SE21Sustainable Estonia 21

Estonian National Strategy onSustainable Development

Published by: Estonian Ministry of the Environment

Website: http://www.envir.ee

Contact person: Ms.Ülle Vaht, e-mail: ylle.vaht@envir.ee

Translated by: Marina Maran

Layout by: OÜ Arhitektuuri Domeen

This book has been printed on 100% recycled paper

ISBN number 9985-881-30-3

Estonian National Strategy on Sustainable Development Sustainable Estonia 21 was developed

under supervision of the Estonian Commission on Sustainable Development

Tallinn Pedagogical University (currently Tallinn University) was leader of the consortium developing the Strategy

Estonian National Strategy on Sustainable Development Sustainable Estonia 21 was approved

by Estonian Government: March 17, 2005

by Estonian Parliament (Riigikogu): September 14, 2005

Tallinn 2005

Sustainable Estonia 21Estonian National Strategy on Sustainable Development

Approved by Riigikogu (Parliament of Estonia) on September 14, 2005

Contents 2

Introduction 4

Chapter IContext and goals 9

Context 9

Goals 13

GOAL 1: VIABILITY OF THE ESTONIAN CULTURAL SPACE 13

GOAL 2. GROWTH OF WELFARE 17

GOAL 3: COHERENT SOCIETY 23

GOAL 4: ECOLOGICAL BALANCE 27

Relations arising in moving towards the goals 31

Summary 34

Chapter IIDevelopment options of Estonia 39

Introduction 39

Business-as-usual scenario 40

Conservative development path 42

Social partnership 44

Summary 46

Contents

Chapter IIISynthesised scenario: Estonia as a knowledge society 49

Characteristics of the scenario 49

Preconditions 51

Positive impact 52

Threats 53

Judgement of sustainability 54

Chapter IVCourses of action 57

Introduction 57

Course of action A: Transition to knowledge-based state governance 58

Baseline situation 58

International experience 59

Possible solution for Estonia 61

Course of action B. Intellectual and social support to knowledge society 64

Education 64

Research, development and innovation (RD &I) 73

Human-nature relations 76

Social support to the knowledge society 78

Introduction

Sustainable Estonia 21 (SE21) is a developmentstrategy devised on the basis of the Terms of Referenceapproved by Government Resolution No. 33 of 24 July2001 and set out in procurement contract No. 2-11-13/146. According to the Terms of Reference, SE21is a strategy for developing the Estonian state andsociety until the year 2030 with the aim of integratingthe success requirements arising from globalcompetit ion with the principles of sustainabledevelopment and preservation of the traditional valuesof Estonia. Pursuant to the Terms of Reference, SE21is not an academic survey but a proposal of goals andcourses of action that could provide a foundation forpublic understanding on sustainable development ofEstonia. It is a development programme covering allof societal life, not a strategy focusing on ecologicalissues only. According to the Terms of Reference, SE21is an integral conception of the society, which doesnot go deep into the specific problems of any individualsphere of life but defines the movement of Estonia asa whole on relatively general scales, such asindividualism-solidarity, mobility-stability, innovativity-traditionality, etc.

The SE21 strategy is clearly focused on thesustainability of Estonia. The main task of the strategyis to answer the question of what should be done to

ensure successful functioning of the Estonian societyand state also in the longer term. The idea of thestrategy is to suggest ways and solut ions forharmonised activity of various social actors in ensuringthe sustainability of Estonia. As SE21 has a longertime horizon (30 years), it cannot focus only on today’sconcerns. An important aim of the strategy is toestablish the capabilities and mechanisms in thesociety that would ensure the persistence and successof Estonia also in new and unexpected circumstances.Considering the inevitably changing environment, SE21is not intended as a finished product, a document thatwill become an unequivocal code of practice upon itsapproval. SE21 is designed as a feedback-based andperiodically self-correcting societal process, in a waya mechanism of self-management of the society. Thecore of SE21 consists of (commonly valued)development goals, which are expected to be realisedwith contribution from a broad range of actors andwith funds from a variety of sources.

Alongside the Terms of Reference for SE21, thestrategy builds on:

1. The principles for preparing national sustainabledevelopment strategies (NSDS) developed in theEuropean Union member states and in other countries.Since the UN Conference on Environment andDevelopment held in 1992 in Rio de Janeiro, whichcalled for the preparation of national development

strategies, many countries have prepared the relevantdocuments and a certain tradition of strategic planningin the context of sustainable development hasdeveloped. As this sphere is still characterised by asignificant diversity both in substantive and inassessment terms, also the NSDS documents ofdifferent countries are rather varied.2. The principles of the European Union Strategy forSustainable Development, see the web site at: http://www.europa.eu. int /comm/environment /eussd/index.htm3. The apparatus of concepts and approachesdeveloped under the sustainable developmentparadigm and the analyses and studies on sustainabledevelopment carried out in Estonia.4. Development plans and strategies already drawnup in Estonia (over 60 documents).5. Modern social theoretical conceptions that seekto relationalise and comprehend the social, economicand ecological development of the Western societalmodel, its risks and challenges (U. Beck, A. Giddens,M. Castells a. o.).

SE21 was drawn up mainly by means of expertassessments based on studies conducted and datagathered earlier in the relevant fields. As set out inthe Terms of Reference, the preparation of SE21 didnot involve the conduct of new studies. SE21 wasprepared by five working groups with the participationof over 50 experts of different spheres of life. In parallel

with the work of expert groups, the key aspects of thestrategy were discussed with social partners,stakeholders and the public. In total, 32 seminars,round tables and discussion events were held withvarious partners from outside the expert groups. Manyof the ideas suggested during the discussions havebeen incorporated into this document.

Stage I of the work (March-May 2002) consisted indefining the general scheme of the strategy andspecifying the most important contextual (global andin-count ry) impacts and development t rendsinfluencing the state of Estonia in a 30-yearperspective. Stage II of the work (June-August 2002)consisted in formulating the national developmentgoals and proposing mechanisms for theirachievement. In stage III, the indicators characterisingthe goals were described, the interactions betweenthe goals were analysed and the possible developmentscenarios outlined. A so-called synthesised scenariowas outlined in stage IV and courses of action wereproposed for its realisation.

The strategy SE21 was drawn up by a consortiumconsisting of the following agencies:Institute of International and Social Studies of TallinnUniversity;Institute of Ecology of Tallinn University;Estonian Institute for Future Studies;Lõhmus, Haavel & Viisemann Ltd.;Association of Estonian Engineers.The Estonian Institute for Sustainable Development(SEI-Tallinn) participated as a partner.

The steering group of SE21 consisted of: MatiHeidmets, Andres Jagomägi, Ene Kadastik, MarjuLauristin, Mai Luuk, Ahto Oja, Jaan-Mati Punning,Ruuta Ruttas, Külliki Tafel, Erik Terk, Rain Tamm andRaivo Vetik.

The following experts participated inSE21 working groups:Toomas Asser , Peeter Ernits, Arvi Hamburg , LeeniHansson, Mati Ilomets, Jüri Jagomägi, Mari Jüssi,Ülo Kaevats, Mihkel Kangur, Jüri Kann, Tiiu Koff, ErikKosenkranius, Ilona Kõrgema, Heikki Källu, Olev Liik,Piret Lilleväli, Heino Luik, Leo Mõtus, Heldur Meerits,Kaia Oras, Hannes Palang, Marje Pavelson, MargusPensa, Ruuben Post, Ivi Proos, Tõnis Põder, PeepRatas, Toomas Reisenbuk, Hanno Riismaa, VelloRosenberg, Juhan Ruut, Lembit Rägo, Georg Tamm,Jaan Tamm, Olavi Tammemäe, Anu Toots, MargusUudam, Raivo Vilu, Heido Vitsur, Rein Vöörmann

SE21 interim reports were commented by:Irja Alakivi, Andres Harjo, Allan Kokkota, ToomasLiidja, Matti Masing, Toivo Palm, Ülle Puusta, AnneRandmer, Erna Sepp, Enn Siim, Marek Tiits, LembitTuur, Arvo UkleikaThe final text of SE21 was edited by Mati Heidmets,Marju Lauristin, Erik Terk and Ruuta Ruttas.

The authors of SE21 wish to thank all who participatedin the various stages and contributed to the discussionsheld in the course of the work.

Chapter IContext and goals

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9

Chapter IContext and goals

Context

As the first step towards designing a sustainabledevelopment strategy for Estonia, the key assumptionsand context factors which Estonia’s development in thenear decades will depend on need to be outlined.Continuation or deepening of the following globaldevelopment trends having an impact on Estonia’sdevelopment can be assumed:1. Continuation and deepening of globalisationprocesses. The area of open market economy isexpanding, which in turn implies an increasing influenceof international corporations, increasing globalisation ofeconomy and politics, sharpening competition foremployment, growing pragmatisation of politics, everstronger domination of the English-speaking global(economic, scientific, cultural) elite.2. Increasing appreciation of local identity. As acounter-reaction to globalisation, local and regionalattempts to diverge from globally spreading trends, tovalue the local language and culture and to integratethe global and the local are strengthening worldwide.Regions and states that better succeed in cultivatingtheir identity will gain an important competitiveadvantage.

3. More differentiated population picture,increasing individualism. A continuing rapid growth ofpopulation in developing countries vs. negative growthand ageing of population in developed countries will resultin an increasing external pressure for immigrationcombined with the need for additional workforce.Transformation of the traditional family model intodifferent (more individual-centred) models. The valuepicture will become more individual-centred andhedonistic, time will become a central life value. Periodicalretraining and 2–3 careers during one’s lifetime will bean ordinary life model.4. Continuation of consumer society, expansionof the model of welfare society. As developmentresource (energetic natural resources, consumptiondemand) will suffice in the near future and the openeconomic area will increase, also the production-consumption cycle will accelerate. There will be a shifttowards an increase in the share of services related toindividual welfare/development (tourism, recreation,health, entertainment, counselling), in particular for theelderly. Needs disseminated from the centre vs. theimpossibility of the periphery to meet them will becomean important source of tension. The areas covered withthe model of welfare society will expand.5. Increasing differences, growing polarisation.Continuing regionalisation – an increase in regionaldifferences (in incomes, way of life, attitudes) bothglobally and nationally; growing disparities betweendevelopment centres and peripheries both in the

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economic and cultural sense. Perpetualisation ofdisparities and their periodical canalisation intoconfrontation (with terrorism as an extreme form). Thepower and energy of international politics will be spenton reconciliation of the (ever distancing) opposites/differing interests: north-south, poor-rich, global-local,profit-environment, etc.6. Accelerating technologisation. New technologies– IT advances, biotechnology, social technologies – willcontinue to be the key areas and development engines.Internet will become a total communication channel.Technological research and development will become thekey areas of central economy. Social innovation or societalrenovation will gain equal importance with technicalinnovation, driven by the knowledge that (a society) whodoes not renovate itself will lag behind. Technologicaldifferences will become the main watershed betweenthe developed and developing world.7. Increasing pressure to counterbalance thedrawbacks of consumer society. Actions to ensureecological balance (environmental conventions, regionalagreements, protection programmes, etc.), to mitigatedevelopmental differences (Tobin’s tax, regional policy,development aid), and to protect local cultures andcounteract to Anglo-American cultural monopolism(stricter language laws, immigration quotas) willescalate, international anti-globalisation movement willstrengthen. As a positive programme – economicmechanisms promoting ecological technologies will beproposed and introduced.

8. Ideology of hot spots. Political approach todevelopment issues continues not to be systematicand forward-looking (i.e. in accordance with thesustainable development paradigm) but focused onindividual key issues or “hot spots” – AIDS andimmigrants, terrorism and climate change, lack ofwater and educational renovation. Resources andactivity are channelled into individual hot spots, whileall the rest will recede into the background.9. Advantages of strategic planners. States andsocieties capable of moving from the responsive or hotspots’ scheme to the model of strategic planning, whonot only respond to current concerns but are capable ofsetting common and longer-term goals and mobiliseresources for achieving the goals, will continue to have asignificant development advantage. Societies asintegrated actors (societies capable of making decisionsand realising their goals) have obvious advantages in anopen and ever more complex world.

In terms of the international political context, the strategyproceeds from the following general assumptions:

1. Estonia is part of the Western political andeconomic space. We assume that the integrity andinfluence of the European Union and NATO will persist.2. Global balance. We assume that no persistentlyopposing groupings will form among Western countriesand no new confrontation will develop in relations betweenthe Western world and Russia. Both the economic and

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political influence of Southeast Asia is expected toincrease, leading to the establishment of a new globalpolitical, economic and military balance.3. Ecological disasters are not expected to happen,while environmental requirements will becomeincreasingly stringent.4. Estonia is an open and integrated society.We assume that the development of Estonia will beconsiderably stronger connected with / influenced bydevelopments in the world’s political, economic andsocial space, in particular in Europe and the Trans-Atlantic space.5. Concerted action. We assume that realisation ofthe sustainable development model for Estonia will bepossible through blending into global developments, notthrough setting goals that ignore global developments orare in conflict with them.

Estonia’s capacity in 2005 to function in a sustainablemanner in the above-described context is characterisedby the following circumstances:

1. Conflict between external expectations andinternal capability. Our main partners in an openEuropean space are mature societies and countrieswith long experience and tradition. Staying and beingsuccessful in such context requires similar qualitiesfrom Estonia – a well-functioning democracy and strongcivil society, primacy of society over state, aprofessional state apparatus, defined and protected

national interests, equal rights of groups, domesticpeak competence in key areas, powerful internationalcommunication, etc. At the same time, Estonia’scapacity to function as a strong state and an integralsociety is only just developing. Therefore, it is a centralprecondition for Estonia’s sustainability that the countryestablishes itself (rapidly and effectively) as afunctioning state and efficient/coherent society. Theonly alternative is the status of an underdevelopedperiphery of the European Union whose main role isto absorb assistance funds and who has almost nosay in decision-making.2. Sense of danger. Despite the undoubted successof Estonia during the first decade of its new independence,a clear sense of danger about Estonia’s sustainabilityhas taken hold of a big part of the population. This isconnected, on the one hand, with Estonia’s perceivedweakness to function in an open European space, buteven stronger with several internal trends in the societythat make the country’s persistence questionable:population decline and deterioration of public health,coherence of society fallen below the critical limit,fragile cultural and political identity, weakness of thestate and administrative incapacity as a hindrance todevelopment, etc.3. High expectations. The needs and wishes ofthe people of Estonia are considerably higher than ourcurrent reality can meet. This concerns both the economicpossibilities, a safe living environment and smooth stategovernance. Catching up with the EU average quality of

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life is indispensable in the interests of sustainability. Alengthy stay among the countries with the lowestperformance in (also the enlarged) EU will be clearlydestructive for Estonia.4. Willingness for concerted action. Driven by thesense of danger on the one hand and a relatively highlevel of pretensions on the other hand, an expectationfor concerted action to strengthen the society and stateand thereby increase our sustainability has developed inthe Estonian society. A perceived sense of danger alongwith a desire for accelerated development has acted asa starting point and motivator for mobilising resourcesand finding new development opportunities in severalcountries (Ireland, Finland). According to our judgement,there exist today sufficient resources and willingness foragreeing on common goals and taking concerted actiontowards achieving the goals also in Estonia.Proceeding from the above context description andan overall assessment of the situation of Estonia, fourdevelopment goals of central importance for thesustainability of Estonia are presented hereby.According to the Terms of Reference for SE21,development goals are “… long-term goals based onthe principles of sustainable development …derivedfrom the international context and the Estoniansituation” (Terms of Reference, subsection 2.1)

The proposed development goals of Estonia werederived from the following notions:1. Common values. Development goals must

express the most general objectives or common valueswhose achievement is important for the majority ofthe people of Estonia.2. Persistence and continuity. An essential featureof development goals established in the context ofsustainability is their orientation to ensuring persistenceand continuity. In that regard the goals may differ in theiremphasis from those set in other general strategies(national development strategy, budget strategy, etc.).3. Existing goals and objectives. Development goalscannot be “worked out” and imposed upon the society.They have to be existent in the society itself and canonly be formulated and specified (through discussions,debates). Both the essence and formulation of thedevelopment goals has to meet the expectations andnotions of the majority of the Estonian society aboutthe future of Estonia.4. Bindingness. There is sense in setting goals only ifthe goals are important enough to become binding. Inother words, agreement upon a goal implies alsowillingness to make efforts, to take action and spendresources to achieve the goal

The four development goals for Estonia proposed bythe experts of SE21 are presented and specified below.The goals are described through the followingcomponents: essence of the goal, its components andindicators, threats to the achievement of the goal,expected target condition by the year 2030, keymechanisms for achieving the goal.

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Goals

GOAL 1:VIABILITY OF THE ESTONIANCULTURAL SPACE

EssenceAccording to the Constitution of the Republic ofEstonia, the state of Estonia shall “ ensure thepreservation of the Estonian nature and culture throughthe ages”. Sustainability of the Estonian nation andculture constitutes the cornerstone of sustainabledevelopment of Estonia. The development goalpostulating this has a fundamental meaning, thepersistence of Estonianhood is the highest priorityamong the development goals of Estonia.

