Baltic States – the new Mecca for innovation and technology in Europe?

  • 2021-02-11
  • Lucas Baltis

Is the Baltic States really the new Mecca for innovation and technology? That question was among a number discussed at an international online conference where representatives of five countries of the Baltic Sea Region—Lithuania, Latvia, Estonia, Poland and Germany—deliberated the changes to the political, economic and business landscapes, as well change and crisis management strategies.

Renowned experts in fields as diverse as politics, diplomacy, economy, business and trade, foreign affairs, regulatory compliance, technology and innovation, as well as consultancy agencies, together concluded that the pandemic had had significant effects on the region’s future. The reflection can be summarized as: "Things will never be as they were, therefore we need to work together in order to provide the best possible outcomes for our businesses and comunitites.”

The strategic dialogue revealed that advancements in digitalisation have sped up by five to ten years as a result of the pandemic and the EU Green Deal initiative, yet they have also brought new challenges. Therefore, the need for alignment on strategic transformations were discussed, at the centre of which should be region-wide cooperation and change management strategies for all areas of life.

Progress in the region is hampered by competition

The Honorary Consul of the Republic of Lithuania in Hamburg, Dr. Dietmar O. Reich, noted that Baltic States are often described as a “Mecca” for innovation in the world. International investors are drawn to the region’s laser and technology sector, as well as the strong conditions for start-ups that exist there, and development of IT and innovations. Internal competition, however, is limting progress for the entire region.

Global Change Expert, CEO and Founder of ADMIS Consultancy, Vaiva Adomaityte, stated: “If the entire Baltic Sea Region collaborates to centralise their strategic investment management functions and international commerce, as well as streamlining economic development projects, they could become a very strong independent economic bloc.”

According to the Chairman of the Foreign Affairs Committee at the Parliament of the Republic of Latvia, Rihards Kols, projects such as GovTech Lab in Lithuania, e-Residency in Estonia and the e-Parliament model in Latvia, which went live in May 2020, are among a number of examples of how a model created in one country can be successfully transferred and implemented in another country, thereby achieving greater alignment and mutual progress.

The pandemic has demonstrated the growing need to diversify partnerships in order to create more opportunities and build more resilient models. Discussions at the conference thus sought out ways to improve cooperation mechanisms within the Baltic region and the wider EU, and with other countries globally, including in Asia and Africa. At the same time, relations with neighbouring Russia remain complicated due to political tensions, and do not currently allow for the building of stable partnerships, despite the mutual benefits those could bring.

It is necessary to change govarnance models to foreground an agile and socially responsible strategy

In times of seismic change, major political decisions can only be implemented if they are accepted by society. Adomaityte highlighted how recent global events demanded a strategic shift among governments towards social responsibility.

Alexander Kulitz, a member of Parliament at the German Bundestag in his speech about Germanies preparedness to face the challenges of the 21st century noted: “it is important to allow the economy to breathe for it to grow”. Kulitz urged the importance of digitalisation in countries governance and in the overall Baltic Sea Region strategy.

Result of the dialogue: 500 expert recommendations

The objective of the research study, international Baltic Sea Region debates and questions answered by 500 experts from Lithuania, Latvia, Estonia, Germany and Poland- is to create a report containing strategies and recommendations on the current situation and suggesting key priorities for international collaboration, while outlining a joint economic strategy for the Baltic Sea Region countries.

“The potential of the Baltic Sea Region has been mentioned in Germany’s strategic business development plans for quite a long time and the first priority should be to strengthen geopolitical relations so that close cooperation emerges,” the Chairman of the Board of Federal Association for Economic Development and Foreign Trade (BWA), Michael Schumann, stated.