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National System of Innovation, Triple Helix and Intermediary Innovation Support Organisations in a Post-socialist Country: the Case of Latvia

  • Baltic Studies Centre

Abstract and Figures

In the formation of a knowledge-based economy an increasing attention is being paid to the fact that national competitiveness largely depends on the efficient linking of different actors within a national system of innovation. Among others, one of the crucial links in seen between university and industry in promoting innovation process. One of widely applied policy options for stimulating their interaction and knowledge transfer between them is through the promotion of intermediary innovation support organizations. This is a topical and disputable issue not only in developed countries, but also transitional economies as in the case of post-socialist countries like Latvia. However, issues related to the promotion of innovative development are context specific for these economies, thus direct application of western models to post-soviet conditions is problematic, since different and specific sets of problems have to be faced. This thesis examines the related theoretical approaches and concepts both on demand and supply side developed in the western world, and implications, when these are applied to other contexts. It aims not only to relate them to post-socialist countries, but also to promote dialogue between different western schools of thought themselves. Furthermore, this study aims to detect and analyse the developments of intermediary innovation support organisations in Latvia and their efficiency as well as the drawbacks in fulfilling tasks ascribed to them. The roles of Triple Helix elements, i.e., higher education and research organisations, industry and government, are examined in the formation and performance of these support organisations. Like in other European countries, there is a certain mismatch between the words and the deeds, though due to specific circumstances. On a meso level, the Triple Helix roles have not been fully comprehended and adopted yet by the involved actors. From a macro perspective, a well-functioning national system of innovation is still under formation. Alongside the need for a more profound governmental ideological and financial support and venturesome people, there is also a need for the change of governing mentality, as well as a further elaboration and optimisation of organisational and institutional structure.
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Department of Technology and Social Change
The European Inter-University
Association on Society, Science and
National System of Innovation, Triple Helix and
Intermediary Innovation Support Organisations in a
Post-socialist Country: the Case of Latvia
Anda Adamsone
Linköping University
International Programme in Science, Technology and Society
Systems of Innovation, Public Innovation Policy and Innovation Strategy
Word count: 20 626
I would like to express my deepest gratitude to those people who have kindly assisted me in
working on this thesis. First and foremost I owe an immeasurable gratitude to the study director
of our Master’s programme Leif Hommen, who has been of an untold help to me throughout the
whole programme as well as the thesis writing procedure with his responsiveness and valuable
comments on various stages of the thesis. David Doloreux is another person whom I would like
to express my deepest appreciation for taking the troublesome task of assisting me and guiding
my work on the thesis and for who’s help I didn’t have to ask twice. Of course, I can’t do without
thanking Charles Edquist, who, despite his overloaded schedule, showed interest in my work and
undertook the responsible role of my chief supervisor. Many thanks also go to Johanna Nählinder
from Tema-T doctoral programme for commenting on the theory part of my thesis. There have
also been several people whom I haven’t met face-to-face, but who have been responsive to my
inquiries. This is Martin Meyer from the Finnish Institute for Enterprise Management who
assisted me with some literature, and Richard Ferguson from Sweden and Nikos Varsakelis from
Greece, who kindly provided me with a set of research instruments previously used in their own
research. Work on this thesis wouldn’t have been so exciting without my course-mates their
comments on the initial ideas of this research as well as continuous sharing of our experiences. I
couldn’t have come that far and accomplished this work without the immense and continuous
support provided by my chief in Latvia Janis Kristapsons, who’s belief in me and in the
importance of my education has provided me with considerable opportunities and space for
personal development. Finally, neither the thesis nor my studies in Linköping would have been
possible without the financial support provided by the Swedish Institute through its Visby
Programme. Last, but not least, I have to thank my family and my closest person for being with
me and supporting me throughout this year both from a distance and back at home.
In the formation of a knowledge-based economy an increasing attention is being paid to the fact
that national competitiveness largely depends on the efficient linking of different actors within a
national system of innovation. Among others, one of the crucial links in seen between university
and industry in promoting innovation process. One of widely applied policy options for
stimulating their interaction and knowledge transfer between them is through the promotion of
intermediary innovation support organizations. This is a topical and disputable issue not only in
developed countries, but also transitional economies as in the case of post-socialist countries like
Latvia. However, issues related to the promotion of innovative development are context specific
for these economies, thus direct application of western models to post-soviet conditions is
problematic, since different and specific sets of problems have to be faced. This thesis examines
the related theoretical approaches and concepts both on demand and supply side developed in the
western world, and implications, when these are applied to other contexts. It aims not only to
relate them to post-socialist countries, but also to promote dialogue between different western
schools of thought themselves. Furthermore, this study aims to detect and analyse the
developments of intermediary innovation support organisations in Latvia and their efficiency as
well as the drawbacks in fulfilling tasks ascribed to them. The roles of Triple Helix elements, i.e.,
higher education and research organisations, industry and government, are examined in the
formation and performance of these support organisations. Like in other European countries,
there is a certain mismatch between the words and the deeds, though due to specific
circumstances. On a meso level, the Triple Helix roles have not been fully comprehended and
adopted yet by the involved actors. From a macro perspective, a well-functioning national system
of innovation is still under formation. Alongside the need for a more profound governmental
ideological and financial support and venturesome people, there is also a need for the change of
governing mentality, as well as a further elaboration and optimisation of organisational and
institutional structure.
Abbreviations …………………………….………………………………………...
1. Introduction ……………………………………………………………………...
1.1 Research area .........................................................…………..….........
1.2 Research aim ..........................................................................………...
1.3 Level of analysis ....................................................……………............
1.4 Research questions .......................................……………........….........
1.4.1 General ................................……………..............................
1.4.2 Specific .................................…………….............................
2. Theoretical framework …………………………….……………………………
2.1 Systems of Innovation approach ……………………………………..
2.1.1 Origins …………………………….………………………...
2.1.2 National systems of innovation ………..……………………
2.1.3 Definitions …………………………….…………………….
2.1.4 Justifying national perspective ……………….……………..
2.1.5 Concluding remarks ……………………………..…………..
2.2 Triple Helix approach to innovation studies ………………………….
2.2.1 Basic principles and concepts …………………………….…
2.2.2 Triple Helix and SI complementarity vs. substitution? …...
2.3 Technology transfer ………………………………….……………….
2.3.1 Definitions …………………………….…………………….
2.3.2 Transfer agent ……………………………………..………...
2.3.3 Transfer object …………………………………………..…..
2.3.4 Transfer mechanisms ………………………………………..
2.3.5 Transfer media …………………………….………………...
2.3.6 Technology recipient ………………………………………..
2.3.7 Concept application …………………….…………………..
2.4 Intermediary innovation support organisations ………………………
2.4.1 Origins and functions ………………………..……………...
2.4.2 Efficiency assessment …………………..…………………...
3. Methodology .........................……………..................................…………….......
3.1 Qualitative vs. quantitative ........……………………............................
3.2 Case studies ...........................…………...………….............................
3.3 Methods .....................................……………………............................
3.3.1 Interviews …………………………………………………...
3.3.2 Document analysis ………………………………………….
3.4 Ethical considerations …………………………………………………
3.5 Generalisability and validity ………………………………………….
3.6 Concluding remarks …………………………………………………..
4. Implications for post-soviet countries ………………..…………………….…
4.1 Emergence of the National systems of innovation …………...……….
4.2 Triple Helix role formation …………………………...………………
4.3 Developments in technology transfer ……………...………………….
4.4 Innovation support initiatives …………...…………………………….
5. The case of Latvia ……………………………………………………………….
5.1 Innovation policy framework in Latvia …………...…………………..
5.2 Case study outline and analyses ………….……….………………….
5.2.1 Latvian Technological Centre ………………….…………..
58 Origins …………………….………………………...
58 Aims …………………….…………………………..
59 Services and functions …………………….………..
60 Activities …………………….……………………...
60 Tenant firms ………………………………………...
5.2.2 Latvian Technology Park …………………………………..
62 Origins ………………………………………………
62 Aims ………………………………………………...
63 Services and functions ………………………………
64 Tenant firms ………………………………………...
5.2.3 Summary ……………………………………………………
5.2.4 Comparison and data interpretation ………………………..
67 Underlying intentions ……………………………….
67 Triple Helix application ……………………………..
68 Technology transfer …………………………………
73 Location preferences ………………………………..
76 Contributing development factors …………………..
77 Management ………………...………………………
78 Tenant firm co-operation ……………………………
81 International co-operation …………………………..
82 Role of innovation support organisations …………...
7 Words and deeds …………………………………..
84 Summary …………………………………………..
6. Conclusions and suggestions for further research …………………………....
Bibliography ……………………………………………………………………….
Books, journal articles and papers ………………………………………...
Web pages ………………………………………………………………...
Newspaper articles ………………………………………………………..
Appendices …………………………………………………………………….…..
Appendix 1: Basic interview questions for tenant firms ………………….
Appendix 2: Basic interview questions for LTC/LTP managers …………
Appendix 3: Interview list ………………………………………………...
Business Innovation Centre
Central and Eastern European countries
European Union
International Association of Science Parks
Innovation Centres in Eastern and Central Europe
Intermediary innovation support organisation
Innovation Relay Centre
Latvian Academy of Sciences
Latvian Technological Centre
Latvian Association of Technological Parks, Centres and Business Incubators
Latvian Technology Park
Local currency in Latvia
National System of Innovation
New technology based firms
Riga Technical University
Research and development
Systems of innovation
Small and medium-sized enterprises
Science and technology
Science and technology system
Triple Helix
Technology Park/Centre
Technology transfer
Union of Soviet Socialist Republics
1.1 Research area
During the last decades there has been an increasing understanding both in developed and
developing countries of the changing factors in influencing national competitiveness under
conditions of international globalisation. In both academic and policy discussions, innovation-
related issues have become matters of central interest to many of the actors involved, due to
recognition of the crucial impact of innovations on national competitiveness and the national
economy as a whole. Development, production and application of new products and processes
through the commercialisation of scientific results form the basis of the new knowledge-based or
learning economy. These processes have, to a smaller or larger extent, become imperatives of
economic development for the current generation.
The shift to this new perspective has also dictated a need for appropriate theories, concepts, and
analytical tools for exploring, understanding, and analysing these ongoing processes in terms of
their economic, political and social aspects. It has become vitally important to understand their
underlying principles, interconnections, consequences, and future prospects. Since the beginning
of Schumpeterian era in 1930s, which can be considered as the starting point for theory and
research aimed at understanding the role of innovation in the economic development, there have
been ever increasing attempts to map the patterns and dynamics of innovation.
Boundary breaking and blurring, in both geographical and institutional terms, is one of the most
characteristic traits of the new economy. Science, research, technology, and their combinations,
in both a literal and a figurative sense, are the keywords for this era. The shift to a knowledge-
based economy has introduced new actors, as well as assigning new roles to already exiting ones.
Linkages among actors involved in innovation processes are coming to be considered as vitally
important. Of these, one of the crucial links is that between higher education and research
organisations, on the one hand, and industry, on the other. In promoting innovation processes,
this linkage is frequently mediated by governmental initiatives. Such interactions are increasingly
coming to be viewed in a wider context - i.e., network of innovation-related actors on local,
sectoral, regional, national or international level. This perspective has led to the comparatively
recent development of systemic approaches to the analyses of innovation processes.
These practical and theoretical aspects of innovation are topical issues, not only in the developed
countries but also in transitional economies such as the post-socialist countries. In post-socialist
economies different and specific problems have to be faced, since they have recently experienced
a shift from planned to market economy, as well as a consequent shift in the direction of the
knowledge-based economy.
1.2 Research aim
The purpose of the current study is to investigate and analyse the development of innovation-
related linkages among academia, industry, and government from a systemic perspective.
Empirically, the study focuses on intermediary innovation support organisations (IISOs) such as
technology parks/centres (TP/C) in a post-soviet country (Latvia). These organisations are being
developed in order to fill the gap between higher education and research organisations and
industry. Of key importance to the study is their efficiency, as well as the drawbacks of these
IISOs in fulfilling the assigned tasks to them - especially with reference to the promotion of
technology transfer between the academic and industrial actors. These issues are seen as highly
relevant, since TP/Cs are a relatively new phenomenon in this region, and have not yet been
widely or intensively researched.
1.3 Level of analysis
Within the broader field of innovation studies it is possible to distinguish between three levels of
analyses - micro, meso and macro - where the first concentrates on the internal capabilities of
firms, the second focuses on interactions between and within subsystems, and the third takes a
more general view of the whole system.1 In this study, the focus will be on the meso level
referring, among other things, to the interactions between the firms and universities, which are of
prime interest. However, it is rather obvious that although the focus will be mainly on the meso
level, elements from the other two - macro and micro - levels will inevitably be touched upon, as
no strict demarcation between the three can be made.
1.4 Research questions
In order to be more specific about the issues of interest within this study a set of research
questions have been developed. These questions aim at making specific inquiries about the
relationships among different concepts, variables, phenomena, events, and things2 within the
chosen research area and the set level of analysis. If, following Flick, we divide research
questions into those ‘oriented towards describing states’ and those ‘describing processes’, then
the current research is more concerned with the latter type, which seek to ”describe how
1 Fischer, M. M. (2001) ”Innovation, knowledge creation and systems of innovation”. The Annals of Regional
Science 35, p. 213.
2 Madsen, D. (1983) Preparing the research proposal (Chapter 4). In Successful dissertations and theses - a guide to
graduate students’ research from proposal to completion. San Francisco/London: Jossey-Bass. p. 37.
something develops or changes”.3 But it must be noted that, far from being only exploratory and
descriptive, this study also aims to be of an explanatory character.
1.4.1 General research questions
In formulating research questions it is considered practical to make a distinction between ‘general
and specific research questions’4, or ‘research questions and subsidiary questions’5, where the
former are formed to guide the overall thinking within the project, while the latter are more
concrete and directly related to the empirical procedures.6 In regard to the general research
questions of this study, it has been found useful to make a further distinction between theoretical
and empirical ones. Thus, the main research questions are stated as follows:
Theoretical 1: To what extent can the Systems of Innovation (SI) perspective be combined
with the Triple Helix (TH) approach to innovation studies in relation to TP/Cs?
Theoretical 2: How can the selected theoretical approaches and concepts be applied to post-
soviet countries?
Empirical 1: What are the main postulated and actual operational principles of TP/Cs in
Latvia under the given institutional and organisational set-up?
