14.12.2016
Rail Baltic, connecting Estonia with Europe, would help transform the Baltics into a unified region and better connect them with Europe, which would benefit all Estonian residents, believes economic expert and Teleport business developer Kristjan Lepik.
One important trend that I have observed in connection with Teleport's work in Europe and elsewhere is that people are moving more and more. Both to work abroad and to live and study. People's communication space is expanding. Today we live in an information space that is international. On Facebook, young people in their 20s often have half of their friends abroad. And in this world, good connectivity is extremely critical. In other words, how different countries are connected to each other.
Sometimes two points may be geographically distant from each other, but if the connection is very strong in some other form, then good connections allow for a strong bond. For example, our advisor Parag Khanna, has pointed out in his books that maps should instead show who is connected to another country and by what ties, instead of borders.
How is Estonia connected to other countries?
Using the example of Estonia, we could talk about banking and business ties with Sweden. We have financial lines running there, although Finland is actually closer. However, if it were not possible to move comfortably and quickly between the two countries, these business lines would not run together. Connectivity is crucial.
As we work with data at Teleport and compare different cities, we see that Estonia has a lot to offer the world for a smart entrepreneur. Our prices are affordable, we have a clean and beautiful environment, and English is definitely spoken better than the European average.
But if you look at the current connections, this is one of Estonia's biggest disadvantages. I know of investment deals that have not been made because investors cannot get here from London. We do not have a good flight connection with London and people do not spend their time to get here with two stops. So the deal will fall through. Riga is also significantly ahead of us thanks to Air Baltic.
That is why it is important to understand that the role of connectivity cannot be underestimated. As humans, we are built in such a way that we often have difficulty understanding major changes. Most people expect the status quo to continue. When the real estate bubble was at its peak in 2006/2007, most people expected prices to continue to rise. When prices were almost -50% cheaper and therefore affordable for a few years, most people also expected the price hike to continue. That is why most people cannot understand how much of a change it would bring with Rail Baltica. There are also comments like “Who would take this train here anyway?”. 8 million passengers come to the Port of Tallinn every year. If six Regulas were running instead of Tallink ships, how many would there be? 2 million? But if the Regulas had been running for several years, it would be very difficult to sell the idea that we would put large and new ships into operation. It seems that when thinking about Rail Baltica, people have a hard time understanding how it will change our lives? People talk about the Baltics as a unified space, but in reality our cooperation is lacking. If we were one region through connectivity and could travel from Tallinn to Riga for work in two hours, the Baltics would become a much more unified region. Estonia, Latvia and Lithuania are small countries in terms of their population, but by uniting, our strength would grow.
I was living in Berlin this spring. I needed to go to Munich for work, so I chose the train. The ride took six hours, but it was very comfortable and I could work in peace the whole time. The plane would have flown for an hour, but with all the changes it would have taken at least four hours from door to door and would have been much more inconvenient for working, chopped up. So that day the train was a more efficient solution for me, if I had had a very busy day with meetings, I would have chosen the plane.
Every step matters
That is why it is important to understand that every step we take to improve connectivity contributes to the revitalization of our economy. All Estonian residents would benefit from this. We ourselves would be better off and we ourselves would in turn become more attractive to foreign companies. If a company comes to Estonia and creates 1000 new jobs, as Kuehne + Nagel did, it would also raise the wage level in this sector. If a company decides to establish a factory in Estonia, for example, the wages of factory workers would rise. By reviving the economy, everyone would benefit from improved connectivity.
The main concern of the skeptics seems to be that neither goods nor people will move on Rail Baltic in the future. This in turn suggests that we could put an end to life here in Estonia altogether? Nothing moves here, no one comes here, and no goods come here. Such thinking is weak and unsustainable. Seeing how connectivity creates thousands of new opportunities and is a significant bottleneck for Estonia today, I consider Rail Baltica to be a very important project for Estonia.
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