The modern science-based notion does not view nationas biological kinship based on a common genetic root(origin) but as cultural association based on a commonculture, common perception of history and commonlanguage. Preservation of a nation “through the ages”is conditioned first of all on the existence of culturalmechanisms that enable the Estonian national identity(cultural cohesion) to persist and ensure that thevalues, traditions, behavioural patterns and elementsof way of life intrinsic to the Estonian national cultureare passed from generation to generation and alsoaccepted by new set t lers. The core of suchmechanisms is national-language education and

cultural creation (incl. research) based on the nationallanguage, and the functionality of national-languagecommunication and national cultural values andbehaviour patterns in everyday life and in all spheresof life.

In the context of SE21, sustainability of the Estoniannation is expressed through the preservation of theEstonian cultural space. The Estonian cultural spaceis defined as an arrangement of social life based onEstonian traditions and the Estonian language. Thisculture is carried by people identifying themselves asEstonians and communicating in the Estonianlanguage. The Estonian cultural space is characterisedby Estonian tradition based practices in behaviour, inrelationships and in the mode of living. The Estoniancultural space has materialised in the Estonian naturaland living environment and in the Estonian signenvironment (communication language, symbols,personal and geographic names, colour preferences,building and home design practices, generally knownpieces of art and literature and historical figures,historical anniversaries and calendar, etc.)

Thus, the Estonian cultural space in the present (socialscientific) meaning is a significantly broader conceptthan the spheres of direct creative activity or folkculture. It is the living space of Estonianhood with allof its components and attributes. Preservation of thecultural space is a precondition for the preservation of

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national identity, which in turn motivates people bothto use the national language and to hold in esteemthe national values in a changing and globalising world.

Components and indicatorsof the goalSustainability of cultural space is assessed using thefollowing three criteria (sub-goals) along with theirindicators.1. Extent of the Estonian cultural space. Indicators:number of carriers of the Estonian culture, theirlocation (in Estonia, outside Estonia), degree ofmaterialisation of the Estonian culture (in architecture,landscapes, sign environment), prominence of theEstonian culture, its translatability and distributionoutside of Estonia. The prominence and broadaccessibility of the Estonian culture along with itsincreasing translatability and dissemination outsideEstonia are the highest priority from the point of viewof the sustainability of the Estonian culture.2. Functionality of the Estonian culture. Indicators:intensity of the use of Estonian culture elements (incl.language) in different spheres of life (everydaycommunication, research, education, legislation,politics, technology, etc.), i.e. the degree to which theEstonian language, culture treasury, tradit ions,behavioural and communication patterns have takenroot and are necessary and usable in everyday lifeand for the functioning of various institutions of thesociety.

3. Temporal continuity and plasticity of theEstonian culture. Indicators: capability of culturalmemory to act as a link between past experienceand the future, openness of national culture to thenew, enrichment and interpretation capability ofnational culture on the world’s changing culturalscene, endurance of cultural memory (tradition) andapplicability of cultural memory in relation to newdiscoveries, new spheres, new technicalenvironment , new cultural phenomena, newrelat ionships and modes of communicat ion.Translation capacity (incl. in the technical sense)and translatability of the Estonian language andculture in the globalising multi-cultural environment.

ThreatsPreservation of the Estonian cultural space and therebyalso the long-term viability of the Estonian nation isthreatened in today’s context primarily by:1. A drop in the number of Estonian-speakers(demographic crisis);2. The Estonian language and culture beingoutcompeted due to the increased influence of otherlanguages and cultures in the Estonian cultural space;3. A certain stagnation of the Estonian language andculture, their failure to adapt to the requirements ofthe new global civilisation (information society andtechnological culture), which reduces the functionalityof national culture and weakens its motivation forpersistence;

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4. Vulgarisation of the Estonian language and culturedue to the influence of international junk culture;5. A lack of resources endangering many spheres ofculture that need state support in a small nation likeours. A lack of resources for storing the Estonian-language cultural treasury and for ensuring itsaccessibility may lead to the loss of a big part of ourcultural memory and disruption of cultural continuity.It is essential for the preservation of our culturalmemory and sustainability of the Estonian culturalspace that the most important cultural texts (folkloretreasury, cultural history archive, music, Estonianclassical literature, Estonian visual arts treasury,recordings of theatre performances, Estonian films,radio and TV archive, etc.) are made available in thedigital environment.

Desired state by the year 2030Stabilisation of the demographic situation inEstonia. The permanent population has stabilised at1.0–1.5 million. Integration mechanisms are in place,ensuring the integration of new settlers into theEstonian cultural space. Estonianhood is valued,Estonia is the preferred living and working place forthe younger generation. The living environment ofEstonia is favourable for importing competence fromthe outside world.

Development of a double identity as an Estonianand a European. With Estonia’s integration into

Europe, but also due to persisting tension betweenEurope and some other large communities, people inEstonia are identifying themselves widely as Europeans(“ I am a European” ) alongside their ethnic self-identification and valuation (“ I am an Estonian”).Estonians are accepted as Europeans both in theircharacter and deeds.

Fear of extinction has disappeared. Adaptabilityof culture, incl. its reproduction mechanisms andrenewal capacity, has reached a level that allowscontinuous supplementation of the cultural treasuryand its transfer to new generations of culture carriers.The Estonian culture has reached a dynamic balanceand sustainability in its relations with world culture,existential fears have been overcome.

Virtual Estonianhood. An essential part of theEstonian culture has “ moved to the virtualenvironment” . Located in electronic archives,museums and libraries, it is internationally accessibleand translatable into other languages, thus beingaccessible and understandable to everyone locally andto all interested people worldwide.

Contributing globalisation. The Estonian experiencein synthesising the national and global culture and inapplying socio-technological know-how is spreadingand is usable also outside the Baltic countries. TheEstonian case has been reflected and employed in

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1 Capacity of culture to critically analyse and evaluate itself

several smaller cultural spaces. This is Estonia’srecognised contribution to the preservation of thediversity of the globalising world.

Key mechanisms for achieving the goalEducatedness. To ensure that an education in theEstonian language and related to the Estonian cultureis provided in Estonia, while being internationallycompetitive, grounded on developments in modernsciences and technology and connecting the Estonianculture with world culture. Such education will integratethe national identity with professionalism, social skillsand the global cultural horizon. Education (incl. familyeducation, informal education, media) will promotethe valuation of ethical values of ethnic (Nordic) origin, atraditional human-nature relationship, a natural lifestyleas part of the modern mode of living and socialisationprocess. Estonian (Northern European) culture elementswill become stronger regulators of everyday life than theyare at present, which will lead to increased harmony andbalance of human activity with the environment, increasedself-regulation and self-control and a rise in the generallevel of civilisation (according to N. Elias).

Reflexivity. Raising of the renewal capacity and criticalreflexivity1 of the Estonian culture. This will be ensuredby act ive part icipat ion of Estonian-speakingintelligentsia in international and internal professionaland public communication; development of the

Estonian philosophic, scientific and professionallanguage; holding of professional and scientificdiscussions and public socio-critical and culturaldisputes on Estonian-language media. This will resultin an increase in the diversity and internal dialogicalityof the Estonian culture, stimulation of the formationof new notions and interpretations, modernisation ofthe historical conscience and world picture ofEstonians.

Communicativity. Usability of the Estonian culture ininternational communication and its translatability intoother languages and codes. This includes the spreadingof knowledge of several foreign languages in Estonia;availability of archivals and cultural texts important forthe Estonian culture in a digital format; introduction anddissemination of an important part of the Estonian culturein the main world languages; integration of the Estonianhistory and cultural memory with the European and globalcultural memory and historical conscience; participationin international research, technological and culturalprojects; Estonia becoming an important place on theglobal cultural map and in the global cultural calendar.The inevitable closedness and danger of self-centrednesstypical of a small culture will be overcome by digitisingthe Estonian cultural treasury, but also through investmentinto culture and through increased openness of themodern Estonian culture. Different from other countries,tolerance to cultural differences will increase both

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internally in Estonia and in a broader context. The Estonianculture will become more attractive among the younggeneration but also among immigrants thanks to itsdiversity and translatability. People will be seekingspecificity in the overall uniformity of the way of life, findingit in national culture.

Innovativity. An increased renewal capacity of culturewill facilitate the integration of the Estonian culture intothe modern technological civilisation and contribute tothe understanding of central global issues – from geneticsto the Muslim world. New forms of communication willbe found. The capability of the Estonian culture to identifythe elements of distant cultures that have historicallyinfluenced the country and to make creative use ofthese elements in developing our own culture willincrease, as will the capability of incorporating newscientific and technological ideas and global influenceswithout losing our own identity. Innovativity of theEstonian culture, its capability of generating new ideasand meanings at an internationally renowned level,constitutes Estonia’s contribution to the general cultureand will become an important factor in increasing thespecificity and attractiveness of Estonia and instimulating cultural exchange. Dynamic preservationof the specificity of the Estonian culture (incl. the mainelements of local exotics) and maintenance ofpossibilities for free and right choices is the key to theprominence of Estonia and Estonians (as individualsgrowing in this specific environment).

GOAL 2:GROWTH OF WELFARE

EssenceWelfare is defined as the satisfaction of the material,social and cultural needs of individuals, accompaniedby opportunities for individual self-realisation and forrealising one’s aspirations and goals.

From the point of view of the Western ideology ofindividualism, welfare of an individual is a value in itself.Also the definit ion of sustainable developmentformulated by the Brundtland Commission reflects themindset according to which the realisation of thewelfare aspirations of one generation should not impairthe possibilities of future generations.

Although also other values have to be taken intoconsideration in striving for welfare and complexethical dilemmas arise (responsibility for all livingbeings; sacrificing of the welfare of some individuals,if even a minority, to achieve the welfare of others;sacrificing of collective values fixed in culture toindividual welfare), i t is hard to imagine adevelopment model of a democratic society underwhich the natural aspiration of individuals to increasetheir welfare is inhibited. Naturally, the essence ofwelfare changes in time and is also changeable toa certain extent through culture, education andupbringing.

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Although the above definition relates the term ‘welfare’with an individual, the overall level of welfare is importantalso as an indicator of a society or territory. Growth ofwelfare enables us to reach a situation where Estonia isadequately valued as a place for living, working and self-realisation. This, in turn, is a precondition for realisingthe goal of viability of cultural space and other goals.

The present situation of Estonia can be interpreted intwo ways in terms of welfare. From the globalperspective, the welfare level of the Estonian societyis relatively high rather than low. At the regional level(in the Northern European context), Estonia is a countrywith a low welfare level. In other words, despite thepositive dynamics, there is a strong deficit of welfarein Estonia. Estonians and other inhabitants of Estoniado not compare their welfare level with developingcountries but with the European Union member states,in particular the Nordic countries. The deficit of welfareconcerns particularly the economic component ofwelfare (GDP per capita in Estonia in comparable pricesis currently app. 40% of the EU average), but alsoother components, above all security. At the sametime, the indicators measuring the potential for furtherdevelopment (e.g. the indicator of economiccompet it iveness) rank considerably higher ininternational comparison than welfare indicators do.

The sharpened perception of the deficit of welfare, inparticular its economic component related to limited

consumption possibilities, has both positive andnegative effects. The positive side lies in the fact thatpeople who are dissatisfied with their level of welfareare willing to make efforts to raise the level. If notcatching up with, then at least approaching the levelof reference countries is an accepted motive in theEstonian society, which should help avoid stagnation.At the same time, reinforced development towards anincrease in individual welfare and, especially, itscomponents related to consumption may inhibit theevolution of the notion of welfare itself (generaldirection: from quantity to quality) and may create arisk of raising individual welfare at the expense of otherimportant goals.

Components and indicatorsof the goalWelfare is divided into three components that can beregarded as sub-goals of achieving welfare.1. Economic wealth - indicators: level of financialincome per family member and structure of incomes;level of consumer expenditures per family member andstructure of the expenditures (share of expenditureson basic needs);2. Level of security - indicators: health status, riskof il lness, crime rate, risk of unemployment,distribution of stress. These indicators are measurablealso through various integrated security indices.3. Diversity of opportunities (for self-realisation,recreation, social communication) - indicators: actual

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length of working week, satisfaction with work, use oftime (share of “tied” time), possibilities for educationaluse of time.(The second and third goal can be “bought” to a certainextent by aid of economic wealth. Yet such possibilitiesare limited – their realisation will create sociallyineffective “surrogate” consumption, e.g. a demandfor excessive security services or nature turning intoan attraction).

Threats1. When welfare does not grow fast enough (inpart icular when combined with insuff icientdevelopment of attractiveness of the environment), thismay lead to mass leaving of young people. This mayhave catastrophic consequences, in particular in theconditions of an ageing society.2. Failure to ensure material welfare. This may leadto consequences such as continuing deterioration ofhealth status, reinforced pressure on the environmentor disintegration of the cultural environment.3. Failure to move on to the next, innovation-basedstage of economic development due to several reasons(incl. incapability to carry out a sufficiently effectivereform of education and training). In an increasinglyexpensive economy, this will not only slow down thegrowth of welfare but also bring along severe socialattendant phenomena (related to e.g. possibleunemployment).4. A rise in infrastructure prices (Estonia needs large

investments, in particular in view of the increasingecological restrictions, which will make productionexpensive) wil l lead to a reduct ion in thecompetitiveness of the economy along with the variousnegative consequences.5. Failure to enter the markets of important targetcountries, e.g. due to dumping accusations and theaccompanying measures.6. Shocks in the external environment will be asevere blow for an open economy like Estonia.7. There may be rather long periods during whichthe economy grows but the employment rate does not(“ jobless growth”).8. Development based on services industry may berelatively hard to “digest” for the traditional agriculturalregions and, especially, for the industrial regions(Northeast Estonia).

Desired state by the year 2030Economic wealth and the standard of living of peoplewill rise to at least 80% of the average of the presentEU member states by the year 2030 and there will besufficient potential (level of education and training,internationalisation, innovativity) also for furthernarrowing of the development gap and for going aheadof the EU average in the longer run. The mentality of a“poor relative” will have disappeared from the relationswith our Nordic neighbours. The economy of Estoniawil l st i l l rank somewhat higher in terms ofcompetitiveness than in terms of the living standard

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also in 2030. Estonia will have managed to avoid thestatus of Europe’s periphery (described as focusingon the production of cheaper and simpler products orcheap sale of natural resources or the naturalenvironment).

Economic development will proceed in stages.Although certain signs of the emergence of post-materialist values can be noticed already soon, thedevelopment of Estonia will still remain relatively strongoriented to an increase in the living standard duringthe next 10–12 years. In this period it will be necessaryto try and balance the excessive economy-centrednessby actions promoting a rise in consumption cultureand in the quality of life (as an alternative to relativelyprimitive materialistic and hedonistic consumption andchasing of commercial diversity), and by policiesensuring ecologicality and social coherence.We can assume that significant progress will be madewith regard to some components of security (inparticular crime reduction) already during the firstperiod (10–12 years), while several other components,such as the risk of overworking and stress, will still remainhigh compared to developed countries. Working weekwill remain relatively long in the beginning. The growth inthe quality and attractiveness of the living environmentwill vary in speed, being rapid in elements related tointernational communication and economic developmentand slow in other elements (e.g. reconstruction ofsocialist-time city districts) due to limited resources.

In the second half of the period (tentatively in the years2015–2020), there will be an important shift inemphasis. Valuation of the components of securityand diversity will significantly increase among thepopulation, which will be reflected as a change in bothfinancing preferences and personal behaviour patterns.

As regards security, the situation in Estonia in 2030will not differ significantly from the Western and Nordiccountries, though for some elements more significantprogress cannot be observed before the years 2020–2030. A decent security network will have been createdfor risk groups, while the risk of job loss will still haveremained high. Public health will have improved andlife expectancy considerably increased. The averagelife expectancy will have increased to 77–78 years bythe year 2030.

From the point of view of diversity of opportunities,the present clear demarcation line between workingtime and free time will become much more blurred fora big part of workers by the year 2030. The share ofprofessions requiring creat ivity will increase.Companies will value creativity in employees andstimulate learning and communication through variousnetworks. The ways and forms of recreation will havebroadened sharply (in particular for the elderly), aswill have participation in various voluntary communityactivities and forms of activity combining learning andrecreation. The range of intellectual services offered

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will have been extended. Urban spaces will have beendeveloped into diverse and attractive environments andpossibilities for human visiting and human activity willbe provided also in natural environments. Estonia willhave developed into the “Nordic Dublin”, i.e. a placewhere one can combine a varied and pleasurable lifeand recreation with state-of-the-art internationalproduction and business.

Key mechanisms for achieving the goalThe following outlines the (partly interconnected) keymechanisms for moving towards the goals.

