Estonia’s International Position, on the Basis of Research and Development Activities of the Business Sector *
Outcomes of research and development activities and innovation in the business sector of a state are shaped through a complicated, often contradictory process under the influence of various fields of innovation policy.
There are large discrepancies in the theoretical treatments as well as the empirical analyses of the shaping of research and development activities and innovation in the business sector. The study organises theoretical treatments into a system, analyses the problems brought out in empirical studies and evaluates Estonia’s international position based on indicators of research and development activities and innovation in the business sector, compared to the position of the European Union and the states closely associated with it.
In order for the research and development activities and innovation to be successful in the business sector, a comprehensive innovation policy support system must be developed. In addition to government sector research and development activities, the business sector should be supported first and foremost by the education system, and a legal environment necessary for deepening the cooperation must be shaped.
The intervention of the government sector is only justified when market or system failures appear in the business sector; however, their detection is not easy. The possibility of applying government sector support mechanisms is created by measures that do not lead to distortions of competition when eliminating market and system failures.
The importance of research and development activities of the public sector must be emphasised. The business sector is offered results of fundamental studies as an outcome of the research and development activities of the government sector, as well as infrastructure and personnel for carrying out the research and development projects of the business sector.
The empirical analysis involved 18 indicators that describe research and development activities and innovation in the business sector, which brought out different assessments of Estonia’s position. The results of both the theoretical and the empirical analysis show that Estonia must improve its work in developing the innovation policy support system of the business sector and the adequate and efficient support measures in order to improve its international position.
*The article has been written with the support of the targeted financing project No TMJJV 0037 of the Ministry of Education and Research “Path Dependence Model of Developing and Implementing the Innovation System of a Small Country”.