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34 DESIGN007 MAGAZINE I MARCH 2018 industry has continued to stay relevant since that time? Kolk: Yes, we built radio sets in the '20s and it grew from there. Of course, we had at least 50 years of Soviet occupation where electron- ics was present and thriving, but it was behind Iron Curtain, which means it was really tailored to that market. When the wall came down, we were out in the cold, because that was our competitive market and we were not part of the global value chain. We perhaps used differ- ent processes and different approaches, so we had to learn—very fast. So we had a complete industry overhaul in the '90s, and now I'd say we are world class, as our export figures show. We have large multina- tionals, the biggest of them being Ericsson, who has a large factory in Estonia, and Ameri- can companies, FLIR, Amphenol there and others. Then we also have EMS companies, usually European mid- dle-sized companies. And then we have an increasing number of engineering companies that are really growing. Some of them are exporting just engineering services, and others develop complete prod- ucts while some companies launch their own products. So we have the whole value chain in place: design companies, several manufac- turing companies, after-sales companies, and all the major distributors are present in Esto- nia, so the components can be bought locally. Likewise, all the machinery, all the materials, all we need for electronics manufacturing is there. And Estonia is now rather famous for our IT companies and how well IT is implemented in government services. Citizens communicate with the state through the Internet. So now we are basically marrying this together with our industry and all that came before. Everything is growing nicely. For our electronics industry and especially for engineering companies, we see a large opportunity in helping companies make their products smart and connected. That's what it's all about now with IoT and all these things. You really cannot sell a product today that is not connected and doesn't have an app with it. Our electronics engineers and IT guys together can create the complete solution to help com- panies in very different sectors, be it smart clothing, smart cities, or smart machines. We are about to have very interesting references there. I will gladly work with American col- leagues in the same way. Shaughnessy: You talked about being able to compete on the global market and keeping your cost down. What's the secret to doing that? Kolk: Well, we cannot really be the cheapest. There is always somebody who can undercut you by five cents. Although now we have cases where we have done competitions with facto- ries in China and India, and we have better pricing because of a more streamlined produc- tion and better organization. But we don't have many people, so we have to manage with small teams and do big things. And it shows in the price at the end of the day. Another thing is that the local market is small and we are not the cheapest place in the world, so we don't produce too much consumer stuff anymore. We used to make cellphones in large volume in the old days, but now it's mostly professional electronics. So, we're talking about automotive, railway, aerospace, indus- trial. These are industries where the quality, reliability and the delivery matters. Shaughnessy: Doing the high-tech stuff. Kolk: Doing the high-tech stuff, yes, and you have to be close to the customer, so we are serving Northern Europe, Scandinavia, Ger- many, and these areas. We are close and we can get products over there by truck in day or two. It works pretty well. Shaughnessy: Tell us about your background. Arno Kolk

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