Skip to main content
invest in estonia

Chatbot

South Estonia

Discover Southern Estonia - the region´s economic development runs around the city of Tartu, where ICT and startup ecosystem, science and cooperation with academia give an important meaning for the whole region.

  • 5 counties
  • 16% of GDP
  • 16 towns

Overview

South Estonia has five quite diverse counties: Tartu, Viljandi, Valga, Võru and Põlva. The total area of this region is around 13,200 sq km, and the population in 2023 was ca. 295,000.

South Estonia is like a small model of Estonia, where the region´s development revolves around the city of TartuICT and startup ecosystem, higher education, and healthcare keep providing many profitable jobs.

The South Estonian economy continues to be driven by the timber and food sectors. Throughout its history, South Estonia has traditionally been a rural area – plenty of forested areas and fertile farmland. Companies in Southern Estonia develop and use wood-based materials and have become top performers in this field, for example, helping Estonia achieve its position as the largest exporter of wooden houses in the EU.

Science and cooperation with academia play a significant role in the region. The IT companies, universities, and science parks in Tartu contribute to the automation, digitalization, and product development of industrial producers in South Estonia.

Continuous additional investments in the region increase the added value to manufacturing output and gradually create new jobs for people living in the more remote areas. There are many centers in Southern Estonia with most of the needed services available locally, providing a good living environment.

Tartu County

Tartu County is an integrated economic system and labour area with its centre in the city of Tartu. The service sector provides 2/3 of the employment in the county and the city of Tartu is the service and logistics centre for the whole of South Estonia.

According to Statistics Estonia, the main activities in Tartu rural municipality in 2022 were agriculture, forestry and fishing; construction; wholesale and retail trade; manufacturing and professional, scientific and technical activities.

Tartu County has a highly-developed infrastructure, and an excellent transportation system connecting highways, railways, and a regional airport.

Tartu Airport is located in Reola, Ülenurme Parish, near the Tallinn-Tartu-Võru-Luhamaa highway. It is the only Estonian regional airport where the airline operates an international scheduled service (between Tartu and Helsinki, Finland; operated by Finnair). Tartu Airport is also home to Estonian Aviation Academy – a state-owned professional higher education institution teaching and training specialists for Estonian and international aviation enterprises and organisations.

Tartu is known as the first city to implement mobile parking in Estonia and the first city in the world to build a broadband network connecting to all schools and public buildings (in 2000).

Since 2016, Tartu has been hosting the largest startup festival in the Baltics, sTARTUp Day, which brings together startups, traditional entrepreneurs, investors, innovators and students. The event aims to connect startup-minded people and celebrate entrepreneurship in the smart city of Tartu.

Key sectors and success stories

Possibilities for cooperation

Estonian Biobank offers co-operation possibilities for developing personalized strategies for disease prevention and treatment.

  • There is development potential for knowledge-intensive production in the region due to its universities. Some successful spin-offs of Tartu University are operating in the fields of biotechnology (Tartu Biotechnology Park) and biomedicine. Tartu University Institute of Technology is a research and development institution, which aims to facilitate the generation of new technological solutions. The R&D centers have been established in the areas of material and chemical technology, biomedical technology, environmental technology, and information technology. Tartu University Institute of Computer Science facilitates knowledge transfer and industry collaboration in fields like artificial intelligence and machine learning (incl. deep neural networks), cybersecurity and data security, self-driving technologies, Internet of Things (IoT).
  • Tartu Science Park is the innovation engine of South Estonia. The mission is to nurture start-up companies into global businesses. Tartu Science Park is the first science park in the Baltics, founded in 1992 by Tartu city, county and two universities. To facilitate innovation and technology transfer, Tartu Science Park is offering incubation and consultation services to research-based and high-tech oriented companies and promoting cooperation between research institutions.
  • Estonian Biobank was founded in 2000 as a volunteer-based biobank. Today, it contains a collection of health and genetics data of over 200 000 individuals, approximately 20% of the adult population of the country. This enables long-term follow-up of the cohort, including diagnoses, drug prescriptions, lab tests, and medical procedures. These datasets are being used to discover associations between genetic variants and diseases, and to test and implement ‘genetics-first’ approaches for early detection of individuals at high risk for diseases and developing personalized strategies for disease prevention and treatment.
  • Tartu Centre for Creative Industries (TCCI) operates as the coordinator of creative industries in Tartu and South Estonia by providing creative industries-related information and training, legal and economic consulting for creative entrepreneurs, as well as business incubation services.
  • Estonian Smart City Cluster (ESCC) is designed to create an innovative environment in cities that will boost the competitive ability of companies by bringing together businesses, citizens, public authorities, R&D institutes, and structures that support innovation. Smart solutions for Tartu.
  • Besides the academic and science-orientated achievements, the city of Tartu has been chosen to be the European Capital of Culture 2024.

