1 Entrepreneurship and SME Development in Estonia.

Development of new member states can be characterized as a distinctive experience that started 18 years ago and where entrepreneurship has been assessed as a driving force of decentralisation, economic restructuring and movement in the direction of market economy. For example, as a result of the growth of SME sector, the share of employment in SMEs achieved nearly 80 % of total employment in the business sector by 2005. As countries vary markedly in a way they regulate and provide an environment for enterprise, Estonia is an interesting case with its notably open small economy, extremely liberal economic policy and the ability to stay on the economic growth trend for more than ten years before economic decline last year. The paper is based on empirical evidence drawn from three large-scale telephone surveys undertaken in 2002, 2005 and 2008. The analysis of the above-mentioned databases is supplemented by a review of secondary data from other studies undertaken in Estonia. A short overview shows continuous development of SME sector and the importance of its contribution to the economy, but also changes in the structure of enterprises by size and activity. Based on these changes and changes in business environment entrepreneurship policy in Estonia have been changed towards supporting the competitiveness of enterprises. Although considerable progress has been made in institutionalisation of entrepreneurship policy, there is a need to offer more actively services which can better consider the needs of newly established firms and entrepreneurs in regions with the aim to strengthen the role of entrepreneurship in economic development