Kaja Kallas startupperitele: Eesti on superriik, aga me mõtleme end ise ilma asjata väiksemaks

Good morning, everyone. So, this is the second day of the conference and I am happy to see people are actually here even after tonight's, yesterday's afterparty. I went to sleep really early, but I, when I met Taavi ten minutes ago, he looked like he did not have any sleep, so. Good morning, yes, good. How many, how many hours did you sleep this night? Kaja Kallas, how many hours of sleep last night? Actually, I also think five, but not because I had party, so I left the dinner and I was like preparing for today, so very intense day

I had.

Okei, so our guest is well-prepared and actually so are we, because the, the, the idea, the format of the thing we are doing here is, we sent out. Messages, phonecalls to start-up people all over the world. Estonian start-up community, the global community, LinkedIn, Facebook. And we ask if you had a chance to ask the prime minister of the best start-up country in the world, one question, what would it be? And we got a load of questions and we have some questions ourselves. We end ten-forty. Hard stop, mis the prime minister will be on the stage, but let's go. I did not get any questions from you, Taavi, so I, I think everything is clear.

No, no, just as our children are going to the same class at school, so I was like, like feeling more relaxed, so, yeah.

I'm, I'm afraid of Taavi's questions actually, because he was, he was also, I mean, he has been very engaged in, in building the start-up community here, but. Let's see what comes out of it. This podcast.

Jaa, well, according to statistics, nine out of ten start-up podcast fail badly and everyone loses their money, so we are not, we are not one of them. But let's begin. A question that we got a number of times, was that as I said, Estonia is widely considered to be the best start-up country in the world. If, if it is true, of course. But the question to the prime minister is. Why do you think that is, like is, is Estonia somehow different, do we, is there something in the water here that makes us great start-upers?

No, I think it is part of the, also the bigger picture, when you are a small country and we don't have a lot of people, so. We don't have a lot of resources, that means the only thing you can build your. Economic prosperity on is smart people, it is technology, it is brains. So, therefore, we have made decisions in the past to do that and I think the start-up sektor is a very vibrant sektor, because. Spe, specificaly, you know, few, few decisions in the past, one is in two thousands, Estonia introduced digital ID. And at that time, I, I remember that you know, if we would have ask the people, do you need digital identity, then the people would have gone like, why, what is that? But you know, the government didn't ask really and it was a co-operation with the private sektor, together with the. Governmental sektor and, and how to make people take up the digital identity, of course, what the people are most interested in. Money. So you get your funds back when you file your taxes online, with the digital identity, you get your tax refunds back earlier and that made people take up the digital identity. Where we could also build different services on, so I think this is, this is a very important decision. The other decision, it is also building a very, very strong education system, because I mean from, from the early on. And, and always, when I tell this, I mean people, I mean children. Who are their heroes? What are, I mean, who are they looking up to? Because they wanna be like them. So we have in Estonia a cartoon, where the hero is a dog that is a girl that is an inventor. And, and if, if you listen to the music in the musicals, it's all about you know, chemistry is fun, you know, mathematics is super interesting, you know, physics, you go into physics. And, and when I so, you know, you have all these charts and, and, and when I so that Estonia is in top five in the world for women inventors. So, and, and then I was like, okay, this is definitely working.

Okei, but how your life has changed during last two years, because you have been very vocal about the Ukraina and, and I think big, big appreciation of, of the job you have doing there. Before that was more about IT and start-ups, now it's more about defense.

I have been actually in private practice longer than I have been in politics. And when I was in private practice, I was a law, lawyer, attorney at law, then my main specifics were competition law and energy law, so I was really, really narrow in that respect. Oh, you are from Estonia, see my computer doesn't work. So, so everybody sees you as the tech country and, and, and I am of the opinion that. You know, you have your strengths and you have your weaknesses, so you can build on your strengths to become number one in the world. Whereas your weaknesses remain your weaknesses. And where, I really notice that everybody knows Estonia being digital, that's, that meant that I started to deal with those topic's there. And really, when you, when these services are taken from you, you can't use them, I mean, I bring you one example. In the belsian, I mean, I get an envelope, which is as thick as that, a big one and a small booklet with it. I was like, what is that? That is the tax declaration, oh my god, to really people fulfill that. And then you have only, you know, working hours that you have to go and stay in a queue and to file this and. And, and the little booklet was how to fulfill this tax declaration, it's like okay. This is, this is hard, so we have it, we have it better.

Did you, did you fix any of your colleagues'computers? Did you manage?