Viljandi County

Viljandi County is located in southern Estonia and offers an excellent living and working environment. The capital of the county is Viljandi – the 6th largest city in Estonia. The vital industrial, technological, and service-sector enterprises are all represented in the county. The main focus is on the timber, paper and furniture industries, also in other manufacturing fields like textiles, metalworking and mechanical engineering. The region has all the required infrastructure and support services in place for further growing developments and investments.

Mäeltküla Industrial Park is a fast-developing industrial park owned by the Viljandi rural municipality and is situated only 2.5 km from the city of Viljandi. The industrial park offers the right of superficies for 16 plots with the purpose of production building, storage building, wholesale, and logistics center land. Another logistically good positioned Suure-Jaani Industrial Park provides production and commercial land plots equipped with the necessary infrastructure, where everything is available to start or expand the production.

Traditionally, agriculture and food industry have a meaningful part in the region´s economy. One of the educational institutions playing a role in this is Olustvere School of Service and Rural Economics. The school unites three areas of rural life into one unified food product chain, starting with producing the raw material, continuing with processing and preparing the food, and ending with the service.

Väikejärv Lake in Viljandi County. The nature of the area surrounding Viljandi offers superb possibilities for recreation.

Viljandi, the administrative center of the county is a well-known cultural hotspot of the region. Viljandi Culture Academy is one of the four colleges of the University of Tartu. The Academy provides applied higher education and has offered a specialized culture education since 1952. The Estonian Traditional Music Center is also based in Viljandi and organizes every summer the Viljandi Folk Music Festival, which brings around 30 000 guests to the city to enjoy international musicians.

Key sectors and success stories

Põlva, Valga and Võru Counties

Valga, Võru and Põlva counties are situated in the most southern part of the country: Valga County borders Latvia in the south and Võru County is the only Estonian county bordering two neighboring countries – Latvia in the south and the Russian Federation in the east; Põlva County (with its capital, Põlva) is situated north of Võru County.

Valga County is an area of industry and agriculture but also an area of a well-known recreation and sports center Otepää, which bears the title of Estonia’s Winter Capital each year from 21 December to 20 March. The main focus areas in the region fall into the following fields of the economy: manufacturing of wood products, construction, food and crop production, livestock farming, and wholesale trade.

The tourism economy is growing significantly too, as in recent years the entire region has gained international spotlight for hosting a WRC Rally event.

Võru County’s main economic sectors are forestry and wood processing, furniture and food industries, and tourism. The county is strategically placed on trade routes between the East and West, a location suitable for Logistics. The highest peak in Estonia – Suur Munamägi (reaching 318 meters above sea level) is located near the village of Haanja, in Võru County.

One of the characteristic aspects of the business environment in Põlva County is the large share of micro-enterprises. The main economic sectors are agriculture, forestry and fishing. Tourism plays an important role in the region, similar to the neighbouring counties. One of the largest enterprises in the region is in the pulp and timber sector – Räpina Paberivabrik AS that is the largest manufacturer of packaging corners in the Baltics and the Nordic countries, and among the top three in the world in terms of the product range in this field.

Key sectors and success stories

Read more about investment opportunities in South East Estonia.

Loading map...

Loading

South Estonia

The map of South Estonia shows major strategic assets such as transportation hubs, industrial parks and educational institutions of the region. To go into more detail, these websites can be useful when interested in South Estonia:

You are also welcome to send us a request for personal e-consulting to obtain more specific information.

Regions

News & events

Need more information?

Need more information?

What is it like to run a business in Estonia? How to benefit from the e-solutions and the efficiency of our business culture? What are the opportunities in specific sectors? Who to partner up with?

The Estonian Investment Agency’s team is happy to help you via its complimentary e-Consulting service, organize online or offline follow-up events such as virtual investment visits and guide you through the fairly simple process of investing in Estonia.

Request e-consulting