The Power of Positive Memory Loss

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Yet this generation is uninterested in ethnic rivalries. It's one of Estonia's characteristics that many of the top jobs in politics and business are held by people under 40, who are too young to have been tainted by the Soviet legacy. They are also the ones buying the new homes that are shooting up on the outskirts of Tallinn. Much of the building is being done on credit, leading bankers to worry about a bubble economy. "Some people think they have discovered the never-ending hockey stick," frets Erkki Raasuke, chief executive of Hansabank, Estonia's biggest. He is 35.

Most Estonians, enjoying a boost in living standards, are hoping the boom can continue. But there's at least one caveat: Estonia needs to resolve its labor shortage. "We are running out of people," says Craig Rawlings, president of the American Chamber of Commerce in Tallinn. Still, Estonia has shown that it can improvise. "We're a very small country," says Skype's Tamkivi. "That means we just have to be efficient." So far, they've managed.