Orientation to an economic and employmentstructure suitable for Estonia while beingconsistent with t rends in the externalenvironment. Such an economic structure couldconsist in an export-oriented and sectorally diverseservices economy. Services-centred economy is moreflexible and sustainable than would be an economybased on large-scale production, both in the narroweconomic sense and in the sense of employment andecology. Services in this context are not understood intheir narrower, sectoral sense but in a broader sense,as the creation and operation of services systems whichmay and should encompass also various industrialcomponents. The geography of economiccommunication will be purposely expanded – thecurrently dominating economic communication withNorthern European countries will be supplemented with

increasingly dense communication with the rest of theEU and economic leaders elsewhere in the world.Economic communication with the economic spaceof Russia and the rest of the CIC countries will re-intensify, with Estonian-based enterprises being ableto switch to providing services to the modernisationprocess that Russian economy will be undergoing withthe aid of Western capital.

Services will be both exported through the Internet orthrough their direct provision in the territory of othercountries and provided in Estonia’s own territory. Inaddition to conventional tourism (whose servicesspectrum will broaden), Estonia will have assumed animportant position also in providing healthcare, welfare,training and other services to the inhabitants of othercountries in its own territory. This will be facilitated bythe fact that relatively many Nordic people will havemoved to live in Estonia for a longer or shorter time.In the provision of these services, emphasis willgradually shift from cheapness and acceptable qualityto more expensive and high quality services.

Economic sectors based on the use of Estonia’sown resources acting as a buffer. The futureeconomy of Estonia will largely not be based on ourown natural resources but the latter (forest, agriculturalraw material, etc.) will still have an important stabilisingrole, especially in situations where depressions orfailures of the international economy (no matter

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whether due to the economic cycle or for other reasons– ecological problems, terrorism, etc.) may cause theeconomy to go off the track, at least temporarily.

Networking. Firms based in Estonia, including smallfirms, will become increasingly involved in internationalnetworks, assuming different functions there, incl.functions that will gradually become more complex andexpensive. The Estonian state will contribute to suchnetworking through its support measures, making use ofalso the relevant opportunities provided by the EU. Inpart such networking will take place by mediation of thefirms and institutions of the neighbouring country Finland.

Technological development. Transition frominvestment-centred economy to innovation-centred economy. As Estonian economy will graduallybecome more expensive (which will be accelerated byaccession to the EU), it can no longer be based oncheap production inputs and attracting of foreigncapital with cheap production inputs (low salaries,cheap raw material, low ecological requirements). Theproduction of high tech and medium-high techproducts has to increase at the expense of low techproducts and services, in particular in exports. Thispresupposes a specific support policy, which can besuccessfully implemented only in public-privatepartnership. The policy has to strengthen the linksbetween enterprises and universities and researchinstitutes, contribute to the creation of high tech

communities and provide general support to thecooperation of enterprises in the field of innovation,create the instruments of risk capital, support thetransition from research to the development of productsand technologies, foster spin-offs, facilitate access totechnological information networks. Investments ofenterprises into product and technology development,incl. applied studies, have to significantly increase.

Education system and training as the foundationof economic development. Neither economicnetworking nor the transfer to innovation-centredeconomy would be possible without a quantitative leapin education and training. It is important for a smallcountry to ensure principal access to education forthe entire population. At the same time, the reform ofeducation, retraining, lifelong learning, etc. all haveto be in line with the demands of the economicenvironment (of the coming period). This implies aneed for close cooperation with the private sector. Thestudy system has to be such that it provides eachworker with access to in-service training and retrainingwhen necessary, allows them to change the area ofspecialisation, etc. This is achievable only by aid ofmodern learning technologies.

Institutional development and public-privatepartnership. Welfare is created not only by developingthe economy but also by achieving the necessaryoutput in health care (health being the key element of

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public security), by creating a human-friendly urbanenvironment through planning and by raising the generalquality of the living environment across Estonia.

Mechanisms balancing the excessive dominationof materialistic consumption. In particular in thefirst half of the period, it will be necessary to speciallycontribute to the development of the concept of welfareand to “non-material” (incl. cultural) consumption andecological changes in the way of life. This is animportant area for cooperation of the media, the thirdsector and the state.

GOAL 3:COHERENT SOCIETY

EssenceAchievement of the first two goals established inthis strategy (preservation of the Estonian culturalspace and growth of welfare) will be possible only ifthe benefits from these goals can be enjoyed bythe majority of the population and the price forachieving the goals is not destructive for the societyas an integral organism. Realisation of the goals ispossible only in a situation where an absolutemajority of the members of society believe in andcontribute to their achievement, i.e. in a coherentand harmoniously functioning society.

The third goal expresses the desire to reach asituat ion where al l members of the societyparticipate within their powers in the creation ofbenefits and get a fair share of the creat ion/production. In pract ice, this means concertedaction in particular in those fields of social lifewhere there is a risk of development of long-termconfrontat ion/exclusion – poverty t ransferredbetween generations, closed enclaves of non-Estonians, educational exclusion, development lagof peripheral living regions, etc. Achievement ofsocial cohesion means both social and regionalbalance, overcoming of the excessively large in-country differences in Estonia.

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Coherence does not mean uniformity and is not incontradiction with innovativity. A coherent societycontains enough creativity and innovativity, whichcreates sufficient motivation for the young andeducated generation to realise themselves in this verycountry.

Components and indicatorsof the goalThe following three sub-goals along with their indicatorsare used for assessing social coherence.1. Social inclusion. Basically the entire populationof Estonia is involved in creating values and inconsuming them, but also in shaping the developmentof the society. Indicators: Gini index, employment rate,share of working population in relation to totalpopulation, share of households below poverty line,share of population covered with health insurance.2. Regional balance. Internal regional differencesin Estonia are decreasing, every region of Estonia hasfound a suitable way of raising their value as a placefor living and working. Indicators: distribution ofincomes and level of poverty risk broken down byregions, share of school dropouts and universityadmissions broken down by regions, regionalpreferences in the choice of places for living andworking.3. Strong civil society. An active network ofcitizen associations has developed alongside thepublic and private sector. The third sector is

participating as an equal partner both in politicaldecision-making and in providing various services (incl.those with a social focus). Indicators: number andmembership of citizen associations, legal draftssubmitted by the third sector, dynamics of financingof the third sector.

ThreatsCoherence of the Estonian society in the currentsituation is threatened mostly by:1. A high level of economic inequality. The Giniindex of Estonia has been ca 0.37 in recent years,which is considerably closer to the relevant index ofRussia than that of the EU.2. A continuing tendency towards an increase inregional imbalance in Estonia and towards the“extinction” of peripheral living regions. Net incomeper household member in 2001 was 33 000 kroonsin Harju County and below 20 000 kroons in severalSouth Estonian counties.3. Several marginalised groups of populat ionreaching a situation from where a “return” into activelife is no longer practicable. The share of the long-term unemployed in relation to the total number ofthe unemployed has been as follows: 2000 – 45%,2001 – 48.3%, 2002 – 52.8%.4. An emerging trend towards “brain drain” , whichinhibits the sustainable development of severalspheres of life providing public benefits (health care,social welfare, education, etc.);

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5. Difficulties of the Estonian labour market inadapting to the new environment resulting from theEU labour division and development of informationtechnology – high level of unemployment, failure ofemployers to offer new flexible forms of work andfailure of employees to participate therein. Theaverage rate of unemployment in Estonia in recentyears has been as follows: 2000 – 13.6%, 2001 –12.6%, 2002 – 10.3%.6. Limited administrative capacity of national andlocal authorities, which often reduces the quality ofpublic services and inhibits also application forfinancial support from the EU funds.7. Limited capaci t y of t he thi rd sector inrepresenting public interests, in creating jobs andproviding services (education, social welfare, etc.).As a result, an important social resource remainsunutilised.

Desired state by the year 2030Social inclusion. Social st rat i f icat ion hasdecreased, the Gini index of Estonia does not exceedthe EU average, support systems based on thecooperation of three sectors have been created forless compet it ive individuals and families withsubsistence difficulties. The social welfare systemhas developed to a level where the incomes of noneof the significant groups of population remain belowthe subsistence minimum established in the EU.High-quality healthcare service is available to

everyone. Integration of non-Estonians has reacheda level where disparities due to the ethnic origin ofindividuals in employment, participation in politics,etc. are minimal. The metaphor of “ two Estonias”has been forgotten and replaced by an image ofEstonia as a variegated and cosy place.

Regional balance. The key economic indicatorsfor Tallinn and the rest of Estonia are similar. Thelevel of unemployment does not exceed 8% in anyof the regions; the openness and flexibility of labourmarket is counterbalanced by a system ofeliminat ing labour market risks. Employmentrelations are governed by the principle of socialpartnership. A system of lifelong learning has beenestablished, offering professional in-service andretraining.

Strong civil society. An effective third sector hasdeveloped, providing various public services andparticipating in political decision-making. The levelof participation in elections is at least equal to theEU average.

Key mechanisms for achieving the goalPurposeful budgetary policy, incl. the use of the EUStructural Funds. Regional balance will be increasedduring the first half of the period not only through Estonia’sown specific programmes based on budgetary resourcesbut also with financial support from the EU regional

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programmes and the EU Social Fund. This will result inthe development of suitable forms of economic activityand a sufficiently strong infrastructure in regions and inreduction of economic inequality and social exclusion ofindividuals and families. An important instrument forachieving the goals will be income policy, which will bedeveloped based on the ideology of equal possibilitiesbut supplemented with the principle of redistribution sothat the Gini coefficient of Estonia will reach the EUaverage level and the share of households below povertyline will decrease.

Labour market policy. The emphasis of labour marketpolicy will shift from the currently dominating passivemeasures to active measures (facilitation of retrainingand return to the labour market), budget allocations tolabour market policy will rise to the EU average level. Theeducation system will be developed by the principle ofconsistency between the education system and labourmarket demand. A system of lifelong learning will beestablished.

Social policy. Functioning support systems becreated for excluded social groups with subsistenceproblems, allowing their participation in the labourmarket and thereby improving their welfare. Transferof poverty and social exclusion between generationswill be inhibited through improving the socialfunctions of the family benefit system and educationsystem (social rehabilitation and compensation for

the inequality of family environment, lifelong in-service training and retraining, training of socialcoping). Effective social insurance will be preventingthe economic situation of risk groups (the elderly,disabled, unemployed) from falling to a level wheretheir part icipat ion in social life and culture isseriously hindered due to the lack of resources.

Administrative reform and partnership-baseddecision-making. An important precondition forachieving the object ives is a successfuladministrative reform resulting in the creation oflarger local government units with a st rongadministrative capacity and budgetary base andfunct ioning in cooperat ion with third sectororganisations. A broad range of stakeholders and thewide public will be involved in policy-making throughcitizen associations. Important decisions will bepreceded by a comprehensive (incl. social scientific)expert analysis of their impacts. Emergence of a strongthird sector requires a significant increase in statesupport to this sector both in the form of financialresources (tax exemptions, etc.) and training anddevelopment activities.

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GOAL 4:ECOLOGICAL BALANCE

EssenceMaintenance of ecological balance in the nature ofEstonia is a cent ral precondi t ion for oursustainability. It is also our contribution to globaldevelopment, following the principle that requires abalance both in matter cycles and in flows of energyat all levels of the living environment.

The overall aim is to integrate the considerations ofself-regeneration capacity of nature into the use ofnature. The main funct ion of environmentalprotection is not to protect resources and the naturalenvironment but to achieve their harmonious andbalanced management in the interests of theEstonian society and local communities. The aim isto reach a situation where human does not regardthe environment as a pool of objects requiringprotection but as an integral whole which humanitself is part of. The aim is combined conception ofnature as a value and as a central developmentresource of the society in the context of overalldevelopment of Estonia.

In planning the protect ion and use of t heenvironment, Estonia should not necessarily pursuethe conceptions of developed countries, which areenvironment- and pollution-centred and directed to

consumption habits, but we should proceed alsofrom the local tradition and specificity. For instance,the native landscapes of Estonia as cultural heritagecould be regarded as an added value which canpartly compensate for the higher living standard inseveral countries and thereby reduce “brain drain” .The landscape of Estonia could become a keyelement of the ecosystem, becoming treated as aliving environment encompassing inter alia alsoglobal resources such as weather (climate), air andwater. At the local level, landscape means a placeof l iving along wi th i t s biological diversi t y,recreational resources, but also views and otheraesthetic parameters, whose preservation anddevelopment is important for the achievement ofall development goals.

Components and indicatorsof the goalThe goal of ecological balance is broken down intothree main components:

Use of natural resources in ways and quantitiesthat ensure ecological balance.Indicators: the existence and compliance monitoringof resource use regulations based on continuousmonitoring of the reserve and regeneration capacityof natural resources (e.g. licensing, as is currentlyapplied in f ishery); share of consumpt ion ofrenewable natural resources in relation to total use

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of natural resources; share of semi-naturallandscapes.Areas of monitoring: freshwater reserve, water use(l/person), share of recovered water in overallconsumption (75%); state of coastal sea; share ofproductive forest in relation to total forest area;share of biologically productive land in relation tototal agricultural land; share of the use of renewableresources – not in excess of natural regeneration;share of renewable energy.

Reduction of pollut ion. Indicators: effect ofpollution charges on the organisation of production;air quality (ratio between emissions and sinks oftoxic and greenhouse gases; water quality (drinkingwater quality, recreational and fishery value of thesea and inland waters); level of waste management(degree of sorting and utilisation of waste (at least75% of waste), share of packaging tax in the costof products; share of production based on secondaryraw material); degree of environmental impact ofthe entire product life cycle; structure of transport(share of public and rail transport).

Preservation of biological diversity and naturalareas. Indicators: share of traditional land usepractices; species diversity index; coverage ofprotected areas and Natura 2000 sites (no less than10% of the territory of Estonia); share of landsexcluded from economic use (at least 5% of the

territory by the year 2010); share of seminaturallandscapes; investments into environmentalprotection and environmental education (% of GDP).

ThreatsEcological balance is an essential precondition forachieving any of the goals. Despite the seemingsimplicity and clarity of this requirement, it containshidden threats that may complicate its realisation.In particular, we are largely influenced by trendsinduced by globalisation, such as:1. al ienat ion f rom the t radi t ional naturalenvironment and use of nature, an importedconsumption culture leading to the domination offoreign interests:2. an urbanisation trend leading to a situationwhere landscape becomes a clearly delineated“gewgaw” for a narrow group of stakeholders;3. the trend of increasing the share of renewableenergy production, though in itself praiseworthy,increases also pressure on the natural environmentand biological diversity;4. closing of valuable recreation areas (especiallycoastal areas, valuable inland landscapes) andignoring of the “everyone’s right” ;

Desired state by the year 2030Stable and knowledge-based management ofthe Estonian environment. Cross-usable nationalregisters of natural resources (incl. landscapes and

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objects of biological diversity) has been created andthe relevant statistics organised. Integrated planningtakes place based on careful consideration ofenvironmental balance in every sphere of life. Therewill be effect ive cooperat ion between publicauthorities and different stakeholders. Extraction ofnatural resources is based on prior prepared andwell-motivated optimal use schemes allowing tomaximise economic benef i t whi le avoidingirreversible damage and wasting. Significant shiftshave taken place in the structure of transport – theshare of environmentally friendlier modes oftransport (rail transport) has increased. A municipalwaste sorting system is in place and higher pollutioncharges have been established for industries andtransport. A sustainable consumption mechanismwill has incorporated into the criteria of publicprocurement procedures, nat ional investmentprogrammes, etc. (on the basis of which projectsare selected for investment)

Value judgements concerning the use of theenvironment proceed primarily from the needto preserve an ecologically balanced livingenvironment. Landscape plans covering the entirecount ry envisage the regional funct ioning ofmechanisms ensuring a balance between human-made and natural landscapes and facilitating theopportunities of all residents to use the recreationalresources of the natural environment. The principle

that prohibits the use of the environment on theverge of risk has taken firm root. Development ofknowledge and technologies may be inducingchanges in the management of certain resources.The state is supporting traditional land use practices(crop fields, pastures, forest) through its regionalpolicy.Estonia is a worthy participant in global eco-logical developments. Estonia is party to the maininternational conventions and is actively implement-ing measures for preserving and improving the stateof the environment of the Baltic region. A balance/database of transboundary pollution and pollutionoriginating from Estonia has created, pollution tar-get values has been agreed upon and used as abasis for recalculating pollution charges and estab-lishing new charge rates. The ratio of pollutantsgenerated (incl. atmospheric emissions, packaging,etc.) in relation to material benefits produced haveconsiderably decreased.

Key mechanisms for achieving the goalEducation. The society, being part of the ecosystem,has to assume responsibil ity for harmoniousdevelopment of ecosystems. The main preconditionfor this is ethical and scient ifically groundedmanagement of the natural environment (livingenvironment). Reasonable management of naturalresources presupposes integrated development oftechnical and ecological education, which in turn

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presupposes a different structure of education –ecological education has to form an organic part ofeducation at all levels of study. Balanced sustainabledevelopment of Estonia is condit ioned on thepromotion of the natural-scientific way of thinkingin all strata of the society, in particular in politicaldecision-makers and officials.

