Saturday, 8 June 2013

Danish expert says Estonia has potential to become the richest nation in the world

Hans Peter Bech, who has been consulting and selling different IT products for over 20 years, recently gave a presentation on the challenges and possibilities that Estonia has in the IT field.

Estonia as a small country has been growing and gaining more recognition and has been used as an example in several cases for its great integration with IT in almost all fields. Hans Peter Bech thinks that because of this fast development, Estonia has the potential to become the richest nation in the world and is happy to share his knowledge on how to do that.

He says that the DNA of modern software engineering is what holds the key to this. At first, it important to understand what kind of a role does software engineering have in the world today. The presentation carries the title ’’Software is Eating the World’’, which is a quote by Marc Andreessen. He was part of the team to create the first internet browser Mosaic and has gone forth to create several other software programs that have been widely in use. He quickly understood that software based businesses are taking over and invested in over a 100 software ventures in total. Looking at the numbers that software based companies are making now, it seems that his prediction has been correct.

Software programs nowadays are not just programs developed for the internet, like Facebook and YouTube, which are completely new services and now make up a whole new level of business. Different software is also used for established products that we already know and use, for example cars and TVs, in order to improve their value. The third level is made up of software programs that have taken over whole businesses, for example iTunes with music equipment manufacturers and record labels and Skype with telecom operators. The reasons why these software engineering companies are becoming successful is because of the low cost of entry, the big potential market, the location of the business has no relevance and innovating concepts are easy to test and produce.

There is a growing need for software programs in all industries and the opportunities are endless. In this field bigger countries have no comparative advantage over small countries like Estonia. In Hans Peter Bech’s words Estonia has an agile software engineering tradition and holds potential in to moving agile business development in a big way.

The level of investments in Estonia at the moment is fairly high, but in order to improve the statistical indicators, more are needed. The challenge for Estonia here lies in increasing the growth and value of the country. According to Hans Peter Bech Estonians must move up in the innovation value chain. Instead of being a key partner in other countries’ business models, they must innovate their own business models. Estonians must operate an open eco-system to encourage people to start up new businesses and foreign businesses would be interested in investing.

All of this can be said to any small country in the world, but Hans Peter Bech believes that Estonians are better positioned than most. The solid economy, the democratic foundation and tradition for agile software engineering are all huge assets for Estonia. If these things are taken advantage of in the right way, Estonia can become very successful.

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