Estonia is the 132nd-smallest country in the world by land mass, yet it produces more start-ups per head of population than any other country in Europe. It has a population the size of Copenhagen but has one of the world's most advanced e-governments.

What is it about this former Soviet state, with an obscure language and unenviable weather, that produces so many start-ups?

Of the 20 finalists in January's Seedcamp, an entrepreneur-mentoring program, four were Estonian—including the eventual winner, GrabCAD, a social network for engineers which has 10% of the world's mechanical engineers registered.

According to Antti Vilpponen, CEO and cofounder of ArcticStartup, a site that follows entrepreneurship in the region, Estonia has three things in its favor: political leadership, the success of Skype, and its culture.

The leadership has been clear and consistent. President Toomas Hendrik Ilves, the country's fourth president in modern times, wouldn't be offended to be described as a geek. On the desk in his personal office is a 27-inch iMac; he owns a MacBook Air and an iPad2 as well.

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