Priorities of Latvia in the Field of Innovation Stakeholders’ seminar “EU Strategy for the Baltic Sea Region – Incentive for Innovative Entrepreneurship”

Latvijas Republikas

Ekonomikas ministrijaMinistry of EconomicsRepublic of Latvia

Priorities of Latvia in the Priorities of Latvia in the Field of InnovationField of Innovation

Stakeholders’ seminar “EU Strategy for the Baltic Sea Region – Incentive for Innovative Entrepreneurship”

21.09.2011.

Juris PūceState Secretary

Ministry of Economics of the Republic of Latvia

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ContentContent

Economic development trends

Economic challenges and policies for further growth

Innovation support activities

2

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Economic development of Latvia in the medium termEconomic development of Latvia in the medium termForecast of Latvia’s GDP (2004 = 100)

Rapid development scenarioRapid development scenarioin 2012-2015 average annual GDP

growth rate: 4.5%4.5%

Moderate development scenarioModerate development scenario in 2012-2015 average annual GDP

growth rate: 2%2%

3

Economic development trends Economic development trends (I)(I)

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4

Economic development trends (IEconomic development trends (III))The economy has resumed growth, main driving force - exportsThe economy has resumed growth, main driving force - exportsSeasonally adjusted data, 4th quarter of 2005 = 100Seasonally adjusted data, 4th quarter of 2005 = 100

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Decomposition of Latvian exportDecomposition of Latvian exportss share share’s’s growth to the EU by using a permanent market growth to the EU by using a permanent market share analysis (%)share analysis (%)

-21,1%

+28,5%

5

Competitiveness has a major role in export growthCompetitiveness has a major role in export growth

+40,2%

58% 58% of exports growth was driven by increasing

competitiveness

45% of exports growth was driven by

increasing competitiveness

6% of exports decline was effected by decreasing

competitiveness

Economic development trends (Economic development trends (III)III)

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Economic development trends Economic development trends (IV)(IV)

Qualitative changes in Latvian export structure

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Share of BSR countries* hi-tech intra-EU exports in total exports, %Share of BSR countries* hi-tech intra-EU exports in total exports, %

Data source: Eurostat

Economic development trends Economic development trends (V)(V)

* except Germany

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Main elements for competitivenessMain elements for competitiveness......

Source: GCI

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Competitiveness of LatviaCompetitiveness of Latvia

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0Institutions

Infrastructure

Macroeconomicenvironment

Health and primaryeducation

Higher education andtraining

Goods market efficiency

Labor market efficiency

Financial marketdevelopment

Technological readiness

Market size

Business sophistication

Innovation

Latvia BSR, avr

Source: GCI

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Innovation support systemInnovation support system

Support for fundamental research and State research

programs

Support for participating in international research

programs

Support for applied and market oriented research

projects

Support for Technology transfer contact points in Universities

Competence centers

Business incubators – support for new innovative companies

Innovation and entrepreneurship motivation and awareness program

Support for development of new products and technologies

Development of research

infrastructure

Support for introducing of new products and technologies in

production

Support for high-added value investment projects

Venture capital and early stage funding (pre-seed, seed funds)

Development of commercial research

infrastructure

Activities to rise capacity of researchers and to attract new

researchers

Technology incubator (in development)

Ministry of Education and Science Ministry of Economics

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Key policy directions: To promote cooperation between enterprises

and researchers

To support development of innovative companies

To promote access to early stage finance

Innovation priorities in Latvia

Quantitative target of Latvia for expenditures on R&D is 1.5% of GDP in 2020

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Promotion of cooperation between Promotion of cooperation between enterprises and researchersenterprises and researchers

Goal: to bring together researchers and enterprises to implement common, knowledge-intensive industrial research and product development projects

6 Competence centres established (Transport and Mechanical Engineering; ICT; Pharmacy and Chemistry; Forestry; Electronics an Optics; Environment, Bio-energy and Biotechnology)

70 companies, mostly SMEs, involved in competence centres Financing from public resources: 56 MEUR, private co-financing: 30

MEUR

Goal: to encourage practical linkages between scientists and entrepreneurs and promote commercialization of state funded research

8 TTOs established at higher education institutions Financing from public resources: 2.75 MEUR

Technology Transfer Offices (TTOs)

Competence Centres (CC)

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Support for: Industrial research (aid intensity 50-70%) experimental work and prototyping (aid intensity 25-45%) production equipment acquisition (aid intensity 35 %) 188 contracts signed on ~45 MEUR

Support for: equipment purchase, industrial building construction or reconstruction (aid intensity 45 %) support for large-scale projects, min. amount 4.25 MEUR 27 contracts signed on ~84 MEUR

Funds available exclusively for “green technologies” development and introduction into production Norwegian Financial instrument financing – 11 MEUR Support available for ~ 100 companies

Support for development of Support for development of innovative companies (I)innovative companies (I)

Grants for development and introduction of new products and technologies in production

Grants for knowledge or technology-intensive high value-added investments

Smart technology fund NEW 2012

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Goal: to support development of new competitive and viable enterprises by providing them with appropriate business environment and business support services, e.g. infrastructure and consultations

10 BI established: 9 regional (296 enterprises) and 1 in Riga for creative industries (42 enterprises)

Funding: 28,7 MEUR (ERDF)

Goal: to motivate the wide range of society to start their own business and to develop innovations and use innovative solutions

Implemented by Latvian Investment and Development Agency Funding: 2,4 MEUR (ERDF)

Support for development of Support for development of innovative companies (Iinnovative companies (III))

Business incubators (BI)

Innovation and entrepreneurship motivation programme

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Access to early stage financeAccess to early stage finance

Goal: to improve access to venture capital and early stage financing to promote creation and development of innovative fast growing companies

Measures: Seed and star-up funds – financing for development of initial concept

or product development and initial marketing Venture capital instruments – financing for growth and expansion of

companies in order to help them to increase production capacity Mezzanine instrument – funding for companies in addition to bank

loans to cover the investment costs of the project New measures are developed:

Co-investment and Growth funds (from 2012) Planed outcome – at least 125 enterprises supported Funding – 87.5 MEUR (2011.-2013.)

Venture capital and seed money

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Brīvības iela 55, Rīga, LV 1519Tel.: +371 67013101Fax: +371 67280882E-mail: [email protected]: www.em.gov.lv

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Documents

Priorities of Latvia in the Field of Innovation Stakeholders’ seminar “EU Strategy for the Baltic Sea Region – Incentive for Innovative Entrepreneurship”