R&D Investment and Competitiveness in the Baltic States

The article is aimed at the analysis on how R&D investment should influence the competitiveness among the firms in the Baltic States and what the main obstacles for R&D investment are. Most theories emphasize the importance of R&D investment in the creation and development of country's competitive advantage. Each country has its own unique characteristics, with different resources and opportunities to use them for the increase of competitiveness. The use of resources for R&D investment is much more efficient together with a proper identification of industry sectors and formation of priorities for R&D investment. The research has revealed that the economies of the Baltic States basically cover low technology industries where innovations are continual and based on market demand whereas the largest share of R&D funding consists of the state budget funds, allocating comparatively the largest part of the funds in the sector of higher education. Rather different correlations between the same economic indicators or indexes reveal that the indicators determined by R&D investment compose only an insignificant share in the scale of the sources of economic growth.