Overview

The Latvian Government has been working to develop its government policies in various areas that will affect IT success now and far into the future.  Estonia is further along in its government support and guidance on IT infrastructure.  For example, Estonia is further along in the integration process with EU partners than Latvia on political, trade, and socio-economic structures which is closely integrated with the West.  Additionally, Estonia has been developing, through the Estonian Institute for Future Studies, alternative scenarios for the development of Estonia in the next 10 - 15 years that has a strong focus on modernization of economic structure (including employment) in the technological revolution.  The Institute outlined a number of key government efforts that can greatly enhance the country's ability to continue moving forward at an aggressive pace.  Visit High Requirements for the Governments for addtional information on the Institute's recommendations.

Estonia and U.S. relations have been an important aspect of Estonia's development.  It is presumed that the IT revolution will be pivotal in the country's transformation into the information age.  The following content provides information on research and development, financing, research and technology guidelines, and telecommunications policy; all of which will have incredible impact on the future of the country's economy and the development of the Baltic region as an IT player.

Research and Development

Government funding and policy development related to research and development of science and technology concentrations has been significant however more must be done.  As a point of reference, below is a brief overview of the current state of affairs for research and development in Latvia in the area of technology development as reported .

A sharp decrease in the number of researchers and an extremely unfavorable age structure of university teaching staff and the researchers has been the product of underfunding of research and higher education.    Salaries of scientists are inadequate and the ability to attract young specialists to enter into research career is difficult.  As a result, the number of persons employed in research and technology development has noticeably diminished drastically during the years 1990 – 1996.

Year                                                    1990          1993          1996

Total number of employees                 30,700          8,536       4,744
Researchers                                       17,700           3,999       2,839
Researchers with scientific degrees       3,710           1,977       1,491

Researchers per 1,000 inhabitants

Latvia*            0.95
Estonia           3.0

* Should be ensured 1.2  in 2000  and 3.0  in 2010

Unfortunately at the time these statistics were reported in 1998,an effective dialogue between the government and scientists had not been achieved.  The funding of research from the state budget of Latvia was one of the lowest in the Eastern Europe and if the expenditure on research and technology development in Latvia in 1990 was 1.6% of GDP and on this score Latvia was but slightly lagging behind the advanced European countries, then in 1997 this figure was already four times less (21).     The funding of research from the state budget amounted to 0.24% of the GDP only in 1998.  An alarming statistic is that by 2003, more than five hundred academic staff members of higher educational institutions will reach the age limit of 65, among them about 300 professors and associate professors.

The Plan

To deal with these major developmental deficiencies, a reorganization of the government research administration was already in place during the period of time 1990 – 1997.  Latvia moved to the grant system of the funding of scientific research, which is in line with international practice and ensures internal competition.   Additionally, the system is professional, democratic, and requires low administrative costs. The Latvian Council of Science supported 650 research projects in 1997, which were carried out in 86 institutions.

In addition to the system of funding established for the basic and applied research, the market-oriented research projects are also carried out with technological centers proving to be efficient in advancing small enterprises.

During the research-planning phase, the main tasks of science were outlined:

1) to create intellectual  environment  for the development of good university education and the society on the whole,

2) to lay foundation for the development of innovative technologies and elaboration of technology transfer mechanisms, as well as to encourage wider application of scientific methods and manners in public administration and national economy;

3) to promote dynamic and sustainable social development and economic growth, to ensure the research and preservation of national identity and cultural heritage.   Striving to fulfill these tasks necessitates a radical increase of the budgetary financing of research on the whole, ensuring at least the GDP share of 0.8% by 2001 (the average figure for the Eastern Europe and Baltic countries). By 2010  this figure has to be annually increased at least for 0.1% from GDP. As soon as in 1999, the government funding of research needs to be definitely increased at least for a sum necessary to cover the participation fee bound with the access of Latvia to the EU Fifth RTD Framework Program and other analogous programs.

Source: National Concept of the Republic of Latvia on Research Development
The major priority areas outlined for research development include:

• information technology;
• material sciences;
• forestry and timber technology;
• organic synthesis, biotechnology, biomedicine and pharmacy;
• Letonics.

The National Priority for research financing has the following principles:

• Granted research projects as the principal form of research activity.

