Download State of Baltic Rim Competitiveness

Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Measures of Competitiveness
Prosperity
Productivity
Competitiveness
Innovative Capacity
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Source:
Michael
E.H.Porter
Copyright 2004
© Christian
M. Ketels
Decomposing Prosperity
Prosperity
Domestic
Purchasing
Power
• Consumption taxes
• Local market competition
• Efficiency of local industries
Income
Labor
Productivity
Labor
Utilization
• Skills
• Capital stock
• TFP
Baltic Sea Region Report – HH Conference 09-02-04 CK
•
•
•
•
3
Working hours
Unemployment
Participation rate
Population age profile
Copyright 2004 © Christian H. M. Ketels
Influences on Competitiveness
Multiple Geographic Levels
World Economy
Broad Economic Areas
Groups of Neighboring
Nations
Nations
States, Provinces
Cities, Metropolitan
Areas
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Source:
Michael
E.H.Porter
Copyright 2004
© Christian
M. Ketels
Profile of the Region
Western shore
Eastern shore
Nordic Countries
Northwest Russia
• Northwestern Region
• 16 Mio. People (27%)
• GDP of € 46bn (4%)
• Denmark, Finland,
Norway, Sweden
• 24 Mio. People (41% of
the region)
• GDP of € 793bn (74%)
Baltic States
• Estonia, Latvia,
Lithuania
• 7.4 Mio. People (12%)
• GDP of € 34bn (3%)
Northern Germany
• Hamburg, MecklenburgVorpommern, SchleswigHolstein
• 6.3 Mio. People (11%)
• GDP of € 172bn (16%)
Northern Poland
• Zachodnio-Pomorskie,
Pomorskie, Warminsko-Mazurskie
• 5.4 Mio. People (9%)
• GDP of € 24bn (2.5%)
Source: EU (2004)
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Cluster Composition
Baltic Sea Region Export Performance by Cluster
World Market Share,
2000
BSR overall: +2.1%
(versus +5.3% world trade)
18%
Forest Products
Telecommunication
16%
14%
12%
10%
Multiple Business
8%
Household
Health Care
Materials &
Metals
6%
Food & Beverages
4%
Transportation
2%
Textiles & Apparel
0%
-10%
-5%
Petroleum/Chemicals
BSR overall: 5.36%
Power
Entertainment
Office
Personal
0%
Semiconductors
5%
10%
15%
20%
25%
Absolute Growth* of Exports, 1995 - 2000
*Growth figures exclude Baltic States and Northwest Russia
Source: WTO (2004), Institute for Strategy and Competitiveness, author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Regional Cooperation
Levels
Countries act as one
Stage 3: Joint action
• Limited independence
• Includes joint positioning of the region abroad, including in international/
supranational bodies
Stage 2: Coordinated action
• Medium level of independence
• Includes joint efforts to upgrade border procedures, improve infrastructure,
develop clusters, ..