Technological innovat ion. Employment ofregistered and future natural resources (includingthose whose monetary value is as yet difficult todetermine) has to be preceded by investments intonew technologies that allow the development andapplication of the most optimal use schemes andtake maximum account of the principles of thenatural matter cycle. The level of use of naturalresources should be determined primarily by the self-regeneration capacity of the natural environment.

At the same time, Estonia has to carry out productdevelopment in directions supported by our resourcebased on our environmental condit ions andenvironmental values. For instance, in drawing up useschemes for landscapes or in developing forestmanagement one has to proceed from the need topreserve rural life and the Estonian culture, long-termplanning in the energy sector has to proceed fromenvironmentally friendliness, etc. Steps for switchingto post-oil-shale power production have to be plannedalready today. The natural resource of Estonia is also

an important source of means for solving today’s socialproblems and ensuring the growth of welfare.

Ecopolicy. Economically and ecologically optimaluse schemes have to be developed for the naturalresources of Estonia. As the first step, registersencompassing all natural resources and landscapesshould be created. The use of natural resourcesshould be organised by the principle “ from rawmaterial to product” , taking into account the “bufferprinciple” (not to act on the verge of danger but toleave reserves for unexpectancies).

A national sustainable development monitoringsystem has to be established for assessing thecomponents of the goal of ecological balance, bothby using the existing environmental monitoring dataand by adding new structures for assessing allindicators and monitoring all processes.

The use of renewable natural resources has to bebased on the principle that the use of resourcesshould not exceed their regeneration capacity. Fossilor non-renewable natural resources should be usedconsistent with the principle that their exploitationhas to be secured until they can be replaced withsome other resource, e.g. a renewable resource.

Discussions and studies on the locat ion andcoverage of protected territories have to be

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launched. The current intensive expansion ofprotected areas in the conditions of weak and softadministrative management is not effective enough.It is important that the legislation regulating the useof the natural environment is obeyed withoutquestion.

Tax policy has to include mechanisms for promotingrecovery of materials and pollution charges forreduction of pollution.Energy management of Estonia has to bereorganised by supporting and giving preferentialtreatment to low-energy activities. Environment-friendlier modes of transport should be preferred.As renewable energy product ion is inevitablyaccompanied by problems related to the use oflandscapes – loss of habitats, additional load duringthe harvesting of biological resources, noise, spoiltlandscape, etc. , i t is necessary to developmechanisms allowing adequate assessment of andcompensation for adverse environmental impact.

Relations arising in movingtowards the goalsThe conception of sustainability of Estonia presentedhere is based on the above-described fourdevelopment goals. Estonia will be sustainable ifits movement towards all of the four goals is clearlyperceived by the society, if it is measurable andconsistent. If any of the goals is neglected ordistanced from, this would mean a danger tosustainability. Estonia is sustainable whenpreservation of the Estonian cultural space,growth of welfare of people, coherence of thesociety and balance with nature are ensured.All of the goals are important, none of them can besubstituted with another one. Therefore the fourdevelopment goals have to be treated as a holisticsystem which is to be considered and taken intoaccount in an integral manner to ensure oursustainability.Movement towards some of the goals may be moreamplif ied in society at a certain t ime periodcompared to movement towards some other goal.From the end of the 1980ies until the countryregained independence, issues related to thepreservation of the Estonian cultural space wereclearly in the foreground, while the topics of welfareand economic growth dominated in the 1990ies andseveral aspects of social coherence have beenshifting to the foreground in recent years. Yet it isprobably inevitable that the temporarily “neglected”

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goals will be pursued in an amplified (compensating)manner in the following period. The system has toretain its integrity.

It is not difficult to see that the established goalsthemselves are somewhat contradictory – amplifiedmovement towards one goal may inhibit theachievement of another. Heading towards rapidgrowth of welfare may not have the best impact onthe Estonian cultural space or ecological balance,placement of social coherence in the foreground maynot support economic growth, etc. The question ishow goals different in their essence and orientationcould be pursued and taken into considerationsimultaneously. In figurative terms – how to runsimultaneously both to the left and to the right, tobe both open and Estonia-centred, to ensure rapideconomic growth and actual nature protection, etc.Integrated analysis of the dynamics of differentspheres of life is a complicated task, yet it is notpossible without it to perceive what the aspirationsto achieve results of one or another type (economic,social, etc.) mean in reality, what kind of constraintsand opportunities do they involve. In the course ofdrawing up the SE21, interactions between differentgoals were assessed in order to identify the relationsarising between the goals on the way to theirachievement, and also to determine the factors thatEstonia’s movement towards sustainability currentlydepends on. Assessment of interactions between

goals is of great importance for SE21, as the relationpictures unfolding as an outcome of the assessmentprovided one of the bases for devising thedevelopment options presented in the followingchapter. Each development option or scenariopresented in Chapters 2 and 3 is a construction of,on the one hand, aspirations towards amplifiedrealisation of the above described goals and, on theother hand, the choice of a certain ideology andinstitutional mechanism for achieving the goals. Ananalysis of interactions helps us to understand thelogic of the already ongoing self- regulat ingdevelopment, the possibilities and impossibilitieshidden in it. The scenarios were developed by addingalso the component of active subjective choice, i.e.the attempt of the more active part of the society todirect the development in one way or another.Interrelations between goals were assessed at thelevel of their components. More specifically –amplified movement towards one goal was assessedwith regard to its impact on the components of othergoals.The following chart visualises the results of thisanalysis, presented not at the component level butas already generalised interrelations between goalsas wholes.The thicker lines in the chart describe strongerimpacts and the thinner lines describe weaker ones.The following impacts were identified as strongerimpacts.

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Chart 1Interactions between goals

1. Impact of the Estonian culture (culturalspace) on ecological balance, with the strongestimpact at the component level being on reductionof pollution and preservation of biological diversity.This impact was assessed as strongest based onthe understanding that culture as the shaper ofvalues and attitudes is an important determinant ofthe actual use of the environment.2. Impact of viability of the Estonian culture(cultural space) on social coherence of theEstonian society. The impact was assessed asstrong in regard to all three components of socialcoherence (regional balance, social inclusion, civilsociety). A common cultural context acts in a wayas a binder in uniting the carriers of culture into acoherent society.

3. Impact of the Estonian culture (culturalspace) on human welfare. This impact, too, isstrong in regard to all three components of welfare(economic wealth, level of security, diversity ofopportunities for self-realisation and recreation). Theassessment is, again, based on the understandingthat a common cultural context creates a sense ofsecurity and shapes common values.4. Impact of welfare on social coherence ofthe Estonian society. At the component level, thisimpact is strongest on social inclusion, assumingthat an overall rise in welfare will free up the timeand energy of people for other, in particular socialactivities.5. Impact of social coherence on the Estoniancultural space is signif icant as to all three

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components of cultural space. A coherent societyis a central precondition for the preservation ofcultural space.6. Impact of ecological balancedness ofEstonia’s development on human welfare wasassessed as strong based on the understanding thatecological balance determines the overal lenvironment that we live in – air, water, landscapes– and is thus also a central factor of welfare.

The assessment of interactions indicates that thehighest impact on other goals (and also theircomponents) emanates from viability of the Estoniancultural space, whose impact was assessed asstrong on all the other three goals. This, in turn,implies that efforts towards this very goal may havestrongest impact also on the achievement of theother goals. Thus, by bringing the viability of culturalspace to a central place, by assigning it a somewhatmore important role compared to the other goals,there will be reason to expect that at least some ofthe remaining goals or their components will beachieved in parallel.

The development goal with the strongest influencefrom other goals was found to be the coherence ofthe Estonian society. In other words, achievementof this goal is the most affected by movementtowards the remaining three goals. Thus, contraryto focusing on the viability of cultural space, in case

Estonia’s development path is built up on amplifiedmovement towards social coherence, this wouldmean both the most resource-consuming developmentpath (since achievement of each “bit” of coherencewould require investment into the other goals) andalso the most time-consuming path (as (all) the othergoals would have to be achieved before).In addition to the analysis of interactions, trends ofthe last decade were assessed for each developmentgoal. The following picture unfolded.

The most problematic developments were identifiedin regard to social coherence – there has been aclear trend towards a decrease in coherence in termsof both inequality and regional differences. Certainpositive developments can be observed only fromthe point of view of civil society.

Developments in welfare have been contradictory –simultaneous growth and decrease in wealth(depending on the social stratum) was observedalongside a decrease in security and a rise in self-realisation possibilities. Viability of the Estoniancultural space has certainly increased after thecountry regained independence, while new seriousthreats emanating from globalisation have emerged.As regards the ecological status, there has been animprovement in terms of environmental pollution,while some areas of use of nature (e.g. forestcutting) have become very critical.

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According to the judgement of SE21 experts, theestablished goals will be the most complicated toachieve in the coming decades in the field of socialcoherence, as the development trends in this sphereso far have been contrary to the established goals.In view of the development goals as a holisticsystem, failure to achieve the goals in the field ofcoherence will mean a threat to the sustainabilityof the entire development of Estonia.

SummaryThe above-described four development goals are notunique in the context of the sustainable developmentstrategies prepared in other countries. The goal ofecological balance with its various components ispart of all strategies drawn up to date. Growth ofwelfare and social coherence are set as goals inthe strategies of many countries (United Kingdom,Germany, Aust ria, Netherlands, a. o.), whilepersistence of the cultural space as a separate goalis a relatively specific aspect in SE21. According toour knowledge, it has not been set as a goal in anyof the existing strategies. It is not difficult to seethough that the goal related to cultural space wasset due to the particularity of Estonia – the historicalexperience, small society and l imited stateresources, which all makes this goal substantiatedand also indispensable in the very context ofsustainability, along with the above-noted fact thatit is just the developments in cultural space that

provide the best support (or hindrance) to theachievement of the other goals.Considering the practices of drawing up sustainabledevelopment strategies in developed countries, theEstonian strategy, too, could be built up as a “ linear”document. Taking the established goals and theircomponents as a basis, the next step would consistin drawing up an action plan for moving towardseach of the goals and developing a system ofindicators for progress monitoring and assessment.This approach would mean, however, that thegeneral way of funct ioning and the regulatorymechanisms of the society would remain the same,just movement towards some priority goals wouldbe amplified.

According to the convict ion of SE21 experts,continuation of the present (linear and priority-based) development will not ensure the sustainabilityof Estonia. Susta inabilit y of Estonia isconditioned on clear development accelerationin the coming decades. Development accelerationin this context means acceleration in moving towardsall four development goals, in particular catchingup with the EU average welfare indicators andbringing the coherence and functioning capacity ofthe society to a level comparable with the EUcountries. If Estonia stays among the last fivecountries of the enlarged EU, it will be unsustainablealready just because of the fact that more and more

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people in Estonia, being in an open reference spaceof Europe, will begin to ask themselves – why justme should live and realise myself here, in anunderdeveloped periphery of the EU? The leaving ofthe most capable elite may become a critical blowto Estonia’s development and sustainability. Thedevelopment task of Estonia for the near decadesis difficult and in a way paradoxical – to catch upwith the EU quality of life, while preserving theEstonian cultural space, significantly increasingthe coherence of the society and ensuring anecological balance. This is possible, but notthrough the continuation of the development modelso far but through a shift of paradigm.

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Chapter IIDevelopment options of Estonia

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Chapter IIDevelopment optionsof Estonia

IntroductionAccording to the judgement of SE21 experts, the centralprecondition for Estonia’s sustainability is developmentacceleration in the coming decades, meaning accelerateddevelopment towards all four development goals. The reasonlies first of all in a change in our political, economic andsocial environment resulting from accession to the EuropeanUnion. Estonia will be sustainable in the conditions of anopen European space only in case it is capable of functioningequally with both “old Europe” and American and Asiandeveloped countries, both as a state and as a society. Thischallenge cannot be resolved by simple and mechanicalcontinuation of the current development path. The challengepresupposes purposeful introduction and powerful cultivationof new development factors.Proceeding from the above understanding, the expert groupsof SE21 analysed the possible development models ofEstonia with the aim of defining the development path(s)allowing development acceleration while also ensuringsustainability. The analysis springs from the actual socialarrangement of Estonia in the past decade, which can bemost broadly described as the model of low stateinterference, also described as market-centred, liberal orindividual-centred state. Indeed, after the restitution of

independence, self-regulation and market relations beganto play a determining role both in the economy and in otherspheres of life and the main emphasis was placed on thedriving role of personal responsibility and competition. Infact there was no choice – it was the low-interferenceapproach that made the society to function, opened upindividual resources and brought Estonia into a relativelysatisfactory condition compared to other Central and EasternEuropean countries, at least in the economic sense. Yet it isgenerally known that this path had a destructive effect onsocial coherence. Today’s question is: what would be thebest way to move on in terms of sustainability of Estonia.According to SE21 experts, the today’s society of Estoniahas got the makings and potential for continuing in at leastthree directions. The first option lies in continuing the presentscheme of low interference. As alternatives to this business-as-usual scenario, Estonia could make a shift either towardsa more conservative and nation-centred model or towardsa societal arrangement based on social partnership.The following presents an analysis of the three potentialdevelopment paths or scenarios outlined by SE21 expertgroups. The analysis is based on expert judgements andgroup work and includes the motives for launching and adescription of the basic characteristics of each scenario, adescription of the circumstances supporting the relevantdevelopment path, the projected impact/outcome ofrealisation of each development path from the point of viewof the four development goals, an assessment of thestrengths and weaknesses of all scenarios and a generalisedjudgement of the sustainability of each path.

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Business-as-usual scenario

MotiveA tried and tested scheme that does not presupposesignificant changes in the current arrangement of sociallife. The expectation that market-driven economicgrowth will help to resolve also the problems relatedto this scenario, in particular in regard to socialcoherence.

CharacteristicsMarket-centred conception of society based onconfidence in the rationality and initiative of individuals.Efficiency, rationality and profitability are the centralcriteria in all spheres of life. A trend towards reducingpublic expenditures, providing support to businessesand using private capital also in spheres so far operatedby the public sector (education, research, health). Adesire to divide the functions necessary for thefunctioning of the state and society between the EUinstitutions and local governments (Estonia is simplytoo small for effective functioning as a state).

Supporting factorsRealisation of this scenario is supported by Estonia’srapid integration into the world economy and a goodstate of the latter. Liberal market economy gives usseveral advantages in the neighbourhood of the social-democratic Nordic countries, increasing inter alia theinflow of foreign investments and growth of welfare.

This path is clearly supported by economic operators,foreign investors, but also the younger generation andrisk-prone people.

Positive impactThe scenario will have a favourable effect on economicdevelopment and (economic) welfare, though not inthe longer term. As regards civil society, the scenariowill, on the one hand, promote its development (therewill be a perceived need to protect one’s rights,represent one’s interests, etc.), while, on the otherhand, the state and businesses will not pay muchattention to grass-root democracy. Still, privatecontributions to the third sector will increase,competitiveness of the people of Estonia will increase,Estonia will integrate more fully into internationalstructures. The “invisible hand” or market mechanismswill urge all members of the society to maximise theirefforts. The (total) energy unleashed under thisscenario will be the highest among the three options.

ThreatsPreservation of the Estonian cultural space is not apriority in the context of this scenario, individualisticvalue orientat ion does not promote nat ion-centredness. Social coherence will not increase,(economic, regional) gaps will continue to widen.A society built around material success and at thesame time highly stratified is a favourable breedingground for crime. Poverty of certain groups of society

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and the backlog of whole regions will begin to amplifythe negative demographic trend, aggravating the deficitof human capital and increasing non-productiveexpenditures. The pressure to import high-qualitylabour will increase, which will sharpen relationshipsin the labour market and increase the risk of conflictsin the society as a whole. Market-centred Estonia willcome into conflict with its Nordic (social democratic)neighbourhood, Nordic countries will reduce theirsupport to Estonia at the international level. Ifeconomic growth should be inhibited, Estonia will runinto great difficulties. Such a situation would requirestate interference but since the state will have only amarginal role in economic regulation, there will be noentrenched instruments for offsetting economicfluctuations and solving crises. There will still be adanger of remaining a cheap subcontracting countrydue to the absence of a purposeful innovation policy,which the pure market does not ensure.

Judgement of sustainabilityA low-interference scenario is effective in the shortterm (during the transition period) but it will not ensuresustainability of Estonia in the long run. The centraldevelopment goals of Estonia (I and III) will remainunachieved. In particular in terms of social coherence,Estonia is already today close to the critical limit(comparable to Russia rather than Europe).Reproduction of human capital will suffer, the efficiencyof use of human resources will decrease, a big part of

the population will be excluded from the creation ofvalues. There will be a strong pressure to deplete thenatural resources.

