Digitalisation and Convergence – The Example of Estonia

Szentmihályi, Szabolcs (2023) Digitalisation and Convergence – The Example of Estonia. FINANCIAL AND ECONOMIC REVIEW, 22 (1). pp. 143-158. ISSN 2415-9271

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Abstract

Estonia achieved development while maintaining balance through comprehensive, innovative competitiveness reforms, with significant economic convergence between 2010 and 2019. The development level of the Estonian economy rose from 64.2 per cent of the EU average to 82.3 per cent during this period, the second highest change in the East-Central European region in the last decade. On the whole, the room for manoeuvre for Estonian macroeconomic policies was very limited over the past two decades as a result of the fixed exchange rate system and later introduction of the euro. As a result, the growth path that ultimately led to rapid convergence had to be pursued in the area of competitiveness and structural policies. Estonia found the opportunity to break through in digitalisation and transformed itself into the region’s digital leader through symbolic gestures and practical steps, not only leading to improvement in productivity but also contributing to the creation of world-renowned companies.

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