Abstract
The process of economic development is increasingly dependent on new technologies. Because of patents and copyrights, countries innovating poorly assume a subordinate position in the international economic system, reproducing a situation that can be describes as “development of underdevelopment”. Although Latvia has joined the European Union and adopted the Euro, it is still struggling for development. A fair question regards the state of innovation of the Latvian economy. This paper discuses the relationship between innovation and development, making a critical assessment of Latvia’s innovation performance, in comparison with other European Countries. The results show that Latvia is one of the least innovative countries in Europe. This was aggravated by Latvia’s own economic structure, which is trapped into non-dynamic sectors. As a result, it has the same structural problems it had just before the 2008 crisis. The author suggests that, although it is necessary to implement structural policies promoting innovation, Lavia’s own economic and political structure might impede it.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
Although in the last 30 years the religious notion of the market as a demiurge responsible for solving all the problems of mankind has been imposed and repeated in a monotone way as a dogma, the History shows that without the intervention of the State to protect the system of Capitalism from itself, most probably it would have disappeared by now. Not only the great slump of the 1930s, but also the crisis the world is facing are good examples. Without support of the state the capitalist system most probably would consume itself and disappear, so that development is completely dependent on the State.
- 2.
For an extended discussion about the changes in the reproductive dynamic of the capitalist system in the 1970s, see the second chapter of KARNĪTE, Raita, BĒRZIŅŠ, Ivans, POPOVIČA, Santa (2007). Ārvalstu kapitāls Latvijas banku pamatkapitālā. Riga, LZA EI, 128 lpp. For a debate about the strategies of Milton Friedman and George Stigler to promote the Neoclassical/monetarist approach as the only valid in economics, see Freedman (2008).
- 3.
Many scholars fear to be labelled as “Marxist”, the same as to be accused to be a witch in the Middle Ages, if they make structural analysis of the economic system in force. This is an ideological consequence of the victory of the Neoclassical approach, mainly the Chicago’s monetarist school in combination with Hayekian ideas, reducing Economics to econometrics based on Neoclassical assumptions—in other words, to a field (not the most noble one) of mathematics. This is part of the explanation of the poor level of economic analysis of the last 40 years.
- 4.
Thus, it is not the result of a conspiracy theory, where evil countries try to dominate others, but the output of the Historical process. However, countries (evil or not) trying to dominate others is a common pattern in History, and a very actual issue, by the way.
- 5.
In a general manner this economic policies were based in the Washington Consensus’ conclusions, which turned to be a religion whose 10 commandments were: (1) fiscal discipline; (2) prioritisation of the public expenses; (3) tax reforms; (4) financial liberalisation; (5) free exchange regime; (6) commercial liberalisation; (7) free direct foreign investment; (8) privatisation; (9) deregulation and (10) defence of intellectual property.
- 6.
Creative destruction must be understood in a Schumpeterian way.
- 7.
For example, the fact that some companies are using the internet as a vehicle to sell products is just a change in the way the information is distributed through the society. It doesn’t represent the creation of new knowledge, but rather it is utilisation, being part of the concept of “information economics”.
- 8.
The difference is that Schumpeter developed and applied this concept to the process of competition in specific industrial sectors, while in the case of the Knowledge Society in this text it is being applied to the process of destruction of modes of socioeconomic reproduction of the capitalist system.
- 9.
China has two important financial centres: Shanghai and Hong Kong. They are part of the Knowledge Society. Continental China is not. The point is that assembling electronic components to produce computers, for example, doesn’t make this activity to be part of the Knowledge Society as discussed before.
- 10.
The international community, mainly through the IMF and World Bank, traded help for neoliberal reforms. Since the countries in transition a deep need for financial support, even in the case the politicians were able to deal pragmatically with the transition, the neoliberal policies would be implemented anyway.
- 11.
The idea is that fragile economies cannot deal with the pressures of the international system, being subordinated to foreign interests, which may not be the most valuable to a country’s development.
- 12.
The politically correct word for the process is “restructuration”.
- 13.
Extension in the Latvian academic system occurs mainly in the health sectors.
- 14.
One exemption is the pharmaceutical sector.
- 15.
The newest available data set for patents is from 2005.
- 16.
Ibid.
- 17.
There are distinct indications of capture: clientelism, predation, fusion, exploitation, and formation of specific state institutions and capacities (Grzymala-Busse 2008).
References
Bērziņš J (2008) Latvia and EU: the political economy of underdevelopment. In: 4th pan-European conference on EU politics’ paper, Rīga
Bērziņš J (2009) Latvia and the knowledge society: development, underdevelopment and macroeconomic performance. Humanities 1(58):42–68
Dedrick J, Kraemer KL, Linden G (2008) Who profits from innovation in global value chains? A study of the iPod and notebook PCs. In: 2008 industry studies conference paper, Boston
European Comission (2013) Innovation union scoreboard 2013. Directorate-general for enterprise and industry, Brussels
EUROSTAT. http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,45323734&_dad=portal&_schema=PORTAL&screen=welcomeref&open=/&product=REF_TB_information_society&depth=2. Accessed 31 Dec 2008
Félix B (2008) Patents and R&D personnel. Eurostat statistics in focus, 107/2008
Frank AG (1966) The development of underdevelopment. Monthly review, vol 18. http://findarticles.com/p/articles/mi_m1132/is_n2_v41/ai_7659725. Accessed in 28 Dec 2008
Freedman CF (2008) Chicago fundamentalism: ideology and methodology in economics. World Scientific, Singapore
Grzymala-Busse A (2008) Beyond clientelism: incumbent state capture and state formation. Comp Polit Stud 41(4–5):638–673
Hirst P, Thompson G (1996) Globalization in question: the international economy and the possibilities of governance. Thompson Polity Press, Cambridge
Karnīte R, Bērziņš I, Popoviča S (2007) Ārvalstu kapitāls Latvijas banku pamatkapitālā. LZA EI, 128 lpp, Riga
Oliveira F (2003) O ornitorrinco. Boitempo Editorial, São Paulo
Rzymalabusse A (2008) Beyond clientelism: incumbent state capture and state formation. Comp Polit Stud 41(4-5):638–673
Santos T (1970) The structure of dependence. In: American economy review: papers and proceedings, IX, 2(2)
Schumpeter J (1928) The instability of capitalism. Econ J 38(151):361–386
Schumpeter J (1947) The creative response in Economic History. J Econ Hist 7(2):149–159
Smith A (1994) An inquiry into the nature and the causes of the wealth of the nations. Modern Library, New York
Steuart J (1767) An inquiry into the principles of political economy. http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/steuart/index.html. Accessed in 20 Dec 2008. www.merriam-webster.com/dictionary/information. Accessed in 29 Dec 2008. www.merriam-webster.com/dictionary/knowledge. Accessed in 29 Dec 2008
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2015 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Bērziņš, J. (2015). Innovation and Development in Latvia. In: Leal Filho, W., Úbelis, A., Bērziņa, D. (eds) Sustainable Development, Knowledge Society and Smart Future Manufacturing Technologies. World Sustainability Series. Springer, Cham. https://doi.org/10.1007/978-3-319-14883-0_4
Download citation
DOI: https://doi.org/10.1007/978-3-319-14883-0_4
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-14882-3
Online ISBN: 978-3-319-14883-0
eBook Packages: Earth and Environmental ScienceEarth and Environmental Science (R0)