A significant part of the society has by now perceivedthe threats associated with the business-as-usualscenario, which has created preconditions for a shiftin paradigm. The shift can take place in two directions,towards the national-conservative development pathor towards the path of social partnership.

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Conservative development path

MotiveIn the circumstances of increasing indeterminacy ofthe external environment, conservativity as a survivalstrategy has justified itself repeatedly in history.Accession to the European Union significant lyincreases indeterminacy also for Estonia, which makesit justified to adopt a cautious and preservation-oriented strategy.

CharacteristicsThis strategy is based on a nation-, home- and nature-centred ideology, which combines in itself the valuesof national culture and naturalness with traditionalconservative values (order, authority, tradition, self-discipline, loyalty, family-centredness). The aim isstability, not change or development. There will be aprevalence of self-defence attitudes, a desire to inhibitnegative external impacts and the impact of foreigncultures, especially the American mass culture, andof the consumer society. The main objects ofprotection/preservation will be the Estonian language,traditional national culture and an unspoiled naturalenvironment, and also a secure and natural, traditions-based way of living. This will be sought through thecreation of a well-functioning support and supervisionsystem and a propaganda machinery. A clear limitbetween “the own” and “the alien” will develop. Asystem of norms and restrictions will be established

for the protection of “ the own”. Power will be relativelycentralised, the role of the state will be perceptible inall spheres of life. Sustainability will be interpreted asthe protection of the existing, as cautiousness inimplementing any changes, prevention of externalimpacts. High preventive taxes will be imposed onpolluting and environmentally dangerous economicactivity and violations will lead to severe punishments.

Supporting factorsAn important factor prompting the country to head forthe conservative development path is seen in externaldanger to the independence of Estonia and to thepreservation of Estonianhood – the existence of long-term hotbeds of war in the world, refugee andimmigration pressure, threats from Russia, etc. Thisscenario may be triggered also by a sharp internalfeeling of danger – widespread lack of confidence inthe cultural sustainability of Estonia or recognition ofthe possibility of ecological disaster (e.g. plans ofmassive import of foreign workforce into Estonia or anagreement on establishing an international nuclearwaste repository here). Also the turning of the currentdevelopment path to an even more liberal track,combined with the growth of consumerism, may, as acounterreaction, create a favourable ground for thestrengthening of isolationism and traditionalism insociety, which will support the unfolding of theconservative scenario.

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Positive impactThe scenario will have a positive impact on severalsub-goals – social coherence wil l increase,maintenance of the cultural space will receive specialattention, regional differences will decrease, theecological status will improve. Security of people willsignificantly increase. Economic wealth will becomemore evenly distributed but unfortunately at aconsiderably lower level compared to the EU average.Life in general will be more peaceful, there will befewer sources of stress than in the case of e.g. thebusiness-as-usual scenario.

ThreatsContrary to the expectations, this scenario will not solvethe demographic crisis but will rather have an oppositeeffect. Emigration pressure, in particular among theyounger generation, will be discernible. Despite therecommendations to address welfare as an integratedsystem, not just from the economic point of view, alsothe goal of welfare will remain unachieved (in terms ofthe desire to catch up with the EU average welfarelevel), which will generate dissatisfaction. Self-realisation possibilities will be more limited due tocultural protectionism than they are “abroad”. The“duplicity syndrome” will reappear to some extent –people will act “as one should” in public, while theirtalk and deeds in private life will be different. Aconservative and supervision-oriented state willgenerate groups of dissidents, who will be questioning

the prevailing mindset. Suppression of consumptionneeds will create a basis for an increase in smugglingand corruption. The possibilities of internationalintegration and also the ability of people to adapt tochanges in the surrounding world will decrease.

Judgement of sustainabilityThis scenario will be sustainable in the conditions of apermanent external danger or internal crisis butrelatively non-sustainable in the conditions of an opensociety. It will be difficult to match this scenario withlife in an open European space. Adoption of aconservative attitude after accession to the EU willdefinitely mean the status of an underdevelopedperipheral country.

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Social partnership

MotiveThe understanding that it is not possible to copesuccessfully in increasingly complex settings withoutengaging the broad range of interests andcompetences present in society into decision-making.On the other hand, a desire to overcome alienationphenomena through radical decentralisation anddemocratisation.

CharacteristicsUnlike the market-centred business-as-usual scenarioand the state-centred conservative scenario, thedevelopment path of social partnership is stronglycentred on civil society. It follows the model of the so-called network society, in which a broad range of actorsand groups of actors with different interests isoperating, driven by a wish to protect their (special)interests in the policy-making process, while acceptingthat decision-making requires the involvement of alsothe other interested parties. The state gives up themonopoly of decision-making, involving various socialstakeholders in the decision-making process. Theprocess is public and t ransparent . Decisionsconcerning the public sphere are made by the principleof partnership between the state and civil society; thereis a close cooperation between the private sector, thestate and the third sector in the economy, especiallyin the provision of services. The principle of partnership

has become a good custom and a generally applicablecode of practice. Even if common understanding isnot reached, the other party is seen as an equal partnerwhom one has to live together with, not as an opponentwho has to be “ripped off” . The feeling of solidarity isactively cultivated, incl. through the media. Applicationof the principles of solidarity and the mechanisms forreaching agreement are supported by legislation.

The difference from the conservative scenario is aprinciple one. Under the conservative scenario thecentral actor is a strong and hierarchic nation state,while the partnership scenario means movement inthe opposite direction – towards the division anddispersion of the decision-making mechanism.Discussions between different social actors lead tohorizontal agreements, which serve as a basis in policyare implementation. National developmental prioritiesand the principles of redistribution of national incomeare agreed upon, taking into account the interests ofall key social groups.

An important role of media in this context is to mobilisepublic interest and develop the intersection of differentopinions. The educating role of media will increase,with the aim of forming common opinions and mutualunderstanding and bringing together people withdifferent interests and different experient ialbackground. Supporting factors

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This scenario may become t riggered by thecontinuously increasing impact of the Nordic politicalculture in Estonia, but also by the over-amplificationof the “ invisible hand’s” scenario or the conservativescenario, which will raise public dissatisfaction anddrive citizen associations to intervene more actively inpublic life. On the other hand, this scenario ispreconditioned on the stability of the state andeconomic conditions, a sufficient level of welfare anda broad and functioning civil society. Partnership willbe fostered by the weakening of the impact ofcompetition logic also in the business world and inpolitics: here, too, will be shifts towards a negotiation-centred cooperation culture. The importance of socialcapital (trust, cooperation capacity) also for economicsuccess, not to speak about a democratic politicalsystem, will be increasingly understood. People’sattitudes will adapt to this understanding: distrust willdecrease and barriers will lower, the self-enclosed anddistrustful Estonian will become a smiling and broadlyand openly communicating European.

Positive impactInclusion and partnership will have a remedying effecton people’s feeling, even (economic) difficulties willbe perceived as less significant in a situation wherethere exists social support and a possibility to explainand argue one’s situation. The diversity of the culturalspace will increase, including by adding of non-Estonian elements (as the range of partners includes

also other ethnic groups). The growth of social capitalwill facilitate more efficient use of the human resourceand add to the quality of human capital through apositive and stimulating social environment. Thedecisions made will have broad social support, whichmakes it easier to implement them. Social coherencewill significantly increase and various green groups willbe seeing to it that ecological issues receive sufficientattention.

ThreatsThe scenario will unfold slowly, as it presupposes acritical mass of certain qualities in the society (a well-developed civil society, tolerance of differences,negotiation skills, low authority), but also a level ofwelfare that would allow people to spend more timeon social dialogue. The central threat is related to lossof time – the decision-making process will becomelengthy, negotiations will drag, adoption of manydecisions may be late. In particular the launching oflong-term programmes requiring coordinated effortswill be inhibited due to the large number of actorsinvolved and due to actively expressed specificinterests. A failure to reach agreements will increasethe potential for conflicts in society and also theagreements themselves may not always be rational.Due to the central role of social issues, this scenariowill not be the best one also from the point of view ofrapid economic growth. As all parties are partners,the interests of different nation groups will be taken

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into account , result ing in an increase in themulticulturality of the Estonian society along with allthe associated positive and negative effects.

Judgement of sustainability. Partnership society isa sustainable societal model in the conditions wherethe main preconditions for its functioning (level ofwelfare, functioning civil society, dialogue culture,strong common values) are well developed. Thepartnership scenario would be a well-functioning modelupon the basement of cultural integration, which doesnot exist today in the society of Estonia. In view of theunderstanding according to which one of the centraltasks of Estonia is to catch up with the quality of lifeof the EU (in terms of welfare, coherence andecological balance), Estonia needs more than just apartnership society. Estonia needs partnership alongwith strong accelerating impulses to development.

SummaryAccording to the judgement of SE21 experts, thepositive impact of the business-as-usual scenario onEstonia’s development is becoming exhausted and ashift towards a new development scheme isindispensable. When comparing the other two abovedescribed options, the conservative model andpartnership model, the situation is contradictory. Thereis clearly more expectation and willingness today insociety to move towards the conservative model, yetthe path of partnership society has several advantagesfrom the point of view of sustainability of Estonia.Proceeding from the understanding that Estonia needs,on the one hand, a development accelerat ion(discernible approaching to the quality of life of theEU) and, on the other, also a growth in socialsustainability, neither of the scenarios in their pureform will lead to the achievement of the goals. Theconservative model will create inevitable tensions inconnection with openness and EU membership, whilethe building of a partnership society would requiremuch more time and resources than are available inEstonia. In such a situation, it is necessary to considerthe possibilit ies for reconciliat ing the differentapproaches, for developing a synthesised scenariowhich would attempt to combine the strengths of theabove three paths and minimise the threats inherenttherein. Such scenario could consist in a developmentpath leading to the knowledge society as described inthe following chapter.

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Chapter IIISynthesised scenario:Estonia as a knowledge society

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Chapter IIISynthesised scenario:Estonia as a knowledgesociety

Characteristics of the scenarioThis scenario / development path constitutes an attemptto synthesise the strengths of the above three scenarios,taking serious account of also the trends developed todate in the international context. The idea of thesynthesised scenario is to bring Estonia closer to theknowledge-based or knowledge society – a societal modelcurrently in a developing stage worldwide. It is based onthe conviction that none of the above three developmentoptions alone would ensure the sustainability of Estonia.Estonia’s chance is to purposefully combine the potentialsand interests already existing in society with the elementsof the (presumably success-generating) model ofknowledge society.

This is a model consisting in:1. The adoption and application of the principles ofknowledge-based management and learning organisationboth in state governance and in the public and privatesector; subjecting of political decisions to rationalcalculation and feedback-based analysis.2. Powerful incorporation of competent expertise andpublicised feedback into governance with the aim of

detecting and correcting dangerous trends and mistakesand incorporating corrections proceeding fromdevelopment needs both into the financial policy andinto decisions made in other spheres, while beingindependent of party and group interests.3. Feedback- and knowledge-based management isfounded on agreements in regard to the developmenttargets of Estonia and on strategic development planssupporting those targets. Development plans and theensuing political decisions (incl. legislation) are preparedin cooperation with both domestic and foreignindependent research and analysis centres (universities,independent research centres) and with cit izenassociations and local governments. Short-term tacticaldecisions and medium-term plans are based on long-term development analyses and strategies.4. Agreement-based development plans underpinningmanagement decisions are prepared in a dialoguebetween different parties, with the essence of the dialoguebeing not so much competition of interests but ratherthe comparison and reconciliation of integrated ideasand visions. The dialogue is based on the (world’s) bestknowledge in the relevant sphere, on the analysis ofinternational experience and on a reliable set data onEstonia together with the necessary generalisations.Sectorality will be replaced with synthesised solutions.5. A rational conception of human and society basedon informed choices and learning ability is beingcultivated, knowledge and analysis are valued. Growth ofknowledge and educatedness and their effective

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application as a development resource is recognised asa national priority.6. Movement to the innovation-based stage ofdevelopment (according to Porter) receives strong statesupport. Different from the current low-interferenceapproach, this scenario involves the development of aclear national policy directed not to stability andpreservation (the conservative scenario) but to theachievement of agreed development goals. Nationalpolicy will be directed to strengthening the capability ofthe Estonian society to move to the trails of the knowledgesociety, but also to promoting the key spheres of theknowledge society – education and research, innovation,development. As the key to the whole model lies in therearrangement of societal relations, a particular focuswill be laid on promoting social innovation.7. The behaviour strategies necessary for successfulperformance in a global risk society (according to U. Beck)will be gradually adopted, including those concerningdispersed responsibility and the role of independentcentres of expertise, but also concerning the actors ofnational policy and sectoral actors (networkingcooperation between various expert and interest groups).8. Education will develop into lifelong learning also inpractice, being directed to maximising the creativity andlearning ability of individuals and shaping the skills ofidentifying, analysing and solving problems from earlychildhood to high age. Curricula will pay special attentionto the development of strategic thinking and acting, criticalreflexivity and cooperation ability. Risk assessment and

risk management skills will be developed. Feedbackingmechanisms will be developed for education and labourmarket.9. The use of media as the initiator of and forum fordevelopment debates will be expanded. This will result inincreased critical reflection capacity of people andinstitutions, which is a determining component of thisdevelopment model.10. Estonia’s possible version of moving towards theknowledge society combines/maintains the positiveelements of the development paths analysed above (andhaving societal support). Figuratively – the energy-unleashing effect of competition combined with theculture of social dialogue and valuation of the Estoniancultural space.

Knowledge society differs from other development modelsfirst of all in its attempt to subject the process of politicaldecision-making to systemised knowledge on Estonia andthe world, to establish mechanisms for creating and usingthis knowledge. The ideal of the knowledge society is asociety that rationally plans its development and realisesthe plans in a concerted manner. The state is one (andby far not the only) party in this planning and realisation.The main instrument of “self-management” of aknowledge society is strategic planning, that is, settingand agreeing of goals by different and adequatelyinformed parties, an action programme for realising thegoals, but also mechanisms for revising the programmeitself in the course of action. The main difference from

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the business-as-usual scenario lies in striving forknowledge-based programming and feedbacking (vs.confidence in self-regulation). Different from theconservative development path, this scenario has anemphasis on openness and includes a principallydecentralised decision-making mechanism (vs. hierarchicdecision-making), while the difference from partnershipsociety lies in the desire to replace an interest-based(and very lengthy) dispute of different partners withknowledge-based decisions, which all parties also pursue.Figuratively, this is a societal model that is capable ofmultiplying the current employment of collective intellectand where power and money go on the preparation ofpolitical decisions, not on dealing with the consequencesof incorrect decisions

A knowledge society cannot be “ entered” butpreconditions can be created for this model to graduallytake root also in Estonia.

big chances for maintaining its success in an openEuropean space if proceeding the same way.2. An understanding that development acceleration isnot only the growth of gross domestic product.Development acceleration means the process of thesociety as a whole reaching a sustainable state, a clearmovement towards all of the primary development goals.Development acceleration can be realised only in casethere exists a critical number of interested parties,supporters and contributors, and through theirinvolvement in the decision-making process. This meansa principal broadening of the range of both participantsand decision-makers, on the one hand by adding ofgroups and individuals possessing world-level expertise,and on the other hand through the participation of variousstakeholders of the society.3. A vision of Estonia’s future as part of the world,valuation of openness. Next to that, sufficient valuationof Estonia itself as a place for living and working and theensuing wish to contribute to the development of Estoniaas a whole. A political and social will to turn Estonia’sdevelopment into a joint effort based on efficient use ofintellectual resources.4. As this path constitutes a qualitative change inmanagement methods and political culture, it means ina way a breaking of tradition. It may be boosted by acertain societal shock, an “awakening crisis”, for instancea broadly perceived danger of Estonia’s developmentbecoming inhibited due to a decline in economic growthor lack of administrative capacity and Estonia falling

Preconditions1. The first precondition for moving towards theknowledge society is a broadly accepted conviction thatnone of the three above described scenarios (or any otherscenarios) would be able to bring Estonia to the desiredstate (European quality of life and sustainability). Thejudgement of the today’s situation of Estonia should beredefined: not “efficient and successful” but “poor andweak”, rather a country that has coped so far but has no

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among backlogged countries in international comparison.A crisis that would mobilise a big part of actors tocontribute to the acceleration of Estonia’s development.5. A central factor is the existence of an elite supportingthis development path and leading the process, whilebeing already “in” in the knowledge society and alsosufficiently motivated to contribute to the developmentof Estonia. The elite of the knowledge society is not theeconomic high class but educated and internationallyexperienced new-generation leaders of scientific,economic and political life, who will assume responsibilityfor reaching the knowledge society, understanding thatthis is basically the only way for Estonia to get amongthe top countries of Europe in terms of both productivityand the level of social welfare.6. The rooting of the scenario of knowledge society issupported by both institutional pressure from the EU anda tightening competition between the EU member states,but also a competition between the EU, USA, China, a.o. Asian countries at the global level. The internationalenvironment and the existence of positive models in othersmall countries (with Finland and Ireland as goodexamples) will have a favourable impact on the scenario.

knowledge-based decision-making may become animportant development impulse for Estonia.2. Knowledge-based approach will accelerate transitionto innovation-centred economy. Introduction of the modelof high-tech and knowledge-driven economic growth willlead to an increase in the productivity of the Estonianeconomy and welfare of the members of society.(Problems emerging in low-tech and low-salary industries(food industry, power production, timber and furnitureindustry, textile and ready-made garments industry) needto be solved in parallel).3. The scenario will give strong positive impulses tothe broadening of the Estonian cultural space, to anincrease in its functionality and innovativity. Knowledgesociety presupposes the informedness of all membersof society and their engagement in discussions, whichwill activate contacts between the users of the Estonianlanguage and facilitate intensive development of newmeanings (terms, concepts) within different spheres andin their contact areas.4. A big part of actors from different spheres of societywill be engaged into a network-based decision-makingmechanism, which increases participation and coherence.5. A systematic approach to the development of thesociety, the economy and the natural environment willlay an emphasis on integrated, ecological conceptionsand applications and promote an integral understandingand conception of developments in both the naturalenvironment and the human and cultural environment.This will result in an increase in ecological awareness,

Positive impact1. The role of homespun wisdom, emotions and groupinterests in the formation of decisions will decrease andthe best knowledge of the sphere of life concerned willgradually come into use, no matter what part of the worldit originates from. Movement from interest-based to

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which facilitates purposeful consideration of the state ofthe natural environment and contributes to the valuationof balance and diversity not only at the macro level butalso in everyday behaviour.6. The scenario will have a positive impact on regionaldevelopment, incl. the development of diverse and flexibleforms of employment and settlement, resulting in auniform rise in the quality of life and the living environmentin Estonia as a whole.7. There will be a positive impact on the achievementof the goal of ecological balance thanks to switching toinnovative eco-management and knowledge-basedproduction.8. A rise in educatedness and the emergence ofinnovative fields of activity will increase the diversity ofself-realisation possibilities. The use of new interactivemedia in recreation will increase. This will result inincreased attractiveness of Estonia as a living and workingplace for the young.

