Estonia Does Not Have to Choose Between Economy and Culture. 

When we speak about a successful Estonia, we usually focus on productivity, investment, digital capabilities and exports. These are the right indicators. The economic success of a small open economy depends not only on what we produce, but also on how quickly trust is created in international relationships. Trust is an economic resource: it reduces partners’ perceived risk, accelerates decision-making and opens access to cooperation networks. Small countries are often left out of international competition not because they lack capability, but because they lack visibility and familiarity.

Professional classical music is one of the fields in which Estonia has built an internationally recognisable mark of quality over several decades. Leading concert halls such as Carnegie Hall in New York, major festivals and international collaborations are places where Estonia’s name is consistently associated with excellence. This experience travels with people beyond the cultural sphere and shapes how companies, clients and investors participating in value chains perceive Estonia as a reliable partner. Professional culture is therefore not only a question of identity, but also part of the country’s visibility infrastructure in an economic sense.

The problem is not so much that culture is undervalued, but rather that the funding model is too narrow. Estonia’s professional cultural institutions, like those elsewhere in the world, rely largely on public funding. This model has made it possible to build a strong system, but it also makes the system vulnerable in the long term. The preservation of quality depends almost entirely on the capacity of the state budget. When pressure on the public sector increases, there is no mechanism that automatically brings more private capital into the system. A report by the Foresight Centre points out that the decreasing share of public money in culture is an international trend, and that increasing the role of the private sector requires suitable incentives and frameworks.

In many countries, this risk has been addressed through the institutionalisation of philanthropy. But what is philanthropy? Philanthropy does not mean random donations or a charitable gesture. It means a partnership with clear rules, where private-sector contribution becomes a predictable part of financing the public good. At the same time, philanthropy is not something reserved only for large sums. On the contrary. Anyone can be a philanthropist if they support a field that matters to them once a year or regularly, even with a small contribution.

In the Estonian context, three practical steps would make sense.

First, state amplification of donations. When a private individual or company makes a targeted contribution to a professional cultural institution, the state adds a fixed percentage to it. The cost to the state arises only when the private sector has already contributed. The logic of the United Kingdom’s Gift Aid system is instructive here: donations are effectively topped up through the tax system, and a clear, well-known rule turns giving into a social habit rather than an exception.

Second, match funding. Time-limited campaigns in which donations are matched by another funder. Importantly, the matching amount does not have to come only from the state. It can be provided by philanthropists, foundations or companies that amplify public donations, for example, turning 50 euros into 100 euros. In Estonia, the matching contribution could come from a public source, a private-sector fund, or a combination of the two. This would reduce the burden on the state while increasing the motivating effect of “my euro does more”.

Third, a capital fund for professional culture, or in other words, an endowment. By this I mean core capital that is not spent, but invested, with the returns helping to cover operating costs and reduce annual budget risk. Such frameworks are widely used in Europe, for example in France and the Netherlands.

The economic impact of these three practical steps extends far beyond the cultural sector. The Foresight Centre’s report examines the potential economic impact of stimulating culture and indicates that, depending on the model assumptions, support for the cultural sector can boost the economy and increase tax revenues. For example, if state amplification cost 4.6 million euros in the first year, tax revenues would at the same time increase by 2.1 million euros compared with the baseline scenario. In the report’s long-term view, a state investment of 15 million euros in 2035 would return 10 million euros in tax revenue, while an additional 63.5 million euros would be added to GDP through wages, services, production and tourism.

Small countries do not compete through volume. They compete through credibility. Credibility is not created by campaigns, but by institutions whose quality endures for decades. This is therefore not only a matter of cultural policy, but of a funding model aligned with a broader mindset. One that connects cultural excellence and economic success into a mutually reinforcing system.

Estonia does not have to choose between the economy and culture. Estonia sells when Estonia sounds.

This article was written for Edukas Eesti, an opinion-piece competition organised by Äripäev, Helmes, Elenger, Sorainen, Swedbank, Verston and Telia Eesti, seeking ideas to renew Estonia’s success story and accelerate the country’s development.