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

Table 22: Size and Export OrientationPopulation(million inhabitants)Exports as a Share of GDP (2001)Denmark 5,4 30,8%Estonia 1,4 60,5%Finland 5,2 32,7%Latvia 2,4 25,8%Lithuania 3,5 38,1%Norway 4,5 34,2%Poland 38,6 20,5%Sweden 8,9 36,0%Source: World Economic Forum (2003)Secondly, while SMEs are widely regarded to be the backbone of the economy in these countries– and the motor for growth and employment – they are not the drivers of innovation. Thus, similarto the findings for the B4 presented in the chapter 2, recent studies identified a shortage of innovativeSMEs as one of the main weaknesses of the Finnish innovation system (Georghiou et.al (2003),European Commission (2001b)). This is interesting given the fact that Finland is generally regardedto be a highly effective and well-functioning system.Another factor identified by policymakers both from the Nordic and Baltic Sea Countries wasthe perception of a ‘dual nature’ or ‘polarisation’ of innovation and economic development. Thuspolicymakers regarded their countries to be characterised, on the one hand, by metropolitan areas(Stockholm, Helsinki, Tallinn, Riga, etc.) and large, and in the case of the Baltic Sea countriesfrequently foreign-owned, companies, both of which are internationally at the forefront in termsof innovation and economic development. On the other hand, policymakers were faced with ruralareas with very low levels of growth, employment and economic development. Nordic and Balticpolicymakers argued that these perceived disparities when it comes to regional economic growthand innovation placed unique demands on policymakers seeking to design national policies forinnovation and enterprise development. However, it should be pointed out here that, comparedto other EU Member States, including the New Member States, the countries in question displayrather small regional disparities when it comes to unemployment or GDP per capita (see EuropeanCommission (2003j)).Turning to the differences between the Nordic countries on the one hand and the Baltic countries andPoland on the other, one of the most notable discrepancies, from an innovation system perspective, isthe level of expenditure on R&D. As could be seen in chapter 1, the Nordic countries tend to investa considerably higher share of GDP in R&D than the EU average, while the Baltic Sea countries tendto invest far less, both in terms of private and public expenditure on R&D.Perhaps even more important than R&D, from the point of view of economic growth is the fact that,according to the available indicators, there is a considerable gap between the Nordic and the Balticeconomies when it comes to innovation or innovativeness.According to the indicators for innovation established so far, the Nordic countries generally emerge astop performers in most categories. Table 23 shows a number of indicators which illustrate the Nordiccountries’ leading positions both when it comes to investing in and making use of new technology.Nordic countries top the international tables for investing, patenting, and publishing R&D. In92