LABOUR AND ECONOMIC GROWTH THROUGH EDUCATION AND RESEARCH IN LATVIA

Abstract

The structure of Latvian economy and distribution of employees within it during last years has changed. Dealing with study of population, one can find young people share continuous decline and labour mean age increase, but in situation of economic slowdown Latvia also face challenge to develop knowledge-based economy. One of the means of helping to achieve the goal of becoming competitive and knowledge-based economy is through an investment in human capital. To ensure sustainable development there is a need to balance between social and economical growth using available resources. The theoretical concepts have shown that further growth has to be built on innovation, diffusion and adoption of new technologies and new products which increases competitiveness of the economy. Attained educational level not only enhances the ability of a country to develop its own technological innovations, but also its ability to adapt and implement technologies developed elsewhere. Educated society can contribute from the transfer of latest technologies from abroad because any investment demonstrates stronger positive impact on economic growth in country with higher level of educational attainment. Attained education is relatively high in Latvia - 30.7% of employed persons (15-74) and 15.4% of job seekers (15-74) had attained higher education in 2010. If the labour market could not accommodate skilled workers it raises question of country’s ability to use educational investments efficiently. According to the latest statistics (European Innovation Scoreboard 2010) Latvia has relative strength in human resources (new doctorate graduates, population completed tertiary education and youth with upper secondary level education), but Latvia is among ‘modest innovators’ taking last place in EU-27 range and its performance is estimated as well below that of the other countries of European Union (EU). The statistical data have showed that labour is more used in final good sector, not in research sector that produces technology in Latvia. Only 0.5% of labour in 2009 was employed in research and employment in knowledge-intensive service sectors was 26.8% of total employment in 2008. According to calculation the lowest added value to GDP per 1% of the labour was in agriculture and fishing caused by high proportion of labour allocated in this sector, but the highest added value to GDP was in financial mediation and business activities in 2009. After accession in EU there are available structural funds for member states, also for implementation of practical research projects during EU structural funds 2007-2013 programming period in Latvia. These projects would promote integration of the science and manufacturing and were approved in 2010 and in the beginning of 2011. Implementing practical research projects scientific institutions are provided with opportunity to employ highly educated scientific personnel and develop innovative products and technologies influencing the changes in economic structure. The research is based on statistical data analysis. Comparative and analytical methods have been mainly used in the paper taking into consideration the scientific literature. DOI: http://dx.doi.org/10.5755/j01.eis.0.5.1072