Estonian large companies are investing in innovations, Latvian companies - in employees

A survey of Chief Financial Officers conducted by SEB bank confirms that 64% of Estonian companies are investing in innovating their products and services, while 56% of their competitors in Lithuania and 47% in Latvia are doing the same.

A survey of Chief Financial Officers conducted by SEB bank confirms that Estonian large companies are the Baltic leaders in terms of investments in innovations. 64% of Estonian companies are investing in innovating their products and services, while 56% of their competitors in Lithuania and 47% in Latvia are doing the same. Latvia has the highest share of large companies, who are not investing in innovations - 19% or nearly every fifth company with yearly turnover above 20 million euros refrains from innovations, while in Lithuania 12% and in Estonia only 6% of large companies share this view.

Latvian large companies are the most active in terms of investing in development and training of their employees. This approach was confirmed by 58% of CFOs in Latvian large companies, 56% Estonian and 38% Lithuanian CFOs.

Ints Krasts, board member of SEB Latvia: “Development of technologies and digitization is changing all kinds of businesses whether we want it or not. If we look at the financial sector, even today we have to compete not only with other banks, but with a much broader range of companies. Fintech companies have proven their ability to do bold innovations, to react quickly and take risks. However, the advantage of banks has always been stability and capitalization, which make them able to withstand any turbulence. Due to digitization, financial services are bound to become simpler, but they also have to remain just as secure and reliable.”

Baltic large companies are changing their business models due to digitization: 21% of Lithuanian CFOs, 16% of their colleagues in Latvia and 15% in Lithuania have said that their companies are adapting their business models to fit in the new business environment.

Digitization is changing the daily routines of CFOs as well as their role in the organization. Majority of Baltic CFOs (61% in Latvia, 58% in Estonia and 53% in Lithuania) are convinced that digitization provides an opportunity for efficiency increases within their organization. However, it also requires new skills and knowledge. 50% of Estonian, 40% of Lithuanian and 35% of Latvian large company representatives have agreed that IT skills and analytic tools are becoming increasingly important in their professional life.

This is the fourth survey of Baltic Chief Financial Officers. Previous surveys were done in 2014 and 2015. Results reveal whether CFOs expect that next six months will bring good or bad news for businesses, identify which are the main concerns and challenges, indicate whether businesses plan to expand or decrease their workforce and give an insight in other topics as well. 263 largest companies with annual turnover over 20 million euros from Latvia, Lithuania and Estonia participated in the survey, which was carried out during September of this year.