Contribution of the Public Sector to the Development of Innovation: Position of Estonia

Abstract

Under conditions of regional competition the authors discuss the role of the public sector in developing innovation activities and the ways to encourage innovation in the private and the public sector. Innovation policy gets linked to modern stage theories of development that focus on innovation. Estonia has reached the investment driven stage. With respect to several innovation indexes and measures of innovation policy a statistical comparison between Estonia and European Union member countries shows whether Estonia belongs to the group of leaders, renegades from leader role, losers or to that of aspirers. The indexes and indicators applied refer to the Community Innovation Survey, Summary Innovation Index, and Global Competitive Index. Although public higher education and R&D expenditures and co-operation of firms are above EU levels the analysis demonstrates that total R&D expenses are below European average. Co-operation between Universities and private firms is low and the number of patents as well. The knowledge creation and the ability to apply innovations enabled Estonia to reach an “aspirer position” whereas with respect to global competition Estonia possesses a “looser” position partly due to the lack of scientists, engineers, etc. Estonian public sector should develop and promote actively the necessary and promising fields of innovation analysed.