Experience of RIS Latvia Project Knowledge

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Experience of RIS Latvia Project Knowledge
Valdis Avotin, RIS-Latvia coordinator Latvian
Development Agency , November 24, 2003
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What is a Regional Innovation Strategy?
RIS is a strategy and framework which sets out
aims, strategic objectives, the vision and then
actions to guide and influence decision-makers
in business, education, research, government and
the voluntary/community sectors to share a
common understanding and agreement on how to
enhance regional growth through innovation.
What does it mean?
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What is the process to develop a RIS?
ANALYSIS OF REGIONAL OFFER AND DEMAND
MATURITY
MONITORING AND EVALUATION SYSTEM
BUILDING A REGIONAL CONSENSUS
ANALYSIS OF GAPS
STRATEGY DEFINITION
PILOT PROJECTS
A LOT OF WORK is it really necessary?
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Examples of strategic objectives ?
To increase the level of innovation in the
region through targeting and strengthening
identified SME growth sectors (Yorkshire, UK)
Qualitatives
To improve the capabilities of SMEs to adopt
innovation (Aragon, Spain)
To develop a world-leading research capability
in biotechnology (Alsace, France)

Quantitative
Attract 200 post-graduate scientists to the
region by 2006
Attract 100 M EUR of science-related inward
investment to the region by 2008
Establish 100 new science-based businesses in
the region by 2007
Then each strategic objective is  filled up 
with the content
Which content?
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Latvia crisis, stabilization, reforms and
development (but what kind of?)
GDP/per capita
1st phase - degradation (till 1991)
6th phase endogenous innovative economics (2005
- )
2nd phase - riddance (1991-1993)
Inflation
5th phase exogenous innovative economics (2000
-2005)
4th phase - recovery (institutional reforms
1994-2000)
3rd phase - stabilization (1993-1994)
Prof. U.OSIS
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Growth Competitiveness 2002 Top 75
Countries
Finland (1)
USA (2)
Japan (15)
Israel(17)
Taiwan (21)
Ireland (22)
Hungary (26)
Igaunija (27)
Turkey (33)
Latvia (42)
Lithuania (49)
Russia (58)
Ukraine (60)
Romania (61)
Source The Global Competitiveness
Report 2001-2002
Bulgaria (68)
Bolivia (75)
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Growth Competitiveness for the Next Five Years
Top 75 Countries
Finland (1)
USA (2)
Taiwan (7)
Ireland (11)
Japan (21)
Israel (24)
Hungary (28)
Estonia (29)
Lithuania (43)
Latvia (47)
Source The Global Competitiveness
Report 2001-2002
Turkey (54)
Romania (56)
Bulgaria (59)
Russia (63)
Ukraine (69)
Zimbabwe (75)
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Relative market shares in the EU by industry
clusters, 1999
Source WB Report 2003
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Innovation Competitiveness in EU, 2002
LV
LT
EE
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LATVIA Knowledge Economy Index (WB)
Izglitiba
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INNOVATION POLICY - KEY PRIORITY FOR DEVELOPMENT
OF COMPETITIVENESS (2003)

• KEY OBJECTIVES OF THE NATIONAL INNOVATION
  PROGRAMME (being developed)
• Formation of the society open to innovative
  activity
• Innovation policy coordinated with the EU
  regulations
• legal environment favorable for innovative
  business
• support to innovative enterprises and to their
  further growth
• efficient cooperation between all elements of the
  innovation system.
• Innovation policy in Latvia is at its development
  stage. The Latvian Government has passed in 2001
  the National concept for innovation, and is soon
  going to accept the National program for
  innovation and its action plan that will set
  concrete goals for a period of 3 to 5 years.
• Reduction of the trade deficit and an increase by
  20 of the high-tech products in total exports
  is expected.