Ja, well, I said that it's not running in my veans, really, because I'm estonian, but, but the idea was, yeah, yeah, oh, yeah, you know, these things.

I had a similar experience, I was in New Zealand once. Queenstown, like, it's off island. It's like Otepää. So, in the middle of nowhere. There was a skydiving company, who does these double or jumps that, like you are. Hooked to somebody and then you'd jump out of the, out of the plane. And it's a one-time event in your life, because if you do it, if you like it, you start jumping yourself, if you don't like it, you don't do it anymore. So it's like basically, this company was eager to capture maximum money out of the customer, because like he or she never returns, like so just like grab as much as possible. And they figured out, like okay, we should create a video about the jump. But how to create a video and, and basically deliver it so rapidly that, when the person comes down, you instantly get the video and bye-bye. And they figure out, like okay, it's a digital thing, we need Estonian for this. So they went to the local bar in, in the middle of nowhere. Any Estonian? And there was one backpacker, lady from Tallinn University, who knew nothing about IT, but. There was a question, is there any Estonian in this bar? And she raise the hand. But she, she could not help.

Is there any doktor? No, is there any Estonian? And she still

lives there. And deliver the service.

So very good, we are already operating at the global level and there are a couple of questions about that global level, namely about global talent, so. How do we want to win this talent? How do we want people to move in and, and more specifically, someone said that, you know, salaries are raising, taxes are, are, are rising, prices, inflation, you know. Estonia is, has become, has become quite expensive. So, immigration policy's, yeah, you know, there are better countries in the world. What do we do?

Ja, sitting here in the morning with this weather, you know, you kind of think that this is the way it

is here.

Well, don't lie to people, no, you have to be honest. You know, in november, it's, we stay inside, mostly, but I always say to our foreign guests. You know, it's like living in a refrigerator, you stay young and fresh for a long time, so it has its plusses. And you know I did, and also by the way, I also learned that Estonias cows are the most productive cows in the world because they like the climate. It's nice and fresh and, when I did the Daily Show, then I was explaining this because the weather was really, really bad and, and, and then the, then the, you know, the comedian said. I can see you have given this a lot of thought. Yeah, because you have to explain this somehow, but. So, the climate is not the thing, I mean we have definetely better places. I think it's the for tech sektor, it's the, it's the eco-system. I mean doing business, the business environment is, is good, I mean also for governments we try to be, I mean we are very. Accessible, I mean, we are listening to the worries that, that companies have, sometimes I think that, you know, we are so accessible that some, you know, if company has a problem, the first person he contact's is the prime minister and sometimes I think, you know, there should be some layers in between also. But, at the same time, this is, this is a good thing, because then you know, when people have issues, then we try to. Really address them if they are, you know, issues that make the business environment better. This is, this is something and of course the education system, so that our own people would be. Would be smarter and, and take this, you know, maybe tech away.

Do you think we need more foreign talent in Estonia? What's the optimal level?

So, so that's why we have made all this, you know. Regulats that, that start-up sektor, tech-sektor, can recruit people. Easier way than, than, you know, lower salary. Employees, for example, to, to really attract the talent.

So you think that we should bring in more people?

I, I don't think the, the quantity matters, it's more like quality again, if, if I say that building on your strengths, I mean. We will never be a big industry country, because we just don't have enough people, I mean. Skeleton's investment to France is a good example. There innovation center is in Estonia, the high salaryjobs are in Estonia, the factory is in France and Germany, so, so because they have a much more people there. So I think, you know, attracting the talent and, and the, the people that come with new ideas and really, I mean, enlarge this sektor, it is what we are after.

And, to be honest, we are in a startup conference, so the first statistics, 39% of all the start-ups have founder, co-founder as an e-resident. So, yeah, we don't have to bring them in, like, so.

Ja, jaa, that is true, okay. I, jaa, I should have thought that you want to, want to get to that. No. But it is true, I mean the idea behind e-residents is that you know, we don't have a lot of people, but people started to ask that we also want to enjoy your digital services, so, so this is the way to do it, actually.

Let's talk about, like, politics and helping companies, like there was a scandal just a couple of weeks ago. Bolt wanted to get some help from Estonian government in Brasles, about, about the way, how, how say the, like. Customers and, and the provi,s, provi,s, provi,s, provi,ers, actually traded in European Union, like. And there was a scandal that, like no, we should not, like, stay, or, like, we should not, like, represent our companies, in, in, in a seda strong way. On the same time, when we worked in Brassalls, like. We were always about the, the car industry and UK was always about the banks, like, so. And we were basically more, like, I mean. Me, me, me didn't have anything to represent basically, because all the competition is so small. Now we have a global player, like, and we should be the, the first runners in that field.

