Product development is inevitable
When analysing the economic growth of Estonia that has slowed down, and the factors that influence the growth of productivity, it is inevitable to pay greater attention to the issues of product development. If product development is scarce, the goods produced and exported remain valued lower, and there is no movement from the raw material based economic model to the innovation model with greater added values.
Also, without product development, many companies remain companies “intermediating work time resources”. The limited innovation absorption capacity – capacity to find and implement new know-how and technologies to increase productivity – of companies significantly reduces the development of productivity, including products. In this context, five central hindering factors may be highlighted. First, confusion in the roles, indicators and terms of science, innovation and the private sector. Second, low intellectual property intensity and awareness of the Estonian economy and economic policy. Third, the lack of an innovation policy on the part of undertakings and the professional and central confederations in industry. Fourth, undertakings, developers of economic policy and universities lack a clear shared situational awareness of the innovation environment, the roles of technology transfer structures, and the division of tasks. A functioning and effective knowledge transfer environment is a precondition for the functioning of a competitive information society – the central infrastructure of a knowledge intensive society, and not merely one of the side activities of universities. Fifth, despite the noticeable development of the Estonian venture capital market, continuing attention to increasing the investment management capability is also necessary, besides increasing the volume of investments.