Empirical 2: What are the main differences among firms located in different TP/Cs and these
organisations per se (i.e., among organisations within the category of TP/Cs)?
3 Flick, U. (1998) An Introduction to Qualitative Research. London: SAGE Publications. p. 51.
4 Punch, K. F. (1998) Introduction to Social Research: Quantitative and Qualitative Approaches. London: SAGE
5 Madsen, D. (1983), op cit.
1.4.2 Specific research questions
As can be inferred from the general empirical research questions, the independent variable here is
defined as ‘institutional and organisational set-up’, while the dependent variable is ‘operation of
TP/Cs’. Of course, the existence of other potential intervening or intermediary variables affecting
their operation must be acknowledged. Thus, no argument is made for any exclusive links
between the two main variables. Nevertheless, the study attempts, to the extent possible, to arrive
at sound conclusions as potential bases for further studies in this area. The specific research
questions derived from the empirical general research questions are accordingly as follows:
Under what circumstances were the selected TP/Cs established?
What are the roles of government/academia/industry in TP/Cs’ operation?
What are the contributing factors for successful TP/Cs operation?
What are the main technology transfer mechanisms used by TP/C firms?
As can be inferred from the general theoretical research questions, the theoretical framework is
built upon theories in the field of innovation studies with particular focus on two theoretical
approaches - ‘National Systems of Innovation’ (NSI) and ‘Triple Helix’ (TH). Other key
concepts include those of ‘technology transfer’ (TT), ‘intermediary innovation support
organisations’ (IISOs), and ‘innovation in post-socialist (CEE) countries’. As indicated above,
the mutual interrelation and compatibility of the two approaches, their positioning within a
broader theoretical discussion, as well as relation to the specified key concepts is examined. This
task constitutes a part of the thesis that is equally important as its empirical investigation. The
initial assumption is that application of these selected concepts forms a multistage model or
6 Punch, K. F. (1998), op cit, p. 34.
pyramid, with an increasingly focused subject gradually achieved with every next concept in the
following ascending order NSI-TH-TT-IISO (see Figure 1).
Intermediary Innovation Support Organisations
Technology Transfer
Triple Helix
National Systems of Innovation
Figure 1. Hypothetical conceptual pyramid
To avoid some misunderstanding it should be noted that this hypothetical model does not imply
that the given theories and concepts are embedded in a hierarchical way but rather they are
closely interconnected in a particular way in the given research area.
2.1 Systems of Innovation approach
2.1.1 Origins
During the post-war period there have been major changes in the conceptualisation of the process
of innovation emerging from and leading to different perspectives on this phenomenon. In this
regard Roberts has identified four main schools of thought in this field, arranged in the following
order of their emergence: (1) linear models, (2) interactive stages, (3) firm-centred models, and
(4) systems of innovation theory.7 In this context, SI theorising developed in a way as a counter
approach to the mainstream economics during the last couple of decades. It also embodies the
above-mentioned conceptual shift from the so-called linear model (either technology-push or
market-pull), which “conceives of commercial research and development (R&D) as applied
7 Roberts, R. (1998) “Managing innovation: The pursuit of competitive advantage and the design of innovation
intense environments”. Research Policy 27, p. 162.
science and envisions a smooth, uni-directional flow from basic scientific research to commercial
applications”8, to more interactive models of the innovation process, recognising its
multidimensional nature as well as the existence of numerous feedback loops among the steps in
product development and sources of knowledge outside the firm.9 Both the systemic and
interactive approaches to comprehending and analysing the innovation process argue in favour of
the existence of complex interdependencies and interactions between the various elements of the
innovation process and the influencing factors.10
The SI approaches are considered to have originated from the theories of interactive learning as
well as evolutionary and institutional theories.11 In brief, the interactive learning approach
implies the existence of complex interactions among different actors. Thus, the innovation
process is assumed to involve interactions between firms, between firms and other organisations,
and between organisations and existing institutions (in the form or rules and norms) that both
restrict and enhance innovative activity. In its turn, the evolutionary perspective on innovation
stresses the existence of mechanisms for both creating and promoting innovations, as well as
performing selection both before and after their emergence. SI approaches put considerable
emphasis on the institutions, or the so-called institutional set-up, and include both non-profit and
profit-oriented organisations by examining their mutual interactions within the defined unit of
analysis. In respect to the latter, it should be noted that originally the concept of SI first evolved
8 Edquist, C., Hommen, L. (1999) “Systems of innovation: theory and policy for the demand side”. Technology In
Society 21, p. 64.
9 Kline, S.J., Rosenberg, N. (1986) An Overview of Innovation. In The Positive Sum Strategy: Harnessing
Technology for Economic Growth. Landau, R., Rosenberg, N. (eds.) Washington D.C.: National Academy Press. Pp.
10 Edquist, C. (1997) Systems of Innovation Approaches - Their Emergence and Characteristics. In Systems of
Innovation: Technologies, Institutions and Organisations. Edquist, C. (ed.), London: Pinter, p. 2; Edquist, C.,
Hommen, L. (1999), op cit, p. 64-65
11 Edquist, C. (1997), op cit, p. 5-7; Edquist, C., Hommen, L. (1999), op cit, pp. 67-69.
in a national context and thus initially emerged as ‘National Systems of innovation’ (NSI)
approaches, which were only later supplemented by sectoral12, regional13 and technological14 SI
2.1.2 National systems of innovation
The foundations of the NSI approaches can be traced back to the work of Lundvall, Freeman, and
Nelson. Some initial ideas underlying this theoretical framework are ascribed already to Friedrich
List and his concept of ‘national system of political economy’. However, the current NSI concept
has developed rather independently of List’s ideas, which were later recognised only in
retrospect.15 The national perspective within the SI tradition can be grounded in the common
assumption that competitiveness and economic growth are national goals of first priority and that
innovations are a key factor in reaching these goals.16 Furthermore, as it is acknowledged that
nations differ in their ability to innovate, different national patterns of innovation are assumed to
exist that might be attributed to the existence of different NSIs.17 This can thus be seen as the
basic reason for the interest and analysis of the constituting elements of these NSIs. While among
other elements List put great emphases on the role of the state in co-ordinating and carrying
12 Breschi, S., Malebra, F. (2000) “Sectoral Innovation Systems: Technological Regimes, Schumpeterian Dynamics,
and Spatial Boundaries. In Systems of innovation: growth, competitiveness and employment Edquist, C., McKelvey,
M. (eds.) Vol. 1. Edward Elgar Publishing. Pp. 261-287.
13 DelaMothe, J., Paquet, G. (eds.) (1998) Local and Regional Systems of Innovation. Amsterdam: Kluwer
Academics Publishers; Cooke, P., Boekholt, P., Tödtling, F. (2000) The governance of innovation in Europe.
London: Pinter; Fischer, M. M. (2001), op cit.
14 Carlsson, B., Stankiewicz, R. (1991) “On nature, function and composition of technological systems”. Journal of
Evolutionary Economics 1 (2), pp. 93-118.
15 Freeman, C. (1995) “The ‘National System of Innovation’ in historical perspective”. Cambridge Journal of
Economics 19, p. 5; Lundvall, B.-Å., Johnson, B., Andersen, E.S., Dalum, B. (2002) ”National systems of
production, innovation and competence building”. Research Policy 31, p. 215.
16 Reger, G., Schmoch, U. (eds.) (1996) Organisation of Science and Technology at the Watershed: The Academic
and Industrial Perspective. Physia Verlag Heidelberg. p. 121.
17 Ibid.
through long-term policies for industry and the economy18, Freeman emphasises social and
political institutions that accompany technical innovations19. For his part, Lundvall accentuates
user-producer interaction within the national economy and the concept of learning as the
underlying principle of NSI. Among others, he sees the interactions between the firms and higher
education and research organisations as an integral part of any model of NSI.20 Finally, Nelson
sees competing and co-operating firms as the basic elements of NSIs, while also acknowledging
the role played by national universities as well as public funds.21 Generally, it is accepted that all
elements of NSIs are closely intertwined and a radical intervention at one point can cause
unforeseen effects in other areas.22
2.1.3 Definitions
Although it can be observed that the concept of NSI is a very broad one, several attempts at
defining it have been made. Of course, it is not possible to review all of them, but at least some
examples can provide a basic understanding about the state of art and problems in defining the
constituting elements of NSI (see Table 1).
All the enlisted definitions highlight one or another aspect of NSI, depending on the coverage of
the concept either in more general or more concrete terms. However, the following basic
elements are in common to them: (a) national framework, (b) public and private actors (firms,
18 Freeman, C. (1995), op cit, p. 7.
19 Niosi, J., Saviotti, P., Bellon, B., Crow, M. (1993) “National systems of innovation: in search of a workable
concept”. Technology in Society 15 (2), p. 208.
20 Lundvall, B.-Å. (1988), op cit, p. 363, 364.
21 Nelson, R. R. (1998) Preface to part V (National systems of innovation). In Technical Change and Economic
Theory. Dosi, G., Freeman, C., Nelson, R., Silveberg, G., Soete, L. (eds.), Pinter Publishers, p. 309.
22 Reger, G., Schmoch, U. (1996), op cit, p. 130.
higher education and research organisations, government), (c) networking and interactions
between the involved elements, and (d) knowledge communication.
Table 1. Selected NSI definitions
The NSI is a network of institutions in the public and private sectors whose activities
and interactions initiate, import, modify and diffuse new technologies.23
The NSI encompasses elements and relationships, either located within or rooted
inside the borders of a nation state, which interact in the diffusion and use of new, and
economically useful, knowledge.24
In a narrow sense the NSI includes organisations and institutions involved in searching
and exploring such as R&D departments, technological institutes and universities,
while in a broader sense it includes all parts and aspects of the economic structure and
the institutional set-up affecting learning as well as searching and exploring the
production system, the marketing system and system of finance present themselves as
sub-systems in which learning takes place.25
Niosi et al.
The NSI is the system of interacting private and public firms (either large or small),
universities, and government agencies aiming at the production of science and
technology within national borders. Interaction among these units may be technical,
commercial, legal, social, and financial, inasmuch as the goal of the interaction is the
development, protection, or regulation of new science and technology.26
Patel and Pavitt
The NSI is composed of the national institutions ((1) business firms, (2) universities
and similar institutions providing basic research and related activities, (3) a mixture of
public and private institutions providing general, education and vocational training,
and (4) governments) their incentive structures and their competencies, that determine
the rate and direction of technological learning (or the volume and composition of
change-generating activities) in a country.27
Thus, based on these common elements, a provisionally comprehensive definition of NSI could
encompass the totality of public and private organisations interactively operating in the
generation, application, commercialisation and diffusion of knowledge forming the base of new
or improved technology under the framework of existing institutional set-up within a particular
23 Freeman, C. (1987) as cited in McKelvey, M. (1991) How Do National Systems of Innovation Differ? Working
Paper No 79, LIUTEMA/T/WP-91/0079, p. 11.
24 Lundvall, B.-Å. (1992) Introduction. In National systems of innovation: Towards a theory of innovation and
interactive learning. Lundvall, B.-Å. (ed.), London: Pinter, p. 2.
25 Ibid, p. 12.
26 Niosi et al (1993), op cit, p. 212.
27 Patel, P., Pavitt, K. (1994) “National innovation systems: why they are important, and how they might be
measured and compared”. Economics of Innovation and New Technology 3, p. 79, 80.
country. Most likely, a more detailed definition is hardly possible, due to the very basic idea of
NSI, which stresses the existing differences and divergences between different countries in
respect to innovation processes. Rather, only a general definition, indicating the broad common
features or giving hints to the elements that should be looked for, can be put forward. The
alternative of providing an exhaustive definition is not viable, as it can in no way define
everything that should be seen as relevant.
2.1.4 Justifying national perspective
One increasingly topical issue in regard to NSI concerns the adequacy of the national level in the
emerging global economy that is now widely postulated. Many authors address the challenges
posed by globalisation, internationalisation, and the spread of transnational corporations, on the
one hand, and regionalisation, on the other, to question the relevance of the national perspective
and the nation state as an analytic category.28 Nevertheless, numerous attempts to refute such
claims have been made by various SI researchers. According to Lundvall, the NSI approach is
characterised by a belief in the importance of national systems in supporting and directing
processes of innovation and learning, even in the era of globalisation and regionalisation.29 The
coexistence of these divergent trends of simultaneous globalisation/localisation or international
unification/diversification is acknowledged as constituting ”two strictly interrelated aspects of
contemporary technological change”30.31 Though admitting the growing importance of external
28 Freeman, C. (1995), op cit, p. 15; Nelson, R. R., Rosenberg, N. (1993) Technical Innovation and National
Systems. In National Innovation Systems: A Comparative Analysis. Nelson, R. R. (ed.), Oxford University Press, p.
17; Lundvall, B.-Å. (1988) Innovation as an interactive process: from user-producer interaction to the national
system of innovation. In Technical Change and Economic Theory. Dosi, G., Freeman, C., Nelson, R., Silverberg, G.,
Soete, L. (eds.), London: Pinter, p. 360; McKelvey, M. (1991), op cit, pp. 4-5; Porter, M. (1990) The Competitive
Advantage of Nations. London: The Macmillan Press.
29 Lundvall, B.-Å. (1992), op cit.
30 Archibugi, D., Michie, J. (1997) “Technological globalisation or national systems of innovation”. Futures, Vol.
29, No.2, p. 122.
international connections, such national elements as education system, industrial relations,
technical and scientific organisations, government policies, cultural traditions and their influence
as still considered fundamental.32 This argument is also supported by Nelson’s study of 15
countries and their respective NSIs33 where it was concluded that although there are many
similarities, there are still a number of elements that demonstrate rather great divergence among
different NSIs to mention. These include, among other things, variations reflecting differences in
economic and political circumstances and priorities, size and degree of affluence, possession or
lack of natural resources, beliefs about the kind of role government should play in shaping
industrial development, and characteristic packages of fiscal, monetary, and trade policies,
education and training systems.34 Accordingly, the following arguments or determinants are put
forward in order to justify the national perspective35:
- market and natural resource specificity;
- higher frequency of informal collaborations within the national economy;
- technically-based interdependencies that are more prone to occur within national economies;
- politically driven linkages and determinants, such as science technology policies, that are
basically national in scope;
- the state, and the power attached to it, and the nation as a political entity;
- historical context of a particular country, and institutional path dependency;
- special national features, long-standing traditions, etc.
