In the last few years lively discussions have been held in Estonia about what the country’s hitherto economic growth has rested on and how to speed it up in order to catch up with the average living standard of the European Union.

Knowledge-based economy is increasingly the key term used in the discussions about the strategies of future economic development in Estonia, Europe, Asia as well as in America. The Estonian Research and Development Council, as strategic advisor to the Government, has substantial contributions to make in these discussions.

In general terms, the Regular Report on Estonia’s progress towards accession to the European Union, as well as the World Economic Forum and several other organisations estimate Estonia’s economic situation and its future perspectives to be promising in the global competitiveness setting, pointing out, however, a few dangers that need to get the Government’s careful attention in the near future.

The current Review synthesises the results of various international surveys about Estonia. In their analysis the authors relied on widely accepted economic approaches. The Review aims to give a maximally objective and pragmatic view of the Estonian socio-economic conditions and foundations of development. The issues related to specifi c aspects of research policy, which are traditionally the main concern of the Research and Development Council, will only receive a cursory glance.
The terms innovation policy, economic policy, or public policies in general used in this report do not represent any particular political party’s policies. The authors use them, proceeding from the classical public administration perspective, thus proposing a certain universal foundation that does not depend on the political leanings of the parties that form the Government or fi ll the seats in Riigikogu [Estonian parliament].