But we, as I said, you know, the government is very accessible, so, so we always, when we have the negotiations on the European level, we also listen to our companies and, and you know, you know, provide conditions, considering also what they are bringing on board, we are trying to listen. It doesn't mean that we always agree with everything, because we see also the picture not only from the company side, but also wider picture. And, and we also are around the European table, we like to be constructive partners, that means that. You know, we say that we don't agree to this, but we can agree to this, so we are able to compromise and that is actually important, because. And then you are taken seriously when you have issues, people listen to you.

I have had some experience with an Estonian health system and, and the health system of a larger country. I've been talking to friends and I, I sincerely, I get the sense that in Estonia. In a big country, noh, it's not a topic. At the same time we sort of get nervous. And, and there is a skandal, when, you know, when an Estonian sometimes decides to move abroad or where Estonian companies invest abroad. We had two cases last week's, oh my god, they are investing into France, what's going on? I think it's time to maybe grow a little.

No, but, but this is actually a good, good sign of our development and I sometimes, you know, like to really think about how, how far we have come from the time, when we regained our independence, 32 years ago. And, and this is a great thing, that our companies are actually, you know, buying up companies.

Keep track of every single founder and the company, where are you going, come back.

Yeah, but this is, but I guess it's not an Estonian issue that the media really wants to focus on the negatiiv, so, so from every, every aspect, you know, you can draw something negatiiv, because people react to negatiiv. But I, I, I would want to see that this negativity doesn't drown us. So that you know, I, I had one conversation with one. Entrepreneur who is acting in different countries and, and they said that you know, I see that in other countries. People are actually you know making themselves bigger, like showing things better than they are. Whereas in Estonia we try to say no, it's, it's not really like. No, and I, I bring you one example, when I was member of European Parliament and, and then. You know, it's a very, very small example, but still there was, you know, exhibition of different libraries and, and libraries had their own show there and, and our Estonian libraries show the digital mandala, so it was hugely popular, like. There was a lot of crowd there, because all the others are just, you know, books and nothing, really interaktiv. And, and I went there and said, oh, it's so great, what you're doing here, no, no, no, but Latvians have it much better. So it's like, you know, own it.

Salute to all the Latvians, but. Still, I mean, I think we have to look into the mirror. We have analyzed what is important to build a proper digital society. And one thing, I totally agree is that even if you have the best one in the world. And we don't have, the best one is actually in China. I mean, we don't have to salute to this, what they have, but, but digitally they are more advanced. But we are doing great and we analalised all these factors, like what people, like, see as, as valuable things. And one conclusion was that you have to constantly amuse the nation. So basically you have to bring in, like, new innovation. And, like, I think we have to take in some criticism from the, from the public sektor part, like public sektor always has been, like, very innovative in Estonia. But lately, I mean, like, there hasn't been, like, any major news, I mean, like, yeah, the AI comes, et cetera, but, like, and what we have here, but, I mean, like.

I'm, I'm reading a question, why, question number 8, why are governments always so slow to make decisions?

I mean, when I was, when, as I said, I've been in private practice longer than I've been in politics, so. I was in private practice, I was like okay, we get these things done. Then I went into politics and is like okay, these things take super long, but then. I went into European politics as I, you know, Estonia we do it fast. So it all depends on, on the, on the comparison. Of course we would like to be faster, we don't have. I mean, we have the human rights and, and data protection and all these things that the Chinese don't have, so we have. I mean, and I think it's a positive thing. Also that we, we think along the lines, but. Need to have those discussions, I sometimes think that we are also maturing democracy now, which means that also you know, processes take longer because people really are not that. Prone to, to new ideas, new ideas always and the media always piks like oh, this is supernegative and then. Either you are over it and you still do it or you, you say that okay, you are right and we, we back off.

Are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are we are.

But this is, this is a topic that is very divisive, I mean. Half, half of the population supports and half don't. And, and I think, you know, we have to have initiated discussions, but I don't think that we reach the decision there. So this is not exactly the innovation.

No,

no, no, but, I mean, we are still open to discussing ideas, but it's also true that, as I said, that you know, this negativity, what is, I mean, Moises Naim has written already years ago a very good book, The End Of Power. That means that, you know, you have nowadays small groups that have more power than they had ever before to veto things. And then, of course, politicians. Are, I mean, tied to the public opinion and if the public opinion you know shows that it's to the other direction, then most of the people, politicians, don't have the courage to push forward, even if you think you know it's the right thing to do.

