Creating a 21st Century National Innovation System for a 21st Century Latvian Economy
The Latvian economy made great strides in recovering from the economic shock of the early transition and the adverse aftereffects of the 1998 Russian financial crisis. Nevertheless, Latvia faces serious challenges to its future growth and prosperit...
| Main Authors: | , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/11/5491122/creating-21st-century-national-innovation-system-21st-century-latvian-economy http://hdl.handle.net/10986/14186 |
| Summary: | The Latvian economy made great strides
in recovering from the economic shock of the early
transition and the adverse aftereffects of the 1998 Russian
financial crisis. Nevertheless, Latvia faces serious
challenges to its future growth and prosperity despite these
impressive achievements and the outward appearance of
macroeconomic stability and economic progress. A wide
variety of recent studies suggest that the Latvian economy
is not particularly competitive and, even more worrisome,
they indicate that Latvia is not well positioned to gain
ground in the race for global competitiveness, prosperity,
and rising standards of living. Most of Latvia's growth
to date has come from one-off gains generated by structural
reforms, privatization, and reallocating resources, not
inexhaustible reservoirs of growth. Latvian enterprises will
be able to sustain economic growth and create high wage jobs
only by becoming internationally competitive, innovating,
accumulating new knowledge and technology, and finding a
high value added niche in the European and global division
of labor. This paper is designed to help Latvian leaders
develop a clear diagnosis of the innovation and
competitiveness challenges facing Latvia as it prepares to
enter the EU and, more important, design and implement
policies and programs to ensure that Latvia reaps the
maximum possible benefits from EU structural funds. Section
II analyzes the current structure of Latvia's
production, imports, and exports. Section III uses data from
a number of competitiveness reports to benchmark
Latvia's current progress against a number of
comparator countries and to pinpoint Latvia's strengths
and weaknesses as an innovative economy. Section IV offers a
detailed list of potential policies and programs that could
improve the competitiveness of Latvian enterprises and the
efficiency of the Latvian National Innovation System. The
recommendations include specific policies and programs to
improve (1) the production of knowledge in Latvia, (2) the
commercialization of technology produced by Latvian
scientists, small companies, and research institutes, and
(3) local firms' capacity to absorb, adapt, and adopt
existing knowledge produced outside Latvia for use inside Latvia. |
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