Ursel Velve, chair of the management board at the Estonian Business and Innovation Agency (EIS), said Wednesday that the organization is streamlining its service portfolio — from more than 200 services down to 50 of the most impactful — as part of its updated strategic focus.

There are four key criteria EIS is using to determine which services to retain: whether a similar service already exists on the market, whether the service's cost outweighs its impact, whether the service aligns with EIS's strategic goals and whether it supports the core of a company's development efforts, rather than simply acting as a booster.

"A business plan needs to stand on its own and then the state can step in to provide support so companies feel confident enough to pursue R&D, make investments and export," Velve said. "We will certainly continue reviewing and updating our service portfolio."

Velve added that EIS aims to shift from being a distributor of grants to a provider of development financing, which means a smaller share of services will be grant-based.

"The annual volume of funds directed to the market is between €450 million and €600 million. If banks aren't willing to finance something, EIS can step in. But once a company reaches a certain level of maturity, that money can be redirected to the next growth-stage business," Velve explained.

Loan volumes will increase from €16 million to €57 million annually and guarantees from €130 million to €184 million.

Over the next three years, EIS will focus on four priority areas: research and development, exports, investments and housing.

Among the measures planned for 2026 are a €130 million Social Climate Fund to assist low-income residents, a €100 million rental housing measure and an €80 million applied research support scheme.

Additional funding includes €24 million in structural funds for the defense sector, €25 million for innovation loans, €20 million for research and development projects of pan-European interest and €14 million in Norwegian support for green technology development.

According to Velve, the goal is to make EIS a strong competence center, offering services with minimal bureaucracy and fostering substantive dialogue with businesses. The agency also plans to increase the share of employees with backgrounds in the natural sciences, precision sciences and economics.

"It's important that our administrative costs don't make up a large portion of service prices," Velve emphasized. She noted that while personnel costs made up 5.5 percent of EIS's operational budget this year, that figure is expected to fall to 3.9 percent next year, with a long-term goal of 2 percent.

EIS currently employs 350 people. Under the new strategy, the agency has already reduced its workforce by 60 this year.

Administrative burden is expected to decrease and EIS will begin measuring the impact of every euro it invests. The agency also plans to undergo a Pillar Assessment audit, which would enable it to receive direct funding from the European Commission in addition to structural funds.

To track its effectiveness, EIS's primary performance metric will be labor productivity, both at the company and sector levels.

Last year, EIS's clients generated €45,900 in value added per employee. Velve said that figure will serve as the baseline, though the future target level is still being defined in collaboration with researchers. A specific target is expected to be set by the end of the first quarter.

The agency is also emphasizing the role of technology, with its greatest impact expected in digitalization and automation.

"We'll be tracking how investments in digitalization and automation grow with EIS's support," Velve said. "But we'll also look at whether investments in R&D lead to increases in the volume of tangible fixed assets."

Seventy-five percent of EIS's resources are directed toward priority clients — namely, exporters and investors. These clients are served proactively through dedicated account managers. For others, services will primarily be accessible via a new self-service platform currently in development.

EIS was established in January 2022 through the merger of Enterprise Estonia and KredEx. Its strategic direction is determined by the Ministry of Economic Affairs.

--

Follow ERR News on Facebook and X and never miss an update!