LIAA works with OECD on a new governance model

The Investment and Development Agency of Latvia (LIAA) in cooperation with the Organisation for Economic Cooperation and Development (OECD) and the Observatory for Public Sector Innovation (OPSI) has been working since 2021 on the development of a new innovation governance model to stimulate Latvia’s priority economic sectors through innovation. The Biomedicine, Medical Technology, and Pharmaceuticals Workshop on May 17 and 18 will be a pilot project, where the experience and knowledge gained will later be used with other sectors.

In the first face-to-face workshop, participants will work on the following topics:

• ecosystem capacity and resource identification,
• outlining key elements of a vision for the future,
• testing the future vision,
• identifying the first steps to realize the vision.

The joint LIAA-OECD project will conclude at the end of 2022. The result will be a framework for managing the innovation approach in Latvia to create products and services with higher added value and achieve faster economic development.

The Challenge: Low Productivity
One of the main challenges for Latvia’s economic development is low productivity: GDP per employee. Between 2011 and 2019, productivity in Latvia increased by 20.2% (EU average: 5.5%) and the productivity gap has narrowed by almost 18%. However, Latvia’s economic productivity is still only 49.8% of the EU average. One way to raise productivity faster is to innovate. According to the World Intellectual Property Organisation’s World Innovation Index 2021, Latvia ranks 38th out of 132 countries. The leaders in this ranking are Switzerland, Sweden, and the US. Latvia is also not among the leaders in terms of investment in research and development, which accounts for only 0.7% of GDP, against a national target of 1.5%. To address these challenges, a new framework for innovation development is needed.

“Overall trends in innovation development are positive, as companies’ awareness of the need to invest in R&D is growing, but to ensure faster growth we need to create a new framework for innovation development. We will build this framework on the basis of ecosystems, bringing together the resources of research institutions, public administrations, and businesses. To compete with large corporations, whose research budgets often reach the size of the Latvian state budget, we must learn to cooperate and make the most of the resources at our disposal,” said Kaspars Rožkalns, director of LIAA.

He adds that the aim of the project is to develop a governance model for innovation to foster its emergence, as well as to develop and test working methods for coordinating the sector’s activities.

Future Scenarios Will Be Modelled
The working group on the biomedical, medical technology, and pharmaceutical ecosystem management model has already received applications from organizations such as the University of Latvia, the Latvian Institute of Organic Synthesis, the US Chamber of Commerce in Latvia, Children’s Clinical University Hospital, Rīga Stradiņš University, the Ministry of Economics, the Baltic Biomaterials Centre of Excellence, Biocatalyst foundation, UPOlife, Olainfarm, MGI Tech Latvia, and others.

To achieve this goal, various workshops will be organized, including future scenarios for the priority sectors of the smart reindustrialization strategy: photonics and smart materials, biomedicine, medical technologies and pharmaceuticals, knowledge-intensive bioeconomy, ICT, and smart mobility. The workshops will bring together major companies, research institutes, educational institutions, and industry associations, as well as representatives of public administrations.