ABSTRACT
This chapter is concerned with a country in which the pace of transformation since 1990 has been impressive by any standards. One of the recurrent themes running throughout this book is the diversity of experience that exists between different transition economies in the nature and extent of the development of entrepreneurship and small businesses, since 1990. In this context, Estonia is a particularly interesting case, because, as a former Soviet republic, all non-stateowned enterprise was illegal until 1987 when industrial co-operatives were allowed to trade alongside state-owned companies. Unlike Poland, for example, where a relatively large private sector existed during the socialist period, no such recent experience of private enterprise existed in the Baltic States prior to the start of the transformation process. As a consequence, apart from a few joint ventures, and firms set up in the late 1980s as industrial co-operatives, the vast majority of SMEs in Estonia and her Baltic neighbours have been established since 1990. While it can be argued that Estonia’s small size (i.e. approximately 1.4 million people) and its ability to exploit its historic ties with its Nordic neighbours represent distinct advantages compared with some other CEECs, the pace of change from a centrally planned to a market-based economy is impressive.