Ministry of Economics, Republic of Latvia
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Does public intervention really make a difference
in stimulating innovation?
YES
Lets demonstrate it during the RIS process in
Latvia!
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RIS Latvia Objectives and targets

• Facilitate creation of National Innovation System
• Identify key factors and obstacles limiting
  growth of innovative enterprises
• Design action plan to achieve high output and
  impact of prioritair in respect to innovations
  sectors
• Create supportive to innovation environment
• Upgrade National innovation strategy and action
  plan
• Establish monitoring and performance systems

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RIS Latvija strategic goal

• Promote growth of (a) knowledge sectors and their
  inovation potential and (b) intelektualisation of
  traditional industries with aim to increase
  competitiveness of manufacturing and service
  industries.
• The implementation will be supported by
  adaptation of best EU practices and experiences
  as well as proved methods. Special attention will
  be focused to intersector technology transfer,
  e.g. contribution of knowledge industries (IT,
  control processes, new materials, biotechnology,
  finance etc.) to the growth of traditional
  industries, promotion of collaborative networks
  and clusters, to skills demand - supply issue and
  creation of innovations supportive environment.

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Projects stages
Three local partners LDA, LTC and Riga
Region EU partners Stockholm city, Rhineland
Pfalz Duration 1 April 2002 31 October 2004
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Rheinland-Pfalz

• In the mid-80s some 370,000 acres (7.6 of the
  state area) were occupied by military
  installations.
• Since 1988 a total of 94,320 military and
  civilian jobs were lost.
• As a result of military cutbacks the amount of
  1.9 billion US dollars per year was lost as a
  contribution in the gross value added directly or
  indirectly.
• By 1998 some 491 military installations covering
  an area of 25,000 acres were returned or are
  planned to be returned.
• 8 out of 11 military air bases have been shut
  down.
• Likewise many civilian areas returned as a result
  of the privatization of rail and postal services
  and many commercial and industrial shutdowns.

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Conducted analyses

• SMEs needs in innovation analysis
• Services supply analysis
• Analysis of RD capacity
• Analysis of access to finance for innovative SMEs
• Public RD spendings efficiency analyses
• Local government innovativeness analysis within
  Riga region

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1. Analysis of SME needs

• Focus
• to provide data for a demand-driven
• innovation support system
• Procedure
• face-to face survey of 290 companies with a
  follow-up data analysis
• interview based on a questionnaire
• composition of the sample
• small, medium and large firms
• Manufacturing sectors and knowledge intensive
  services active in Latvia
• Results
• overview of SMEs needs concerning
• innovation

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1. Preliminary answers

• Firms need external support for innovation
• in searching for new markets and products,
  qualified work force and enhancing qualification
• in obtaining information on technology
  development
• Innovation ability of firms is mostly influenced
• by managements approach to innovation
• by mentality, skills level and technological
  level
• Greatest barriers to innovation
• management skills
• Innovation culture
• lack of finance
• lack of qualified technology experts

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2. Supply analysis - Objectives

• To create a complete picture of the
  innovation-supporting infrastructure of Latvia
  with respect to resources to assist companies in
  innovation processes, this include to map
• Which kind of services that are available
• Which quantity and on what quality services are
  available
• Competitive advantages of organisations
• Strategies
• Marketing activities
• Performance and performance evaluations

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2. Supply analysis expected outcomes

• Procedure
• survey of 40 innovation service institutions
• Face-to face interview based on a questionnaire
• composition of the sample
• technology centres, universities, service
  institutions, private consultants
• An overview of existing services including areas
  and quantity
• Map of main strengths of organisations
• Knowledge of the concepts of service delivery
• Knowledge of the efficiency of innovation service
  providers
• Knowledge of co-operation and co-ordination with
  other organisations

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3. RD Capacity analysis - objectives

• There is no clear government strategy for RD in
  Latvia
• Many RD-groups have little connection to
  industry or the international RD-community
• Many RD-groups have under-critical mass
• Limited domestic market demand of RD
• There is a need to map the situation and
  implement improvements
• Inventory of RD-groups including resources,
  research areas, co-operation, etc.
• Review of competitiveness of Latvian RD-base
• Create framework of regular monitoring /
  evaluation
• Procedure
• survey of 30 RD institutions with a follow-up
  data analysis
• Face-to-face interview based on a questionnaire
• composition of the sample
• Public and private RD institutes, universities

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3. RD Capacity analysis expected outcome