Stage 1: Learning and benchmarking
• Leaves national autonomy fully intact
• Includes networks covering all areas of policy in an “open model of
cooperation”
Countries act in isolation
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Regional Cooperation
Benefits and Costs of Regional Heterogeneity
Low
Degree of Heterogeneity
High
• Easy to develop a common
identity
• Huge potential gains from
regional benchmarking
• Easy applicability of others’
experience
• Huge potential gains from
division of labor
• Balanced distribution of
benefits
• Regional cooperation is easier
but provides fewer benefits
Baltic Sea Region Report – HH Conference 09-02-04 CK
• Regional cooperation is harder
but provides higher benefits
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Copyright 2004 © Christian H. M. Ketels
Key Implications
Situation
Implications of the Report
Stage 3:
Joint action
• More ambition
than reality
• Current patterns of heterogeneity
suggest high benefits but also
difficulties in achieving joint action
Stage 2:
Coordinated
action
• Some activities
currently under
way
• High level of regional integration
signals room for development of
strategic action plan
Stage 1:
Learning and
benchmarking
• Many activities
currently under
way
• High remaining heterogeneity in the
region signals ample room for
further cooperation
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
The Way Ahead
Ongoing discussions in the Region
Moving to Action
• Validate the performance and business
environment quality assessment
• Identify areas for further in-depth analysis
• Develop the foundations for an
institutional capacity to act
• Launch meetings to define a regional
strategy for action
• Launch institutional structure to
coordinate decision making and
implementation
BDF Meeting Hamburg 2004
BDF Meeting Stockholm 2005
• Launch of the 1st State of the RegionReport
• Set a structure for the regional debate
• Provide data to review performance,
cluster composition, and business
environment quality across the Region
• 2nd State of the Region-Report
• Provide data to discuss the positioning of
the Baltic Sea Region
• Provide data to set regional action
priorities
• Provide data on current regional efforts
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
The Baltic Sea Region Entering a New Era
Past
Present
• Ties in the region far below
historical precedents
• Many trade and organizational
ties across the region
• Enthusiasm about freedom
and opportunity in the East
• Realism about benefits raises
demands on cooperation
• Main goal is political: integrate
and secure
• Main goal is economic: raise
prosperity across the region
• West providing help to East;
East providing new markets
and access to low-wage labor
• West and East operating with
same objectives from different
points of departure
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Towards A New Strategy for the Baltic Sea Region
• How strong is the economic performance of the Baltic Sea Region?
• What is the profile of the economy in the Region?
• What are the strengths and weaknesses of the business
environments across the Region?
• What are the implications for a sound regional strategy?
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Real GDP Development Over Time
Baltic Sea Region Countries, 1993 - 2003
Real GDP, PPP-adjusted,
1993 = 100
160%
Sorted by CAGR,
1993 – 2003:
145%
Poland
Latvia
Estonia
Finland
Lithuania
Norway
Sweden
Denmark
Germany
Russia
130%
115%
100%
EU 25
85%
70%
1993
1994
1995
1996
1997
1999
1998
2000
2001
2002
2003
Source: Groningen Growth and Development Centre and The Conference Board (2004), EIU (2004), authors’ calculations
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Key Observations
Profile of the Region
• Clear dominance of the Nordic countries in the overall Baltic Sea
Region economy
– Countries on the eastern shore still account for only 10% of the regional
economy
– In addition, Germany, Poland, and Russia all have their economic centers
of gravity outside the Region
• Overall growth performance of economies in the Region suggests
dominance of nation-specific over regional factors
– Among western shore countries, Nordic countries did in general better than
Germany but even among them differences emerge
– Among the eastern shore countries, Poland and the Baltic countries
followed different paths. Lithuania in particular stands out with its late
bounce-back from the transition crisis
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Prosperity
Selected European Regions and Countries
Real GDP per Capita 2003,
PPP-adjusted, $-US (1999)
$35,000
Norway
Denmark
$30,000
Germany (North) Sweden
British Isles
Finland
$25,000
Iberian Peninsula
$20,000
Baltic Sea Region
Central Europe
$15,000
$10,000
Estonia
Poland (North)
Lithuania
Latvia
Russia (Northwest)
$5,000
$0
0%
1%
2%
3%
4%
5%
6%
7%
8%
Growth of Real GDP per Capita (PPP-adjusted), CAGR, 2000-2003
Source: Groningen Growth and Development Centre and The Conference Board (2004), authors’ calculations
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Key Findings
Performance Drivers
Advantages
• Labor utilization - employees per capita and hours worked
per employee are highest of all peer regions
– Gap to Iberian Peninsula and British Isles is, however, falling; it
is slightly increasing versus Central Europe
• Labor productivity is on par with Central Europe and
Iberian Peninsula, lagging the British Isles
– Baltic Sea Region is currently improving its position versus
peer regions
• Domestic purchasing power of income is lowest of all peer
regions
– Gap to Iberian Peninsula and British Isles is, however, falling; it
is slightly increasing versus Central Europe
Disadvantages
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Economic Performance
Decomposition by Baltic Sea Sub-region
Nordic
countries
Germany
Poland
Baltic
countries
Russia
Labor
Productivity
++
++
--
---
---
Employees
per capita
=0
-
-
+
+
Hours
worked per
Employee
-
-
+
+
+
Domestic
Purchasing
Power
-
-
++
+++
++
154%
150%
53%
53%
37%
Prosperity
(% of Region)
Note: +++ for >150% above Baltic Sea Region average, ++ for > 50%, + for > average, - for < average, - - for < 30%, - - - for < 50%
Source: Groningen Growth and Development Centre and The Conference Board (2004), national statistics (2004), authors’ calculations
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Innovation Performance
Patenting in the U.S.