Threats1. The primary danger lies in too rapidinternationalisation of the Estonian cultural space, incl.the English language becoming the prevailingcommunication language in several spheres of life.Increased attractiveness of Estonia will also increase thepressure to cultural globalisation and internationalisation,which will lead to the danger of Estonian-language culturebecoming a “museal” unless adequate countermeasuresare taken.

2. There is a danger of widening of the digital andcultural gap between different groups of population, thedanger that the youth culture escaped into a passivevirtual world and “the culture of the elderly” incapsulatedinto the traditional way of life may become marginalisedin a society oriented to active participation and innovation.3. There is a danger that innovative and strategic ideaswill not be sufficiently “translated” into the language ofeveryday life and thereby made understandable andcaptivating for people. Difficulties will emerge inovercoming the interpersonal, intersectoral andprofessional communication barriers (widespread inEstonia in places). Development strategies have to beaccompanied with communication strategies and trainingprogrammes to avoid these threats.4. Resistance and round-defence among politicisedofficials constitutes a danger; the proposals and ideas ofprofessionals continue to be regarded simply as noise.5. Risks are posed by strong social stratification as aremnant from the previous development stages of thesociety and by the existence of “ghettos of poverty”,whose elimination requires a special programme of socialtransition measures (incl. social assistance combinedwith social rehabilitation). Concentration of socialexclusion in regions of traditional extensive production(agriculture and mining) constitutes a danger, which, too,presupposes the implementation of special programmesfor offsetting regional developmental differences as wellas mobilisation of addit ional resources for thestrengthening of local communities.

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Judgement of sustainabilityDespite the above threats and problems, the expertsof SE21 judge that powerful movement towards theknowledge society is basically the only developmentpath that would ensure the sustainability of Estonia.The reason: knowledge society is the onlydevelopment model based on reflect iveknowledge-based adaptation of the society andstate to changes in both the internal and externalenvironment, creating the necessary structures(institutional and intellectual support to strategicplanning) and cult ivat ing reflexivity andcompetence as the central qualities of the society.For a small country lacking the resources for realisingitself by the use of power, the wisdom of adaptationand self-management is in fact the only way todevelopment and success.Knowledge society is certainly not an ideal world or adream country either. Yet this model should (at leastin theory) be knowledgeable of also its own weaknessesand shortcomings, which is the primary preconditionfor overcoming them.

Preconditions for moving towards the knowledgesociety can only develop step by step. One of theessential preconditions is a change of generations inthe key sectors of society, a new elite to lead the wayto knowledge society becoming influential in publiclife, in shaping societal attitudes and policies. An elitewho is able to overcome the traditional closedness of

the Estonian culture and the rigidness ofcommunication barriers, the individualistic “hard-working ethics”, distrust and hostility towards “others”,which all together reduces significantly the cooperationcapacity of the society and inhibits the realisation ofthe social capital as a development resource. Thiscan be overcome only through stimulating cooperationnetworks, but in particular through increasing thewillingness for and skills of cooperation and shapingcommunicative and social skills through the educationsystem.Movement towards the knowledge society is notreducible to computerisation of Estonia, as can oftenbe heard in discussions held in the context ofinformation society. It is first of all a shift towards aprincipally different arrangement of society andgovernance, with the development of the electroniccommunication network being a (certainly important)component of the infrastructure supporting this model.As the unfolding of this scenario requires reforms, inparticular in education and in the culture and practiceof state governance, but also a steady partnershipbetween the state and a (well-developed) civil society,this scenario is not likely to gain full effect before thenext decade. However, the first steps to bring Estoniacloser to the model of knowledge society can be takenalready today. The courses of action to this end aredescribed in the next chapter.

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Chapter IVCourses of action

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Chapter IVCourses of action

IntroductionEstonia as a knowledge society means movement towardssuch an arrangement of developmental managementwhere knowledge constitutes the as central a basis fordevelopment choices as possible and where an as largea part of the Estonian society as possible participates inmaking development choices. In terms of the above-described four development goals, this means a sufficientfoundation of knowledge and a critical mass of competentcooperative participants both for cultural space, welfare,coherence and ecological balance. There is no ideal hereeither, movement towards the knowledge society meansstep-to-step changes in at least four fields:

First – introduction of the principles of knowledge-basedmanagement into state governance. The aim is to movefrom interest-based (sub)decisions towards inclusive andknowledge-based strategic management in makingdecisions that determine the development of the society.

Second – changes in the creation and use of intellectualresources. As intellectual resource constitutes the keyresource of the knowledge society, a significant increasein and making of the best use of this resource is aninevitable precondition for the entire model to take effect.

Third – bringing of human-nature relations into conformitywith the principles of knowledge society.

Fourth – establishment of sufficient support to movementtowards the knowledge society, since a substantive shiftcannot be achieved without this.

None of these changes will take place spontaneously orself-regulatively, movement towards the knowledgesociety inevitably requires the relevant state policy. The“invisible hand” is no use here. The policy can be effectiveonly when it builds on a broad societal conviction thatsuch a development path is necessary and suitable forEstonia.Nor will any of the above-mentioned changes take placeovernight, they all require efforts and a step-by-stepapproach, they all require that the principles of knowledgesociety are applied in developing the knowledge societyitself. At the same time, a clear orientation towards thisvery type of societal arrangement gives sense to themovement and hopefully also shortens it.The last chapter of SE21 proposes courses of action tosupport Estonia’s movement towards the knowledgesociety. The actions are divided into two groups – thosecreat ing the necessary inst itut ional basis forknowledge-based state governance and knowledge-based arrangement of social management, and theones increasing Estonia’s capability of acting as aknowledge society.

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Course of action A:Transition to knowledge-basedstate governanceThe following does not constitute a proposal forcreating new institutions or reorganising the existingones. It proposes a vision of an institutional systemfor “navigating” as sustainably as possible in the spaceof an increasingly complex external environment andconflicting development goals. Creation and launchingof such a system requires a different approach to stategovernance practices compared to the one so far, andalso several different social and political attitudes anda different organisational culture. However, the keyfeatures of developmental management that would fitinto the today’s environment can be defined based onthe experience of several countries and steps fordesigning a model suitable for Estonia can beproposed.

Baseline situationEstonia is currently lacking at least three centralcomponents of the model of knowledge society.First, a long-term integrated development strategy.We have over 6 0 separate and poorlyintercompatible development plans, from which itis possible to gather neither Estonia’s commontargets nor a future strategy. Also the documentEstonian Nat ional Development Plan for theImplementation of the EU Structural Funds – SingleProgramming Document 2004-2006 cannot serve

as such a base document for the following threereasons:1. The document centres on economic development,it does not cover the entire range of issues related toEstonia’s development.2. The document is directed only to those spheresof life that can be supported through the EU StructuralFunds.3. The document has a short time horizon.

Second, there exists no centre (inst itut ion,organisation, network) tasked with the development,monitoring of implementation and revision of suchstrategy.

Third, a cooperation network and dialogue culturenecessary for preparing a development strategy isabsent. Although there has been an improvementin cooperation between the brains trusts of differentagencies and in the involvement of stakeholders inthe preparation of development plans in recentyears, the various development plans are drawn fromvery different bases, their intercompatibility is weakand involvement of the public has been formal. Thepotential of universit ies, research centres andvarious non-governmental brains trusts has not beenmade sufficient use of. In cases where this wasattempted to be done, there have been greatdifficulties with reconciling the mentalities of officialsand researchers.

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In order to move towards strategic developmentalmanagement, it is necessary to establish aninstitutional structure to design and administer thegeneral development strategy of Estonia. Severaldifferent approaches are possible here. If thedevelopment of the strategy is regarded as primaryand institutional arrangement as secondary (creatingthe strategy e.g. by the use of an ad hoc group or incooperat ion between a variet y of exist inginstitutions), it will be justified to start creating theinstitutional “body” for the strategy only after thestrategy itself is completed. The other option is tobegin the development of the strategy from creatinga central institution or network of institutions,assuming that a strategy without a “ master” ,someone to look after its implementation, to dealwith its adaptation, etc. will not prove viable. Theexperience of other countries could be of assistancein selecting the approach suitable for Estonia.

International experienceArguments in favour of both the first and the secondapproach can be found in the practice of differentcountries. The experience of Ireland from the 1960iesspeaks for the first option. In the Irish case, a strategydeveloped by an ad hoc group (consisting of leadersfrom different spheres of l i fe – researchers,technocrats, politicians, trade union representatives,

also the foreign Irish)2 was taken as primary, thecompleted strategy was accepted by political partiesand other social actors and a whole network of semi-state institutions was established to support itsimplementation. True, one institution was somewhatmore important in this network than the others: theIndustrial Development Authority (IDA). Once thestrategy had been realised or became exhausted, anew ad hoc brains trust was convened and a strategyfor the following time period was drawn up.

The Finnish example is more institution-centred. Aninstitution named SITRA (Suomen itsenäisyydenjuhlarahasto) was established in Finland at the end ofthe 1960ies with support from the Finnish Bank. Itbecame the driving institution in preparing a developmentstrategy for Finland, in bringing it to the attention ofsocietal leaders (particularly appreciated are the strategictraining seminars of SITRA, organised on the principlethat high officials, politicians and business leaders arealways trained together), and partly also in contributingto the financing of key sections of new development (riskinvestments). SITRA does not focus only narrowly ondesigning an economic development policy – it has latelybeen dealing also with e.g. the issues of social innovation.

The development success of Finland is sometimesattributed to successful activity of SITRA in the field of

2 A similar approach was used also in the case of the so-called National Understanding at the end of the 1980ies, where the main focus wasnot so much on agreeing a long-term development strategy but on agreeing on measures to avoid the impending macroeconomic crisis.

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development policy. This is in a sense an overestimationbecause SITRA is by far not the only body to shapedevelopmental management in Finland. Remarkable israther the fact that the development-political visionsgenerated at different brain centres have a rathersimilar philosophy and are coherent and easilyintercompatible. Moreover, they are implemented withan important contribution of several other institutions,such as the technological agency TEKES with itscountry-wide network, but also foundations based onprivate capital, etc.

Interesting solutions can be found also from thepractice of other countries3. For instance in Singapurthe preparation of development strategies and visionsis initiated by a special “Singapur 21 Committee”established by and acting under the aegis of theGovernment and headed by the Minister of Education(the Committee includes also Members of Parliament).In several countries, governments have ordered thepreparation of development strategies for a specificperiod from research institutes, establishing therequirement to engage experts from outside theinstitute and to consult with stakeholders as part ofthe envisaged procedure. Despite the variety ofsolutions in different countries, certain commonaspects can still be observed:1. It has become a principle that long-term general

strategies cannot be successfully prepared by officialsonly or mostly. Nor does it work to draw up such astrategy by the use of a politically biased researchcentre (this option was tried recently in Hungary, wherethe ambitious “Szechenyi Plan” was prepared by aresearch institute acting as the Prime Minister’s brainstrust. The plan was discarded at the change ofgovernment in spite of several clearly productive ideascontained in it). It is more fruitful to use an institution,a set of institutions or an ad hoc working group actingrelatively autonomously of the “sitting government”.2. It seems more expedient to use a network ofinstitutions instead of a single “strategy-makinginstitution” (this opinion was represented in a recentexpert analysis on the activity of SITRA e.g. by ManuelCastells, one of the world’s best renownedsociologists). The model of “one institution to draw upthe strategy + other institutions engaged” seems tobe the most effective one.3. The orientation of the strategy to one specific“axis” (e.g. sustainability) should be combined withbroad public involvement.4. Political approval of the prepared strategy cannotbe arranged just by submitting the “finished product”to the Parliament. The representatives of key politicalparties (both the coalition and opposition) and othersocietal parties need to be involved in the processalready during the drawing up of the strategy.

3 See Terk, E. Kurik, S. Pikaajalise arengu kavandamine riigi tasandil. Kas Eestil on teistelt maadelt õppida. (Long-term development planning at thestate level. Does Estonia have something to learn from other countries?) “Eesti Majanduse Teataja” No. 7-8 2001, pp. 8-14 (in Estonian)

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Possible solution for EstoniaPursuant to the logic of SE21, strategic developmentplanning in Estonia cannot be purely sector-centred(oriented to technological development, integrationproblems, etc.), which has unfortunately been thepractice to date. Sustainability of Estonia presupposesan integral approach, which would attempt to takeinto account all key development goals in theirinteraction. In the interests of integrity and adequateconsideration of the multi-directional goals, it wouldbe more suitable for Estonia not to develop single adhoc plans but to create a permanent NationalDevelopment Network to function as a strategic self-management instrument of the society.What is a National Development Network (NDN)?It would be a politically independent body of strategicdevelopment planning outside of political parties, whichwould be both developing long-term programmes andharmonising the strategies of different sectors andmonitoring their implementation. A NDN would be builtup as a network consisting of the representatives ofstate authorit ies, the private sector, cit izenassociations, political parties and public agencies(universities, the Academy of Sciences). The role ofthe NDN would be to draw up terms of reference forthe preparation of development strategies, while thepreparation of strategies (or their alternative versions)would be ordered from both public and private analysiscentres through public competition. The NDN organisesdiscussions of different options with various third sector

groups, holds public debates and formulatesdevelopment plans that are ultimately submitted tothe legislator for approval. The coordinating functionsof the NDN could be performed e.g. by a DevelopmentAgency, which would function as a foundation or publicinstitution and through which the NDN would be alsofinanced. Analogously with the Finnish SITRA model,such network could not only design new developmentideas but also be in charge of training a new,strategically thinking economic and political elite. TheNDN would be the place where sectoral developmentstrategies are integrated with general developmentplans, where their realisation is monitored, specifyingand correct ive measures proposed and thedevelopments and trends in Estonia are compared withglobal trends and plans in other countries. Such ascheme would make longer-term developmentplanning relatively autonomous from the control of the“sitting government” and would bring the process to abroader basis, ensuring movement towards the modelof “self-management” of the society.

What does the NDN do? The NDN acts on thedeductive principle, moving from general developmentprinciples to plans addressing specific topics andissues. The activity of the NDN would be based on theEstonian Sustainable Development Strategy, for whichthe present document could serve as one of the sourcematerials. The Sustainable Development Strategywould be the document defining the most general

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development goals for the state and society and itwould be taken as a basis for preparing base strategiesdealing with developments in individual spheres(cultural space, economic development and welfare,etc.). None of the base strategies will be created inan empty place, several plans and concepts alreadyexist in Estonia for each of them. These will need tobe supplemented and, in particular, integrated into asystematic whole.

