1. Estonian eVikings: The role of ICT related FDI in small catching-up economies

2. Rationale for the study
The need for strengthening the capabilities for policy analysis and formulation
From Lisbon Strategy, and rethinking European development strategy at the political level …
… to contribution to the actual development of national development strategies:
Estonian R&D and Innovation Policy
Estonian National Development Plan

3. Small countries riding the wave
Historic context, and the lessons from earlier catching-up experiences of small countries
From the U.S., Germany and Sweden in 19th century
to the Finnish and Japanese/East Asian catching-up
Catching-up in small countries: Finland, Ireland, Singapore
Special role of the ICTs in economic development nowadays, bio- and nanotechnology in the future
In OECD countries, more than the half of the productivity increase induced by take-up of ICTs, and related innovation

4. “Double diamond” model
Radical technological breakthroughs largely exogenous to the economic development in small countries
The dominance of MNCs in global R&D and technology markets
FDI not only major source for long term capital investment, but even more importantly provides access to new proprietary technologies, markets, managerial skills, etc.
Yet, at the risk of losing independence in formulating economic policy?!
Successful catching-up experiences in small countries
Targeting foreign investments…
… while ensuring the availability of required qualified labour, and upgrading capabilities of the domestic enterprises

5. Conclusions
Radical increase of R&D investment (e.g. to 3% of GDP) not possible without radical change of the structure of the Estonian economy.
NB! Not only in Estonia, but the same applies for large part of the EU NMS-10
R&DI policy focusing on commercialisation of domestic research results via support to private R&D and establishment spin-off companies is not in small countries a viable approach for inducing the required structural change
Three critical success factors:
FDI targeting, and upgrading domestic capabilities
Implies for a strong and very professional policy co-ordination

6. Deliverables: formal and informal
eVikings WP7 report:
The role of ICT related foreign direct investment in economic development in small catching-up economies: implications for Estonian competitiveness strategy
Participation in policy discourse:
Government working party for preparation of the next R&D strategy
Article in the Journal of the Estonian Parliament (RiTo)
Consultations with EC DG JRC / IPTS in Sevilla
Presentation at the expert meeting in preparation of the UNCTAD World Investment Report 2005, with special focus on the internationalisation of research and development.