As we leave the festive season behind, it’s important to carry the Christmas spirit into 2025. The Christmas spirit symbolizes hope, renewal, and the promise of better times ahead. Let’s imagine new ways to improve our personal lives, make our work more meaningful, and pursue other inspiring endeavours. To achieve this, we need to embrace creativity—especially in a world facing tremendous risks and uncertainties.
For the sake of brevity, I will focus on two significant uncertainties:
Firstly, the development of Generative Artificial Intelligence (AI). The rapid advancement of generative AI has sparked both excitement and concern. Many areas are at risk of being fundamentally reshaped by AI. However, we may overestimate its short-term impact while underestimating its long-term potential. The evolution of AI doesn’t strictly follow the so-called hype cycle developed by Gartner; rather, it defies prediction. Those who claim to "know" the future of AI are often engaging in a pretence of knowledge. This underscores the importance of emphasizing uncertainty rather than risks.
Secondly, Trump and Geopolitics. Donald Trump’s presidency is important but shouldn’t be overemphasized. While Trump and his team wield significant power, they remain constrained by structural factors and unintended consequences. During his first administration, a major policy goal—reducing the U.S. trade deficit in manufacturing—ended in failure.
Once again, Trump’s love of tariffs and “Make America Great Again” signals a revival of old-fashioned industrial policy. Tariffs, as we know from Economics 101, are taxes on goods, excluding services where the U.S. has maintained trade surpluses for decades (think Hollywood, Silicon Valley, and Wall Street). This emphasis on manufacturing raises uncertainties about how rhetoric will translate into policy and what unintended consequences may follow. Economists predict negative economic outcomes, while investors anticipate growth in equities. Obviously, equities and macroeconomic performance are not necessarily correlated. Nevertheless, these diverging narratives highlight uncertainty over Trump’s potential impact more than risks, which can often be mitigated.
Our response to both AI and geopolitics can draw from Joseph Schumpeter’s concept of creative destruction. Growth often emerges from the ashes of disruption. While AI may substitute certain business functions, it can complement others. Similarly, while tariffs may hurt manufacturing exports, growth increasingly lies in services. Services are less constrained by asset specificity and offer greater flexibility—qualities that are especially vital in today’s volatile security environment.
We’ve already seen the cancellation of planned foreign direct investments in Estonian manufacturing due to geopolitical tensions. However, growth opportunities lie in combining services and manufacturing, particularly as the latter faces localization requirements.
As a community committed to growth and responsibility, we at EBS must embrace creativity to fulfil our purpose in this turbulent environment. Creativity can help us achieve personal growth and foster the growth of our organizations.
EBS’s role in education and practical research extends beyond Estonia, contributing to the export of high-value-added services. Over the past two years, EBS has trained 400 Ukrainian leaders from educational institutions, private companies, and public agencies. Our annual summer school has drawn hundreds of participants from four continents. These are just a few examples of how we defy conventional wisdom in Estonia, where summer is often seen as an inappropriate time for study.
It’s time to challenge the logic of perceived appropriateness and let creativity run wild.
Meelis Kitsing
EBS Rector and Chairman of the Management Board