Labor costs have grown 2.5 faster in Estonia compared to European average
ABB has invested nearly €9 million in its Jüri plants, opening a wind turbine service center and a large motor line. Estonia needs industry with skilled jobs, the economy minister said.
The wind turbine service center will serve all of Europe and is ABB Group's only facility of its kind worldwide. The new production line for synchronous stators used in motors and generators enables the manufacturing of parts for very large motors, making the Jüri plant the biggest of its kind in Europe.
"Our investment over the past year totaled nearly €9 million. I think that's quite significant in today's economic climate. In the large motor and generator factory, we've already hired 50 people, creating new jobs, and another 10 positions in the service center. In large part, we train these people ourselves. Of course, we expect engineering knowledge or skilled labor, but mostly we have to provide training. We are definitely working on automation and robotics. Recently, we added a highly specialized welding robot and we'll certainly continue in that direction," said Argo Aavik, head of ABB's motors and generators business unit.
Since three new factories are opening in Estonia this week alone, Economy Minister Erkki Keldo (Reform) said the industrial sector appears to be gaining strength.
In Estonia, labor costs have risen 10 percent this year due to inflation, compared with an average of 4 percent in the European Union. According to Keldo, this means Estonia is no longer a low-cost manufacturing country and needs more specialists.
"When we talk about economies of scale, it will be very difficult for Estonia to stay competitive in the future. We're talking about high added value, skilled workers and research and development. It's crucial that more young people choose vocational education so that training better matches the needs of the labor market in the future. And of course, we need a systematic focus on studying science and math," Keldo said.
Raul Eamets, chief economist at Bigbank, said wage growth has outpaced productivity.
"When wages grow faster than productivity, businesses are left with no choice but to automate and digitize. If they don't, they may not survive in this competition at all," Eamets said.
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Editor: Marcus Turovski, Marko Tooming
