The P&Q Interview: Estonian Business School’s Meelis Kitsing On Rethinking AI’s Role in Sustainability

Not so long ago, a major race for business innovation centered around sustainability. Business schools launched new degrees, impact projects, and ESG courses. Companies hired sustainability officers, published glossy reports, and pledged bold climate goals. Even B-school rankings, from the Financial Times to Bloomberg, added sustainability metrics to reward the shift.

Now, the race is on for dominance in artificial intelligence. Worldwide, schools and companies alike are rushing to deploy AI tools, reskill, and rethink workflows at a breakneck pace.

But what happens when these priorities collide? Large AI models demand energy-intensive data centers, driving up emissions. And concerns around bias, ethical misuse, and digital inequality keep growing. Do the environmental and social costs of AI undercut the very goals that sustainability once promised to solve?

Estonian Business School – a private, stand-alone university in one Europe’s fastest growing tech hubs – is racing in a new direction: What if AI could be part of the solution?

“AI is developing so quickly, and there’s still a lot we don’t fully understand. Companies need to consider the specific foundational models they’re using and the externalities that come with them,” says Meelis Kitsing, Rector and Chairman of the Management Board of EBS in Tallinn.

“We are already bringing AI and sustainability together, and we want to push further in that direction. Many programs focus on one or the other, but not both.”

Next month (August 11-15), the school will host its fifth International Summer School with the theme Digitalization and Sustainability. The program brings together global experts, policymakers, and entrepreneurs to explore what it calls two “megatrends” that will change modern society.

A PRIVATE HUB IN A STARTUP CAPITAL

With just 1.4 million people, Estonia is one of the smallest countries in Europe. It is bordered by the Baltic Sea, Latvia, and Russia. Since regaining independence from the Soviet Union in 1991, the country has embraced digitization as a national priority.

Tallin, a city of just over 455,000, sits at the center of the revolution, owing much of its modern tech scene to what Kitsing calls the “Skype Effect.” The early tech darling was developed in several countries, but many of its engineers were based in the Estonian capital. When Microsoft acquired the platform in 2011 for $8.5 billion, many of its Estonian engineers went on to launch or fund new ventures. That early success sparked what would become one of the world’s most active startup cultures per capita.

Today, Estonia has produced 10 unicorns (valued at $1 billion or more) including Bolt and Wise, the latter founded by an EBS alumnus. It leads the world in venture capital investment as a percentage of GDP, and in 2023, was ranked the third fastest-growing tech hub in Europe. Tallinn recently broke into StartupBlink’s global top 50 ecosystems for the first time.

Q&A WITH MEELIS KITSING

Estonian Business School is located in central Tallinn, within walking distance of many of those unicorns. It’s one of the few private universities in the region and operates as a nonprofit. The school enrolls about 1,000 full-time students across bachelor’s, master’s, and Ph.D. programs, with another 700 to 800 participating in executive education each year.

Meelis Kitsing, a professor of political economy, has led Estonian Business School since 2020 and was recently appointed to a second five-year term. Under his leadership, EBS has doubled down on entrepreneurship, digital transformation, and public-private innovation.
EBS also earned Estonia’s first five-year EFMD accreditation for a bachelor’s business program and launched a new business-IT hybrid degree created in partnership with local tech entrepreneurs.

P&Q recently sat down with Kitsing to talk about EBS’s growing international footprint, its approach to sustainability in the age of AI, and what comes next.

What brought you to EBS? Were there unique challenges that attracted you, or was it just the right opportunity at the time?

There are seven universities in Estonia, and EBS is one of them. We’re a standalone business school, but also a comprehensive university – meaning we have PhD programs, high school programs, MBAs, we conduct research, and so on.

What really distinguishes us from other universities here is that we’re a private, nonprofit university, managed by a foundation. On one hand, I’m Rector of the university, but I’m also Chairman of the Foundation. What excites me is the ability to bring together very different fields. Usually, when you think about a university, you think of people teaching, learning, and doing research. But we also have very significant venture-building activities, and we try to connect those new ventures with both teaching and research.

We do this in a couple of ways. In our building, we have several accelerators of which EBS are part owners, such as Startup Wise Guys. They help new companies get started, not just in Estonia but across Europe and Africa. We also have direct investments in about 15 different startups, some of which operate in the U.S. and some that were founded by our alumni.

