SEB Business Barometer: Companies of Lääne County are interested in innovation of products and services

The survey “Business Barometer 2015” conducted by SEB in October and November 2014 has revealed that no changes have taken place in optimism concerning turnover increase among small and medium-sized enterprises in Lääne County. Interest of the companies in Lääne County in innovation of products and services has increased, while interest in expanding on export markets is modest.

The companies planning to increase their turnover by at least 15% next year were classified as optimistic in the survey. In Lääne County, the number of optimists has remained the same, reaching 7% of companies.

The research covering 3,000 small and medium-sized enterprises (SMEs) in Estonia revealed that average business optimism in Estonia has decreased from 25% to 20%. By counties, the companies of Harju County are still the most optimistic. In sectors, trade and industry are continuously on optimistic position, and the construction sector was included as well. Last year, it belonged among the most pessimistic sectors.

“The figure of optimism concerning turnover increase of companies in Lääne County is the lowest in Estonia and the situation was similar in the previous year as well. However, we cannot expect economic stagnation of the region basing on a single figure, because local companies are planning to create new jobs and have significant interest in innovation,” said Tiina Ormisson, the Manager of SEB’s Western region.

Increasing interest in export, few are planning major investments
Compared to the previous year, the percentage of the companies in Lääne County, who are planning to enter new or expand on the existing export markets, has increased (from 13% to 16%). Investment plans of the companies in Lääne County have slightly decreased: while 22% of the companies were planning to make investments exceeding 30,000 euros in 2014, only 13% of the companies in Lääne County are planning to make similar investments in 2015. This is 3 percentage points less than the Estonian average figure. In Estonia, there are still examples of business regions with active investment plans, such as Ida-Viru and Järva counties, where every fifth company is planning investments. Investment readiness is the lowest in Valga County, where only every tenth company is planning investments.

“General expectations of the region for the coming business year leave space for positive, as well as negative assumptions, and it is probably most rational to remember that any situation and all economic conditions always provide space for entrepreneurship and possibilities for major changes, i.e. our economic future (and that of our companies) is in our own hands,” said Ormisson.

Fewer new employees, more interest in innovation
The surveyed companies plan to create almost 1,500 new jobs in total in 2015 in Estonia. This is an unexpectedly high figure, taking account of the current economic situation. Only 4% of Estonian companies expect a decrease in the number of employees. Last year, 12% of the companies of Lääne County planned to employ new employees; now the relevant figure is 7%. The average figure of Estonia is 23% (27% last year).

The number of Estonian companies planning innovation has increased from 59% to 73%. In addition, the companies in Lääne County find innovation of products and services essential, and 70% of the companies are planning innovation this year, which is a 16-percentage-points higher indicator than in the previous year.

According to the research, 36% of Estonian companies are planning innovation of a product or a service, 24% development of employees and 11% a change in their business model. In a year, the interest in innovation has significantly increased in the Estonian construction sector, which is planning to intensify training and development of employees. The most innovative field is still industry, where competition is tight and companies are operating extensively on export markets. Innovation plans are the lowest in agriculture.

ABOUT THE RESEARCH:
In October and November 2014, SEB conducted their third counselling project. Within the framework of the project, the „Business Barometer 2015“ survey of Estonian SMEs was conducted, in order to map expectations of the companies for the coming business year. The research covered 2,837 small and medium-sized enterprises. 60 companies of Lääne County also participated in the research. Most respondents in Lääne County were companies from the agriculture and forestry, trade, industry, education and cultural sectors.

Further information:

Julia Piilmann
Head of Communications
Marketing and Communications Division
SEB Pank

Phone +372 665 5340
Mobile +372 512 4808
Address Tornimäe 2, 15010 Tallinn Estonia
E-mail julia.piilmann@seb.ee 
www.seb.ee