Friday, April 20, 2012

Estonian IT companies and immigration

I acknowledge that with this topic I might wander to an area of strong emotions. Nevertheless I think this is a topic that should be discussed and there is a lot win-win opportunities here. I will start by a few background facts:

In 2006 a population analysis of Estonia was made that you can read here According to the analysis by the time I will retire somewhere in the 2040's the Dependency rate will increase from the current 47% to 70% in Estonia. This means that 30% of the population will be working age and all the rest will be either children or retired. Instead of 614 000 persons working we will have approximately 300 000 people in the working age, but approximately the same number (700 000) people depending on them.

So if we would like to keep the current level of pensions (a pathetic 300 euros/m), social support, education, roads, military etc we would have to double the taxes. In 2045 you will pay 66% social tax, 40% VAT, 42% income tax. So if your employer would pay out 1000 euros, your bruto salary would be 340 euros, your net salary would be 204 euros and you could buy a thing worth 145+VAT. (I would appreciate if anyone could check the math and prove me wrong.)

When the topic of immigration is brought up people tend to think about the "Paris riots" type of problems. Unemployed, uneducated, unfortunate souls living in concrete buildings. But this is only a small part of the truth. Looking at the phenomenon historically then most of the current big nations have grown big thanks to letting others in. USA is the primary example here, but russians, chinese, hindus and many other big nations are mixes of people from various ethnic groups. Letting and getting others in is a good thing I think. And not the least economically. A person with a university degree (especially in medicin or engineering) is very valuable for the society and should be welcomed by every country. Especially by Estonia with the current demographics.

There is huge unemployment in South-Europe and there is no sign of that situation easing. So there are also many IT consultants looking for jobs. For example the number of IT specialists from Greece looking for a job in Sweden doubled this year and from Spain grew 30% according to Resurs Bemanning. Estonian IT companies forecast that they will lack about 6000 new IT specialists in 3 years.

Given this background it is obvious that Estonian IT companies and The Estonian State should encourage IT consultants, software developers and other IT specialists to move to Estonia.

4 comments:

  1. All too true. Now if could just get people thinking about the issue while ignoring all the inevitable scare mongering...

    ReplyDelete
  2. Thanks for your great information, the contents are quiet interesting.I will be waiting for your next post.
    jobs in life Sciences

    ReplyDelete
  3. Hi, I love your creative blog. We are the creative force of our life, and through our own decisions rather than our conditions, if we carefully learn to do certain things, we can accomplish those goals. Keep it up. cheers, @Anne from complete estonian

    ReplyDelete