General participation as a precondition General participation as a precondition for knowledge-based development: for knowledge-based development:

universal regularities and Latvia’s caseuniversal regularities and Latvia’s case

Prof. Edvins KarnitisProf. Edvins KarnitisExpertExpert

Latvia’s Commission of Strategic Analysis

Subcommittee of Saeima on Monitoring the Implementation of the National Development Plan

KnowledgeKnowledge

Business Business Technological Technological

excellenceexcellence

Public Public servicesservices

Quality Quality of lifeof life

IInnffoorrmmaatitioonn

Educationresearch

Innovation

ICT tools and servicesICT tools and services

EnablerCatalyst

RESOURCE GOAL

Information society = knowledge-based developmentInformation society = knowledge-based development

informationinformation knowledge wisdom knowledge wisdom

ICT tools & services

Information

Knowledge

Growth

20

40

60

80

100

120

140

3 4 5 6Networked readiness index, 2006

EE

IE

IT

LV LT

DK

BG

GDP per capita, PPS, EU25=100 (2006)

InnovationEconomy

Processing

Transformation

UseProductivity

Growth

SupportEU25:

40% of productivity growth and 25% of GDP growth

is achieved due to ICT

ICT – growth catalystICT – growth catalyst

Investments

3,5

4

4,5

5

5,5

6

-10 0 10 20

Leaders

Trailing

Catching up

NL

PLBG

LU

LV

DK

LT

EE

Networked readiness index 2006

Progress in global rating 2004–2006Sources: Eurostat, WEF

Resources Knowledge

Wisdom Ability to use them

Goal Quality of life

Strategic principles Inclusion Balancing

Networking Boundary spanning

People FirstPeople FirstA human-centred knowledge-based growth modelA human-centred knowledge-based growth model

approved by Saeima (Parliament), October 2005approved by Saeima (Parliament), October 2005

Resource: knowledge

People: educated, wise and creativeAcquisition

Welfare, security, sustainability

Research & development

Innovation, technological excellence

Creation

Usage

Keeping

Development

Exploitation

NDP: a mid-term implementation programmeNDP: a mid-term implementation programme

Results of applied research

Demand

MotivationFinancial supply

Financial supply

Quality & quantity

37,1

34

33

29,7

41,2

48,6

53,4

25

30

35

40

45

50

55

1994 1996 1998 2000 2002 2004 2006

GDP per capita% of EU25 average

Convergence EU25 + 5%

Slow convergenceEU25 + 3,5%

Real growth

Latvia today: Latvia today: impressive growth, impressive growth, progress inprogress in innovation innovation

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

-4 -2 0 2 4 6

Average growth rate of Sll

2006

Sum

mar

y In

nova

tion

Inde

xTR

ITEE

NO

US

IE

DEJP

FI

SECH

DK

LU

EL

LT

PL

LVCY

RO

Innovation leaders

Followers

Trailing

Catcing-up

Sources: Eurostat, WEF

ICT and innovation: unutilised potential so farICT and innovation: unutilised potential so far

89,762,5 59

247,6

41717,5

21

020406080

100

Compu ters LAN Intranet Extranet Internet Innovativeactivities

Internal External

2006 2004 Integration of businessprocesses 2004

Others

Broad-band

% of all enterprises w ith 10 or more persons employed

51.9

15.1

14.2

9.4

6.6

11.3

0 10 20 30 40 50 60

Lack of e-signature

E-business legislation

Data security problems

Customers' rights

E-commerce documents

Guarantees of e-purchase

% of answers "Right" (2005)

Right40.6%

Wrong28.0%

n/a31.4%

There are barriers for e-business

Sources: Eurostat, CSB

knowledge creation and transfer;

also everyday improvements;

in any sector, region and job;

material motivation – profitability;

selective support of innovative business (taxes, investment and export support, etc.);

cooperation with research institutions;

creative industries: integration in the economics;

To motivate business: innovationTo motivate business: innovation

5.9%

4.6%

12.6%

76.9%

0% 20% 40% 60% 80%

R&Dactivities

R&Doutsourcing

Knowledgetransfer

Purchase oftechnologies

Distribution of expenditures for innovation, enterprises with 10 or more persons employed (2004)

Source: LIDA

6.9

9.8

18.6

25.5

57.8

84.3

0 20 40 60 80 100

Breach of terms

Low competence level

Business do not require R&Doutsourcing

Price for R&D is too high

Inactivity of scientificinstitutions

Lack of information on R&Dactivities

Barriers for R&D outsourcing, % of respondents (2005)

programmes for market oriented research; commercialisation of results;

cooperation with industries;

basic science in priority areas;

renewal of research community;

material motivation – remuneration system;

psychological motivation – academic career, patents;

To motivate academic society: applied researchTo motivate academic society: applied research

Source: LIDA

Society about knowledge: Society about knowledge: strongly understanding, moderately interested, strongly understanding, moderately interested,

underinformed and insufficiently activeunderinformed and insufficiently active

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

EU25 LV EU25 LV EU25 LV EU25 LV EU25 LV EU25 LV EU25 LV EU25 LV

Applying S&Tdevelops our

economy

S&T rise ourquality of life

Young's inte-rest in S&T is

essential

Interested in advancedS&T news

Informed onadvancedS&T news

Read articlesabout S&T

Talk with myfriends about

S&T

Attend publicmeetings on

S&T

Agree, well, regularly Moderately, occasionally Disagree, poorly, never n/a

Source: Eurobarometer, 2006

Renewal of highly skilled human resourcesRenewal of highly skilled human resources