The base strategies will be designed, as far as possible,according to common principles, with interrelatednessand deriving from the principles of sustainabilitybeing their indispensable features. The basest rategies as goal-cent red st rategies wil l betranslated into programmes addressing the keymechanisms / measures for achieving the goals –in the fields of populat ion, health, education,research, security, etc. Part of the programmesalready exist in Estonia, while part are yet to becreated. Both the exist ing and the futureprogrammes will also need to be brought into aharmonised and unified system and measuresensuring their realisation need to be established.The NDN will have first of all a coordinating andharmonising role in the process of st rategicdevelopment planning, start ing f rom theharmonisation of different terms of reference andfinishing with the creat ion of a comparableassessment system. The NDN will certainly not be a

new Planning Committee holding the monopoly ofmaking strategic decisions. Who is the NDN? Ideally, the NDN should be thebrains trust for the development of Estonia. The mostimportant precondition for the NDN to assume thisrole is the professionality and authority of the peopleacting therein. Participation in the NDN will inevitablyrequire the possession of international competenceplus an in-depth understanding of the situation anddevelopments in Estonia. Finding of experts with asufficient authority and level of competence is likelyto prove one of the bottlenecks in creating the NDN.The NDN could develop both on the basis of anexist ing inst itut ion and as a completely neworganisation. It is important that it has a highreputat ion and autonomousness, but also thecapacity to combine the participation of the stateand private sector (the term “semi-state” used inIreland could be suitable). The question of who willconstitute the basis for the establishment of theNDN is not very likely to turn too painful thanks tothe network principle – all serious actors will haveto be involved in any case.

On the other hand, the formation of corporativecommunities, i.e. a situation where the planning ofEstonia’s development becomes an internal matterof a closed company (“a club of the wise”) needs tobe avoided in designing the NDN. The idea ofstrategic self-management of the society can be

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realised only in a situation where all interestedparties are invited to participate and capable ofparticipating also in practice.Developmental management network. Althoughthe NDN is designed as an independent network,there will be sense its activity only if the results areultimately channelled into legislation and the activityof authorities. To achieve substantive involvementof the Riigikogu in strategy-making, a DevelopmentCommittee (an analogue to the Future Committeein Finland) should be established at the Riigikogu.The Committee would be the main state partner ofthe NDN and a participant in strategy-making, thebody through whom strategic planning would berealised at the state level. It would be dealing withboth the general development strategy and the basestrategies, ensuring that these are consistent witheach other and that development - st rategicstandpoints are taken into account both in legislationand in budgeting. Although the committee cannotundertake the work of the Government and otherparliamentary committees, it can formulate state’spositions with regard to long-term issues and providethe relevant orientations both to other parliamentarycommittees and the Government. This would makeit possible to overcome one of the most worryingaspects of the practice to date, where the budget(budget strategy) is the overall base document whichthe development targets and priorities of the societyare derived from, while it should actually be the other

way round – developmental needs should be takenas a basis for budgeting. The entire budgetingprocess and control over budget implementationshould be subjected to the principles of strategicmanagement.In the case of strategic management, each ministry,too, builds its activity on the base strategies, whichserve as a basis for drafting the development plansand action programmes covering the ministry’s areaof administration. Similar strategic planning couldtake place also at the local government level. Thedevelopment uni t s of minist ries and localgovernments would participate in the NDN network,contributing through this participation also to thepreparation of base strategies.Cost of the Development Network. Whenest imat ing the cost of establishment of theDevelopment Network, it should be taken intoaccount that part of its possible structural elementsalready exist and function as institutions. Additionalcosts arise first of all from bringing the currentdevelopment planning into a unified system and fromgathering and organising of data related todevelopmental management.

It is inevitable that the network to be developed hasa coordinating “centre” . Based on the experienceof the Finnish SITRA, this could mean about tenpeople working directly with strategic analysis,development plans and coordination of the relevant

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activities. Of the approximately 100-person staff ofSITRA, ca 20 people have such functions. (Theremaining staff of SITRA has other functions, incl.those connected with investment of risk capital).Considering this and also the need to involve a broaderrange of people in the work of the “centre”, the directannual costs of the “centre” and the network could beprovisionally estimated at around 16–20 millionkroons. The establishment of the “centre” would, ofcourse, cost less to the state, as part of the peoplecurrently working on the same issues elsewhere cansimply be moved over to the “centre” .

A high level of strategy-making would require moreextensive background research in the relevant fieldsas compared to the present, an analysis of theexperience of other countries, training of decision-makers, etc. However, all this would be necessary inany case, regardless of what the development planningsystem will be like. A more detailed calculation of usualstructural costs of development (in the broad sense)would already require a separate study.Creation of a “body” to lead the strategic self-management of the society is a key precondition formoving towards the knowledge society. Without a clearinstitutional basis, planning of the development ofEstonia will still remain a “Brown movement” and areal development acceleration (in all spheres of life)will remain merely a distant dream.

Course of action B:Intellectual and social supportto knowledge society

An institutional network is necessary but alone notsufficient for moving towards the knowledge society.Another inevitable precondition is the existence ofadequate intellectual and social resources and theiractual mobilisation towards the achievement of thedevelopment goals essential for Estonia. Clear keyareas here are education, research and developmentand innovation, but also the creation of networks,organisation of feedback and ensuring of societalsupport to this development path. The followingcourses of action will be central to that end.

EducationBringing of the Estonian education policy intoconformity with the principles established in theEuropean Union.

In adapting education to the needs of the knowledgesociety, the approaches and solutions in Estonianeed to be brought into conformity with the generalprinciples of the education policy of the EuropeanUnion formulated at the Lisbon meeting of theCouncil of Europe in March 20004 . It was recognisedat the meeting that the future of the Europeaneconomy and society will depend on to what extent

4 See: Investing efficiently in education and training. Communication fron the Commission, Brussels, COM (2002) 779 final, 10.01.2003.

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the skills and knowledge of people will be broughtinto line with the needs of a knowledge-driveneconomy. The goals of education of the knowledgesociety need continuous reflexion and the contentof educat ion needs cont inuous adaptat ion inaccordance with the changing needs of the society.

The Council of Europe is of the opinion thatexpenditures on education should be regarded asinvestments. In OECD countries, the efficiency ofeducation expenditures is assessed based on theunderstanding that the extension of the averageduration of schooling by one year increases economicgrowth by 5%. Investments in human capital annuallyadded 0.5% to economic growth in the OECD countriesduring the 1990ies.

The education needs of the European knowledgesociety focus around the following issues:1) to raise the general level of education of the working-age population to at least the level of secondaryeducation2) to embrace the entire population in lifelong learning3) to ensure a sufficient supply of new-generationresearchers and engineers and create attractivepossibilities for their employment in Europe4) to intensify research activity in universities andsecure a new generation of researchers.The emphasis on lifelong learning is related topurposeful application of education for increasing

social coherence and bridging the gap between the“knowledge-poor” and the “knowledge-rich” , withparticular attention paid to continuous developmentof the working skills and competences and citizencompetence of people in all age groups. Thus, thecontribut ion of education to knowledge-driveneconomy is inseparable from the value of educationfor individuals and for overall development of thesociety.

In view of the negative demographic trends in wholeEurope, the Council of Europe emphasises the needto stay longer in employment, to maintain theworking ability and quality of workforce for a longerperiod, and recommends that older age groupsshould be engaged in various forms of lifelonglearning, including retraining for achieving a higherformal education.

Considering the enlargement of the European Union,the challenge of bringing the educational space ofwhole Europe into conformity with the requirementsof the knowledge society by the year 2010 is evengreater.

All countries of Europe are called to radically increasetheir investments into education, viewing them not as“governmental expenditures” but as “knowledgeinvestments”. The Council emphasises the need tobring the resources of private sector into education

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not in place of but in addition to public resources soas to ensure a rise in educational expenditures perstudent to a level comparable to the USA, especiallyin vocational and higher education and in adult in-service and retraining.

A central task is to supplement curricula with keycompetences of part icular importance for theknowledge society, such as digital literacy, learningskills, social competences, business competencesand language ski l ls. Acquiring of these keycompetences in all age groups, including thecategories with a higher social and unemploymentrisk (older or less qualified workers, mothersreturning to the labour market) is the main aim oflifelong learning. The Lisbon meeting recommendedthat t he t ransformat ion of schools intomultifunctional education and development centresshould be supported to promote lifelong learning.

Development of the education strategy of EstoniaConsidering the pan-European trends, it is the primarytask of Estonia to develop an advanced educationstrategy and to link it with the general developmentgoals and needs of Estonia. The projects so far(Learning Estonia, a. o.) provide sufficient startingpoints for this. The education paradigm presented inthe education strategy Learning Estonia largelycoincides with the principles of the Europeanknowledge society for promoting education. The

Estonian education strategy could be based on thefollowing targets established in Learning Estonia.

• High, internationally recognised quality. Formaleducat ion recognised in Estonia secures theopportunities to pursue studies or find work in othercountries, and also to receive students from othercountries.• Accessibility of learning opportunities. Thepossibility to acquire an education tailored to one’sabilities is accessible to every inhabitant of Estoniaregardless of their age, mental and physical health,social status and place of living.• Valuation of the Estonian language and culturein the conditions of cultural diversity.• Multiplicity of learning opportunities. A broadrange of curricula, types of educational institutions andforms of study are in use, taking into account theeducation needs of students with special needs.• Unity. The education system is functioning as aunified system of different forms of study andnetworked educational institutions, with the generalprinciples of its activity not depending on the languageof instruction, form of ownership or level of study.• Openness and flexibility. The education systemis capable of responding to the changing needs of thesociety and individuals and the changing demand ofthe international economy and labour market and isopen for international cooperation.• Partnership. The representatives of three sectors

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of the society – the public, private and third sectorparticipate in the preparation of decisions concerningthe development of the education system. The costsof study are covered on the basis of common interestsby all parties interested in the outcome, which willensure that education expenditures per person reachthe level necessary for the development of theknowledge society.• Efficiency. Macro-economic and social criteria forassessing the effectiveness of education investmentsare defined and scientifically grounded methods forassessing both the effectiveness of teachers’ work andthe effectiveness of concrete education investmentsare worked out.• Future-orientedness. The content and qualityassurance of education are directed to satisfying thefuture education needs of individuals, organisationsand the society.

Key areas in achieving these goals are:Learning as part of the way of life. Each inhabitant ofEstonia has to have access to lifelong self-developmentto maintain their self-dignity, citizen awareness andcompetitiveness in the labour market. No limits areset to the age of students and self-development ispromoted. Considering the declining and ageingpopulation of Estonia and the need to successfullyrespond to changes in economy, it is not enough forEstonia that the young just enter the labour market,since the number of young people who could bring

along new skills and preparedness for changes isrelatively small. Lifelong learning is necessary for allpeople, in particular the older generation, to maintaintheir self-dignity, cit izen awareness andcompetitiveness on the labour market. Continuouslylearning employees constitute a treasure for everyorganisation, be it a business enterprise or a public orthird sector organisation, allowing the organisation todevelop and increase its wealth.

Lifelong learning has to become a natural way of lifefor all members of the society. Learning is no longerunderstood as traditional studying in a classroom.Learning takes place everywhere – in the family, atwork, in community relations, when following themedia, etc. Learning opportunities and curricula aredesigned to fit in with the wishes and needs of studentswithin the possibilit ies of the society. Learningmotivation of people is supported by all means.Attention is being paid to maximal development ofindividual capabilities of people: learners are allowedto use flexible forms of study and individual curriculatailored to their needs and interests.

Recognition of the new role of teachers. The work ofteachers will change. Alongside with the transfer ofknowledge, teachers will assume an important role assupervisors, mentors and mediators. Teachers will havethe task of contributing to the development ofindividuals who are self-confident and dignified, skilled

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to learn and able to cooperate. The changingenvironment and new tasks will increasingly urge alsoteachers themselves to be students.

Curriculum developmentMovement towards the knowledge society implies alsothat the content of education is to be tailored to theexpectations of this societal model. Curricula have tobe significantly better equipped to develop the followingabilities, skills and attitudes of students:

• learning ability and skills;• ability to set goals, detect and solve problems;• ability of abstract and systematic thinking, ability ofcritical analysis and reflexion, ability to synthesise;• ability to make strategic choices and prognosticaterisks and dangers;• decision-making capability and responsibility,management and teamwork skills;• ability of adequate self-expression and effectivecommunication;• ability to use information and communicationtechnologies (ICT) to process and create (search,systemat ise, st ructure, analyse, generalise,disseminate, exchange and store) information;• ability and courage to generate ideas, create newknowledge;• self-confidence, self-dignity, initiative and activity;• honesty, reliability, clear ethical convictions;• mastering of the national culture treasury, ability to

understand other cultures, ability of interculturalcommunication;• skills of staying in a good physical and mental shape;• ability to adapt successfully to a new environmentand meet new challenges (fitness);• familiarity and compliance with the principles ofsustainable development, attaining of the principlesof act ing and behaving in an environmentallysustainable manner and in due consideration ofenvironmental balance.

Education as a national priorityPromotion of lifelong training suited to the knowledgesociety inevitably requires the state to take steps, firstof all by creating the relevant legal environment and afinancing system for making professional in-service andretraining and informal education accessible to all agegroups, but in particular to groups of population at ahigher level of risk. A system for taking professionaland informal training and work experience into accountin formal training needs to be developed rapidly tobroaden the learning opportunities of adults.

The new goals and principles of development of theeducation system and the broadened conception ofthe education system necessitate changes also in thecriteria of quality assessment of education and in thefunctioning and development of quality assurancesystems. As the education paradigm becomes learner-focused, also the quality assessment criteria need to

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be revised. The following criteria have been derivedfrom the principles of knowledge-based management:

• each educational institution assesses the needs andspecificity of students on a regular basis and agreeson the goals to be pursued; the goals are reflected indevelopment programmes, curricula and in theorganisation of work;• standards agreed at the state level and at the levelof educational institutions are used to measure theacquiring of the main competences;• when assessing the work of educational institutions,the added value created by teachers will bedistinguished from the specificities related to the socialbackground and (special) needs of students;• development plans of educational institutions areprepared in cooperation with different stakeholders,which interconnects the institutions and the needs oftarget groups, the community, the region and the state;• the information gathered through quality control andmonitoring is arranged into a format that allows it tobe used both at the school level and state level forcurriculum development , for organisat ionalimprovement of teachers’ basic and in-service trainingand the work of educational institutions, and forassessing the quality of workforce on the basis ofprofessional standards.Teachers and school leaders have a key role inimplementing the changes in the education system ofEstonia. The role of a teacher is considerably broader

than conventionally understood. The expected changesin study content, in the style of teaching, in assessmentmethods, in cooperation relations with parents andthe community, an increase in the number of studentswith special needs, the use of new managementmethods and new technologies – all this requires thepeople earning their living as a teacher to continuouslyself-develop, to be willing to become students overand over again. Preparation of teachers of the 21st

century is one of the key issues for the developmentof Estonia, as is state-level valuation and societalappreciation of teachers’ work.

A new type of teacher competences needs to bedeveloped as the first step in launching the scenarioof knowledge society. This requires the developmentof an in-service training programme for pedagogues(and also parents) together with the relevantinfrastructure, which would ensure a rise in the socialcompetences of pedagogues in the near years andimprove their methodological skills for providingindividual guidance to learners’ development towardsattaining the qualities necessary for the citizens ofknowledge society. The new role expectations forteachers will serve as a basis for reforming theprofessional requirements for teachers, the system forassessing compliance with the requirements and thecurricula and organisation of formal education and in-service training. Primary and in-service training ofteachers should ensure the formation of the necessary

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competences. The willingness of teachers and schoolleaders to develop learning-focused education meansan emphasis on attaining study results specified jointlywith learners. The outcomes achieved in learners’development, in terms of the abilities and competencesof a personality to successfully cope in a knowledgesociety, should become the central criteria forassessing the performance of teachers.

Development of the education system of the knowledgesociety requires that a systematic education code bedrawn up. Legal regulation of the education systemhas to be simple, proceed from consistent principlesand concepts, allow the development of all forms andtypes of study and ensure the accessibility of educationto all members of the society according to theirabilities.

Adaptation of education to knowledge-driveneconomyThe requirements of knowledge-driven economy toworkforce need to be reflected in the general,vocational and higher education curricula of Estonia.Accelerating structural changes in the economy andlabour market impose ever new requirements on theeducational and professional mobility of workers. Inorder to ascertain the need for skilled workers and topspecialists by economic sectors, cooperation has tobe built between public sector organisat ions,employers’ organisat ions and research and

development institutions. This cooperation should bebased on future-oriented sociological, economic andlabour market studies, which are important both forthe planning of governmental financing of universitiesand for curriculum development.

Education is a prerequisite for professional skills,ensuring the theoretical knowledge necessary forpractical work. Numerous attempts have been madeto harmonise the education networks of differentcountries through mutual recognition of universitydiplomas and academic degrees, yet it has beenconsidered more realistic lately in Europe to harmonisethe professional requirements for workers by definingthe required professional skills and the necessaryqualities and basic requirements.

One of the central motives for acquiring education isto acquire a profession, i.e. to acquire the knowledge,proficiencies and skills needed to secure subsistenceincome and a satisfying and interesting work andactivity according to one’s abilities and level ofunderstanding, to perfect and develop in synchronywith changes in the surrounding world.