U.S.Patents filed per
Capita, 2003
200
Sweden
Finland
150
Germany (North)
Denmark
100
British Isles
Baltic Sea Region
Norway
Central Europe
50
Iberian Peninsula
Poland (North)
0
Estonia
0%
5%
Russia (Northwest)
Lithuania
10%
15%
20%
Growth of U.S. Patents Filed per Capita, CAGR, 1998 - 2003
Note: Bubble size is relative to total U.S. patents filed in 2002; sub-national region shares by GDP share
Source: USPTO (2004), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Innovation Performance
Top Patenting Organizations
Company
Country
U.S. Patents, 1997-2001
ERICSSON
Sweden
1246
NOKIA
Finland
809
NOVO NORDISK A/S
Denmark
553
VALMET CORP.
Finland
273
SANDVIK AKTIEBOLAG
Sweden
236
AKTIEBOLAGET ASTRA
Sweden
202
BEIERSDORF AG
Germany
136
ASEA BROWN BOVERI AB
Sweden
133
AB VOLVO
Sweden
126
ERICSSON, INC.
Sweden
99
TETRA LAVAL
Sweden
96
DANFOSS A/S
Denmark
95
SIEMENS ELEMA AB
Sweden
94
AKTIEBOLAGET ELECTROLUX
Sweden
90
DRAGERWERK AG
Germany
83
PACESETTER AB
Sweden
81
PHARMACIA & UPJOHN AB
Sweden
75
KVAERNER PULPING AKTIEBOLAG
Sweden
74
HALDOR TOPSOE A/S
Denmark
71
Source: USPTO (2004), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Other Economic Indicators
World Export Market Share over Time
World Export
Market Share
7%
British Isles
6%
Baltic Sea Region
5%
Central Europe
4%
3%
Iberian Peninsula
2%
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Source: WTO (2004), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Other Economic Indicators
Relative Export Intensity
Share of World Exports versus
Share of World GDP, 2001
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
Ba
lti
c
Se
a
R
eg
Es ion
Li ton
th ia
ua
N nia
o
D rwa
en y
m
a
La r k
Fi tvia
n
Sw lan
d
e
d
G e
er n
m
C
a
en
Po n y
tra
la
lE
R nd
us
ur
op
si
a
C ean
ze
ch Re
R gio
ep n
u
H blic
un
Sl gar
ov y
Sl aki
ov a
e
Au nia
G str
er ia
m
a
Po n y
la
nd
Ib B
r
er it
ia ish
n
Pe Isl
ni es
ns
ul
a
0.0
Source: WTO (2004), EIU (2004), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Other Economic Indicators
Inward FDI Position
Inward FDI stock as %
of GDP, Average 19992001
60%
Estonia
50%
British Isles
Denmark
Sweden
40%
Latvia
30%
Baltic Sea Region
Central
Europe
Iberian Peninsula
Lithuania
20%
Norway
Germany (North)
Finland
Poland (North)
10%
Russia (Northwest)
0%
0%
20%
40%
60%
80%
Inward FDI Flows as % of Domestic Capital Formation, Average 1999-2001
Note: Bubble size is relative to FDI stock in 2001; subnational regions by their share of national GDP
Source: UNCTAD (2004), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Other Economic Indicators
Multinational Companies’ Home Base
Business Week 1000
Fortune Global 500
British Isles
77
British Isles
36
Baltic Sea Region
30
Baltic Sea Region
15
•
•
•
•
•
15
5
5
4
1
• Sweden
• Finland
• Denmark
• Norway
• Northern Germany
6
4
2
2
1
Sweden
Finland
Norway
Denmark
Northern Germany
Iberian Peninsula
13
Iberian Peninsula
7
Central Europe
11
Central Europe
7
Note: Business Week ranks by Market Value, Fortune by Revenues
Source: Business Week (2004), Fortune (2004), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
The Composition of Economies
Local industries
• Do not compete
across regions
• Tied to location
• Dominated by
services
• More critical for
prosperity than for
income
31% of
employment
42% of income
68% of
employment