The idea is not just to diversify revenue sources, though that’s important because we’re a private university in an environment where most others depend on public funding. It’s also about bringing that entrepreneurial experience into the classroom and into research. That’s what excites me. You could say we’re a university-plus, or something beyond a traditional university, especially in the European context. In the U.S., it’s more common for universities to have endowments and similar activities, but in this part of the world, we still have a long way to go in that direction.

Give us some context about Estonia and the area you operate in. Are you a regional school, or do you aim to attract international students?

We attract students from all over the world. We have about 40 nationalities represented in our student body. Most of our students come from Europe, Estonia, Finland, and neighboring countries are well represented. We also have students from Southern Europe, like Italy, and from farther away, like the Philippines.

In terms of context, Estonia really stands out in the region and the world for its high degree of digitalization in both the public and private sectors. It’s a very small country, with just 1.3 million people, but we’ve produced 10 unicorns. Bolt, for example, was founded by one of our alumni. Wise is another. While it’s officially headquartered in London, 70% of its workforce is located just 500 meters from where I’m sitting.

Many of our alumni have been involved in those companies. It really started with Skype, which was founded in Estonia. That created what we call the “Skype effect.” More than 20 years ago, people here were able to build Skype into a unicorn. That success brought inspiration and aspiration for new entrepreneurs, as well as funding since Skype was sold to Microsoft for $8.5 billion. Many people who were involved in Skype went on to found or support other startups.

What were some of your strategic priorities for the school in your first term? And what will you be focusing on in your next?

Estonian Business School was founded in 1988, actually in New York City, by Estonians, Canadians, and Americans. Initially, we were an executive education organization. The idea was to bring people from Estonia to North American universities for short programs. This was during the collapse of the Soviet Union, when free markets and a new kind of enterprise were emerging.

About 30 years ago, we evolved into a university. Historically, we’ve always had strong executive education, and we’ve been very focused on teaching. One of my priorities was to diversify our activities and place more emphasis on research, particularly impactful research. Because we’re a business school, our research needs to be applied. Measured by both quantity and quality, and we’ve made significant improvements in that area.

We’ve also diversified our revenue sources so we don’t rely solely on tuition. For example, we’re involved in major research projects in collaboration with other universities across Europe. One of those is with Bocconi, which is also one of our Erasmus partner universities. That’s a capacity-building project, and we have several others like it.

Looking ahead to the next five years, I’d highlight two key priorities. One is internationalization. Compared to large public universities in Estonia, we’re already more international, but we want to take that further. COVID and the full-scale war in Ukraine created some challenges, but our goal remains to expand our international reach.

The second is impact. We want to have even greater societal impact through teaching, research, and venture-building activities, both for-profit and nonprofit. Those will be the key aims in the coming five years.

Are you looking to grow as a school, or are you comfortable with your current size?

I think we’re quite comfortable with our current size. We’d love to grow a little, but we don’t want to sacrifice quality. The last five years, we’ve really been able to emphasize quality. If you look at student satisfaction and other metrics, they’ve been improving steadily.

That focus on quality is actually a point of differentiation for us. Here in Estonia, we have several larger public universities with big class sizes. In contrast, we can offer a much more personalized experience with smaller classroom interactions. That’s part of our competitive advantage.

An interesting fact is that we also operate a private high school. It’s small, but highly successful, ranked in the top 10 in Estonia based on state exam results.

Does the high school have a business focus alongside the core curriculum, or is it more traditional?

In Estonia, both secondary and higher education are heavily regulated, so we can’t design the high school program entirely as we wish. We have to follow the standard national curriculum.

That said, we typically admit about 50 students each year and divide them into three different study groups, each with a slightly different emphasis. One of those groups does have a stronger focus on business. So yes, to some extent, we integrate business into the high school program where we can.

But I think what really makes it unique is the environment. The high school is based at the business university, in the same building as our ventures and university activities. That creates a very different learning atmosphere, even for students in a standard high school track. They come into a space where business and entrepreneurship are happening every day. They see what’s going on, they interact with university students and entrepreneurs. It’s a learning experience that goes beyond the official curriculum.

You’ve led a transformation at EBS focused on entrepreneurship, digital transformation, and public-private innovation. What drove that shift, and what does it look like at the school?

We wanted to make our research more relevant for businesses, and that was one of the main drivers. So we’ve moved toward producing applied research that addresses real challenges companies face.

We’ve also developed special programs tailored for enterprises, and we make a point of integrating feedback from businesses directly into both our teaching and research. In teaching, that means our classes are more challenge-based rather than just textbook-driven. In research, we aim for real-world impact, often by collaborating directly with external clients.