Where does the prime minister see Europe's so-called great emergents? I know, I don't remember who ask that, but Sten Tamkivi has also, the, the co-founder of Pluralfund, has talked about how actually Europe is in a pretty good spot and things are moving, we are developing, especially deep-tech Europe is. Doing great, but we have a long question, I want read all of it, but basically it's just that everyone else is out investing Europe tech-wise, AI-wise, you know, we are slow and then we are, as Peeter Koppel calls it, an open-air museum.

Ja, this reminds me of, of a joke I heard and actually don't remember a lot of jokes. Actually, you have to old a lot of jokes. Ja, ja, ja, ja, ja, but I'm, I'm also surprising myself in this regard, right now. But, but the joke was that you know, what is the word, word for each region, like for, for Silicon Valley, it's Innovate. For, for Europe, it's regulate and for Washington, it's letigate. So, regulate is not that bad. What

would the word for Russia be, for Moskva? Take it, take it all. Grab it. But,

but you know, I think we have problems in Europe and these are related to. Not subsidizing, not dealing with the competition issues, really. I mean what we saw, when we have had different crices, then you know, different countries. Put a lot of subsidies, you know, to, to different industries, which is state aid. And that means that those countries that have. Deeper taxpayers'pockets will do it more, which is we don't deal with the competition issues that are really there. And in the end, also the big countries will run out of taxpayers'money and the competition issues are still there. So we have to focus on those to, to have this move forward. What is the positive thing is, you know, there are polls all around the world. And people from all around the world, the place where they want to live, is Europe. So, so we have a lot of soft power actually in this regard, because we have the rules in place for protection of our people.

But, like you said, like the competition is really high, like in a global level. Also Estonia has developed super rapidly and like, I think all Estonians agree that, that it has been a great journey, last 30 years, so. And it leaves your mark, so there was another poll like, currently going on, it's better Estonian, where four companies, Bolt, L2, Kaubamaa Grupp and LHV. Asked from, from the city of Estonia, like if you, if you would have 100,000 euros. Where you, like where you think that, that, that money should be invested or like, like, like what you would like to help? And it was astonishing that 37% of the audience, like the citizens of Estonia, chose mental health. So what, what we learned from

this? Yes, I mean, I started as a prime minister, turn COVID and one of the first things I did was also create. Like mental health. Crisis group, because this was an issue and it is still an issue, so we put a lot of money to mental health. But we still have a lot of problems, of course you know, it's a discussion, whether you know, people know it more now and there are more. Able to react to those issues or is it really growing bigger? And of course all these tools and tech equipment are not really hopping in this regard, so, so we have to, you know, help people. On the other side, I mean, the easiest way is to, you know, stay away from Twitter and all these places.

Okei, I will, I

will stop your little family meeting with another question

about European Union.

No,

but I

just want it to follow-up. It seems that every, pretty much every morning I open my computer and read the news. I discover that EU has decided to find and find another one of global tech companies, you know, if it's like five billion or 500 miljon or 500 miljon, so it seems that it's sort of. A business area, a new business area of the European Union, the European commission is to find Apple, find Google, find Meta. And it just goes on and on and on and on and regulate and I think we, to me, it seems a lot, what you think about it, have we gone too far?

I mean, of course, there's a discussion about, about, whether you know, the rules are too, too much. And I, when I was a member of European Parliament, I always thought that you know, if you make the rules, keeping mind the incumbent, you always actually design the rules for the incumbent and not for everybody else. So, so you limit and you actually make, make it for, for, for the one, who is already on the market, but. At the same time, I have to also keep in mind, you know, for example, the misinformation and, and all this. I mean, Russia is also having this shadow war against all of our societies to create chaos. To, to undermine demokraasis and all this and we see, you know, the tech platvorms are these things, where these things, I mean, really reach people, so, so this is also an issue on the other side, so. How to strike that balance, is of course, very, very delicate thing to do, so. You know, I feel that maybe Europe has done a little bit over. The top in, in some, some aspects, but in some aspects we actually want to see more, I mean Telegramis, for example, a platform where we see most Russian narratives and really getting to people and they are not under these regulates.

At the same time, American, some American tech commentators, analists are seriously discussing. That maybe Apple should just pull for, noh, pull from the European market.

This is, this is yes, if you look at the numbers, then sixty two percent of United States investments go to, go to Europe and American companies earn two point seven times more profit from Europe. I have no idea.

