FOSTERING RESEARCH, INNOVATION AND DIGITALIZATION IN EUROPE AND LATVIA

The contribution of higher education to jobs and growth, and its international attractiveness, can be enhanced through close, effective links between education, research, and innovation - the three sides of the 'knowledge triangle'. In addition, digitalization serves as a catalyst for closer integration of various elements within the 'knowledge triangle'. In this paper, the main focus is placed on research, innovation and digitalization performance in the EU member states and their financing from the different European instruments. This paper presents the rationale behind the EU Investment Plan, evaluates the current research, innovation and digitalization performance of Latvia from multiple perspectives, looks at the economic consequences of innovation activity, and provides an overview of the EU innovation support instruments relevant for Latvia. The paper concludes that besides funding, the inherent quality and marketability of research projects remains essential. As regards digitalization, Latvia has relatively developed connectivity and infrastructure, but is increasingly facing shortage of skilled ICT professionals and integration of internet-based solutions in business operations, especially among SMEs, is below its EU peers. Latvia ranks 19 from EU-28 in Digital Economy and Society Index 2017. Overall progress is driven by increasing shares of fast broadband subscriptions as well as by the improved delivery of public services. More and more Latvians are going on-line and are using eGovernment services but still half of the population has low or no digital skills. Latvians are increasingly shopping online but businesses are exploiting technologies in a limited way. The paper concludes that, for innovations to flourish, investment is, no doubt, a necessary pre-requisite, globally, in Europe and in Latvia. In this context, the national governments are responsible for a reasonable budgetary spending for research, but even more for creating conducive framework conditions - such as fostering private enterprise, creating a vibrant eco-system for start-ups, fighting shadow economy and improving the business environment. The EU stands ready to offer multiple support instruments, ranging from Investment Plan to Structural Funds, to Horizon 2020, and to InnovFin. However, even when financing is available, it is up to the research community to make good use of them.