Cluster
• Compete across
regions/countries
• Can locate
anywhere
• Strong role of
manufacturing
• Critical for income
57% of income
Natural-resource
based industries
• 1% of income and
__employment
Source: Michael E. Porter, Economic Performance of Regions, Regional Science (2004), Cluster
Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Relative Cluster Specialization
Baltic Sea Sub-Regions
Nordic
Higher
share
Lower
Share
Telecom
Forest Products
Health Care
Oil/Chemicals
Food Products
Defense
Power
Household
Metals
Multiple Bus.
Entertainment
Office
Semiconductor
Transportation
Textiles
Personal
Germany
Semiconductor
Transportation
Office
Personal
Multiple Bus.
Textiles
Entertainment
Power
Health Care
Household
Metals
Food Products
Oil/Chemicals
Forest Products
Telecom
Defense
Russia
Defense
Oil/Chemicals
Metals
Multiple Bus.
Forest Products
Personal
Food Products
Power
Textiles
Transportation
Entertainment
Semiconductor
Household
Office
Health Care
Telecom
Baltic
Textiles
Forest Products
Household
Food Products
Entertainment
Telecom
Metals
Personal
Power
Oil/Chemicals
Office
Transportation
Health Care
Semiconductor
Multiple Bus.
Defense
Poland
Textiles
Entertainment
Personal
Household
Metals
Transportation
Power
Defense
Food Products
Forest Products
Multiple Bus.
Office
Semiconductor
Oil/Chemicals
Health Care
Telecom
Source: WTO (2004), Institute for Strategy and Competitiveness, HBS (2004), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Determinants of Productivity and Productivity Growth
Macroeconomic, Political, Legal, and Social
Context for Development
Microeconomic Foundations of Development
Quality of the
Microeconomic
Business
Environment
Sophistication
of Company
Operations and
Strategy
• A sound macroeconomic, political, legal, and social context creates the
potential for competitiveness, but is not sufficient
• Competitiveness ultimately depends on improving the microeconomic
capability of the economy and the sophistication of local companies and
local competition
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Source:
Michael
E.H.Porter
Copyright 2004
© Christian
M. Ketels
Business Competitiveness Index
Ranking of European Regions and Countries
Baltic Sea Region
British Isles
Central Europe
Iberian Peninsula
TOTAL RANK
6
TOTAL RANK
9
TOTAL RANK
21
TOTAL RANK
27
Finland
1
United Kingdom
6
Germany
5
Spain
25
Sweden
3
Ireland
21
Austria
17
Portugal
36
Denmark
4
Slovenia
30
Germany
5
Czech Republic
35
Norway
22
Hungary
38
Estonia
28
Slovak Republic
42
Latvia
29
Poland
46
Lithuania
40
Poland
46
Russian Federation 63
Source: Global Competitiveness Report (2003), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Business Environments’ in the Baltic Sea Region
Key Observations
Context for
Firm
Strategy
and Rivalry
Factor
(Input)
Conditions
+ Companies competing globally on
innovation and differentiation
+ High formal openness of markets
– Low rivalry on many local markets
– High level of taxation, especially on
labor, reduces incentives
– Presence of distortive subsidies,
especially in Germany and Russia
+ Strong physical infrastructure,
especially for communication
+ High skill base of the labor force
+ Well developed science system
Related and
+ Public servants apply laws with
Supporting
neutrality; low level of corruption