31 Niosi et al (1993), op cit, p. 222; Freeman, C. (1995), op cit, p. 16.
32 Freeman, C. (1995), op cit, p. 5.
33 Nelson, R. R. (ed.) (1993) National Innovation Systems: A Comparative Analysis. Oxford University Press.
34 Nelson, R. R. (1993) A Retrospective. In National Innovation Systems: A Comparative Analysis. Nelson, R. R.
(ed.), Oxford University Press, pp. 506-515.
35 Niosi et al (1993), op cit, p. 211; Edquist, C. (1997), op cit, p. 12, 18-19; Lundvall et al (2002), op cit, p. 215;
Reger, G., Schmoch, U. (1996), op cit, p. 130.
2.1.5 Concluding remarks
From its very emergence the SI approach has tried to direct or redirect attention to other
previously not considered factors in the innovation process. The proponents of this approach
stress that the contextual framework and the systemic interactions taking place within it are both
influenced by historic and institutional aspects of the system under study thus opening up space
for a better understanding of the ongoing processes and their outcomes in the field of innovation.
Unavoidably, there might be some uncertainty as to the possibilities of its conceptualisation and
operationalisation. Nevertheless it can serve as a useful framework for approaching innovation
phenomena, and as basis for mapping the field to be studied. The appropriateness and usefulness
of a particular SI approach should be determined according to the particular research question
and the case one wants to examine. In case of the current research, the NSI approach is seen to be
an appropriate one, first of all, as a broader theoretical framework and, secondly, as adequate in
the case of a small country like Latvia. Of course, due to the comprehensiveness of the concept,
not all of it can be covered within this thesis. Thus a more focused approach of particular
segments of the NSI is further elaborated. However, this does not mean abandoning the broader
SI framework. Within it, the prime importance is given to the roles and interactions between the
major actors, the policy framework, and historically specific factors to be elaborated in the
following chapters.
2.2 Triple Helix approach to innovation studies
In order to specify major actors within NSI and to have a deeper comprehension of their roles and
interrelatedness another theoretical approach, that of the Triple Helix, is adopted. In relation to
the NSI perspective, the TH approach is seen as a useful tool for focusing research.
2.2.1 Basic principles and concepts
Triple Helix approach to innovation studies as a theoretical frame of reference was introduced by
Henry Etzkowitz and Loet Leydesdorff.36 In particular, it has contributed to understanding the
changing interactions between university, industry, and government, all of which have lately
experienced significant changes in their roles and functions, as well as in their interrelations.37
The basic assumption underlying this approach is that each of these up to now relatively distinct
institutional (public, private and academic) spheres are now assuming tasks that were formerly
largely the province of the others, increasingly working together with a spiral pattern of linkages
emerging at various stages of the innovation process.38 According to the TH model, four
processes that are related to major changes in the production, exchange and use of knowledge
have been identified:39 (1) internal transformation in each of the helices, (2) the influence of one
institutional sphere upon another in bringing about transformation, (3) creation of a new overlay
of trilateral linkages, networks, and organisations among the three helices, and (4) recursive
effects of these inter-institutional networks representing academia, industry and government, both
on their originating spheres and on the larger society.
Interactions among the TH elements is not something brand new, since their development can be
traced back to the second half of the 19th century. However, the “codification of the network
mode as a regime of university-industry-government communications” is of a rather recent date,
36 Etzkowitz, H., Leydesdorff, L. (eds.) (1997) Universities and the Global Knowledge Economy: A Triple Helix of
University-Industry-Government Relations. London: Pinter.
37 Etzkowitz, H., Webster, A., Healey, P. (eds.) (1998) Capitalizing knowledge: new intersections of industry and
academia. Albany, NY: State University of New York Press.
38 Etzkowitz, H., Leydesdorff, L. (1997) Introduction: Universities in the Global Knowledge Economy, p. 2;
Etzkowitz, H. (1997) The entrepreneurial university and the emergence of democratic corporatism, p. 143. Both in
Etzkowitz, H., Leydesdorff, L. (eds.), op cit.
39 Etzkowitz, H., Webster, A., Genhardt, C., Terra, B.R.C. (2000) “The future of the university and the university of
the future: evolution of ivory tower to entrepreneurial paradigm”. Research Policy, Volume 29, Issue 2, p. 315.
basically being used only since the early 90s.40 This codification arose under conditions of
increasing acceptance of evolutionary thinking in economics, allowing for the systematic study of
interactions between more than two sub-dynamics as sub-systems.41 Development of the TH
approach is also grounded in an increased comprehension of the relevance of technological and
academic knowledge to industrial production, as well as social development and the policy
questions surrounding these relations.42
2.2.2 Triple Helix and SI complementarity vs. substitution?
According to the above-outlined basic principles of the TH approach, it seems to have originated
from a background rather similar to that of the SI approach. One common point of reference for
both approaches is evolutionary economics, since the proponents of the TH approach claim to use
an evolutionary perspective on innovation analysis.43 Leydesdorff and Etzkowitz refer to
different selection mechanisms, which constitute an important element in evolutionary
economics, and they also subscribe to the non-optimality thesis, stating that “under the emerging
TH regime of knowledge-based economic developments one can expect an endless transition of
innovation, rather than a journey to an assumed ideal model of socialism or capitalism”.44 In the
same way, rather extensive references to the interactive character of innovation process are made,
thus demonstrating certain common ground in the theory of interactive learning as well. It has
been argued, e.g., that “the study of the Triple Helix requires a model that complements the
40 Leydesdorff, L. (2000) “The triple helix: an evolutionary model of innovations”. Research Policy 29, p. 252.
41 Leydesdorff, L., Etzkowitz, H. (2001) ”The transformation of university-industry-government relations”.
Electronic Journal of Sociology 5, 4.
42 Leydesdorff, L., Etzkowitz, H. (2001), op cit.; Leydesdorff, L. (2001) Knowledge-Based Innovation Systems and
the Model of a Triple Helix of University-Industry-Government Relations. Paper presented at the conference “New
Economic Windows: New Paradigms for the New Millennium”, Salerno, Italy, September 2001.
43 Leydesdorff, L., Etzkowitz, H. (2001), op cit.
44 Ibid.
institutional perspective with a focus on interactive operations at the system level”.45 Besides,
although it does not explicitly state this, the TH perspective also pays a lot of attention to the
institutional set-up by looking at the norms and principles underlying academia and industry.
Last, but not least, there is a further similarity to SI in that the local specificity and uniqueness of
a particular ‘system’ is occasionally admitted by TH authors by referring to ‘nested subsystems’
and ‘local trajectories’ with interaction pattern variations abounding across countries.46
However, the relation of the TH model to the SI approach is not so straightforward. Although
they might have common grounds there are still some divergences between the two (see Table 2).
Etzkowitz and Leydesdorff claim the underlying model of TH to be analytically different from
that of NSI, since the latter “considers the firm as having the leading role in innovation”, while
the TH approach focuses on “the network overlay of communications and expectations that
reshape the institutional arrangements among universities, industries, and governmental
agencies”.47 On the other hand, the reverse argument can be made, that, while the SI approach is
more focused on firms and on the demand aspects48, the TH model deals more extensively with
university/academia or the supply side. Thus TH can be seen as a meso-level approach dealing
with relations among specific sub-systems, taking a more conceptual or a priori approach
directing attention to three specified categories of actors. In contrast, SI approaches are more
operational and open-ended, particularly at the macro level of NSIs.
45 Leydesdorff, L., Etzkowitz, H. (1997) A Triple Helix of University-Industry-Government Relations. In
Universities and the Global Knowledge Economy: A Triple Helix of University-Industry-Government Relations.
Etzkowitz, H., Leydesdorff, L. (eds.), London: Pinter, p. 158-159.
46 Ibid, p. 159.
47 Etzkowitz, H., Leydesdorff, L. (2000) “The dynamics of innovation: from National Systems and “Mode 2” to a
Triple Helix university-industry-government relations”. Research Policy 29, p. 109.
48 Edquist, C., Hommen, L. (1999), op cit.
Table 2. SI & TH: some similarities and differences
Systems of Innovation
Triple Helix
Common characteristics
- Evolutionary perspective
- Interactive character of innovation process
- Coexistence of different interrelated actors
- Institutional set-up
- National/local differences
- Broader spectrum (open-endness)
- Demand aspects
- More focused and strictly defined field
- Supply aspects
On the whole, even though differentiating themselves from the SI perspective, the proponents of
TH model still make rather extensive use of the SI concept by arguing that “interaction between
the different functions [of TH elements] is needed in order to generate and sustain the specific
configuration of an innovation system”49. Thus it could be argued that the TH model takes the SI
approach as the broader framework examining more specifically the relations between the three
identified types of actors, since it is noted that the result of the interactions underlying the TH
model “increasingly form the basis of regional, national, and multinational innovation systems in
various parts of the world”.50 However, there is still very limited communication between these
two theories, especially on behalf of the SI perspective advocates who make almost no reference
to the TH approach. Accordingly, this thesis makes an attempt to bring these two perspectives
together and use them as mutually complementary and enriching, rather than opposing
approaches to innovation studies. The foregoing discussion is also partly an answer to the
theoretical research question concerning their compatibility. Unavoidably, there are both
49 Leydesdorff, L., Etzkowitz, H. (2001), op cit.
common stands and differences between the two. Nevertheless, their origins are rather similar,
with only some focus distinctions that simply enrich our perception of the broader phenomena of
innovation processes.
2.3 Defining technology transfer
Irrespective of the major or minor differences between the two approaches addressed above, in
one way or another they both deal with issues related to the interactions between different actors
within the innovation system. And they both address the possibilities of improving the innovation
process, which is seen as crucial for the development of countries nowadays. Such improvements
can occur through different mechanisms, one of which is the linking of industry and academy.
Since the ultimate focus of this research is on IISOs and their role in providing means for the
stimulation of this link between the TH elements within NSI, it becomes essential to define what
is understood by this linkage through the concept of technology transfer.
2.3.1 Definitions
There is a wide range of literature implicitly or explicitly addressing the issue of technology
transfer and applying this concept since the early 1970s, thus providing a wide range of
definitions of this phenomenon (see Table 3). On the one hand, their variety can be explained by
the different disciplines and purposes of particular research projects.51 On the other hand, and on
a more general level this diversity arises from the fact that perceptions about the nature of the
50 Etzkowitz, H., Leydesdorff, L. (1998) A Triple Helix Model of Innovation in University-Industry-Government
Relations. Abstract of conference paper. International Sociological Association.
51 Bozeman, B. (2000) “Technology transfer and public policy: a review of research and theory”. Research Policy
29, p. 630.
transfer process are based on the underlying understanding of the innovation and innovation
process per se, which has changed substantially over time.52
Table 3. Selected definitions of technology transfer
Technology transfer is the movement of know-how, technical knowledge, or
technology from one organisational setting to another.53
Bessant and Rush
Technology transfer is the process through which technology moves from outside
sources to the organisation54.
Williams and
In a broad view, technology transfer reflects all or some components of the
process of moving ideas from the research laboratory to the marketplace.55
Technology transfer is the iterative movement of (this) applied knowledge via one
or more communication channels, with its communicating agents (..) being dyads
structured as groups or organisations.56
Technology transfer usually involves some source of technology, possessed of
specialised technical skills, which transfers the technology to a target group of
receivers who do not possess those specialised skills and who therefore cannot
create the tool themselves.57
Laamanen and
Technology transfer is the active interaction between two or more social entities
during which the sum of technological knowledge remains stable or increases
through the transfer of one or more components of technology.58
These selected definitions vary in their scope and coverage, which makes it harder to establish
precise boundaries of this phenomenon, however certain steps can be taken in order to overcome
this vagueness. An initial distinction has to be made between domestic and international or cross-
52 E.g., Bessant, J., Rush, H. (1995) “Building bridges for innovation: the role of consultants in technology transfer”.
Research Policy 24, pp. 97-114; Roberts, R. (1998), op cit.
53 Roessner as cited by Bozeman, B. (2000), op cit, p. 629.
54 Bessant, J., Rush, H. (1995), op cit, p. 97.
55 Williams, F., Gibson, D.V. (1990) Introduction. In Technology Transfer: A Communicative Perspective. Williams,
F., Gibson, D.V. (eds.), Sage Publications, p. 10.
56 Ibid, p. 13.
57 Leonard-Barton, D. (1990) The Intraorganisational Environment: Point-to-Point Versus Diffusion. In Technology
Transfer: A Communicative Perspective. Williams, F., Gibson, D.V. (eds.), Sage Publications, p. 45.
58 Laamanen, T., Autio, E. (1993) Technology Transfer between Research Laboratories and Industry: Measurement
and Evaluation. Technical Research Centre of Finland, Espoo, VTT Research Notes 1507, p. 16.
national technology transfer.59 Traditionally, much research has focused on the latter, by
examining technology transfer from developed countries to developing countries, thus implying
transfer across the boundaries or borders of a particular country. Such research is referred to as
“developing country oriented technology transfer research”.60 On the other hand, the concept of
domestic transfer or “innovation oriented technology transfer research” limits the scope of
research to the transfer process between different units within a selected country.61
A further strategy to operationalise a given concept of technology transfer can be accomplished
by a closer examination of the constituting elements of the technology transfer process -
respectively, ‘transfer agent’, ‘transfer object’, ‘transfer mechanisms’, ‘transfer media’, and
‘technology recipient’. This division into elements can provide a more elaborate understanding of
this rather complex process.62 However, it is important to comprehend that technology transfer is
not an instantaneous event but a time-based process - a complex activity involving multiple
actors and elements and various different patterns of interrelationship with a different set of
influential participants and issues at each stage in the process.63 Though not yet reflected in all
the above given definitions it is increasingly acknowledged that the process is a two-way or bi-
directional interaction rather than a one-way transfer.64 Thus, most definitions reject the linear
view of the transfer process and accept, instead, an interactive one which also forms the bases
59 Bozeman, B. (2000), op cit, p. 630.
60 Laamanen, T., Autio, E. (1993), op cit, p. 7.
61 Ibid.
62 Bozeman, B. (2000), op cit, p. 628, 629, 637; Buratti, N., Penco, L. (2001) “Assisted technology transfer to SMEs:
lessons from an exemplary case”. Technovation 21, p. 36.
63 Bessant, J., Rush, H. (1995), op cit, p. 98.
64 Meyer-Krahmer, F., Schmoch, U. (1998) “Science-based technologies: university-industry interactions in four
fields”. Research Policy 27, p. 842.
of SI and TH approaches.65 Now, more often the sharp distinction between the transfer agent and
recipient is being blurred, and it is used only for analytical purposes, as is also done here.
