The inverted baltic mountains and innovation

True that. The Balts like to compete - even if its for the fastest drop in economy. Lithuania posted - 22.4% in 2Q. Lat and Est will be soon to follow with their figure, which should be similarily record-making and ground-breaking. Anyways, sexy stuff for the historical statistics lovers. For the rest of us, its already the thing of the past.

As we still hear the sucking sound that is pumping air out of inflated economies, things are starting to look very mid-2000´ish, except the terrible headache and obligations. Looking forward this seems like a new quest for the export growth and innovation is about to begin. This time much more likely though. Why? Since there are so many things one CANT do any longer in baltic economies that involve conventional local real estate, consumer discretionary and credit related activities. It is possible but its no longer a fool`s market out there - no more easy money.

So basically we (as everyone else) are facing ruined demand inside out while in Estonia the external debt (private sector) has increased 56% during 2004-2008. This means that to some extent people will be much more active to develop whatever they need to sell, much more active to find new markets. Its about survival more than ever before. It is clearly visible that EU funds are being used much more agressively to share the sunk costs with export oriented development/marketing. Out of all these trials and errors that take place now, quite a few good things must pop out and it would be a good start.

Most of the technological innovation has taken place during hardest times in history - that includes wars. Its a harsh truth and driven by necessities not by free will of people to come together and do something beautiful. In economic terms baltics has been in trenches for a while already, which gives much better odds for a critical mass of good things brewing underneath all the warm air that is being pumped out of the macro statistics.

If public sector/government would also take more means for improving conditions (!) and motivations for startups, entrepreneurs and grassroot level initative, the outcome in 4-5 years could be even better. Especially now, when unemployed include blue, white and all the other "collars" there are.