Industries
– Significant level of bureaucracy
+ Presence of a number of globally
– Emerging weaknesses in the
competing cluster
education system
+ Strong basis for the activation of
existing clusters
Demand
Conditions
+ Demanding regulatory
standards, especially on
environmental issues
– Buyer sophistication,
including government
procurement, is only
average
Source: Global Competitiveness Report (2003), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Factor Conditions
Public expenditure
on education
as % of GDP, 2001
Spending on Human Resources
10%
Denmark
9%
Sweden
8%
7%
Norway
6%
Finland
Baltic Sea Region
Lithuania
Estonia
Latvia
Poland (North)
Central Europe
5%
Germany (North)
4%
3%
Iberian Peninsula
British Isles
2%
1%
0%
-2%
0%
2%
4%
6%
8%
Growth in Spending on Human Resources, CAGR 1995-2001
Source: EU Structural Indicators (2004), author’s calculation
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Factor Conditions
Average of Reading, Scientific, and Mathematical Literacy
Average Educational
Attainment, 2000
560
540
520
OECD average
500
480
460
440
420
Ja
pa
n
Ko
re
U
ni
Fi a
te
nl
d
a
Ki nd
ng
do
m
Ire
la
n
Au d
st
Sw ria
ed
B e en
lg
iu
Fr m
S w an
itz ce
er
la
n
C
ze No d
ch rw
a
U Rep y
ni
te ub
li
d
St c
at
e
D
en s
m
a
H rk
un
G gar
er y
m
an
y
Sp
ai
Po n
R
la
us
nd
si
an
Fe Ita
de ly
ra
t
P o i on
rtu
g
G al
re
ec
e
La
tv
ia
400
Source: OECD PISA-Study (2003), author’s calculation
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Context for Strategy and Rivalry
Market Pressure
Baltic Sea Region
Nordic
Germany
Baltic
Poland
Russia
Effectiveness of Anti-Trust Policy
10
11
5
43
45
73
Hidden Trade Barrier Liberalization
11
10
13
41
52
79
Foreign Ownership of Companies
12
16
11
52
47
93
Intensity of Local Competition
18
22
13
39
51
83
Tariff Liberalization
20
24
15
38
45
76
Administrative Burden for Start-Ups 22
21
34
34
52
84
Extent of Locally Based Competitors 23
37
4
46
46
48
Extent of Distortive Subsidies
17
93
26
78
70
29
• Nordic and Germany both formally open for competition but effective
competitive pressure is significantly lower in Nordic countries
• High differences in competitive intensity among Baltic countries, Poland,
and Russia
Source: Global Competitiveness Report (2003), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Context for Strategy and Rivalry
Taxes on Production
Direct Taxes and Social Security
Contributions as % of GDP, 2002
40%
Social security contributions
Direct taxes (labor, capital)
35%
30%
25%
20%
15%
10%
5%
sh
Is
l
es
a
ul
Br
iti
ni
ns
io
n
Pe
Ib
e
ria
n
ea
n
ro
p
Eu
en
t
ra
l
Ba
C
Source: Eurostat (2004), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
Re
g
ni
a
ua
Li
th
tv
ia
La
ia
to
n
Es
la
n
d
y
Po
m
an
G
er
or
wa
y
N
ar
k
d
en
m
D
an
Fi
nl
en
Sw
ed
ltic
Se
a
R
eg
io
n
0%
32
Copyright 2004 © Christian H. M. Ketels
ltic
Se
a
R
More
flexible
D
Less
flexible
eg
en ion
m
N ark
or
Sw way
e
Li de
th n
ua
n
Po i a
la
n
La d
G tvi
er a
m
a
F i ny
nl
a
R nd
us
si
a
Br
iti
sh
Is
le
s
U
Ire K
la
C
nd
en
tra
lE
ur
o
A u pe
s
C
ze H tria
ch un
Re gar
pu y
b
Po lic
Sl land
o
Sl G ven
ov e ia
ak r m
R an
ep y
ub
Ib
er
lic
ia
n
Pe
ni
su
Sp l a
Po ain
rtu
ga
l
Ba
Context for Strategy and Rivalry
Flexibility of Firing
80
70
60
50
40
30
20
10
0
Source: World Bank (2004), author’s analysis.