2.3.2 Transfer agent
By transfer agent, ‘donor’66, ‘source’67 or ‘transferor’68 one usually means university, a research
centre, or R&D departments of firms69. Essentially, this is the action subject, represented by
either an individual or organisation that generates or provides the elements to be transferred.
When speaking about the transfer agent, it is argued that such issues as the nature of the
organisation, its history and culture have to be taken into account70. This position, shared with
both NSI and TH, does not apply only to the transfer agent, but rather to the whole process of
technology transfer.
2.3.3 Transfer object
The concepts of ‘technology transfer’ and ‘technology recipient’ obviously point to technology as
the transfer object. However, it is important to define what one means by technology. In many
cases the technology is seen as hardware or a physical artefact, which considerably limits our
understanding of the characteristics of technology. In order to avoid this misconception it is
important to speak also about ‘knowledge transfer’, which is in many respects closely linked to
the notion of ‘technology transfer’. The link between these two concepts is rather inevitable, due
to the fact that it is not merely the product that is transferred but also knowledge of its use and
65 Buratti, N., Penco, L (2001), op cit, p. 36; Williams, F., Gibson, D.V. (1990), op cit, p. 16.
66 Buratti, N., Penco, L. (2001), op cit.
67 Williams, F., Gibson, D.V. (1990), op cit.
68 Laamanen, T., Autio, E. (1993),op cit, p. 8.
69 Buratti, N.,Penco, L. (2001), op cit, p. 36.
70 Bozeman, B. (2000), op cit, p. 639.
application.71 Thus, one has to take into consideration the multi-dimensional character of transfer
objects and technology transfer in general, as these are reflected in the forms, mechanisms, and
media by which technology is transferred - be it tangible, embodied, codified or tacit.72
2.3.4 Transfer mechanisms
A wide range of possible variants of transfer modes have been considered in both the theoretical
and empirical literature, which also refers to ‘transfer mechanisms’ and ‘transfer channels’. A
technology transfer mechanism is “any specific form of interaction between two or more social
entities during which technology is transferred”, while a technology transfer channel is “the link
between two or more social entities in which the various technology transfer mechanisms can be
activated”. 73 From the perspective of the technology recipient, Padmore et al have distinguished
between four transfer channels of innovation knowledge: (1) embodiment in acquired goods, (2)
embodiment in acquired services, (3) acquisition of intellectual property, and (4) acquisition of
human capital.74 On the other hand, Etzkowitz et al identify three degrees and mechanisms of
academic involvement for the transfer agent: (1) the product originates in the university but its
development is undertaken by an existing firm, (2) the commercial product originates outside of
the university, with academic knowledge utilised to improve the product, or (3) the university is
the source of the commercial product and the academic inventor becomes directly involved in its
commercialisation through establishment of a new company.75 In more concrete terms the most
commonly cited transfer mechanisms are contract research, co-operative research, sponsored
71 Ibid, p. 629.
72 Bessant, J., Rush, H. (1995), op cit, p. 98.
73 Laamanen, T., Autio, E. (1993), op cit, p. 17-18.
74 Padmore, T., Schuetze, H., Gibson, H. (1998) “Modelling systems of innovation: an enterprise-centred view”.
Research Policy 26, p. 616-617;
75 Etzkowitz, H. (1998) “The norms of entrepreneurial science: cognitive effects of the new university-industry
linkages”. Research Policy 27, p. 827.
research, workshops, seminars, licensing, patent purchase, publication screening, consultancy,
staff exchange, education of personnel, student training, use of lab facilities, lab visits, spin-offs,
informal contacts etc.76
2.3.5 Transfer media
Though the terms are sometimes used interchangeably, a differentiation between concepts of
transfer mechanism and transfer media should be made. If transfer mechanisms are the ones listed
above, then transfer media can be defined as the external conditions or milieu where the transfer
is carried out or encouraged. Among these, the importance of different intermediaries is
stressed.77 It is noted that interface organisations are essential to effective analysing, planning and
implementation of the transfer process by promoting awareness among technology recipients of
their needs, by monitoring technology markets, by guiding the initiation and successful process of
technology transfer, and by assisting technology recipients in technology adoption.78
2.3.6 Technology recipient
As to the technology recipient, several authors distinguish between transfer from a single source
to one receiver site (point-to-point transfer) and transfer from a single source to multiple receiver
sites (diffusion).79 Sometimes the distinction between these two modes is made by referring to
diffusion as passive while characterising point-to-point transfer as an active and intentional
process.80 The respective receiver site, or the technology recipients, are sometimes also referred
76 E.g., Bozeman, B. (2000), op cit, p. 641; Stankiewicz, R. (1986). Academics and entrepreneurs: Developing
university-industry relations. St. Martin’s Press Inc., New York, pp. 44-67.
77 Bessant, J., Rush, H. (1995), op cit.
78 Buratti, N., Penco, L. (2001), op cit, p. 36.
79 Leonard-Barton, D. (1990), op cit.
80 Laamanen, T., Autio, E. (1993), op cit.
to as ‘destinations’81, or ‘transferees’82, and these can either be governmental agencies, non-profit
organisations, or businesses.83 However, one usually means by technology recipients the firms
that may either directly use or co-develop the technology.84
2.3.7 Concept application
Given these theoretical concepts, the following scheme can be made for their application in the
current research (see Table 4). Initially, it should be clarified that by choosing to adopt the
framework of NSI and TH approaches, this research focuses mainly on the domestic technology
transfer, although international aspects are touched upon as well. The primary transfer source in
the current research is identified as higher education and research organisations. Accordingly, the
transfer media is embodied first of all in the particular NSI - and, on a more particular level, in
IISOs - while the recipients are firms hosted by these organisations. As to the transfer
mechanisms, the whole spectrum of those listed above in section 2.3.4 is initially taken into
consideration, with final selection being made through the analysis of research results. The same
is true as to the transfer object. This research deals primarily with the point-to-point transfer
mode, thus paying less attention to the diffusion process.
Table 4. Technology transfer scheme application
Transfer agent
Transfer object
Transfer media
Transfer mechanism
Higher education
and research
codified, tacit)
innovation support
Tenant companies
81 Williams, F., Gibson, D.V. (1990), op cit, p. 13.
82 Laamanen, T., Autio, E. (1993), op cit, p. 8.
83 Bozeman, B. (2000), op cit, p. 643.
84 Buratti,N., Penco,L. (2001), op cit, p. 36.
2.4 Intermediary innovation support organisations
As already noted above, different technology transfer media are considered to play an
increasingly important role in promoting innovative development. In this respect, one of the
subsystems of the NSI can be seen as being formed by different IISOs that operate within a
particular country and that are basically initiated by governmental bodies in order to create a
supportive environment for new technology-based firms. Since this kind of organisation is of
prime interest for the empirical study of this thesis, the following section will develop insight into
their origins, functions and some previous research carried out on them.
2.4.1 Origins and functions
The idea of IISO originally came from the USA. Stanford Industrial Park, Silicon Valley,
Research Triangle Park and Route 128 were initial US examples of this kind of organisation in
the 1950s, and were enthusiastically followed by European countries in the coming decades.85
The original idea of IISOs was to provide assistance for the technology transfer from the
academy to industry, but over time a range of other functions and tasks have been added86, e.g.,
given the cuts in university funding as an external stimulus for their own commercial activities.
These organisations have taken various forms as well as various names in different times and
different places. This could be due to the diversity of local contexts - various degrees of
development and the particular needs of regions and countries - as well as evolution of the idea
85 Stankiewicz, R. (1986), op cit, p. 68; Massey, D., Quintas, P., Wield, D. (1992) High-tech Fantasies: Science
parks in society, science and space. Routledge, p. 9; Roberts, R. (1998), op cit, p. 169; Storey D.J., Tether, B.S.
(1998) ”Public policy measures to support new technology-based firms in the European Union”. Research Policy 26,
p. 1037-1040.
86 Sanz, L. (2001) “Becoming knowledge farms: the role of science/technology parks in the knowledge economy”.
Paper presented at the conference “Baltic Dynamics 2001”, Riga, Latvia, September 14-16.
over time.87 The end result has been, in any case, a great variety of existing ‘models’.88
Accordingly, the relevant literature is full of a wide range of terms like ‘science park’,
‘technology park’, ‘research centre’, ‘technopole’, ‘research park’, ‘innovation centre’, ‘business
incubator’, ‘technocell’, ‘industrial zone’, ‘industrial park’ and number of other terms that have
to do with business support. However, these can be disaggregated, first, on the basis of whether
they aim to support business in general or specifically innovative businesses, and, second,
according to whether they provide services and/or infrastructure. The primary interest in this
research is on organisations supporting innovative business by providing them with both
infrastructure and services, thus limiting the available spectrum of coverage. Nevertheless, even
after this elimination, variations still abound. By now, several international as well as numerous
national associations have been formed for bringing together the representatives of these
organisations in order to share their experiences, arrive at common problem solutions, and
establish some common standards and principles of operation, which are also reflected in
definitions of various kinds of IISOs and their tasks (see Table 5).
As can be inferred from these definitions, each of these forms of IISOs has some certain
specificity, however, there are several basic elements that are present in all of them. Among these
one could mention: (a) existence of managerial staff, (b) provision of physical infrastructure and
(c) services, as well as (d) orientation to small, high-tech companies as the main tenants, and (e)
facilitation of technology transfer as one of the main tasks.
87 Gibb, J.H. (1985) Science parks and innovation centres: their economic and social impact. Proceedings of the
conference held in Berlin, 13-15 February 1985. Commission of the European Communities. Amsterdam: Elsevier
Science Publishers.
88 Sanz, L. (2001), op cit.
Table 5. Key definitions of IISOs
Definition of IISOs
Association of
Science Parks
(IASP) 89
A Science Park is an organisation managed by specialised professionals, whose
main aim is to increase the wealth of its community by promoting the culture of
innovation and the competitiveness of its associated businesses and knowledge-
based institutions. To reach these goals a Science Park stimulates and manages the
flow of knowledge and technology amongst Universities, R&D institutions,
companies and markets; facilitates the creation and growth of innovation-based
companies through incubation and spin-off processes; and provides other value-
added services as well as high quality space and facilities.
This definition encompasses also other terms such as Technology Parks, Research
Parks, Technology Precincts, Technopoles and the like. It is not implied that such
terms are always synonymous, but the IASP definition comprises those aims and
features that are common to all of them.
United Kingdom
Science Park
(UKSPA) 90
A Science Park is a business support initiative whose main aim is to encourage and
support the start-up and incubation of innovative, high-growth, technology-based
businesses through the provision of: (1) infrastructure and support services including
collaborative links with economic development agencies; (2) formal and operational
links with centres of excellence such as universities, higher educational institutes
and research establishments; and (3) management support actively engaged in the
transfer of technology and business skills to small and medium-sized enterprises.
Association of
Research Parks
(AURP) 91
A university research park is a property-based venture which has:
existing or planned land and buildings designed primarily for private and public
R&D development facilities, high technology and science based companies, and
support services;
a contractual and/or formal ownership or operational relationship with one or
more universities or other institutions of higher education, and science research;
a role in promoting R&D by the university in partnership with industry, assisting
in the growth of new ventures, and promoting economic development;
a role in aiding the transfer of technology and business skills between the university
and industry tenants.
Research Park’ is an expression often used in the USA, whereas in Canada, Europe,
Asia and Latin America, expressions such as Scientific Park or Technology Park are
89 International Association of Science Parks (IASP)
90 United Kingdom Science Park Association (UKSPA)
91 Association of University Research Parks (AURP);
National Business
(NBIA) 92
Business incubation is a dynamic process of business enterprise development.
Incubators nurture young firms, helping them to survive and grow during the start-up
period when they are most vulnerable. Incubators provide hand-on management
assistance, access to financing and orchestrated exposure to critical business or
technical support services. They also offer entrepreneurial firms shared office
services, access to equipment, flexible leases and expandable space - all under one
Association of
Parks, Centres
and Business
A Technological/Innovation Centre (TC) is a structure, which can offer services
and support mainly to technology-oriented (knowledge-based) enterprises. Basically,
a TC has 3 functions: the same as for the business incubator (rooms for lease,
technical and secretarial services, telecommunications, etc.); specialized
consultations and information to technology-oriented business, a support in the
participation in exhibitions and international cooperation, advertising new products,
etc.; advisory services for getting loans and other kind of financial support.
A Science / Technology Park (TP) is a defined area of land and a complex of
several buildings to be used for knowledge/technology based research, development
and production. Here can be located a number of higher educational and research
institutes, technological/innovation centres, business incubators, consultant bureaus,
service centres, etc. The basic function of a TP is to manage this area and buildings
for the efficient development of high-tech business and to provide permanent links
between research laboratories and technology-oriented companies and to promote
the establishment and growth of new innovative companies, including joint venture
companies. Usually the TP are established near Universities or Research centres. For
the TP tenant companies it is possible to provide certain fiscal and economic
It can be noted, though, that the IASP definition is applicable not only to science parks but also to
other mentioned IISOs. Similar implications arise from the AURP definition, where the notions
of ‘park’ and ‘incubator’ are used almost as synonyms, and where reference to different name
preferences in different parts of the world is made. Besides it could be argued, that the available
definitions of various IISOs are still well open in order to not eliminate any potential candidates
to be located within those. These observations support the conclusion that the selection of the
name might occasionally have something to do with ‘taste’, rather than exclusively with some
92 National Business Incubator Association (NBIA).
93 Latvian Association of Technological Parks, Centres and Business Incubators (LTICA)
highly distinct functions and operation principles. This view is also held by Roberts, who
proposes to cover all these terms under ‘innovation intense environments’, which he defines as
“special places, which are purported to accelerate the rate of innovation and proliferation of new
high technology products and industries”94. As this author argues, “in spite of debate over
appropriate form, all terms fundamentally denote special environments in which the stages of the
innovation process can be both accelerated and controlled”.95 Besides it has to be acknowledged
that not all organisations named after one of the above-mentioned terms can be attributed the
characteristics of an IISO and not all organisations fostering innovative business and fulfilling the
respective functions contain the above-mentioned terms in their names. Thus, in order to define
an organisation as one supporting innovation, one has to look not only for its name, but also for
the functions it aims to perform.
2.4.2 Efficiency assessment
Whatever we name the organisations discussed above, the thing that is of prior importance is how
effective they are in actually performing their tasks. There is a range of views on their
performance, but one is again confronted with divergent evidence and opinions ranging from
highly laudatory to strictly negative and sceptical ones.
