Transcript Economic development trends

Latvi j as Republ i k as
Ek on om i k as m i n i str i j a
Mi n i str y of Econ om i cs
Republ i c of Latvi a
Priorities of Latvia in the
Field of Innovation
Stakeholders’ seminar “EU Strategy for the Baltic Sea Region –
Incentive for Innovative Entrepreneurship”
21.09.2011.
Juris Pūce
State Secretary
Ministry of Economics of the Republic of Latvia
Content
 Economic development trends
 Economic challenges and
policies for further growth
 Innovation support activities
Latvi j as Republ i k as
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Economic development trends (I)
Economic development of Latvia in the medium term
Forecast of Latvia’s GDP (2004 = 100)
Rapid development scenario
in 2012-2015 average annual GDP
growth rate: 4.5%
Moderate development scenario
in 2012-2015 average annual GDP
growth rate: 2%
Latvi j as Republ i k as
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Economic development trends (II)
The economy has resumed growth, main driving force - exports
Seasonally adjusted data, 4th quarter of 2005 = 100
Latvi j as Republ i k as
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Economic development trends (III)
Competitiveness has a major role in export growth
Decomposition of Latvian exports share’s growth to the EU by using a permanent market
share analysis (%)
45% of exports growth
was driven by
increasing
competitiveness
+28,5%
6% of exports
decline was
effected by
decreasing
competitiveness
58% of exports
+40,2%
growth was
driven by
increasing
competitiveness
-21,1%
Latvi j as Republ i k as
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Economic development trends (IV)
Qualitative changes in Latvian export structure
Latvi j as Republ i k as
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Economic development trends (V)
Share of BSR countries* hi-tech intra-EU exports in total exports, %
Data source: Eurostat
Latvi j as Republ i k as
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* except Germany
Main elements for competitiveness...
Source: GCI
Latvi j as Republ i k as
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Competitiveness of Latvia
Latvia
BSR, avr
Institutions
7,0
Innovation
6,0
Infrastructure
5,0
Business sophistication
4,0
3,0
Macroeconomic
environment
2,0
1,0
Market size
0,0
Higher education and
training
Technological readiness
Financial market
development
Goods market efficiency
Labor market efficiency
Source: GCI
Latvi j as Republ i k as
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Health and primary
education
Innovation support system
Research and technological
development
Knowledge and technology
transfer
Support for fundamental
research and State research
programs
Support for Technology transfer
contact points in Universities
Market (new products,
technologies and business)
Business incubators – support for
new innovative companies
Support for applied and
market oriented research
projects
Competence centers
Venture capital and early stage
funding (pre-seed, seed funds)
Support for participating in
international research
programs
Support for development of new
products and technologies
Support for introducing of new
products and technologies in
production
Development of
research
infrastructure
Development of
commercial research
infrastructure
Activities to rise capacity of
researchers and to attract new
researchers
Ministry of Education and Science
Latvi j as Republ i k as
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Technology
incubator (in
development)
Support for high-added value
investment projects
Innovation and entrepreneurship motivation and awareness
program
Ministry of Economics
Innovation priorities in Latvia
Quantitative target of Latvia for
expenditures on R&D is 1.5% of GDP in 2020
Key policy directions:
 To promote cooperation between enterprises
and researchers
 To
support
companies
development
of
innovative
 To promote access to early stage finance
Latvi j as Republ i k as
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Promotion of cooperation between
enterprises and researchers
Competence Centres (CC)
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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
Technology Transfer Offices (TTOs)
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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
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Support for development of
innovative companies (I)
Grants for development and introduction of new products and technologies in
production

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
Grants for knowledge or technology-intensive high value-added investments

Support for:
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equipment purchase, industrial building construction or reconstruction (aid intensity 45 %)

support for large-scale projects, min. amount 4.25 MEUR
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27 contracts signed on ~84 MEUR
Smart technology fund
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NEW 2012
Funds available exclusively for “green technologies” development and introduction into production
Norwegian Financial instrument financing – 11 MEUR
Support available for ~ 100 companies
Latvi j as Republ i k as
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Support for development of
innovative companies (II)
Business incubators (BI)
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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)
Innovation and entrepreneurship motivation programme
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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)
Latvi j as Republ i k as
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Access to early stage finance
Venture capital and seed money
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Goal: to improve access to venture capital and early stage
financing to promote creation and development of innovative
fast growing companies
Measures:
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New measures are developed:
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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
Co-investment and Growth funds (from 2012)
Planed outcome – at least 125 enterprises supported
Funding – 87.5 MEUR (2011.-2013.)
Latvi j as Republ i k as
Ek on om i k as m i n i str i j a
Mi n i str y of Econ om i cs
Republ i c of Latvi a
Latvi j as Republ i k as
Ek on om i k as m i n i str i j a
Mi n i str y of Econ om i cs
Republ i c of Latvi a
Thank you for your attention!
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