Estonia 17%

7. EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Estonian Machine, Metal and Apparatus Building Industry – What Kind We Are?
Source: Krediidiinfo

8. Structure of Machine, Metal, and Apparatus Building Industry
EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Structure of Machine, Metal, and Apparatus Building Industry
Source: Estonian Office of Statistics
Source: Results of Research

9. Positive Factors Promoting the Business
EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Positive Factors Promoting the Business
Good general education system
Well educated persons
English (foreign) language competence
Good communications
Well developed infrastructure
Entrepreneurial know-how
Materials available
Estonian Chamber of Commerce and Industry
Tallinn Enterprise Board
Estonian Trade Promotion Agency
Federation of Estonian Engineering Industry
Government support

10. Labour Costs in Engineering and Electronics Industry
EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Labour Costs in Engineering and Electronics Industry
Salary offers in November, 2001
Gross wage (EUR/month) Estonia
Managing director 1500 – 3400
Financial manager 1400 – 2200
Chief accountant 500 – 1500
Specialist 500 – 1400
Salesman 350 – 700
Secretary 300 – 575
Source: MET

11. EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Main Sales Arguments and Threats in Machine, Metal, and Apparatus Building Industry
Sales Arguments
Threats
Good quality of products
Accuracy of order fulfilling
Short delivery time and flexible reaction to the customer’s demands
Cost of the product
Price/quality ratio
Reliability
Increase of product cost due to more expensive resources
materials
energy
salaries
Increase of labour costs is higher than growth of productivity
Restricted number of qualified workforce can not allow development of the branch
Low profit margin
Insufficient knowledge about export markets
Often the level of the graduates can’t satisfy the needs of nowadays production

12. Main Goals Towards Competitive Production
EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Main Goals Towards Competitive Production

13. EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Average Labour Productivity and Labour Costs Productivity Index
1995 = 100%

14. Estonian Employees Qualification System
EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Estonian Employees Qualification System
Resources
People
Money
Time
Professional councils
Working groups
Professional qualification
commitees
Examination commitees
Examination centres
Experts
Award of professional
qualifications
Professional
certificate
Training
Curriculum
Mapping of proffessions
Working out and
modernization of occupational
requirements
Professional
standard

15. Arrival of “Good Estonian Thing” to the World
EESTI MASINATÖÖSTUSE LIIT
FEDERATION OF ESTONIAN ENGINEERING INDUSTRIES
Arrival of “Good Estonian Thing” to the World