Despite their rather extensive promotion in different policy documents on both EU and national
levels, it is notable that academic studies of IISOs have generally tended to be quite critical of
their underlying assumptions and actual performance.96 These organisations have been criticised
for relying on an outdated, linear, model of innovation, thus reflecting an assumption that
94 Roberts, R. (1998), op cit, p. 160, 169.
95 Ibid, p. 170.
technological innovation stems from scientific research and that IISOs can provide the catalytic
incubator environment for the transformation of ‘pure’ research into production.97 This argument
is put forward by Massey et al in their seminal work High-tech Fantasies: Science parks in
society, science and space where they argue that these parks are based on “a rigid and not
necessarily very productive model of invention and innovation”98, since “at the core of the
science-park concept lies the idea that scientific knowledge leads in some linear progression to
technological innovation”99. Their main critique is directed against the postulated aims and tasks
attached to this kind of IISO, and its actual operation in regard both to the tenant firm selection
and IISO performance, which in many cases is not consistent.
A somewhat less critical stand is taken by other researchers, who conclude that location in, e.g., a
science park does not significantly influence the growth and survival of the new technology
based firms (NTBF), but the existence of these IISOs is likely to stimulate the formation of
NTBFs that would not otherwise have been established and thus “constitutes an ‘economic’
magnet for the clustering of technology-based firms which enhances local economic
development”.100 It is also argued that although the location in a science park might not make any
substantial contribution to innovation, it “does confer status and prestige and these indirectly
promote technology transfer and information flows”.101 Another point to be made here is that
recently it has been acknowledged that much of the success or efficiency of an IISO depends on
the quality and managerial skills of the management of the particular organisation.102
96 Phillimore, J. (1999), op cit, p. 674.
97 Ibid, p. 673; Westhead, P., Storey, D. J. (1995), op cit, p. 349.
98 Massey et al (1992), op cit, p. 3.
99 Ibid, p. 34.
100 Storey, D. J., Tether, B. S. (1998), op cit, p. 1040.
101 Bozeman, B. (2000), op cit, p. 641.
102 Sanz, L. (2001), op cit.
Another way to evaluate the performance of these organisations is seen in the comparison
between the performance of firms located on and off these sites.103 This seems to be a very
promising and grounded approach. Again no uniform and consistent results have been yielded by
the empirical studies carried out by different researchers. There exists divergent evidence in
regard to whether there are substantial, slight, or indistinct differences between the two groups of
firms. One reason for these variations might be attributed to the different countries, different
aspects, and different samples selected for the respective surveys. Besides it also has to be taken
into account that these organisations are in many countries a rather recent development, besides
their long-term objectives are difficult to evaluate conclusively in the early stages of their
It can be observed that the evaluation aspect mostly involves referring to success and efficiency,
which are widely used terms but rarely comprehensively defined or operationalised. Many
researchers avoid defining them at all, while others acknowledge that this kind of evaluation is
based on highly subjective approaches and views. As noted by Bozeman, many of these studies
“never make clear what is meant by effectiveness and seem simply to assume that we all hold
some unspecified unitary concept of effectiveness”.105 One proven practical solution to this
problem already touched upon above and also further utilised in this study, is offered by Massey
et al, whereby the evaluation of the success of these organisations is determined in relation to
their self stated aims and goals. In line with this approach, evaluation should seek to determine
103 E.g., Westhead, P., Storey, D.J. (1995), op cit; Ferguson, R. (1999) What’s in a Location? Science Parks and the
Support of New Technology-based Firms. Doctoral thesis. Swedish University of Agricultural Sciences. Uppsala;
Colombo, M. G., Delmastro, M. (2002) “How effective are technology incubators? Evidence from Italy”. Research
Policy, Vol. 31, Issue 7, pp.1103-1122; Lindelöf, P., Löfsten, H. (2002) “Growth, management and financing of new
technology-based firms assessing value-added contributions of firms located on and off Science Parks”. Omega,
Volume 30, Issue 3, June, pp. 143-154.
104 Storey, D. J., Tether, B. S. (1998), op cit, p. 1040, 1041.
whether and how these aims and tasks are accomplished, analysing organisations “on their own
terms based on their own self-conceptualisation and on their own stated objectives”.106 Massey et
al refer to this as the ‘popular conceptualisation’ which is used, e.g., in the policy literature
produced by the IISOs themselves, and later reproduced by other interested subjects, and which
consists of the actual definition and postulated causal relations and effects that are expected to
result from the stated characteristics.107
It has to be admitted that the review of available studies gives a better understanding of the
researchable elements, potential bottlenecks and analytical tools that can be used in investigation
of IISOs. However, the literature does not provide a coherent and uniform picture of the actual
efficiency of this kind of initiative. The divergent results and evaluations are altogether rather
confusing, asking for further research in the field in order to find at least some basic common
principles underlying the operation and success or failure of IISOs. Notably, very little
investigation in this field has been done so far in the context of newly independent post-soviet
countries confronted with the new mechanisms of a market economy.
Based on the theoretical concepts outlined in the preceding chapters, an empirical study has been
carried out in order to see their application in ‘real life’ and to generate some additional insights
into the related issues in a particular setting. In this chapter, a brief overview is given of the
study’s methodological approach and the specific methods used in gathering the relevant data, as
well as ethical and generalisability/validity issues.
105 Bozeman, B. (2000), op cit, p. 637.
106 Massey et al (1992), op cit, p. 29.
3.1 Qualitative vs. quantitative approach
In order to obtain the necessary data for answering the stated research questions initially
application of both qualitative and quantitative methods was planned. The research design did not
advocate taking sides in the ‘paradigm wars’108, and adopted Flick’s standpoint that “qualitative
and quantitative research are not incompatible opposites which should not be combined”109.
However, after a closer initial familiarisation with the selected cases, a choice was made in
favour of the qualitative approach, dictated by the historical and institutional specificity in
comparison to similar cases studied before. It was acknowledged that the phenomenon to be
studied was far from well comprehended within the given social, political and economic context
thus demanding a deeper exploration than could be possible with quantitative methods. The latter
are usually used when quantitative characteristics of a known phenomenon have to be revealed.
At the same time, several complementary research methods were chosen in order to achieve as
broad a coverage of the particular research issue as possible, thus ensuring data triangulation.
Taking data from several sources increases one’s chances of being able to establish trustworthy
3.2 Case studies
The basic approach adopted for accomplishing the study is the case study strategy with its basic
idea that a limited number of cases are studied in detail, with the main objective being to
“understand the case in depth, and in its natural setting, recognising its complexity and its
107 Ibid, p. 13.
108 Oakley, A. (2000) Paradigm Wars (Chapter 2). In Experiments in Knowing: Gender and Method in the Social
Sciences, pp. 23-43. London: Polity Press.
109 Flick, U. (1998), op cit, p. 40.
110 Ibid, p. 50; Oakley, A. (2000), op cit, p. 67.
context”.111 As noted by Yin, case studies are especially appropriate (a) for answering ‘how’ and
‘why’ questions, (b) when the investigator has little control over events, and (c) when the focus is
on a contemporary phenomenon within real-life context.112 Since the research questions posed
and the research area specified met all these criteria, the case study approach was selected as the
most appropriate one.
In order to identify a particular case for study, case sampling was carried out. Accordingly,
Flick’s division between ‘case sampling’ and ‘sampling groups of cases’ was used, whereby the
former implies, e.g. in an interview study, the decision about which persons to interview, and the
latter from which groups these should come.113 This procedure is outlined also by Yin, who
stresses paying attention to the general definition of the case, followed by further clarifications of
the unit of analysis.114 With reference to the principles outlined above, research is based upon
what Yin refers to as ‘multiple embedded case studies’115 of two IISOs in Latvia - the Latvian
Technological Centre (LTC) and the Latvian Technology Park (LTP). Further according to Yin,
embeddedness often implies that ”the same case study may involve more than one unit of
analysis” which occurs ”when, within a single case, attention is also given to a subunit or
subunits”116. Based on this principle, this research deals with multiple units of analysis,
respectively - (1) host organisations, and (2) firms hosted by these organisations.
Case selection for this study was based on theoretical, rather than statistical, sampling. Thus, the
cases are not considered to be statistically ‘representative’, but theoretically ‘typological’. The
111 Punch, F. K. (1998), op cit, p. 150.
112 Yin, R. K. (1994) Case study research: design and methods. 2nd ed. London: Sage Publications. p. 13.
113 Flick, U. (1998), op cit, p. 62.
114 Yin, R. K. (1994), op cit, pp. 31-33.
main sampling criteria for ‘groups of cases’ were (1) time of operation, (2) activity, and (3)
branch coverage. The first criterion was based on the argument that recently established
organisations of this kind might not provide a substantial source of analysis at this particular
moment, since it takes some time before any results can be achieved. The second criterion was
based on the argument that there should be a certain level of relevant activity in order to study
more dynamic cases. Finally, cases with unlimited branch coverage were given priority to avoid
branch specific bias and to provide bases for better case comparability. Based on the three
outlined criteria, two IISOs in Latvia were selected that in their coverage group have been on the
scene for the longest period of time and have declared co-operation between scientific and
business communities as one of their main areas of activity. As to the ‘case sampling’ three as far
as possible divergent tenant firms were selected in each ‘case group’, based on their location and
main business activity.
3.3 Methods
One of the most important sources of information in case studies is widely considered to be
interviews, as interviews are said to be “a very good way of accessing people’s perceptions,
meanings, definitions of situations and constructions of reality”.117 In this study, interviews were
used as one of the main data collection methods, with 2 semi-structured interviews conducted
with the leading managers of LTC and LTP and 6 (3+3) semi-structured interviews with tenant
firm managers of these organisations.118 The first two interviews can be classified as ‘data based
115 Ibid, p. 58.
116 Ibid, p. 49.
117 Ibid, pp. 88-91; Punch, F. K. (1998), op cit, pp. 174-184.
118 See interview questions and interview lists in Appendices (1-3).
on privileged information’, where the justification for interviews is based on the value of contact
with key players in the field who can give privileged information.119 In turn, the other interviews
were used for data triangulation purposes, in order to have representation of the different views
given from different perspectives of host and tenant. Additionally, interviews with the concerned
actors available in local newspapers were used where appropriate. As a complementary source of
evidence in the form of observations of the LTP/LTC environment in terms of physical
infrastructure, location and general attractiveness during the interview arrangement/visit was
3.3.2 Document analysis
Another method commonly used in case studies, and also applied in this research is document
analysis, since both historical and contemporary documents are a rich source of data for social
research.120 Besides, when used in conjunction with other methods and data types, documents can
be important for triangulation, mentioned above.121 There are a wide variety of documents that
can be used for analysis. However, in the current study the relevant documents include, on the
one hand, governmental documents in the form of related programmes, strategies and laws
representing the policy dimension. On the other hand, the home pages of the selected
organisations were also used as sources of information, mainly in regard to their self-presentation
and self-image dimension, constituting an important element in further analysis and interpretation
of interview data.
119 Dencombe, M. (1998) The Good Research Guide for small-scale social research projects. Open University Press.
p. 111.
120 Punch, F. K. (1998), op cit, p. 190.
121 Ibid.
3.4 Ethical considerations
As in almost any social research there was a set of ethical issues that had to be taken into account
and clarified in regard to procedures before, during and after ‘entering the field’. In the current
research the field was approached by the researcher as an employee of her current workplace
which is a public research organisation thus potentially adding more respect to the researcher’s
status. In regard to interviews, the anonymity issue was negotiated with respect to identifying the
respondent in the final material. As to the identification of the two selected organisations, the
decision was made to disguise them since, first of all, this is the practice commonly used by other
researchers in this field, secondly, there is a little likelihood that in such a small sample their
identity could be hidden, and, thirdly, there were too many research questions that couldn’t be
answered without giving particular details about the selected cases.
3.5 Generalisability and validity
The final issue that has to be clarified and that is repeatedly stressed when analysing pros and
cons of the case study approach concerns its generalisability. According to Yin “analogy to
samples and universes is incorrect when dealing with case studies (..) because survey research
relies on statistical generalisation, whereas case studies rely on analytical generalisation”122.
With the latter type of generalisation “a previously developed theory is used as a template with
which to compare the empirical results of the case study”123. The generalisability of this study is
considered to be rather high since the selected organisations can be considered as typical and
taken from a very limited population of this kind of organisations in the given country. In
122 Yin, R. K. (1994), op cit, p. 43, italics original.
123 Ibid, p. 38.
addition, its generalisability is also supported by underlying theoretical implications of a broader
scope, with the cases being used to contribute tests of existing theories.
In its turn, research validity124 is secured by this generalisability particularly, external validity,
or establishment of the domain to which a study’s findings can be generalised. Reliability, i.e.,
insuring that operations of a study can be repeated with the same results, is achieved by providing
the readers with the list of main interview questions, as well as a list of the reviewed literature.
Further, construct validity, which refers to establishing correct operational measures for the
concepts being studied, is accomplished through the use of multiple sources of evidence,
reviewed above. Finally, internal validity, requiring to establish a causal relationship between
conditions, is achieved by trying to establish this relationship between the identified variables.
3.6 Concluding remarks
The chosen methodological framework and the particular methods have both resemblance with
those used in other similar studies as well as some particularities. Case study approach is the one
most commonly used in studying IISOs with some variations in the number of the cases as well
as their geographical location. Similarly, the document analysis is rather widely distributed
among IISO researchers. However, as to the general methodological approach, this kind of
studies tends to be more of a quantitative kind with questionnaire surveys as the main data
gathering method. In this respect, the current research is somewhat different by using a less
widely applied method (in this research area) of semi-structured interviews. These are expected
to provide a better initial insight into the problem area, which might be better comprehended or at
least more widely studied in contexts other that post-soviet countries.
Following the outline of the key concepts and theories as well as more clear-cut identification of
the empirical case study framework, this section takes the form of an applied theoretical chapter.
Since the second theoretical research question of this study concentrates on the application of the
previously discussed theories and concepts to the transitional economies and in particular to the
Central and Eastern European countries (CEECs), then some review of already available
projections is in order here. An additional aim for doing this is to outline the historical and social
context of the developments in these countries as the background for the selected case study,
since the adopted NSI approach emphasises the role of path-dependency and context specific
aspects in its analyses. Of course, the development patterns of these different countries vary.
However, there are some basic characteristics inherited from the socialist period that are common
and might be considered essential.
