The Methodology for Assessment of Bioeconomy Efficiency

Abstract

In order to promote an efficient development of the bioeconomy in Latvia, first, the assessment of the current situation is needed. The challenge is to compere all sectors of bioeconomy under the same terms, but at the same time to capture the diversity of different sectors of the bioeconomy. At the same time not only the comparison itself is vital, but even more - the efficiency of those sectors. Therefore to make a fair comparison two indicators are used in this study: capital productivity and labour productivity by using modified Cobb-Douglas production function. The results show that none of the bioeconomy sectors in Latvia have both a higher investment and labour intensity at the same time. The tendency of ‘buy low & sell high’ exceeds the production of goods in Latvia. The change in one sector would have impact on the whole bioeconomy therefore for further research the development of the bioeconomy should be studied as a whole system.