The need for professions is derived from the strategicgoals of the Estonian economy as a whole and fromthe goals of individual sectors of economy. Despitethe economic restructuring and some refurbishmentin industries, Estonia is still a low-tech country. To

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achieve a breakthrough in transition to knowledge-driven economy, the economic policy and educationpolicy of Estonia need to be synchronously readjustedand brought into consistency with each other to ensurethe conformity of workforce quality to the developmentneeds of the economy.

Acquiring of a profession as the integration of theoryand practice necessary for acquiring skills has totake place as a continuous process over the entirelifet ime, from basic school to ret irement age.Achievement of this goal is the key to overcomingthe current lag in the quality and quantity of labourforce in Estonia. The primary task is to create thepreconditions that would allow our sector strategiesand national policies to respond to changes throughin-service and ret raining. This wi l l becomeparticularly topical in the near decades, inter aliafrom the aspect of engaging work-capable peoplein retirement age into the creation of additional valuein different economic sectors. The EU labour marketwill soon engage our redundant workers by investinginto the organisation of retraining of workers fromnew member states.

Employment contracts between companies andemployees have to be supplemented with the principleof setting out both the need and obligation for worker’sin-service training. An employee must not degeneratewhile working in a company. A business operator has

no right to inhibit the development of workers’professional skills. The national education policy has toregulate the educational and vocational needs not onlyin priority areas but also with a view to safeguarding allprofessions vital for the state and society.

Considering the relatively low sectoral labour demandin Estonia, a significantly greater (joint) contributionfrom sector enterprises themselves needs to beplanned for safeguarding the education necessary forprofessional skills.

To motivate the students of general education schoolsto choose professions essential for knowledge-driveneconomy and to prepare all members of the societyfor successful performance in a high- techenvironment, both at work and in everyday life, thecurriculum of general education schools could besupplemented with a technology module. It isimportant to broaden the use of information andcommunicat ion technology (ICT) in the studyprocess, incl. in making use of the possibilities ofdistance training. The efforts and investments madeso far will lose their value unless fast Internetconnect ions are secured for al l educat ionalinstitutions and work is continued in the fields ofimproving infrastructure at all levels of study,integrating ICT competences into the formal and in-service training of teachers, updating the curriculaand methodologies in the light of new technologies,

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incl. creating Estonian-language databases connectedwith Estonian-language study software and curricula.

Rapid changes in professional skills and requirements(arising from technological development) necessitatevery operational and frequent revision of professionalstandards, as these very standards constitute the poolof requirements from which schools are to obtain theinformation necessary for drawing up curricula in boththe short and the long term. The role of the state andGovernment will consist in ensuring support to allaspirations to acquire education and a profession,charging and entrusting professional specialists withthis task.

In particular professional certification organisations butalso the state, local governments and other relevantorganisations will be in charge of promoting anddeveloping the prestige of professions, continuouslyrevising qualification requirements and designingmechanisms for organising in-service and retraining.

In summaryThe aim is to develop the education offered in Estonia,incl. its organisational structure, into an integral andunambiguous system. This will lead to an educationalsystem which:• is based on a development programme (educationstrategy) consistent with the overall development goalsof the society;

• is regulated by a comprehensive body of educationlegislation;• provides each inhabitant of Estonia with theopportunity to fully develop their potential andabilities;• is subject to quality requirements brought intoconformity with international requirements;• is subject to continuous curriculum development,regular feedback and quality assessment;• functions as an integral system with the Estonianresearch and development activity;• offers education in (dynamic) accordance with thechanging needs of the society and labour market;• functions in an open manner, both allowing Estonianstudents to gain foreign experience and importingworld’s best competence into Estonia;• develops a sufficient set of social and strategiccompetences for coping in an open world (languages,communication skills, goal-orientation, strategicplanning, etc.);• is feedback-based and through that continuouslycorrecting its performance;• is financed at a level corresponding to theimportance of this sphere for the knowledge society,i.e. the share of educational expenditures in GDPhas to increase;

As of today, none of these requirements have beensatisfactorily met, which constitutes clear hindranceto moving towards the knowledge society.

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Research, development and innovation(RD &I)

PrinciplesIt is stated in “Knowledge-based Estonia”, the Estonianresearch and development strategy for 2002-2006, that:RD&I activities support the preservation of the state andthe nation and the orientation of the economy and societytowards sustainable development.

The R&D strategy envisages a review every three years.Thus, the short- and long-term goals for research andtechnological development and innovation groundedthereon, as well as consistency in reaching the goals,have been nationally defined and recognised.

According to “Knowledge-based Estonia”, the strategicRD&I preferences or key areas for Estonia are:• User-friendly information technologies (IT) anddevelopment of the information society• Biomedicine• Materials technologies.The preferences have been defined in considerationof the specific development potentials and possibilitiesof Estonia, the existing research potential, the existingeconomic structure and international trends in the fieldof RD&I.

Information and communication technologies are oneof the technologies that are currently driving a shift in

world’s technological-economic but also societalparadigm. The f ield of biotechnology, incl .biomedicine, has considerably broadened human’sown “sustainability” . In addition to the possibilitiesof clinical medicine so far, this is important fromthe point of view of developing the “health industry”– innovative promotion of biomedicine techniquesand technologies, farmaceuticals, environmentaltechnologies, etc. Materials science is inherently anintegrator and synthesiser of many areas of research.The competence of Estonian researchers so farallows this area to be developed into one of the keyareas of development activity, which will create avery favourable market situation for small andmedium-sized high-tech enterprises. The presentselection of the three priority areas correlates withthe ongoing shift in the global technologicalparadigm, enabling the scientists and engineers ofEstonia to participate in the global RD&I networksin the long term.

Practical application of research results in industry andservices is not possible without development activity.This is the field of engineering, where engineers workhand-in-hand with researchers and economicoperators – industry and services, the main appliersof innovation. The decades-long absence of such aconnecting link, though for different reasons, has beenthe reason why the Estonian industrial technologieshave remained relatively low-tech. It has also led to a

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reduction in the number of engineers and specialistsmastering state-of-the-art high technologies. Yet theexistence of such an implementory-applicationalintermediate link is an inevitable precondition andmotivator for bringing the outcome of research andeducation into an enterprise creating real addedvalue. Also technology transfer can successfullyserve as an input into development activity, which,too, presupposes an adequate supply ofknowledgeable technical specialists and creation ofchoices.

To reach a si t uat ion where research anddevelopment act as the real development engine ofEstonia, i t is indispensable t o support t heimplementation of both fundamental and appliedstudies ( in part icular t hose related to t hedevelopment goals of Estonia). The principle set outin Knowledge-based Estonia according to which …the needs of the economy and social sphere, aswell as societal problems, should be taken intoaccount and become a basis for the planning ofRD&I activities, has to be put into practice. Accordingto the Research and Development Organisation Act,all ministries have to ensure the implementation ofapplied studies necessary for the development oftheir area of administration through initiating andfinancing the relevant national programmes. Thislegal requirement has not been met so far and needsto be put into practice.

Technological innovation is the key area of theknowledge society. Only the best information andcommunication technological environment makes thefunctioning of a knowledge society possible. Onlyknowledge-based solutions will allow Estonia toupgrade its energy sector, healthcare, a. o. spheres oflife. Clear support needs to be channelled to thosetechnological innovations for which a range of high-level actors and know-how has developed to date inEstonia and which therefore have also an exportpotential – health technologies, development ofecological technologies, etc.

StepsFirst, it is important to follow the course adopted bythe Council of Europe in March 2000, which,formulated as a Decision already in March 2003,obligates the Member States to allocate 3% of theirGDP to RD&I activities. Estonia has undertaken toensure a 1.5% allocation by the year 2006, with theshare of enterprises in RD&I to be increased to 0.6%from GDP.

Second, informedness and motivation. An informedand innovation-friendly attitude has to be developedin the society as a whole, such that each member ofthe society would value the achievements in the fieldof innovation (equally with, for instance, the greatachievements of athletes). In addition to financialinstruments, a shift in value judgements will allow the

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development of an environment where the motivationto invest into innovation or to deal with innovation getspaid also through public appreciation.

It is important to motivate all parties:• Economic operators should be motivated to applyinnovation as long-term investment into the strategicdevelopment of enterprises (incl. education, research,development). Today this is done mainly in anemergency or to strengthen personal relations.Investment into innovation and success in this fieldshould become part of client behaviour and societalappreciation of enterprises (innovation-friendlybehaviour of consumers/clients/investors has astronger effect on enterprises than lecturing does).• Researchers – The current disciplinaryfragmentation in Estonia due to the lack of scientificpersonnel and financing does not ensure the desiredresults. The launched creation of technologicaldevelopment centres will make it considerably morerealistic to motivate different research groups to workjointly towards a development outcome and toconvince enterprises/investors of the achievability ofapplied outcomes.• Engineers should be motivated to acquire thenecessary up- to-date professional ski l ls.Professional engineers, in particular, have a realresponsibi l i t y for def ining the needs andrequirements for blue-collar professionals and formobilising governmental financing for their training.

Development requires a strong community ofprofessional engineers with up-to-date knowledge andskills.• Institutions of higher education – motivationmechanisms have to ensure the interest of highereducation institutions in successful innovation throughboth their main activity (teaching and research basedon fundamental studies) and applied activity (appliedstudies, experimental production).

Third, internationalisation. Mobility of researchers,teaching staff, technological engineers a. o. specialists,their contractual working both in Estonia and abroadis a strong development impulse, creating a possibilityto combine the skills of different countries, fields ofexpertise and schools. Openness of educationalinstitutions and development centres is the key topreventing the technological thought of Estonia fromfalling into isolation, which is a real danger in thecircumstances of our limited financial possibilities.

Openness is highly important also in raising the levelof vocational and university education in order totransform our educational institutions into attractiveand acceptable employment and education centresfor young people from foreign countries.

Fourth – social innovation. Considering the fact thatknowledge society is inherent ly an innovat ivearrangement of social and state life, social innovation

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needs significantly more support, for instance throughthe creation of social innovation incubators aimed atencouraging the format ion of socially (anddevelopmentally) oriented citizen associations andthird and private sector initiatives oriented to thedevelopment of the knowledge society.

Fifth – policies and indicators. Development of aninnovation policy (strategy), its continuous monitoringand comparison, improvement and flexibility is the onlychance to be successful in an environment of growingcompetit ion. The role of policy is to delineatedevelopment needs and define the speeds and goalsof development. It is possible that if a systematicscientific, industrial and education policy had existedin the 1990ies, we would be in a considerably betterposition than we are today. It would be expedient tomeasure the effectiveness of RD&I with the followingthree groups of indicators proposed by the EU:investments (5), human resource (6), innovationpotential (2), business innovation (5), competitiveness(2), integrated indicators (2), 22 different indicatorsin total. These indicators are systemat ic andinformative and allow continuous monitoring andcomparison with the external world.

The aim of the RD&I cluster as a whole is to convertthe exist ing information into knowledge-driveneconomy by mediat ion of informat ion andcommunication technologies, with the input to this

economy being learning and education (“ learningindustry”) and output – resource-saving economy (eco-economy). This is practicable only in the context of anagreed national policy, a strategy expressing the policyand a set of indicators for measuring the effectivenessof the strategy.

Human-nature relationsThe success of the knowledge society as thedevelopment path of Estonia will be largely determinedby decisions based on knowledge of the laws of natureand on comprehensive databases allowing theassessment of the funct ioning of the naturalenvironment as an integral system and forecasting ofthe viability of this integral system and its individualtime-space components.

The knowledge society implies an inevitable recognitionof the need to strive for continuous ecological balancein a real economic environment, which is realisedthrough promoting the unity of the use and protectionof nature as the mutually complementary sides of aunitary process, with human regarded as part of theecosystem. This reflects the highly responsible role ofa human individual and the human society, as theyhave to assume responsibility for harmoniousmanagement of ecosystems. Thus, all activities haveto proceed from the global concept according to whichone has to take into account the fundamental principleof ecological balance, i.e. to maintain an environment

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characterised by minimum competition betweenspecies, maximum complexity of the spatial structureof communities and an annual bioproduction equal tothe biomass lost from the community (utilised). In otherwords, there has to be a balance both in matter cyclesand in flows of energy at all levels of the livingenvironment. Ethical and scientifically groundedmanagement of the natural (living) environment wouldbe a key characteristic of the knowledge society

From this follows the principal requirement and courseof action of the knowledge society – promotion ofintegrated and profound knowledge and raising of thegeneral level of educatedness of the population. Overallintegration of nature’s self-regeneration capacity andinnovative solutions into the use of nature has tobecome the main principle of ecosystem management.Thus, the role of natural scientists in general politicaldecision-making has to increase, along with thedevelopment of the relevant environmentally soundtechnologies and the according economic decision-making.

As one of the goals of the knowledge society is ageneral growth of welfare, it is indispensable to engagealso natural resources into the creation of thenecessary resource base. Unreasonable consumptionof natural resources has to be prevented throughengaging the whole society into training in support ofnature conservation and environmental protection. The

principle that sustainable management of naturalresources is not just protection but also ecologicallybalanced use of the resources is of part icularimportance for the knowledge society. Reasonable andopt imised management of natural resourcespresupposes integrated development of technologicaland ecological education, which in turn requires achange in the structure of education.

Employment of natural resources in the knowledgesociety is preceded by the preparation of substantiatedoptimal use schemes allowing maximum economicgain. Landscape plans covering the entire countryenvisage the functioning of balancing mechanismsbetween human-made landscapes and naturaldevelopments on the regional scale. Resourcemanagement models are continuously improved in linewith the development of knowledge and technologies.

Next to promoting the principles of knowledge-baseduse of the environment, measures to ensureuncondit ional compliance with environmentalstandards and regulations have to be applied.Several components of the goal of ecologicalbalance, such as the existence of cross-usablenat ional registers of natural resources (incl.landscapes and objects of biological diversity) andwell-organised statistics, are realised. As the modelof knowledge society presupposes close cooperationwith other count ries, t he requirements of

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international environmental conventions are ineffect , a balance/database of t ransboundarypollution and pollution originating from Estonia hasbeen created, pollution target values have beenagreed upon and are used as a basis forrecalculating pollution charges and establishing newcharge rates, leading to the achievement of therelevant target values (reduction of emissions) bythe year 2030. The mechanism of sustainableconsumption has been incorporated into the criteriaof publ ic procurement procedures, nat ionalinvestment programmes, etc.

In summary, the model of knowledge societycontributes to the valuation of environmentallycompatible behaviour and activities at the national leveland ensures systematic support to them. If the aboverecommendations are taken into account and such adevelopment scenario is implemented, Estonia wouldbe the first country in the world to be able to putsustainability into real practice instead of meredeclarations.

Social support to the knowledge society

Networks and feedbackMovement towards the knowledge society can takeplace only in a situation where it has the support ofthe key groups of society and where the supportersthemselves are involved in cooperation networks.

Development of permanent cooperation networksbetween state agencies, the private sector and citizenassociations should therefore be encouraged by allmeans. Only when a sufficient level of cooperationexperience and a culture of cooperation exist, can thedispersed decision-making mechanism necessary forthe knowledge society, characterised by thecontribution of parties with very diverse backgroundand experience, come into being. Networking couldbe supported by the creation of the relevant nationalprogrammes and financing schemes, possibly by ananalogy with today’s specific (and strongly cooperationnetwork oriented) programmes / financing agenciessuch as the Integration Foundation, Tiger LeapFoundation, etc.

Another central mechanism of the knowledge societyat all levels of decision-making is a well-functioningfeedback system. Without an adequate picture ofdevelopments in the society (and in its differentsectors), the knowledge society will be an illusion.Such a system is yet to be established in mostsectors. Te development of innovative approachesto and innovat ive methods of developmentalanalysis, which will help adequately reflect the(changing and ever more complex) reality, need tobe supported by all means.

Social supportMovement towards the knowledge society is possible

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only in case there exists a so-called leading elite. Theseare groups and individuals interested in suchdevelopment and willing to give their personalcontribution to the design and realisation of the“project” of knowledge society. Development of theleading elite could be facilitated by the following steps:1. To organise the Estonian Development Conference(or series of conferences) where the whole issue canbe discussed from different perspectives along withan analysis of the experience of other countriescurrently moving towards the knowledge society. Inthe longer perspective, the Development Conferencescould be organised by the National DevelopmentNetwork.2. To launch a substantive discussion over thedifferent development alternatives of Estonia on themedia, to engage media channels into knowledge-based mirroring of the society.3. The development of, for example, a “contributors’agreement” on what and how one or another party iswilling to contribute to the development of Estonia couldbe considered as a means for achieving the developmentgoals of Estonia and creating a knowledge society.

The above – creating of the intellectual and social basisfor the knowledge society – is not possible in thepresent situation of frozen educational and R&Dexpenditures. If the orientation to knowledge societydoes not become clearly reflected in the state budget,this orientation cannot develop.