• Picture of the characteristics of RD-groups and
  their competitiveness
• Internationalisation of RD-groups
• A framework for evaluations
• Recommendations for improvements

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4. Analysis of financial resources for SMEs

• Focus
• to analyse external financial resources for
  innovative SMEs
• public financial support schemes, venture
  capital, bank loans and leasing
• Results
• Knowledge of how much money that is available
  from which organisations, to which target group
  and for which innovation process
• Identified gaps in the provision of funding
• Recommendations for improvements

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4. Financial analysis - conclusions

• Public support schemes for SMEs
• limited programs - mostly investment-oriented
• risk aversion
• Bank loans
• risk aversion
• Collateral, positive track record of 2-3 years
  required
• Limited guarrantees
• Venture Capital
• focused mostly on already developed expanding
  firms
• non-existing seed funding and no Business Angels
• RD focused programs Framework Programmes
• New aid programs under construction

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Creation of Networks

• Weak linkages between Universities and Industry,
  local and foreign researchers
• Weak linkages between domestic researchers and
  entrepreneurs and global supply chains
• Local SMEs un large local firms and MNC

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Weaknesses and challenges

• Research and industries develop isolated
• RD policies doesnt include industrys needs
• Economical growth has not increased RD demand
• Small public RD budget doesnt reflect
  Government priorities
• Lack of entrepreneurial spirit
• Low number of students in technical and natural
  science related faculties (lt16)

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Next steps - Stage 2

• Discussion on the results of the aggregated
  analysis with foreign and national partners
• Discussion on initial proposals resulting from
  the SWOT analysis with the Reference group
• Discussion on the process and proposals in the
  Steering Committee, respecting their comments
• Designing the recommendations to the innovation
  strategy as well as measures and pilot actions
• Approval of the upgraded Innovation strategy and
  dissemination of project results

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NIP Ongoing dialogue with target groups

• Regional seminars - 5
• Seminars in universities -2
• Coverage in mass media 14, TV radio 7, press
  relises 3, press conferences 1, presentations in
  conferences, seminars, working meetings 31
• Informative bulletines -3 / 2000 eks.
• www.innovation.lv/ris

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New initiatives

• Design of Riga region innovation strategy
• Analysis of local government innovativeness
• Ogre Most innovative city in Latvia
• Resort and medicine tehnology park in Jurmala
• Konversion project of Tukums former military
  airport
• Development of Riga region biotech cluster
• Wood value chain project

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Additional outcomes

• Design of STP project planning methodology,
  training seminar in LU on technology and science
  parks
• Regular cooperation established with Riga city
  Development Board
• MoE, LDA, NLDF and Mortgage banks risk finance
  experts visit to Swedish finance institutions,
  risk capital concept designed
• IKED knowledge working group meeting in Riga
  organised, report at recent Baltic Development
  Forum in Riga
• Collaboration with WB NIS assesment project
• Transfer of best Foresight practices

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Future Sub-Commission established in Parliament

• Parliament established Future sub-comission like
  in Finland with objective to facilitate states
  long-term development strategy design.
• Future sub-comission will work under Commision of
  Education, Culture and Science
• Key priorities will be education policy promotion
  of technology capacity, entrepreneurship and
  efficiency of EU funds

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Areja vide
TEHNOLOGIJU KOMPETENCE
EKONOMKAS ATTISTIBA
1
NACIONALA INOVACIJU SISTEMA
2
Izglitiba
Finanu sistema
GLOBA- LIZACIJA
INOVACIJA
Uznemej-darbiba
Zinatne
POLITISKIE ASPEKTI
Likumdoana
DEMOGRAFISKIE ASPEKTI
SOCIALIE ASPEKTI
3
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RIS PROJECT IS CLEARLY ONE OF THE MOST SUCCESSFUL
INSTRUMENTS FOR KNOWLEDGE ECONOMY DEVELOPMENT
Thank you!
THE LATVIAN DEVELOPMENT AGENCY
Perses iela 2, Riga, LV 1442, Latvia Phone 371
7039400 Fax [phone] E-mail
vavotins_at_LDA.GOV.LV HTTP//WWW.INNOVATION.LV/RIS