2936 40

23 20 212931 26 26

3428 33 31

36 3426

3952

37 40

0

20

40

60

EU25 FI IE DE LV LT EE

25–34

35–44

45–64

% of total R&E population

Key group in innovation: researchers and engineers (2004)

277

739 744891

1013

0

200

400

600

800

1000

1200

< 30 30 – 39 40 – 49 50 – 59 60 +

Persons in age group

Age distribution of academic staff in public higher education institutions (2006/07)

Sources: Eurostat, MS&E

10,2 7,7 5,91,9 3,9 7,4 6 4,1

32,127,5

7,9

27,4

0

10

20

30

40

EU25 DE DK EE EL HU IE LT LV PT SE UK

% of population 25–64

Participated in education in the four weeks preceding the survey (2005)

Education: from several guru Education: from several guru to mass-production of knowledge potentialto mass-production of knowledge potential

qualitative basic, compulsory secondary, competitive and publicly accessible tertiary education;

higher level specialists, master and doctoral degrees;

life-long learning for everybody;

from brain donor country to brain beneficiary country;

Source: Eurostat

Motivation to learn: employment and earningsMotivation to learn: employment and earnings

117 116 118

109

131

154

10393110109 111

100103

117124

113

90

100

110

120

130

140

150

160

DE EE FI IE LV LT PT SK

High-tech

Mediumhigh-tech

Mean annual earnings per person employed in manufacturing (2002)

% of total manufacturing earnings

10,3

15,1

11 11,4

6,47

13,3

4,4

7,75,96,97,9

10,9

7,35,4 6,5

3,34,12,4 1,9

3,42,2 2,6

0

5

10

15

20

EU25 LV LT FI IE SK

Total

Basiceducation

Secondaryeducation

Highereducation

Unemployment rates of the population by level of education (2006)

% Unemployment rates of the total population 25 – 59

Source: Eurostat

23

65

3934 38 38

8

30

58

4432 37 39

8

83 84

0

30

60

90

Better help Gainflexibility

More andbetter

information

Feel more incontrol

Save time Save money Fasterservice/reply

Noadvantages

Individuals

Enterprises

Experienced benefits with online public services (EU25, 2004)

% of services' users

45 53

218

2160

20

40

60

80

100

EU25 SE LV EU25 SE LV

Don't use Internet

Have access/use Internet

Also obtain informationfrom public authorities

Also download forms

Also submit completedforms

Enterprises Individuals

%

Usage of online public services (2006); percentage of total businesses / population

Usage of online public servicesUsage of online public services

Source: Eurostat

18.224.5

0.1

24.5

44.337.5

0

10

20

30

40

50

Lack of skills Access coststoo high

Equipment coststoo high

Don't wantInternet

Securityconcerns

Have Internetaccess

elsewhere

% of households not having Internet access

Reasons for not having Internet access in households (2006)

Internet access in householdsInternet access in households

3223

8 14

3238

17 209 13 15

19

19

913

29 15

31 22

15

24 19

0

10

20

30

40

50

60

70

EU25 LV all 1 adult 2 adults 2 adultswith

children

Riga Surroundings

Kurzem e Latgale Vidzem e Zemgale

Others

Broad-band

% of households

Internet access in households (2006)

Sources: Eurostat, CSB

Motivation for access: supply of online servicesMotivation for access: supply of online services

32

81

22

45

2.6

40

85

31 32

3.6

19

34

13 154.2

0

20

40

60

80

100

Fixed telephonelines

Mobile telephones PCs Internet users Internet hosts

Latvia

Europe

World

% of population

Penetration of basic ICT (2005)

1020

3040

5063

71

79 83

0

30

60

90

LV PL EL LT EU25 DK UK EE AT

% of availability

Availability of 20 basic e-government services (2006)

Sources: ITU, Eurostat

3124

82

5

157

39

23

62

8

28

1116

10

58

28

39

24

59

31

43

30

0

30

60

90

EU25 (2005) Latvia – total Age 16–24 Age 45–54

Formal education institution

Training courses on owninitiativeTraining courses on demand ofemployerSelf-study

Learning by doing

Informal assistance from othersWhere and how IT skills were acquired (2006)

% of IT using individuals

0

20

40

60

80

100

EU25 Latvia –total

Males Females Age 16–24 Age 25–54 Age 55–74 Primaryeducation

Secondaryeducation

Highereducation

No basicskills

Low level

Mediumlevel

High level

Individuals' level of basic computer skills (2005)

%

Computer literacyComputer literacy

Sources: Eurostat, CSB

deeper integration of the Baltic Sea Region: political, legal and economic aspects;

active function of metropolises – real knowledge hubs; Hanseatic League;

strengthening capacity and competitiveness of Riga;

Riga as a knowledge gateway, transfer of Riga’s excellence and potential to towns;

Baltic Sea region and polycentric developmentBaltic Sea region and polycentric development

towns as the knowledge, business, social and culture centre of surroundings;

virtual enterprises and e-work –the base for development of rural areas;

Public opinion study: Public opinion study: in general, things are going in general, things are going

in the right or in the wrong direction? in the right or in the wrong direction?

56 53 52 50 49 48 40 32 28 25 23 21 20 13

2518 30 26 32 36 34 46

4857

50 60 61 61

0102030405060708090

100

IE EE FI LT SE DK LV EL EU25 UK DE PL FR HU

n/a

Wrong

Qccas-sionally

Right

%

Source: Eurobarometer, 2006