Factors and impacts in the information society - a prospective analysis in Estonia

Traditionally, Estonia has been a user rather than a producer of information and communication technologies (ICT). However, with the inflow of foreign investments, mainly from Sweden and Finland, the IT infrastructure of the Estonian firms has been completely renovated and converged to the level of their host companies. As a result, the Estonian ICT sector witnessed a gradual development during the last decade encompassing a wide variety of activities from low value added computer assembling to higher value added software production and telecom services.

The paper presents a detailed description of the structure and the dynamics in the development of the Estonian ICT sector during the period from 1995 to 2001. First, the general macroeconomic framework is outlined and thus the place of the ICT industry within that framework is defined. Next, the strengths and weaknesses (SWOT) of the industry are analyzed in the second section. The ICT penetration among the main groups of economic agents is taken into account. The third section describes and evaluates the different existing national and regional policies concerning the Information Society development in Estonia. Finally, in the fourth section, the impact of the ICT market regulations is assessed by means of SWOT analysis again and the results are summarized in the fifth section.

The authors found that Estonia has achieved one of the highest ICT penetration rates in Central and Eastern Europe due to its early and rapid application of the Internet in research and education.

The authors’ main recommendations are:

• for the future development of the information society and overcoming the digital divide, the implementation of the new technology should improve even further
• special efforts must be paid to integration of the existing independently built public information systems
• ICT implementation could be facilitated by enhancing the efficiency of the IT specialists training

In general, adjusting the national economy to the new technological-economic paradigm represents a future challenge for the Estonian ICT sector. This requires the creation of the necessary institutional environment, ICT development in the public sector and promoting improvement in ICT knowledge of the population.