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MAREK.TIITS@IBS.EE

National innovation systems concept as a policy tool in refining catching-up strategies in small developing countries. MAREK.TIITS@IBS.EE. Photo: Johannes Pääsuke 1912 Estonian National Museum. Recent policy work in Estonia.

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MAREK.TIITS@IBS.EE

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  1. National innovation systems concept as a policy tool in refining catching-up strategies in small developing countries MAREK.TIITS@IBS.EE Photo: Johannes Pääsuke 1912Estonian National Museum

  2. Recent policy work in Estonia • Competitiveness and future outlooks of the Estonian Economy, Estonian R&D Council, 2003 • Made in Estonia, forthcoming 2005 • Theoretical framework • ICT, bio- and nanotechnology trends 2015+ • Estonian main socio-economic challenges • Policy scenarios

  3. What policies should a small country pursue? • Antonio Serra, Breve trattato delle cause che possono far abbondare li regni d’oro e argento dove non sono miniere [A brief overview of reasons that may bring a lot of gold and silver to kingdoms where there are no mines], Naples, Lazzaro Scoriggio, 1613. (See also: Reinert 1994, Freeman 1998)

  4. From business cycles to long waves of development Source: Perez (2002)

  5. Global spread of technologies Initial R&D effort …as they matured in mass production paradigm Increasing returns Decreasing returns Source: Wells (1972)

  6. Catching up or lagging behind? Quality of industrial change in selected World regions, 1980-2000 Source: Reinert and Kattel 2004

  7. Small/developing country squeeze • Global technological development largely exogenous to domestic R&D efforts • Domestic (tiny) public investment into R&D generally not a feasible way to acquire presence in radically new indigenous high-tech industries • Increasing cost competition in resource and/or labour intensive low-tech sectors • Avoid social dumping and “race to the bottom”

  8. Policy strategies Fast follower Technology diversification Technology leader Cost leader Source: Wells (1972)

  9. Locational windows of opportunities • Attracting certain parts of the value chains of new high-tech industries, i.e. ICT, bio- and nanotechnologies • … while ensuring positive spillovers from FDI and upgrading the existing traditional activities

  10. Lessons for future • Emphasis on structural adjustment and horisontal policy co-ordination • strong insight on the development of global markets and new technologies • future education and technology needs (inward technology transfer and R&D are both important) • life-long learning and active labour market policies • targeting of specific FDI and ensuring spillovers / technology transfer to indigenous companies

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