That includes both public and private sector work. We’ve run programs for government institutions and for companies, and we also partner internationally. We have about 70 partner universities globally, and we collaborate on a wide range of research and innovation projects.

For example, we recently launched a project with the Hanken School of Economics, a university in Finland, and another in Latvia. The focus is on supporting young entrepreneurs and startups. So this transformation works across multiple levels.

I want to talk a bit about the upcoming Summer School on Digitalization and Sustainability. Tell me about Tallinn in terms of entrepreneurship, tech, and fintech and put that in context for the event?

We’re located in central Tallinn, which is where many of Estonia’s most successful startups and unicorns are based. It’s a great location for this kind of program, especially in August which is one of the best months to visit Estonia.

With the Summer School, we’re bringing together academics, policymakers, and entrepreneurs. Our keynote speaker will be Bengt Holmström, the Nobel Prize-winning economist from MIT. He’s also an honorary doctor at Estonian Business School (he received the title two years ago) and has collaborated with us before.

On the policy side, we’ll have representatives from the European Commission and Estonia’s former Minister of Climate, who is now a member of parliament and chairs the Environmental Committee. We’re also bringing in the President of the Research Council from Argentina to speak about university-business collaboration.

We’re involving entrepreneurs as well. One example is the founder of Lingvist, an Estonian startup that uses AI to help people learn languages more efficiently. It was founded by Mait Müntel, a physicist who previously worked at CERN. Lingvist is now working with Japanese platforms to help people in Japan learn foreign languages.

Altogether, we’ll have around 15 speakers from academia, policy, and entrepreneurship. The goal is to bridge these different perspectives and have a more well-rounded conversation about digitalization and sustainability, not just from a high-level or purely entrepreneurial view, but bringing those angles together.

Who are the attendees of the Summer School? Are they primarily Estonian business students, or do they come from around the region?

They’re international students. The Summer School is one of our efforts to bring more international students to Estonia, and summer is the best time to do that. Most participants are master’s students.

Each year, we have a strong showing from Switzerland, but we also have students from the U.S., Kenya, Belgium, and other countries. So, we typically have participants from four continents. It’s definitely an international program.

While it’s not specifically targeted at Estonian students, they’re of course very welcome to attend.

What is this year’s focus or theme for the Summer School?

This is the fifth time we’re running the Summer School, and the emphasis is on digitalization and sustainability. When we started, we noticed that many programs focused on one or the other, but not both. Our idea was to bring those two themes together.

For example, AI requires massive amounts of data, which in turn requires data centers and data centers need electricity. If you look at the business models of major digital platforms like Google, you’ll see they’ve started to function almost like energy companies. They’re investing in solar and even nuclear power. So, sustainability becomes deeply intertwined with digitalization. How efficiently are large language models running? Where is the electricity coming from, and how is it produced?

That’s what we’ve been exploring through the Summer School. And since we’re a business school, we’re also very interested in how these themes translate into real business models. This year, for example, we’ll visit a brewery that uses AI to optimize its brewing process and reuses all byproducts to achieve high sustainability. It shows that this isn’t just about software or tech, it’s happening across many sectors.

This year, we’re also placing a strong emphasis on university-business collaboration. That’s a key strategic goal for EBS: to pursue more impactful research and challenge-based learning. That’s why we’ve invited the President of Argentina’s Research Council to give one of the keynotes. He’s a veterinarian who led the cloning of the first cow in Argentina and has raised significant private funding for his research.

We’ll also hear from a representative at Estonia’s Ministry of Economic Affairs and Communications, who recently defended her PhD on university-business collaboration. And we have entrepreneurs who used to be academics and will share what it’s like to transition from researcher to founder.

I’ve seen studies on the environmental cost of AI. Like, just typing “thank you” in ChatGPT takes measurable energy. Are those the kinds of things you’re talking about? For example, how a sustainable company should calculate the impact of AI on its footprint?

Yes. AI is developing so quickly, and there’s still a lot we don’t fully understand. But that’s certainly one of the aspects. Companies might be eager to adopt AI, but then they need to consider the specific foundational models they’re using and the externalities that come with them.

What do you see as some of the big challenges facing business education right now? And what challenges are unique to EBS?

One of the biggest challenges for business schools globally is justifying why someone should come study business in the first place. Of course, it depends on the level of study, but take bachelor’s programs, for example. They’re not just about teaching specific business subjects like marketing or finance, they’re more broadly structured as comprehensive social science programs, where students study a bit of everything. They’re more generalist in nature.