Jaa, like, which means that on the same time, they offer service here. You all, like, spend a significant amount of time there, like, you are advertised there. So it's usually that, like, in environment, where you operate, you also paid taxes there, you also give back to that society. That's usual, like ESG start to demand that, like, for example, you have to give back to society. What Facebook give back to Estonia? And you are talking about some kind of penalties, I mean like, like we should text them like, heavily.

But I mean, I agree, but that would be much, like, that would be more fair. Because, and, and at least that way, they would know that it's a tax and they can plan it. If it's a fine from European commission, it's like, it's like rain. But you

know, you know, I can tell you, when this, you know, the big countries agree on this global corporate tax. And wanted to impose this on, on everybody, then we were really against this, because we don't have a corporate tax, mean if you reinvest to your company. Yes, if you take it out as dividends, you pay income tax, but otherwise, no. So if you build your company, invest in your people, you don't pay income tax. But the other pillar, we only agree to this, if. In all over the world, in a similar way, so that we can also get, you know, profit from this, now. Our share. Our share, yes, our share, and now, I mean. The Américans drop the global digital tex, but move down with the corporate tex and I think it's not fair, because it was two sides, but they have their intrest.

Okei, so let's go back to the mental health question, there have been some interviews recently also in Estonian newspapers, how the capital is fleeing Estonia, you know. People not investing, foreign owners selling their real-estate apartments. And I think it was last week when one of the owners of Tallink, one of the largest company in Estonia, gave an intervjuu in Estonia and said, you know, no one, no one in the same mind is actually investing into Estonia right now. At the same time, the numbers don't show it. Yeah, the numbers

don't show it and this is, this is very emotional, so. This is the negativity that I talk about, if I look at the numbers, then. I mean, when. We had the start of the war, then you had some kind of hiccup there, but, but now in two thousand twenty three, the volume of foreign investments was higher than it was in twenty-one. Three point seven billion versus four point two billion. So, so, actually, the number of tourists visiting in Estonia declined to COVID, so, so, but the tourists are back again. So also what is important to say here is that, you know, the security of Estonia is, is the same as in any other NATO country, so. So, we are in NATO, we don't have any first or second class NATO countries. And that's why we don't have war here. And, and the numbers actually don't show, we have. You know, the salaries are raising, the, the. Interestrates are now coming down, we see more investments, we actually see the. Unemployment going down again, I mean last, last year private sector created twelve thousand new jobs in Estonia. So, so, I mean.

To all the foreigner-guest here, it's, it's a huge number.

Ja, ja, we have seven hundred thousand people on the, on the employment market, so, so twelve thousand per year. It is a lot, I mean usual, it has been nine thousand was, was a year before that and then it was around four thousand always in a, in a year.

Okei, but do you see this opinion going around also in the West, it's like you go talk to somebody and I am Kaja, oh yeah, you are, you are from the Russia

thing. No, you know, it's, it's, it's funny thing, I was, I was in Austria. And I thought that this is coming, so I ask my team to, to take the exact kilomeetres from the war. And they was like, okay, you are in the front line of this war, I was like, no, you are much closer to the war than we are. No, but we are neutral. Ah, good luck with that, we were also neutral in 1940, how did that end up? So, they were like really frightened. I mean,

Austria is actually basically Russia, so. Not true,

but, but then it was. Let's talk

about that. And

then it was, then it was Norway and the journalist asked me that aren't you afraid, I said why. You have a border with Russia, I said you have a border with Russia. We have, you know, we are in NATO, you are in NATO, if you are not afraid, we are not afraid, so. So this is actually, I mean, maybe in the start it was an issue, but now everybody sees that this is not the case, really.

Like our intervjuu comes to an end, like do you have a message to the start-ups, like to the people who are here today, like in the second morning, not all of us. Very fresh, but like, still anxious and excited to build something new.

Yes, well first, first of all, I'm very happy that you are here. Second, I hope that you find a lot of good Estonian companies to either invest in or cooperate with, because I think we have a lot of, a lot of potential here, so. Try to organise the weather as it is today and, and everything is fine.

Also, I heard last night from friends that this year currently is a mega mosquito year in Estonia, so. How,

how does it, how does it really work? Because I thought that when we had snow in aprill, like really end of aprill. Well, they

clearly have not, so whatever you do, don't go out of Tallinn.

Most probably they were imported from Latvia or Finland.

Maybe it's a Russian operation. Anyway, now we are not talking sense anymore. Thank you, thank you, Kaja. Big

aplaus to the prime minister, please.

Ettemõte, Roonemaa ja Kotka idupodkast.