4.1 Emergence of the National systems of innovation
When analysing the transformations now occurring in the former socialist countries in regard to
R&D, many actors voice a common view that these countries were formerly characterised by
what has been defined as the socialist science and technology system (S&TS), which was based
on a linear model of innovation.125 They argue that this model reflects the institutional separation
of R&D that was present in these countries, whereby innovation was separated from production
124 Yin, R. K. (1994), op cit, pp. 40-45.
125 Meske, W., Mosoni-Fried, J., Etzkowitz, H., Nesvetailov, G. (eds.) (1998) Transforming Science and Technology
Systems the Endless Transition? NATO Science Series 4: Science and Technology Policy, Vol. 23. Amsterdam:
IOS Press; Radosevic, S. (1999) ”Transformation of science and technology systems into systems of innovation in
central and eastern Europe: the emerging patterns and determinants”. Structural Change and Economic Dynamics
10, pp. 277-320; Acha, V., Balazs, K. (1999) ”Transitions in thinking: changing the mindsets of policy makers about
innovation”. Technovation 19, pp. 345-353; Chataway, J. (1999) ”Technology transfer and the restructuring of
science and technology in central and eastern Europe”. Technovation 19, pp. 355-364. Balazs, K., Faulkner, W.,
and the market.126 In many cases, an NSI is seen as the transformation outcome. However,
opinions differ slightly as to whether it is an already present or only emerging or potential one.
According to Slavo Radosevic, it is obvious that one can’t speak of SI in socialist economies. He
argues in favour of a gradual emergence of different SIs in these countries as an “outcome of
mutual interaction of historical heritage, especially organisational path-dependency,
recombination of existing competencies into new organisational forms, and radical economic
change generated by new incentives and opportunities”.127 Still, he does not acknowledge that
NSIs have already been formed, since extensive organisational superstructure and R&D
capacities should not be confused with the notion of innovation system, which implies knowledge
links and knowledge flows in the innovation process as a collective activity”.128 From this
perspective the emergent NSIs in the former socialist countries are still considered to be very
fragmented and rudimentary.
The reference to the transformation from the socialists S&TS to an emerging post-socialist
innovation system is explicitly made also by Hirschhausen and Bitzer.129 These authors make a
clear distinction between socialist S&TSs and capitalist innovation systems, which is marked by
an overarching role of the state, fully secured government funding and decision making on
merely political rather than monetary bases in the former, and private initiative, market
mechanism operation, and monetary constraints in the latter. The abrupt change experienced by
Schimank, U. (1995) “Transformation of the Research Systems of Post-Communist Central and Eastern Europe: An
Introduction”. Social Studies of Science, Vol. 25, No 4, pp. 613-632.
126 Radosevic, S. (1999), op cit, p. 281-282.
127 Ibid, p. 281.
128 Ibid, p. 302-303.
129 Hirschhausen, C. von, Bitzer, J. (eds.) (2000) The Globalisation of Industry and Innovation in Eastern Europe:
From Post-socialist Restructuring to International Competitiveness. Edward Elgar.
post-socialist countries is even seen by these authors as a technology trajectory change or
paradigm shift in S&T field, due to the marked differences in both the perception of innovation
per se and the actor interplay and role division a change from top-down to bottom-up
approaches. Naturally, this major change and the current shift to the knowledgebased economy
couldn’t be realised on the spot, since the preconditions existing in the west were not present in
post-socialist countries, where they have to start with a “fragmented and devalued S&TS”130.
This gradual change is analysed by Werner Meske in his “three–phase model”, where the first
phase is characterised by a dissolution of the former socialist system, the second phase by a
consolidation of the remaining or newly established S&T organisations, and the third phase by
the integration of these individual parts into a new system.131 In his opinion, the first two phases
have been accomplished by now, while the third one is still under way. According to this model,
the first phase in the post-soviet countries was characterised by the breakdown of top-down
processes, and fragmentation of the S&TS, resulting in the survival of only selected elements in
the form of either individuals or organisations. In the next phase, the organisational structure, in
science, politics and industry, was modified, allocating other functions to former elements, and
new functions to newly established elements.132
There are also some authors, e.g. Acha and Balazs, who are more inclined to speak of already
existing NSIs undergoing transformation. These authors assert that an NSI can’t be created from
scratch. There must already be an NSI in place “developing both because of and in absence of
130 Bitzer, J. (2000) An Evolutionary View of Post-socialist Restructuring: From Science and Technology Systems to
Innovation Systems. In Hirschhausen, C. von, Bitzer, J. (eds.) (2000), op cit., p. 13.
131 Meske, W. (2000) “Changes in the innovation system in economies in transition: basic patterns, sectoral and
national particularities”. Science and Public Policy, Vol. 27, No 4, pp. 253-164.
policy”133. However, by acknowledging the development processes within an NSI they do not
treat it as an accomplished model. In this way, they are basically of the same opinion as other
authors, with the only difference being the use of a specific term for a certain period.
Many of the authors reviewed above are of the same opinion that the main problem for
establishing a coherent and well functioning NSI can be found in the inability to see enterprises
as “the principal performers of R&D under market conditions”134, “the main network organisers
of innovation process”135, and “new ‘organisers’ of innovation generation and diffusion136.
Generally, networking is seen as a problematic issue in the post-socialist countries, since under
the socialist regime it was mainly constructed and managed on a formal level by the state
authorities, and links between domestic users and producers as well as between foreign and
domestic sellers were weak.137 These weak links are seen as a heritage from the former system,
with the persistent socialist model being ‘embedded in these societies’138, thus implying a strong
path-dependency and inertia. According to Meske, lack of co-operation within the science
system, as well as between it and other involved actors, including the government and industry, is
the primary reason for not being able yet to accomplish the third phase of his model. Therefore,
according to Johanna Chataway, the problem of linking organisations and activities undertaken in
them through new networks of actors has become a focus of S&T policy, implying both
dissolution of the old networks and formation of new ones.139
132 Ibid, p. 255-256.
133 Acha, V., Balazs, K. (1999), op cit, p. 347.
134 Ibid, p. 346.
135 Radosevic, S. (1999), op cit, p. 303.
136 Bitzer, J. (2000), op cit, p. 32.
137 Radosevic, S. (1999), op cit, p. 291.
138 Acha, V., Balazs, K. (1999), op cit, p. 346.
4.2 Triple Helix role formation
The roles of the actors involved in the innovation process are also being reconsidered and
modified in the former soviet countries. Both their interrelations and their particular functions
have been, and still are, undergoing certain changes and alterations. The new division of tasks in
the innovation process has also led to the loss of functions for different actors of the former
S&ST. There has been both a transition in the laws and regulations provided by a governmental
infrastructure, and a transition within the organisations and their interrelations.140
While under socialism all relevant functions were taken over by the state, the introduction of
capitalism as an economic principle was marked by a shift of many of these functions from the
state to the private sector.141 This shift has led to the reassessment of governmental roles, in
relation to both the economy and other social institutions. According to Etzkowitz, there are
indications that a more sophisticated view of the role of government as a catalytic force is
emerging in the context of transition economies, thus implying that this transition is not to a pure
market but rather towards a mixed system of market forces and government initiatives.142
However, it must be noted that in regard to S&T issues this shift has been very gradual, since
after the collapse of the USSR the newly established governments left S&T policy without proper
attention. Initially, they were concerned with more urgent matters in social and economic policy
like liberalisation, privatisation and crisis management.143 There was also considerable cutback of
R&D funding, since its potential role in the revival of the economy was not comprehended yet.
139 Chataway, J. (1999), op cit, p. 356.
140 Etzkowitz, H. (2000) “Technology transfer and the East European transition”. Science and Public Policy, Vol. 27,
No 4, p. 231.
141 Bitzer, J. (2000), op cit, p. 24.
142 Etzkowitz, H. (2000), op cit, p. 234.
143 Balazs, K. (1995) “Innovation Potential Embodied in Research Organisations in Central and Eastern Europe”.
Social Studies of Science, Vol. 25, No 4, pp. 655-683; Schimank, U. (1995) “Transformation of Research Systems in
The system change has also affected the research activities of the actors involved. Not only are
many research activities no longer supported and guided by the state, but they have also
undergone organisational change. Under socialism, these activities were organised into three
distinct and sharply separated sectors, namely, academies, universities, and ‘branch’ sectors,
based on the general principles of central planning, namely, specialisation, rationalisation and
centralisation144. Then, after the collapse of this regime, this institutional separation was
abolished. Under the formerly existing institutional framework, universities were primary
training bodies145, while basic research was carried out in the academies of science, with applied
research and product development being the prime task of branch institutes and special design
offices146. Production was also separated from the former activities and was solely undertaken by
industry, which in turn had no relation to research. This was a rather artificial division,
constructed on the basis of the linear perception of innovation process, and was accordingly
transformed following the breakdown of the socialist system. However, lack of interaction
between these units and their former fragmentation now forms one of the basic problems for
establishing a well operating interactive innovation model. Though formally channelled contacts
were unofficially supplemented by informal links, many of the latter were broken or vanished in
the reform process.147
Central and Eastern Europe: A Coincidence of Opportunities and Trouble”. Social Studies of Science, Vol. 25, No 4,
pp. 633-653.
144 Balazs, K., Faulkner, W., Schimank, U. (1995), op cit, p. 615.
145 Ibid, p. 616; Schimank, U. (1995), op cit, p. 638.
146 Bitzer, J. (2000), op cit, p. 16.
147 Balazs, K., Faulkner, W., Schimank, U. (1995), op cit, p. 616; Balazs (1995), op cit, p. 668.
4.3 Developments in technology transfer
Since networking and linkage formation was rather weak in the soviet times, rather considerable
efforts have had to be made in order to promote and establish them. This is not something that
can be done overnight and it still faces various obstacles. To improve technology transfer
activities, the following barriers have to be overcome:148 (a) ‘financial gap’ between technology
suppliers and users within manufacturing enterprises; (b) shortage of finance for spin-outs and
start-ups, or for project development within existing companies and institutes; (c) lack of
government funding and policy favouring technology as much as basic science; (d) lack of
knowledge and experience of the technology transfer process; and (e) linear perception of
technology transfer concept among policy makers. Other prerequisites for technology transfer
facilitation include a stable political and legal environment “with reliable contracts replacing
force as the guarantor of relationships”.149 Nevertheless, some analysts hold the view that lack of
resources, which is mainly seen as a hindering factor, has in fact been “the most effective
measure of a research policy aimed at intensifying technology transfer to industry”, since those
involved in research have had to look for ways to cope with the situation and for financial
4.4 Innovation support initiatives
Initially the R&D sector was abandoned not only by the government, but also by the market and
industry, thus forcing R&D organisations to adopt either ‘passive’ or ‘active adjustment
strategies’.151 In this context formation of IISOs in the form of science and technology parks and
148 Chataway, J. (1999), op cit, p. 362-363.
149 Landes (1972) as cited in Etzkowitz, H. (2000), op cit, p. 231.
150 Schimank, U. (1995), op cit, p. 645.
151 Balazs, K. (1995), op cit, p. 659-660.
centres, following a model adopted from the western countries was one option for researchers to
make the transition from research to entrepreneurship, though it has been noted that in some
cases these initiatives simply amounted to attempts by research institutes to rent out unused
space152. These were previously non-existent bottom-up initiatives that were expected to improve
communication and networking.
However, as noted by Acha and Balazs, they are not capable of correcting “the problems of
focus, initiatives, structure” which are integral to the principal organisations of the evolving NSIs
of CEECs.153 Initial introductions of elements of this kind have been more like stand-alone
initiatives, and not part of any coherent S&T policy.154 As argued by Balazs, this was more a
means for utilising idle capacity rather than for creating something essentially new, since the
CEECs had as their primary role of job protection rather than job creation.155 However, the role
of these organisations should not be underestimated, since they have a rather vast potential for
further development, depending on the success of local adjustments in determining their optimal
operation modes.
On the background of the preceding chapters we now turn to the examination of the Latvian case,
starting with the outline of the innovation policy developments and framework in Latvia, and
subsequently turning to the selected cases and their analysis.
152 Chataway, J. (1999), op cit, p. 362.
153 Acha, V., Balazs, K. (1999), op cit, p. 347.
154 Balazs, K. (1995), op cit, p. 674.
155 Ibid.
5.1 Innovation policy framework in Latvia
As in most post-socialist countries the innovation policy developments in Latvia are of a rather
recent and fragmented nature with some coherence within it emerging only lately. Since 1991
several documents have been elaborated, reflecting gradually increasing attention to the role and
concept of innovation and its support system.
The process of the commercialisation of science is said to be initiated in 1992 by the Ministry of
Education and Science, with the “Concept of the Development of Technology Centres in
Latvia”.156 These centres were intended as business support structures filling the gap between
higher education organisations and industries, and promoting the development of SMEs through
international economic and scientific co-operation for designing high quality products.157 The
Law of the Republic of Latvia "On Research Activity" was adopted by the parliament in 1992,
with several amendments made in 1996 and 1998. In 1995, the Law "On Higher Educational
Institutions" was adopted, aiming to integrate research institutes into the universities in order to
modernise universities and strengthen their research capabilities. Recently, documents like the
National Programme for Development of SMEs for 1997-2001 (1997), the "National Concept for
Research Development" (1998), and the "Concept for Higher Education Development" (1998)
were developed and adopted by the Cabinet of Ministers. With the aim to stimulate creation of
new technology oriented SMEs and to involve more research laboratories and institutes in state
industrial development, the “Concept for Innovation Activities” (1998) was also elaborated, but it
156 Though this concept is mentioned in some sources, no such document can be found in any governmental reports
or other materials.