As students progress, they can choose more specialized or more general master’s programs. There are also micro-degrees, shorter, focused programs on specific topics. So, students now have a menu of options.

That’s why it’s important for business schools to teach a range of skills. We’re launching a new program this fall that combines IT and business. Of course, students could study IT alone at another university, but our approach is about integrating hard and soft skills. In the modern workplace, that mix is crucial. You need more than one skill set.

It’s a dynamic process. Business schools have to constantly rethink how to combine disciplines, IT and business, or even humanities and business. From my experience studying at universities in the UK, the U.S., and Estonia, I’ve seen that business schools tend to be much more responsive to societal changes than, say, a traditional economics or philosophy department. That responsiveness is a real strength.

Another major challenge is internationalization. Global issues like trade wars, tech wars, and immigration restrictions have made it harder for students to cross borders. You see a trend toward regionalization, more Europeans are choosing to stay in Europe, and it’s becoming harder to get visas. That creates challenges but also opportunities to attract students looking to stay closer to home.

For EBS specifically, we are the only private university in Estonia. The landscape here and in Finland, where we also have a strong presence, is dominated by public universities that benefit from government funding. So, the terms aren’t in our favor. But we’ve managed to operate since 1988 in this very tough environment by constantly asking what makes us different. What’s our unique value compared to the public institutions? That mindset keeps us agile and focused.

And yes, the geopolitical situation affects us – we’re right next to Russia, and there’s no ignoring that. But Estonia also has an incredibly entrepreneurial ecosystem, with many unicorns and exciting new ventures. That helps offset the geopolitical challenges and continues to attract people who want to be part of something unique.

You mentioned the challenges of competing with publicly funded universities. But does being a private institution also give you more freedom to innovate?

Absolutely. You’re spot on. That’s actually one of our key advantages. The higher education sector here is very regulated, even my own position is tightly governed. That said, because we operate as a private institution and most of our funding is private, we have more flexibility than public universities. Government funding often comes with strings attached, and government institutions tend to be more risk-averse. As a private organization, we’re able to experiment more and act with greater agility.

That flexibility allows us to try new things like our venture-building activities. We can engage directly in new ventures, which naturally involves risk, but we’re in a position to evaluate and take those risks. In the public sector, fear of failure often becomes a barrier to doing anything new.

What are some things coming out of EBS that you’re really excited about or want people to know about?

A couple of things come to mind. One is a completely new bachelor’s program we’re launching in collaboration with a coding school based in northeastern Estonia called kood / Jõhvi. It was founded by some very successful Estonian tech entrepreneurs, including Taavet Hinrikus, one of the founders of Wise, which is now listed on the London Stock Exchange.

This new bachelor’s program is designed to combine one-third IT education with two-thirds business education. We think it’s a really exciting opportunity for international students, especially those looking for a multidisciplinary skill set.

We’re also continuing to grow our venture-building efforts, always looking for new opportunities in that space.

Another recent milestone is that our more traditional bachelor’s business program received a five-year accreditation from the European Foundation for Management Development (EFMD). It’s the first program in Estonia to earn that level of accreditation.

As the U.S. faces intense political pressure and attacks on higher education, do you see an opportunity for smaller European schools like EBS to become more of a destination for international students?

Yes, I think uncertainty in the U.S., especially around things like visa approvals, definitely creates opportunities for European schools. I don’t think the benefit is evenly distributed across Europe. Some countries like Ireland, for example, are seeing a clear boom in interest. I travel to Ireland quite a bit, and there’s a lot of momentum there around international education. Maybe other parts of Europe are also benefiting more visibly. For Estonia, I don’t think we’ve felt the direct effects just yet, but it’s something worth keeping an eye on.

In the long run, I don’t think these kinds of attacks on universities are good for anyone. Europe can step in to some degree, but there are limits to what we can absorb. These attacks undermine the credibility of universities more broadly, and that’s dangerous.

Even before the current U.S. administration, you could already see a shift in MBA rankings. If you look at the Financial Times rankings, for example, there are now more European schools in the top 10 than U.S. schools. Ten years ago, U.S. programs dominated, with maybe just London Business School or INSEAD breaking into the top 10. Now you’ve got Bocconi, INSEAD, HEC Paris, some strong Spanish programs, LBS. And in the last ranking, only about four U.S. schools were in the top 10.

So that trend was already underway, but current U.S. policies and the general uncertainty are likely accelerating it. Even if the policies aren’t directly targeting international students, the perception of instability factors into students’ decisions.

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