“To Support or Procure” is a study funded by the Estonian Ministry of Economic Affairs and Communications. Its objective is to clarify when supporting companies to enhance competitiveness is more effective, and when it is more appropriate to procure innovative solutions from the market. The project aims to understand how different public policy measures affect the development of companies and, based on this, to support the design of a smarter economic policy. The study focuses on the impact of these measures on companies’ productivity, export capacity, employment, and business model innovation. At the same time, the project seeks to identify ways to diversify companies’ opportunities to benefit from public support and to achieve the greatest possible societal impact, even under conditions of limited public resources. The study is carried out during the period 01.01.2026–31.12.2027.

Why do we study this?

Recent years have been challenging for companies. The economy has been affected by multiple crises, rising energy prices, the war in Europe, and growing expectations related to the green transition and technological development. At the same time, Estonia has set a goal to raise labour productivity to 110% of the European Union average by 2035. Achieving this requires more than simply increasing subsidies or expanding public procurement. It is essential to understand which measures actually work, for whom, and under what conditions.

The topic is also important more broadly. The issue is not only about funding, but about how good ideas, knowledge, and innovative solutions actually reach business development and everyday use. There is often a gap between what could be developed and what companies actually implement. Therefore, it is important to understand how public policy measures can reduce uncertainty, create new development opportunities, and support companies in adapting to changing conditions.

What questions does the project seek to answer?

1. How do different types of interventions affect business competitiveness?
   Whether and how business support measures or innovation procurement contribute to increasing productivity, exports, and employment.

2. Which interventions are associated with greater business model innovation?
   Which measures most strongly support business model innovation, i.e. situations where a company adapts its value proposition, services, or operating logic?

3. Do all companies experience these measures in the same way?
   The project examines whether the impact varies depending on company size, location, or sector.

4. Is combining measures more effective than using single measures?
   For example, whether support and procurement together can produce stronger results than either measure alone?

How is the study conducted?

The project combines different data sources and research methods. It uses company-level economic data, datasets on support measures and procurement, surveys, and interviews. This means that the analysis goes beyond numbers: the aim is also to understand why and how specific interventions work - or why they do not work in certain contexts.

What do companies and society gain from this?

The aim of the project is not to produce knowledge only for researchers. The results support more informed decision-making in areas where public funding is used to foster business development. This means:

•     better targeted measures,
•     more evidence-based decisions,
•     greater impact under limited budget conditions,
•     a stronger and more resilient Estonian economy

Who may find this project relevant?

•     Policymakers and ministries, who decide which measures to use and where to allocate public funding
•     Implementing agencies and public sector organisations, who design and implement support measures, procurements, and other policy instruments
•     Entrepreneurs, especially those seeking opportunities for growth, innovation, export expansion, or bringing new solutions to market
•     Industry associations and business organisations, who represent companies’ interests and shape public debate
•     Researchers and analysts, interested in how public sector measures influence company behaviour and outcomes
•     The wider public, as the topic ultimately concerns how taxpayers’ money is used and how the Estonian economy can be strengthened