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Overall Cluster Strength in Europe
GCR Ranking
EU-14 + Norway
2
4
5
7
8
9
10
14
15
17
18
21
25
41
51
Finland
Italy
Germany
Denmark
Sweden
United Kingdom
France
Austria
Netherlands
Spain
Ireland
Belgium
Norway
Portugal
Greece
Accession Countries
31
32
33
34
40
44
45
53
68
Czech Republic
Lithuania
Latvia
Poland
Slovak Republic
Estonia
Slovenia
Hungary
Malta
Source: Global Competitiveness Report 2003/04 , Institute for Strategy and Competitiveness (2004)
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Copyright 2004 © Christian H. M. Ketels
Innovation Capacity
Rank on Innovation
Capacity Index, 2003
1
5
10
15
20
25
30
35
Br
iti
sh
C
Is
en
le
tra
s
lE
Ib
er
ur
ia
op
n
e
Pe
ni
ns
ul
a
Fi
nl
an
d
G
er
m
an
y
Sw
ed
en
D
en
m
ar
k
N
or
wa
y
Es
to
ni
a
La
tv
ia
Li
th
ua
ni
a
Po
la
nd
R
us
si
a
Ba
lti
c
Se
a
R
eg
io
n
40
Source: Michael E. Porter/Scott Stern (2003), author’s calculations
Baltic Sea Region Report – HH Conference 09-02-04 CK
35
Copyright 2004 © Christian H. M. Ketels
Innovation Capacity
Sub-Index by Country or Sub-Region
Proportion of Scientists and Engineers Index
Innovation Linkages Index
Operations and Strategy Index
Cluster Innovation Environment Index
Innovation Policy Index
Rank on Innovation
Capacity Sub-indices, 2003
1
10
20
30
40
50
60
70
80
Germany
Nordic countries
Baltic countries
Poland
Russia
Source: Michael E. Porter/Scott Stern (2003), author’s calculations
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Factor Conditions
Total R&D Spending
Gross Domestic R&D Expenditure as % of
GDP, 2001 (or latest available)
4.0%
3.5%
Nordic
3.0%
2.5%
Baltic Sea Region
2.0%
Central Europe
British Isles
1.5%
Germany (North)
1.0%
Baltic States
Iberian Peninsula
0.5%
Poland (North)
0.0%
-10%
0%
10%
20%
30%
Annual Growth of Gross Domestic R&D Spending, average of three preceding years - 2001
Source: EU Innovation Scoreboard 2003, author’s calculation
Baltic Sea Region Report – HH Conference 09-02-04 CK
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Copyright 2004 © Christian H. M. Ketels
Factor Conditions
Share of R&D Spending by Business
Business Share of Total R&D Spending,
2001 (or latest available)
80%
70%
60%
50%
40%
30%
20%
10%
Ba
lti
c
Se
a
R
eg
io
G
n
er
m Nor
an
di
c
y
(N
or
th
Po )
Ba
l
lti and
c
St
at
es
G Ce
n
er
m tra
an
lE
y
u
(S ro
ou pe
Sl
th
ov
ak ea
R st)
ep
ub
li
C
ze
Au c
ch
s
R tria
ep
ub
Sl lic
ov
en
ia
H
un
ga
r
Po y
la
nd
Br
Ib
er itish
ia
Is
n
Pe les
ni
ns
ul
a
0%
Source: EU Innovation Scoreboard 2003, author’s calculation
Baltic Sea Region Report – HH Conference 09-02-04 CK
38
Copyright 2004 © Christian H. M. Ketels