• At  present stage, the principal form of Latvia’s research funding should be considered the system of granted research projects based on the principle of project competitiveness. The main criterion in the evaluation of projects is their scientific level.

• A limited number of National research programs.

• The national research programs mainly cover the priority research areas. In the course of selection, expertise and approval of the programs competent public and business institutions should be involved.

• In the future, several  research programs currently approved by the Latvian Council of Science, could be transformed into national research programs, taking into account  the previous positive experience of the former in the coordination of allied research, exchange of information and concrete research collaboration.

• Funding of infrastructure of selected research institutions

• State research centers and these, selected through expertise, research institutes receive funding to fully or partially cover infrastructure expenses and material supply of the research area within the financing of research programs of national importance, the support of research groups at international level. Such funding is allotted to the institutes of experimental sciences dependent on their scientific merit, productivity, contribution to social and economic sector, higher education and international collaboration.

• Support to researchers and research groups ranging as excellent by international Standards

As you will see below, the increase in budget for research and development in millions of U.S. dollars has increased.  A comparison with the country of Estonia has been provided.

 Country               1993           1995           1997

 Latvia                    .4               11.9           14.2
 Estonia                   .9               13.5           18.9

Latvia is still behind most other European countries and those in the Baltic region.

Source:  European Commission on the readiness of the East European countries to access to the European Union (Agenda 2000)

Research and Technology Guidelines (21)

• Latvia’s focus on research and technology is outlined by the following guidelines:

• It is necessary for the formation of Latvia into an intellectually and technologically developed country that knowledge-based industries are evolved thus utilizing intellectual potential.

• The priority areas should be supported by government using direct funding, tax relief etc.

• For this purpose the R&D sector needs appropriate funds: starting in 2003 with at least 1% of the GDP and reaching  in the following ten years 1.7–2.0% of the GDP.

• The Technological Centers and Science parks, as well as the publicly funded market-oriented research , should be developed with the help of the Innovation Fund.

• It is necessary to stimulate involvement of researchers in the resolution of topical industrial challenges.

• To proceed with the setting of national priorities in economy by approbating schemes of their financing, to elaborate national programs on economic growth intended to promote efficient utilization of research and technology, to stimulate implementation of innovative technologies, to elaborate innovation strategies, carry out market research raise the interest in business circles.

• To apply widely the activity of expert commissions of national economy sectors and the external evaluation of the largest projects through international expertise.

• To proceed with the reorganization of the infrastructure of national economy sectors, to develop a mechanism for more  efficient  utilization  of resources.

• To carry our efficient measures with the purpose to encourage the emigrated researchers to return back to Latvia.

• To  form the attitude towards science and the state science policy in the traditions of the EU countries

• To increase investments for development of the nation itself, its education, science and knowledge-intensive technologies.

Latvia is planning on complying with the EU Subject Programs on research and technology development through participation in EU programs.  Financial and legislative support is a key component to ensure the internationalization of Latvia’s research and to promote its competitiveness internationally.  In 1999, resources were to be provided in the country's the science budget for the improvement of  research infrastructure, material supply along with additional financial support for participation and cooperation in the EU 5th RTD Framework Program.

State research centers conduct research on a complex and highly scientific level.  Participation in study programs at the higher educational institutionss encourage the utilization of research results in national economy, culture and social sector.  The centers conduct valuable research within the framework of national research programs.  The state ensures the maintenance of the centers and corresponds with the EU policy for Central European countries.

General Telecommunications Policy

Telecommunications policy will be a driving force behind the development of the IT infrastructure and the economy as a whole.
The Government of Latvia is reorganizing the telecommunications sector to better meet the needs of national, economic, and social development in an increasingly information-intensive regional and global economy. The government is trying to adjust its telecommunications sector in order to comply with EU requirements, principles, and practices. The reform of the telecommunications sector in Latvia anticipates the following policies:

• Opening the telecommunications market to new providers and competition;
• Establishing a National Regulatory Authority independent from the government and the operators;
• Privatizing the state ownership interests in Lattelekom.

The Coordination Board for the National Program Informaticsª, the Information Society Forum of Latvia, includes representatives of all ministries, biggest telecommunications and data transmission operators, manufacturers of hardware and software markets, and academic institutions. Its main task is to ensure implementation of the Program in accordance with the defined provisions (5).
 
 

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