No. 24




Estonia’s International Position in Different Areas of Innovation Policy *

15 December 2011


RiTo No. 24, 2011

  • Janno Reiljan

    Professor of Economics, University of Tartu

  • Ingra Paltser

    Assistant, Chair of Public Economics and Policy, Institute of Economics, University of Tartu

Innovation policy is essential for ensuring a country’s development and continuous enhancement of innovation performance.

The aim of this paper was to empirically analyse the position of Estonia in different innovation policy areas in comparison to other European countries. 17 different indicators that characterise the activities of the public sector in pro-moting innovation were used in principal component analysis to reveal the structure of the public sector activities in promoting innovation. The component analysis revealed that the activities of the public sector in promoting innovation could be characterised by six compo-nents: creating appropriate legal and educational environment; funding R&D in government sector and in higher education sector; mediating financial support from the European Union and by cooperating with companies; financing innovation activities in enterprises on the central government level and also on the local and regional level. Analysis of the position of Estonia in these policy areas revealed that in comparison to other European countries, the public sector in Estonia enhances the overall framework for innovation above the European average and R&D in higher education sector is carried out above the average level. But the position of R&D in government sector in Estonia is weak, only a small proportion of innova-tive enterprises in Estonia get financial support for innovation from the public sector (in-cluding the European Union); and universities and public sector agencies in Estonia cooper-ate with companies for innovation activities only to a small degree. The component analysis also showed that of the European countries, in Portugal, followed by Belgium, the United Kingdom and Malta, the activities of the public sector in promoting innovation are the most similar to Estonia. The most distinct innovation policy is implemented in Iceland, Finland and Austria. These findings are definitely surprising and in order to understand the essence and the implementation of different innovation policy areas, a deeper analysis is needed.

Full article in Estonian

*Peer-reviewed article. The research was supported from the funds of the European Social Fund through the Research and Innovation Policy Monitoring Programme.