157 Ribickis, L. (2001) “Problems of Technology Transfer and RTD Activities in Latvia: Role of Universities,
Research Institutes and Innovation Support Structures”. Paper presented to conference “Baltic Dynamics 2001”,
Riga, Latvia, September 14-16.
was only reviewed and taken into consideration by the Cabinet of Ministers.158 In the same year
(1998) the Latvian Government accepted the “Concept for Creation of the National Innovation
System” (NIS), with the main aim of promoting development of the national economy and the
process of integrating Latvia into the European Union (EU). The year 1999 was marked by the
adoption of the national programme “Informatics”, while in 2000 the “Long-term Economic
Strategy for Latvia”, which sought to create a knowledge-based economy in Latvia, as well as the
“Industrial Strategy for Latvia” were accepted. The most recent event in the field of innovation
policy was the adoption in 2001 of the “National Concept for Innovation”, which directly
addresses issues of innovative development in Latvia, and also provides the basic definitions of
relevant concepts.159
Thus, the NSI concept has reached the policy agenda of the Latvian government and is beginning
to be comprehended and adapted to the local conditions. A largely external stimulus for this is the
current goal of Latvia to reach EU development level, and in this respect innovation is slowly
coming to be seen as one of the instruments for achieving this aim. Insufficient levels of all the
components forming innovation system are being understood and acknowledged including,
among other things, the critically low financing for R&D, absence of research work involving
industrial enterprises, poor technical equipment for research activities at universities, weak
linkages between research labs and industry, insufficient technological education at universities, a
legislative environment not sufficiently favourable for innovative activities, problems with
attracting investment for research work for development of new products and services, etc.160
Given these conditions, certain activities are gradually being undertaken in order to improve the
current situation, and one of these initiatives has been the introduction of IISO concepts and
models to Latvia. As acknowledged by Silins et al, these are considered to be effective
instruments for supporting innovations and new SME formation, due to lack of large-scale
investments in transitional countries like Latvia.161 The financing and loan system is still very
rigid in regard to risk capital and new product development; therefore, state support is very
essential. According to the position taken by the Ministry of Economy, “government has a crucial
role in creating an environment favourable for innovative activities by performing rational
restructuring of the economy and promoting development of technology-oriented
entrepreneurship by utilising the resources within its control in an efficient way.”162
The economic and political justification for the implementation of the above-mentioned
technology centre development concept has been the current situation in S&T, characterised by
the multifold decrease of students and people employed in technical sciences, low percentage of
high tech goods in Latvian export and the small number of SMEs, if compared to other European
countries.163 At present, several (though still comparatively few) organisations of this kind have
been established. They have organised themselves in the Latvian Association of Technological
Parks, Centres and Business Incubators (LTICA) established in 1996.164 Among its founders are
also the two IISOs selected for this research, discussed in more depth in the following chapters.
160 Ibid.
161 Silins, A., Stabulnieks, J., Viesturs, U., Ekmanis, J. (1998) “Some problems of innovation and technology transfer
for countries in transition: the Latvian case”. Lecture for the “World Innovation Forum”, November 16-19, Paris.
163 Kondrats, G. (2002) “When science will lay golden eggs” (in Latvian). Majas Viesis, April 5, p. 8.; Feders, G.
(2002) “Creative ideas promote welfare” (in Latvian). Diena, May 11, p. 10.
5.2 Case studies and analyses
In this chapter, introductions of the selected cases, as well as further analyses, are presented using
homepage materials of LTC165 and LTP166, reports167, and information gathered during the
interviews with both the managers and tenant firm representatives of these two organisations, as
well as related interviews and materials published in printed media. While sections 5.2.1 and
5.2.2 are of a more informative and factual character, section 5.2.3 is devoted to more profound
data analyses, comparisons, interpretations, and conclusions. In order to make comparisons
easier, the same progression has been chosen throughout the descriptive part of the two cases.
5.2.1 Latvian Technological Centre Origins
The Latvian Technological Centre (LTC) was the first innovation centre initiative in Latvia,
involving a form of business incubator that was established in 1993 in Riga, the capital of Latvia.
By its legal status, LTC is non-profit limited liability (Ltd) company initiated and financed by
public organisations ministries and municipalities. This idea originally came from the
Department of Higher Education, Science and Research within the Ministry of Education and
Science, and was based on a Concept for the Development of Technology Centres in Latvia
worked out by this department and based on the experience of developed countries. The founders
of LTC were the Riga City Council, the Latvian Academy of Sciences (LAS), the Institute of
Physical Energetics and the Association of Latvian Scientific and Technical Societies of Latvia.
This centre was housed by the founding institute of the LAS, located in Riga and geographically
164 Latvian Association of Technological Parks, Centres and Business Incubators (LTICA)
165 Latvian Technological Centre,
166 Latvian Technology Park,
surrounded by four other research institutes. Implementation of the concept was offered to
different research institutes, but the Institute of Physical Energetics was the only one to take the
risk.168 LTC was intended as a ‘test-bed’ for the development of innovation and technology-
oriented SMEs support organisations in Latvia. The financial base of LTC is drawn from the state
budget, though it is being gradually reduced. Aims
According to the aims set for and by this organisation, its main task is to promote and support the
establishment of technologically oriented SMEs. LTC also aims to promote co-operation between
higher education organisations’ scientific units, on the one hand, and production, on the other; to
create regular contacts between research laboratories and industry; to promote international
collaboration of small enterprises with an aim to produce competitive, high quality, products; and
to create new jobs for qualified specialists and scientists.
In line with LTC statements, its services are provided only to the innovative activities of those
Latvian firms that have already a defined business idea and its implementation plan. A potential
tenant firm’s products, irrespective of its scientific-technical specialisation, have to be
technologically oriented and with high added value. Besides the company has to be registered
with the State Company Register. The potential tenant firm and its business plan are reviewed at
the LTC board meeting, which is constituted by founders’ representatives, and which gives the
final decision of acceptance. At these board meetings, which are held every year, both potential
167 LTC (2002) Report on LTC activities in 2001. 58 p.
168 Kirtovskaja, M. (2001) “Incubator for an innovator” (in Russian). Respublika, April 17, p. 5.
and current tenant firm activities are examined and discussed in regard to their prospective or
further operation within the centre. Services and functions
For the realisation of its aims, LTC is expected to offer business incubator services, starting from
well-equipped office and production facilities on preferential rent terms (on average 60% of
actual cost, ranging from 30 to 100%), technological and administrative services (copying,
printing, translation, telecommunications, incl. Internet etc.), specialised consultations and
information for technologically oriented entrepreneurship, support for participation at specialised
exhibitions, assistance in seeking co-operation partners as well as in marketing newly developed
products and co-operation options, etc., and consultations on the possibilities of receiving credit
or other kinds of financial support by taking part in international projects. LTC tenant firms also
have access to more than 10 local and international newspapers and magazines and are provided
common advertising in printed and other media. They are also offered assistance in creating their
home pages on the Internet. The stated tenant firm incubation period is set for 5 years, after
which full rent has to be paid while other services are still available. The total space of laboratory
and office rooms is about 2,200 square meters, all of which is currently occupied by tenant firms.
The basic LTC staff is formed by 7 people, including the managing director, two project
managers, an office manager, and a chief accountant, all with their offices in the LTC premises
building. Additional people are annually being engaged on a project basis. Activities
In addition to these tasks, LTC participates in, co-ordinates, and promotes projects financed by
the EU. Currently, LTC co-ordinates the EU project IRC (Innovation Relay Centre) LATVIA,
aiming to promote the development of SMEs and international co-operation in technology
transfer. Apart from this project, LTC also co-ordinated the 5th Framework Programme project
on organisation of an international conference on “Baltic Dynamics”, an exhibition called “High-
tech Baltics”, and a parallel broker event that was held in September 2001 in Riga. In a partner
status LTC also takes part in 4 other EU projects on the promotion of SME activities.
Additionally, LTC is involved in a common project with the Finnish government called
“Development of Finnish-Latvian business”. LTC also houses a German Industrial research
association bureau in the Baltic countries that is open to all enterprises and research institutes
interested in co-operation with German partners in R&D.
Last, but not least, LTC also takes part in the development of state economic policy, mainly
through the engagement of its director, Janis Stabulnieks. LTC representatives have been invited
in to, and actively take part in, the development of state innovation policy and strategy. LTC is an
active participant of several international associations, as well as being one of the founders in the
LTICA. Tenant firms
Currently, there are 25 local firms operating at LTC, including four associate ones169, with a total
of around 240 employees.170 The main scientific-technical specialisations of the LTC firms are
laboratory instrument production for medicine and biotechnology, electrical engineering and
169 These are firms that have operated in LTC but in most cases have developed so far as to move to other larger
premises, although they are still in contact with LTC.
170 Since the last available LTC report is for year 2001 the following numbers will be accordingly based on data for
this year.
telecommunications, computer engineering and polygraphy, new material technology and
environmental protection, etc.
In 2001 the total number of 21 tenant firm employees was 233, while in 2000 there were 260
employees for 25 firms, and, in 1999, 258 employees for 31 firms. Out of the 233 employees in
2001, 20 held a scientific degree while 85 had an accomplished higher education. The average
number of employees per firm was 11 compared to 10,4 in 2000 and 8,9 in 1999. Although
during the last years the number of firms has decreased from 39 in 1998 to 21 in 2001, the
average number of employees is constantly increasing. This is also true in regard to the net
turnover, which has increased from 1,27 billion LVL171 in 1997 to 4,17 billion LVL in 2001,
despite the decrease in the number of firms. According to LTC report data, irrespective of the fact
that many LTC tenant firms are still in their initial business incubation stage, the received state
grant is being fully paid back through various taxes collected since the very beginning of LTC’s
establishment, with the returned sum in 2001 exceeding the received one 15,5 times.
5.2.2 Latvian Technology Park Origins
Following the initiative of academic personnel (rector) of the Riga Technical University (RTU),
the Latvian Technology Park (LTP) was founded in 1996 as a non-profit organisation. Other LTP
founders were representatives from both the private and public spheres - University of Latvia
(UA), Riga City Council, the Latvian Development Agency, the Latvian Privatisation Agency,
the Chamber of Trade and Industry of Latvia, the European Development support fund in The
Netherlands, the Latvenergo company, the "Riga Water" company, "Invest Riga" Ltd., and the
"Datorsalons ELVA" company. LTP is morally supported by the Ministry of Education and
Science, the Ministry of Economy and the Ministry of Environment and Regional Development.
LTP is located in the former buildings (barracks) of the soviet army in Riga, on four hectares of
land with a total building and construction space of 6,000 square meters. One of the main goals
for LTP’s establishment was to reorganise this available land and complex of buildings into a
technologically developed area.172 After the withdrawal of the soviet military forces following the
collapse of the USSR, these buildings were left without supervision. This led to their
deterioration before the premises were taken under the supervision of RTU and consequently
handed over to LTP. No funding except for the limited initial capital of the founders and some
orders from the Ministry of Education and Science for realisation of projects dealing with
innovative activities has been allocated for the restoration of the buildings and for the adjustment
of infrastructure. These tasks are still under way, using resources obtained during LTP’s
operation period. Financial support has been requested on both the governmental as well as the
municipality level, though without any substantial results for the time being. However, certain
hopes are still associated with Riga City Council, which is one of the LTP founders. Certain
attempts have been made to attract foreign investors, though it is not expected that such investors
would invest in LTP’s development as such. Aims
LTP aims to promote commercialisation of science through modern technologies, by developing
and supporting small and medium-size production companies. These firms’ innovations are
171 1 LVL=0,593 EUR=0,0642 SEK (15.07.2002)
expected to have originated in RTU, the UA or any other Latvian institution of scientific
research, to be patented, secured by copyright, or otherwise protected, and to prove commercial
viability after thorough market studies. Services and functions
LTP plans to rent out low-rent premises for enterprises according to very different needs, starting
from the small office of 15 m2 up to a space appropriate for a small technologically oriented
industrial enterprise of 500 m2. Currently, 70% of the premises are occupied. A wide land area
with convenient parking places and green zones has been placed at the disposal of LTP. The
enterprises will be able to use separate heated and unheated warehouses. LTP will include
premises for meetings, training and conferences with general-purpose furniture and specialised
equipment. LTP plans to offer services starting from office and secretarial services and up to
complicated technological and legal consultations rendered by the personnel of the LTP, or other
involved or invited firms or persons, depending on the need and economic justification. LTP
Business Innovation Centre (BIC) information service provides EU databases and literature,
Latvian databases and business literature, ICECE, IASP databases and news, and international
networks. The current basic services of the incubator are telecommunications, data
communication, office services (copying, mailing service, secretary, office supply), refectory,
and basic information service (basic business literature and newspapers). LTP in co-operation
with the Swedish firm Reglertekniska Ingenjorsburan AB (RIB) and RTU, has established a
Process Control Training Centre offering training courses in process control and industrial
172 Stabulnieks, J. (2001) “Converting a Research Institute to an Innovation Centre”. In Utilizing Technology
Transfer to Develop Small and Medium Enterprises. E. Bulumac and R.A. Bendis (eds.) ISO Press. p. 104.
The main criteria for selection of participants are expected to be the quality of the idea, market
potential, technological and innovative level, competitiveness of the business idea, estimated
position in the market, entrepreneurial ability, effect of technology transfer, risks, international
level, time schedule, and ‘fit' within the incubator. However, at the moment the basic selection
principle is the production criterion, excluding solely trade-oriented firms, and the financial
capability of a potential tenant firm to invest in refitting the necessary premises. In this respect, it
is seen as a crediting case by LTP. Thus for a certain period of about 4-5 years, depending on the
invested resources, the respective firm is allowed to operate there without paying any rent.
LTP basic staff consists of 7 people, including the chairman of the board, director, accountant,
technical service manager, project manager, consultant, and territory administrator. All except for
the last work in an office located within the premises of Riga Technical University. Apart from
this staff, RTU specialists are being involved for consultations in specific fields. LTP is the
member of several national and international associations and has close contacts with different
local and foreign IISOs. It has also been involved in several EU projects. Tenant firms
LTP firms represent various branches, including construction, education, energetics, engineering,
environmental technologies, food industry, information technologies, light industry, logistics,
mechanics, polygraphy, radionics, services, transport, and woodworking industry. Currently there
are 44 listed tenant firms with 27 located in the park’s territory and 17 outside it. The ones not
located in LTP buildings mainly have weak or even almost no links with LTP and its
management. Their relation to LTP is of a more formal nature, based on initial personal
acquaintance with the first director of the park and fragmentary collaboration. In the opinion of
the current LTP director, these firms can hardly be considered park firms, since they have almost
no financial or organisational relation to LTP. According to this division, the 27 tenant
companies located within LTP premises are mostly service companies or related to food industry,
logistics, building, etc, while the ones located outside LTP are mostly technologically oriented
ones. Since the beginning of LTP’s establishment, the tenant firm turnover has increased from
around 35,000 LVL to 2 million, the number of tenant firm employees has reached 300, and
40,000 LVL are being paid in taxes.
5.2.3 Summary
As can be inferred from the above given factual information, both cases have certain similar as
well as diverse characteristics in regard to both the available figures and qualitative data. In order
to point out at least some key ones, a brief table of the presented facts is provided here as both a
summary of the proceeding sections and an introduction to the following comparative and
analytical chapter (see Table 6).
