CHALLENGES AND IMPLEMENTATION OF KNOWLEDGE BASED ECONOMY IN ESTONIA

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CHALLENGES AND IMPLEMENTATION OF KNOWLEDGE
BASED ECONOMYIN ESTONIA
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NEED FOR CHANGE

• Successful investment based economy, with
  stable monetary system and functioning open
  market economy.
• Attractive for Foreign Direct Investments, which
  induce inward knowledge and technology transfer,
  and support modernisation of the economy.
• Labour productivity was in 1998 still only 37
  of the EU average, continued economic growth is
  need to catch up the EU member states.
• Need to build up well functioning knowledge
  based learning economy, ensuring this way bases
  for the longer term sustained economic growth.

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ESTONIAN RD STRATEGY 2001-2006

• Sees the future Estonia as a knowledge-based
  society where the development of human capital,
  research and adaptation of new knowledge and
  skills is the source of growth in the
  competitiveness of the economy, labour force and
  in the quality of life.
• Specifies the goals, opportunities and
  principles of RD and serves as a basis for
  organising the development of RD in Estonia. The
  strategy establishes general framework and
  foresees volumes of the research and innovation
  support mechanisms until 2006.
• Is the basis for developing annual plans and
  concrete programs to develop RD and innovation
  system according to the goals set.

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THE ROLE OF THE STATE

• State is the main investor in creating the
  knowledge base and assuring the reproduction of
  knowledge and skills.
• State is the catalyst of the innovation process.
  Its role is to quicken the adaptation of new
  knowledge and to encourage enterprises to
  introduce new technologies.
• State as the regulator creates a favourable
  environment for the development of RD and
  ensures safety of consumers in using new
  technologies.

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TODAYs SITUATION

• Total expenditure on RD in 1995-1998 was 0,6
  of GDP, while the EU average was 1,8 of GDP
  (1998)
• Low enterprise RD investment. In 1999 public
  sector investment in RD was 76 of total
  expenditure. EU average was 36 (1998).
• High number of scientific publications. In
  1997, Estonia produced 37 scientific articles per
  GDP, while EU average was 27 articles/GDP, United
  States produced 22 articles/GDP, and Japan 15
  articles/GDP.
• Limited co-operation between researchers and
  industry, low patenting activity.

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PARTICIPAION IN RD ACTIVITIES
of GDP
Source OECD 2001, Estonian Statistical Office
2001
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CHALLENGES

• RD strategic objectives are to renew the
  knowledge base and to raise the competitiveness
  of Estonian enterprises.
• The principles for reaching the objectives are
  socially balanced development, environmental-frien
  dly and saving economic progress and science
  ethics.
• Strengthening RD innovation related public
  policy making, and co-ordination with different
  long term development plans.
• Building awareness on the importance of
  innovation in society in general.

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REALISATION OF THE STRATEGY
of GDP
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REALISATION OF THE STRATEGY

• To increase sharply gross RD expenditure by
  2006 to 1,5 of GDP, making it comparable to EU
  average
• Using additional public appropriations to foster
  growth of business RD investment
• Improving functioning of the national innovation
  system, as the whole, while removing obstacles
  hindering development, and supporting
  prospectively emerging industrial clusters.
• Focus on three key thematic areas
• User friendly information society technologies
• Biomedicine and gene technologies
• Material- and nanotechnologies
• In-depth integration into international research
  and development and innovation networks.

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INTERNATIONAL CO-OPERATION

• Estonia fully support initiatives for
  establishment of the European Research Area,
  which already helps us in adjusting national RD
  and innovation policies.
• Estonian participation in EU RTD Framework
  Programmes has been successful. Estonia is also
  full member of EUREKA and COST networks, but so
  far limited participation to these programmes has
  been seen.
• Co-ordination of national RD programmes is seen,
  as one of possibly the most valuable instruments,
  while being extremely challenging and demanding
  task to realise.
• Prospective successful participation to the 6th
  Framework Programme still subject to final
  definitions of the specific instruments (IP, NoE,
  art. 169), rules of participation and priorities
  of specific thematic programmes.

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THANK YOU!

• Further information
• Marek Tiits
• Permanent secretary
• Research and Development Council of Estonia
• www.tan.ee