Competing in the Single Market - SMEs and ... - Erhvervsstyrelsen

This concern is echoed in the OECD survey of the Baltic countries from 2000, where the authorswarn that:Macroeconomic stabilisation is not an end in itself. It is a necessary condition to start thereform process…Successfully making use of market mechanisms requires Baltic countries todevelop new institutions, without which transitional reforms will be delayed or frustrated.(OECD (2000b))Similarly, when analyzing the development of the Baltic countries in the transition period, Teichmanncomes to the conclusion that, while strict exchange rate regimes and tight fiscal policies have achievedmacroeconomic stability, “insufficient emphasis has been put on institution building” (Teichmann inTeichmann (ed.) (2003), p.38)Innovation Performance in the B4In light of the importance of innovation for economic growth and competitiveness, and, considering theconcerns mentioned in the previous section, the question remains how innovative are the B4? A numberof indicators have been developed in recent years - aimed at capturing and measuring countries’ andfirms’ innovative capacity. Going by these indicators, at a first glance, the B4 countries find themselvesfar below the EU and OECD averages. Table 3 compares the B4 countries with selected ‘old’ EUMember States according to a number of variables which are generally regarded as suitable indicatorsof innovative capacity (for a critical note on these indicators, see Box 3). Thus, the B4 countries haveconsiderably lower numbers, or shares, of EPO patents, employment in medium- and high-techmanufacturing (with the exception of Poland), internet access/use and PCs per inhabitants than the EUaverage. 6 When comparing the shares of internet hosts, internet users and mobile phone subscriptionsthere is a marked difference between Estonia, on the one hand, where the relevant numbers are closeto or even above the EU average, and Latvia, Lithuania and Poland, on the other hand. In terms ofpopulation with tertiary education and ICT expenditure as a percentage of GDP, the B4 are close to,and in some instances, even above the average for the existing EU Member Countries.Table 3: Innovation in the B4 Countries (selected innovation, science and technology indicators)Pop. withTertiaryEducation2002Empl. inMed./ Hi-Tech Manuf.(% of tot.workforce)2002EPO Patentsper MillionInhabitants2001InternetAccess/Use 1 2001ICT Exp.(% ofGDP)2000 or2001PCs per100Inhabitants2002InternetHostsper 1000Inhabitants(Jan 2002)InternetUsersper 1000Inhabitants(2001)Mobile PhoneSubscriptionsper 100Inhabitants,2002Estonia 29.6 3.4 11.0 0.11 9.6 21 37 301 65Lithuania 44.0 2.6 2.4 0.01 5.9 11 11 72 47Latvia 19.6 2.0 7.6 0.00 7.9 17 9 68 40Poland 12.2 7.5 2.5 0.08 5.9 11 12 98 46Finland 32.4 7.4 337.8 0.76 6.8 44 171 431 85Germany 22.3 11.4 309.9 0.66 6.9 43 30 365 73Ireland 25.4 6.9 85.6 0.55 5.3 42 34 234 76Sweden 29.7 7.3 366.6 0.97 9.8 62 83 518 89EU-15 21.5 7.4 161.1 0.51 7.0 31 2 34 315 791composite indicator based on home internet access (% of all households) and share of SMEs with own web site (EIS (2003))2figure for 2001Sources: International Telecommunication Union (ITU) 2003; European Commission (2003l), Eurostat (2003a)6Regarding the share of the labour force working in medium and high-tech manufacturing, it is noteworthy that four other Accession Countries, namelySlovenia (9.2%), the Czech Republic (8.9%), Hungary (8.5%) and the Slovak Republic (8.2%), have considerably higher shares than the B4, and indeed themajority of the existing EU Member Countries (Eurostat (2003c)).19