Lithuania’s EU presidency, which began on 1 July, faces a policy agenda and legislative load unprecedented since the adoption of the Lisbon Treaty in 2007.
All eyes will be on how Vilnius handles the EU’s budget for 2014-20, scheduled to come into force on 1 January. In Brussels, Lithuanian diplomats are busy finalising roughly 70 pieces of legislation to underpin the budget and allow the disbursement of funds.
For research and innovation, the focus is on designing Horizon 2020 and the European Research Area so that together they create a single market for R&D. By the start of 2014, the legislation and architecture must be in place to launch Horizon 2020, which includes the European Institute of Innovation and Technology and Euratom. Efforts are still needed to simplify project administration, improve researchers’ mobility and career prospects, make Europe a more attractive destination for researchers, and engage more strategically in cooperation with third countries.
That might sound like a lot for a country of 3 million people to take on. But Lithuania has strengths that Europe’s larger nations lack. It was one of the countries hit hardest by the financial crisis, with GDP dropping by nearly 15 per cent in 2009. But it has also staged one of the most successful recoveries.
Tough austerity programmes early in the crisis, along with efforts to attract overseas investment and develop export markets, have made Lithuania one of the fastest-growing economies in the EU. Its GDP grew by 5.9 per cent in 2011 and 3.7 per cent in 2012. Exports are growing at an astonishing rate: up by 16.8 per cent in the first quarter of 2013, compared with the same period last year.
It is no coincidence that small countries, in Europe and elsewhere, have generally been the most effective in dealing with the financial crisis through fiscal consolidation and structural reform. Smaller countries can be more agile, as they are more alert to—and more able to engage in—international trends and opportunities. Governing is, in the words of Lithuania’s president, Dalia Grybauskaite, “like managing a kite’s flight”. Lithuania has ridden the winds of change with skill.
Even during the crisis, Lithuania improved its innovation indicators, changing from a “modest” to a “moderate” innovator in the Innovation Union Scoreboard 2013. The past few years have seen an ambitious consolidation of the fragmented science base and the promotion of “innovation by invitation” to tackle low industry investment in R&D.
In 2010, this initiative led to Thermo Fisher Scientific, the world leader in scientific services, acquiring the Lithuanian biotechnology company Fermentas for €183 million. It is now considering investing €20.3m in its Vilnius unit and moving production from Germany to Lithuania. Along with other investors such as the pharmaceutical companies Teva and Valeant, this has made Lithuania an emerging hot spot for the life sciences in central and eastern Europe.
Horizon 2020’s emphasis on international collaboration matches Lithuania’s domestic priorities. Small economies often lack the markets and skill sets needed to develop innovation on their own, and rely on forming mutually advantageous partnerships with other countries. Success depends on early internationalisation of the science base and reaching global value chains.
This means that international cooperation will be high on Lithuania’s agenda for its presidency. The country is already actively engaged in the EU’s Eastern Partnership with six post-Soviet states and the EU Strategy for the Baltic Sea Region, the EU’s first large-scale regional strategy. The Baltic strategy aims to show that innovation-
driven, ecologically and socially sensitive regional policies can lead to growth and prosperity, and so serve as a model for regional cooperation in the EU.
Challenges lie ahead. Lithuania’s government will be leading European discussion and continuing national reforms at the same time. As member states develop their smart specialisation strategies to shape how structural funds for research and innovation are spent, a crucial issue is how to build synergies between these funds and Horizon 2020. Many member states need better policies for internationalising their science and opening up their national systems to researchers from other countries.
Lithuania has promised to bring “a blend of efficiency, flexibility and creativity” to the table. Let us hope that this results in robust multiannual programmes that, by 2014, give European researchers a licence to operate.
Agne Paliokaite is managing director of Visionary Analytics, a research-based policy advisory service in Vilnius. She works with the European Commission and member states to evaluate EU research and innovation policies.
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