Competitiveness and technological capabilities in Baltic industry: Future potentials in a historical perspective

This chapter describes the competitiveness of exports from the Baltic states that is, Estonia, Latvia and Lithuania. It aims to explain in what sectors the Baltics have improved their export position since the beginning of transition and highlights the competitiveness of the Baltics in sectors with little technology-intensity. The chapter argues that the reason is the inferiority of production technology in the Baltics in comparison with their trading partners. It analyses changes in exports from the Baltic states. The chapter also analyses whether competitiveness in the Baltics is due to technological progress. Technological progress is considered to be an important source of competitiveness. Technological progress is generated by developing and diffusing new knowledge or new combinations of existing knowledge. The chapter provides an analysis of the science and technology systems in the Baltic countries to see whether they fulfill the other prerequisites for catching up.