Ida-Viru County is one of Estonia's most important industrial regions, whose economy has historically been closely tied to the oil shale industry and the energy sector. For this reason, the region has been designated strategically important at the national level and its development is guided through targeted action plans. In recent years, this has been primarily linked to the just transition plan, which aims to shift an economy dependent on fossil resources toward a more environmentally sustainable and innovative model.

In 2024, Ida-Viru County had 44,000 employed residents, accounting for about 7 percent of all people working in Estonia. At the same time, the county had the country's lowest employment rate (57.5 percent) and the highest unemployment rate (14.4 percent). Among the unemployed, people with low levels of education and limited Estonian-language skills were overrepresented. About one-fifth of those employed worked in manufacturing, which employs around 9,000 people. This was followed by trade, education and healthcare, which together account for more than half of employment in the region.

Silja Lassur, research lead for the OSKA study at the Estonian Qualifications Authority (Kutsekoda), said that while sector-based forecasts have been compiled in the past, this is the first time researchers have produced a regional forecast. "In the case of the regional forecast, we relied on scenarios developed together with researchers from TalTech and the University of Tartu. The scenario also takes into account the activities of the Just Transition Fund during the current investment period directed to the region," she explained.

According to the forecast, the number of employed people in Ida-Viru County could decline by about 1,200 over the next decade, or roughly 3 percent. At the same time, around 14,400 people will retire from the labor market, meaning that about 13,200 new workers will be needed, including more than 3,000 top specialists and nearly 7,000 skilled workers.

The largest declines are expected, for example, in the trade and clothing industries, which are not competitive on the global market due to input costs, as well as in education. "This is because the number of children in the region is decreasing, which means fewer teachers and kindergarten teachers are needed," Lassur explained.

Oil shale production will also decline slightly, although the largest contraction in the oil shale industry has already taken place. "Over the next decade, no major decline is expected in this sector," Lassur noted.

In the fields of technology and manufacturing, the forecast points to a critical bottleneck: the projected supply of graduates from formal education will not meet demand over the next decade, resulting in a shortfall of around 500 top specialists and 1,000 skilled workers.

The health sector, especially social care, is also critical, as the population is aging and more workers will therefore be needed.

Employment in the tourism sector is also likely to grow. "A considerable number of investments are coming to the region, both in hotels and in the development of various interesting activities," Lassur said.

At the same time, several bottlenecks are emerging that hinder efforts to meet labor demand. Four interconnected factors shape the county's labor market: an aging workforce, a shortage of young people and outward migration, difficulties filling top specialist and highly qualified positions and a large share of unemployed and economically inactive people. A key problem is often a mismatch between skills and employers' changing needs, as well as insufficient Estonian and English language proficiency. This limits both retraining opportunities and movement into higher-skilled jobs.

The study also offers recommendations for policymakers. Lassur said retraining and continuing education opportunities are particularly important so that adults can quickly reskill. "Since some sectors are shrinking and people will need to move into other sectors for work, this is especially important."

Attention must also be paid to unemployed and economically inactive residents. "To bring them back into the labor market, it is necessary to find good retraining opportunities that combine language learning, basic skills and practical training," Lassur said.

A longer-term perspective for the region is also important. "We see that development should continue to be supported through policy measures even after the Just Transition Fund's financing period ends. One small intervention will not change much in the long term; this needs to be done over a longer period," she said. Lassur also stressed the importance of investing in housing and modern urban space so that young people would want to remain in the region.

Researchers will review the completed forecast in two years.

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