Table 6. Basic comparative facts for LTC and LTP
Support organisation
Latvian Technological Centre
Latvian Technology Park
Foundation year
Basic funding
State budget
Accumulated resources
Technical university
2,200 sq.m.
6,000 sq.m.
Riga (capital); Outskirts
Riga (capital); Outskirts
Near to 5 research institutes
Apart from universities and
research institutes
No. of tenant firms/associates
No. of tenant firm employees
Management and administration
7 + projects
7 + projects
5.2.4 Comparison and data interpretation
Following this introductory information, the data obtained have been analysed within the chosen
conceptual framework. Since the NSI perspective has already been rather extensively applied in
regard to the post-soviet context, which is also the condition present in Latvia, subsequent
sections concentrate more on application of the TH perspective and the practice of technology
transfer within the context of these two IISO cases. The review and analyses of these two cases
give way to a number of interesting observations on the level of these particular organisations, on
the more general level of this kind of organisation in Latvia, and finally, again, in the context of
post-soviet countries. In the following sub-sections these are presented mainly on the bases of the
general and specific empirical research questions identified in sub-sections 1.4.1 and 1.4.2, with
some additional themes being marked out and analysed as well. Underlying intentions
The first implication arising from the situation of IISOs of this kind in Latvia relates to the basic
goals for their establishment. While in other countries these organisations are said to be initiated
in certain less favoured regions in order to improve their competitiveness, in Latvia it is more the
case of creating them around certain potentials. At the moment, their development is concentrated
in the capital of the country, since this is the most likely place to attract and generate innovative
business ideas. This is largely due to the population structure of Latvia, where around 40 per cent
of population live in Riga. In this sense, Riga is a typical metropolitan area, where most of the
higher education as well as research organisations are located. These factors could thus be
considered to be the decisive ones in the location of these organisations, which might later extend
to other regions as well. Certain processes of deconcentration are taking place with the
emergence of new developing cities and regional higher education organisations, which are the
prerequisites for the necessary milieu for this kind of development. Triple Helix application
Another essential observation that can be made is related to the general role of the government in
the creation and development of this kind of organisation. With the shift from planned to market
economy, there has been an important change in the role of the government, with private
initiative coming to the forefront instead of overarching public regulation. However, this does not
imply total diminution of governmental involvement in the development of the country’s
economy. According to the official from the Ministry of Education and Science, “it is commonly
thought that market conditions will set everything in order”, but “it turns out that the market can’t
help in this, thus state action is required”.173 In the opinion of the LTC director, “the promotion,
development and improvement of education, research activities and innovative entrepreneurship
is a task of each country’s government”, hence “financial resources of the state have to be
invested for the development and stabilisation of the NSI”.174
The two cases studied present an excellent lesson on how governmental initiative and
intervention is essential in influencing their operation. This is where the TH perspective is so
valuable, since the lack of presence or underdevelopment of one element or the other - be it
academia, government or industry - has a clear impact on the success or failure of development.
It is not to say that lack of one or the other makes it impossible for IISOs to exist, but it definitely
holds back the progressive development of this kind of organisation. In the cases discussed
173 Tomsone, I. (1998) “Will innovations help the economy?” (in Latvian). Neatkariga Rita Avize, March 3, p. 3.
174 Graudins, U. (2001) “Knowledge transformation into money” (in Latvian). Lauku Avize, February 15, p. 26.
above, it can be clearly seen how initial as well as continuous governmental support is essential,
in terms of both finances and the general position with regard to the necessity and role of national
innovation promotion initiatives. According to interviews, governmental structures also play a
certain role on a local government level in providing contract work, etc., with tenant firms. This
is another kind of mutually advantageous collaboration, though constituting rather small
proportion, if compared to collaboration with private firms.
The state’s role is seen as essential under the current conditions, where the credit, loan and risk
capital system is underdeveloped, thus not promoting the establishment and development of new
enterprises. In practice the required investments are not that large in order to support the initial
take-off. Besides, in the case of LTP they are expected to be, and in the case of LTC they have
already been, paid back in considerably larger amounts in taxes and in the overall contribution to
the development of the economy. Thus, it is essential for the government to understand the
principle of how these small innovative enterprises can repay the invested resources. This is seen
as a problematic point, thus hindering the supply of finances from the state.175 Thus, it is not only
about financial but about ideological support as well, since, according to the LTP managing
director, the respective policy documents are “the umbrella determining all operation principles”.
He also admits that there were many programmes made 5-6 years ago, but “if not professionally
worked out they die very soon and no financial injections can change it”. It is also an issue of
governmental priorities. In Latvia, these are currently orientated towards privatisation and related
issues, thus setting aside ones related to the creation and stabilisation of the NSI.
175 Grinberga, H. (2000) “Where product and service meet” (in Latvian). Latvijas Vestnesis, October 5, p. 10.
At the same time the contribution of academia should also not be underestimated, since no
governmental support can help if there is no pool for innovative business ideas to come from. In
this sense, LTC has succeeded by being established on the basis of academic support and by
locating itself in the midst of 5 research institutes that provide the necessary milieu. Actually, this
is another essential contributing factor to the successful development of this initiative, since close
geographical proximity and attachment to these research institutes implies closer links with
research than there might be in the case of LTP. The latter is located more separately and
attached to universities that might be considered to have a more educational orientation,
compared with the applied research focus of the institutes. As argued previously, during the
soviet period research was separated from universities and located within institutes, thus not
being in line with the model characteristic of western countries. Latvia, like other post-soviet
countries, is currently undergoing a transition to this western model, in which both research and
education are integrated in universities.
It should be also noted that many companies were formed right after the collapse of the soviet
regime, under pressing conditions when many existing research units were eliminated, destroyed,
or on the verge of being closed down. According to the interviews, many people partly stayed in
those institutes, research organisations or departments that still existed in one way or another, but
at the same time were looking for other possibilities and options in coping with the critical
situation and future prospects by undertaking private business initiatives. This is something that
was also experienced by researchers in other similar countries, where after the socialist model’s
abolition many elements of the former S&TS strove to transform themselves into commercial
enterprises.176 In many cases, this was more a matter of despair and survival than a well-
considered alternative or preferred option as also established by Schimank177 in regard to other
post-soviet countries. This had to do with the withdrawal of financial resources from the state for
the research institutes, as well as collapse of the whole industrial sector. A lot of work was being
done for the military industrial complex of the USSR, which also collapsed together with this
union. The people involved had accumulated intellectual potential during the soviet times, by
being part of the large science effort of the USSR. Many organisations had to reorient from the
large market of the USSR to the small domestic market. After the collapse, many scientists and
researchers began to specialise in particular fields that they considered more favourable, under
the current conditions, to base their business on. This was the first ‘natural’ impulse for
entrepreneurship, which also marked a certain shift towards more applied research.178
The critical situation immediately after the collapse of the USSR left no space for any substantial
resistance from academic organisations to the entrepreneurial initiatives of their staff members,
since the financial situation of higher education and research organisations was rather critical. In
many cases, those entrepreneurs who still continue some activities in academic organisations
provide certain financial or human resource contributions, which would not be possible if they
were inhibited from carrying on the business activities supplying their main income. This is again
a common trait of all post-soviet countries, where many small firms have been started by
university teachers and researchers with this ‘half-hidden’ arrangement providing the necessary
income for operating the department, covering university overheads, and also allowing for some
176 Hirschhausen, C. von (2000) Main Findings and Perspectives for Innovation policies in Eastern Europe and the
West. In Hirschhausen, C. von, Bitzer, J. (eds.) (2000), op cit., p. 319.
177 Schimank, U. (1995), op cit, p. 641.
178 Grinberga, H. (2000), op cit.
personal income benefits.179 Moreover, as in the case of LTP, the initiatives as such have come
from the academic milieu. The LTC director has come from the academic milieu, as a researcher
himself, and so have the first and the current director of LTP, who have both worked in RTU.
Finally, as to the third TH element constituted by industry, it has to be acknowledged that here
the actual division between the three is starting to erode even more markedly. In the context of
these cases, from a more systemic perspective, ‘industry’ might come to be interpreted as a sum
or the outcome that is created when the two other elements, respectively, government and higher
education and research organisations are joined through the mediation of a IISO. This does not
imply that the two elements merge forming the third one rather in their merger they create
preconditions for another one, which are also essential for further development of all the TH
elements. As stated by the former director of LTP currently taking the post of RTU vice-rector,
there is no industry without science, just as there is no dynamic development of science without
industry.180 In his view “without developed industry no orders will be placed for Latvian
scientists, university research laboratories will not be developed, and there will be no possibilities
to prepare highly qualified engineers and new PhDs to become assistant professors and
professors”.181 The shift to applied research through the establishment of new technology based
companies means a merger between science and industry. On its own, science is expected to
provide only an intermediate, rather than a final, product by supplying research and data output
required by the industry to produce that product.182 But this merger in many cases demands
integration of both functions into one unit, where certain industrial experience is of high value
179 Balazs (1995), op cit, p. 668-669.
180 Grinberga, H. (1997) “In the time of explosive development” (in Latvian). Latvijas Vestnesis, December 5, p. 4.
181 Ibid.
182 Grinberga, H. (2000), op cit.
and together with scientific experience provides a solid ground for these business activities.
However, not all founders of these new technology-based companies have these kinds of
resources. Hence, they generally start off with the scientific element, and later gradually acquire
the entrepreneurial skills required, at the same time also undergoing a change in their thinking.183 Technology transfer
If we speak of interactions between industry and university and technology transfer between them
it has to be noted that understanding of the latter concept in Latvia is mainly linked or associated
with transnational technology transfer, there being almost no reference to domestic one. This
does not imply that the latter does not take place but rather it is not interpreted as belonging to
this kind of process. Based on the interviews and analyses of the selected cases, the assumption is
that technology transfer from higher education and research organisations (transfer agent) to
technologically/scientifically oriented tenant firms (technology recipient) of LTC and LTP
(transfer media) is a rather natural development in the sense that the main transfer mechanism is
embodied in the know-how of the people from academic milieu, who largely form the bases of
these knowledge-based companies. These companies are mainly created or operated by scientific
and engineering technical employees in the role of idea generators, either starting or carrying on
independent entrepreneurship by practically applying their knowledge and practice for production
of knowledge-intensive products. Thus the main transfer object turns out to be embodied human
capital and non-codified tacit human knowledge that is transferred in the form of spin-offs.
Taking into consideration the different profile levels of LTC and LTP, it has to be admitted that
this principle can be more generally applied to the LTC case, since the tenant firm selection
criteria at the moment are higher and stricter as regards firms’ innovative capacity. But this is
183 Ibid.
also true in LTP case with regard to those firms that are of a more technological and scientific
Of course, there are also cases when the transfer mechanism is a spin-out (from a larger
company) instead of a spin-off (from higher education or research organisation), but in the former
the latter base is still present, since the firms spinning-out also have higher education and
academic experience. Generally, there can hardly be any basis for an innovative company without
adequate academic training. Accordingly I would argue in favour of the existence of successive
transfer mechanisms where spin-offs/spin-outs as the initial mechanisms are followed by further
ones, like continuing interaction or knowledge communication with former colleges, on both
informal and contractual levels, or through simultaneous operation in both the former job at
higher education or research organisations and in newly established private business. Other
subsequent mechanisms would include participation in different conferences and exhibitions,
publication, utilisation of laboratory services and expertise of other research organisations, and,
finally, student attraction and employment. Another important mechanism at both early and late
stages is collaboration with clients in the development of products e.g., medical staff in
pharmacy, farmers in agriculture, etc. These mechanisms can be regarded as the most common
ones according to the interview data, while patent purchase, licensing and other transfer
mechanisms are of minor importance.
It is commonplace that students or graduates are attracted to these firms in those cases where the
leading personnel of the company does some tutoring at one or another higher education
establishment where they are in direct contact and communication with these specialists-to-be.
Thus, they have the opportunity to select the best students and involve them into their work.
According to the interviews, tutoring activities also force entrepreneur-academics to keep in pace
with the times and new developments in their particular fields, since students are a demanding
audience. At the same time, student-based firms are less common. According to the LTP former
director Ribickis, “students work in LTP firms, but I can not say that student groups are queuing
up for the creation of their own companies. In the last year of their studies, master and PhD
students are already prepared to put their inventions and research to use, but they are hindered by
the fact that no financial support for business establishment is available in Latvia - the lenders
always ask for a property deposit. We still are not able to value the intellectual property”.184
As to patent and licence purchase firms are not too active, since they have their own research and
new developments that they work with. Neither are they very active in licensing out or selling
their patents if they have any. The latter aspect has to do with the fact that many inventions are
not being patented, due to high costs of the patenting procedure, patent maintenance, lack of
expertise, and only local coverage of the patent in Latvia. Most of the tenant firms do not have
resources for taking out a European or US patent, thus the main protection of their intellectual
property is know-how and tacit knowledge. Often, firms admit that they have patentable products
or processes, but they hesitate to process a patent for both the above-mentioned reasons, as well
as due to uncertainty as to their demand and implementation prospects, which would be needed to
justify the necessary investments. At the same time, the managing staff admits that the weak side
for the firms is the underestimation of intellectual property and insufficient knowledge about
184 Grinberga, H. (1997), op cit.
intellectual property rights and possibilities to protect them.185 Some firms also raised this issue
by pointing to the need for expert consultations. Location preference
With respect to locational choice, there seems to be several underdeveloped services, in both
LTC and LTP, but one has to take into account that IISOs in Latvia are comparatively new
phenomena, with only a few in existence. Accordingly, there is also no scope yet for preference
issues among tenant firms in regard to the selection of a particular location. At the moment, the
basic principle is “take it or leave it”, instead of a list of factors determining the choice of one
location or another. This is true even though there might be a choice between LTC and LTP. In
that instance, however, it can be argued that the two IISOs occupy different niches in this sphere.
According to the LTP managing director, “we are not competitors, thus we help each other and
we are delighted by each others’ successes. We can’t take away anything from each other”. As to
the choice between LTP and LTC, he admits that “any firm will choose a place with more
attractive condition, accordingly to their perception, and there is nothing we can do about it. We
can’t offer better premises than we have. Neither can we reduce the fee since we won’t be able to
maintain the infrastructure”.
Currently the sphere division between the two IISOs might be as follows: that LTC is more
concentrated on small firms of a scientific nature, while LTP is oriented towards SMEs in
general. LTP also offers larger premises, since at the moment LTC has almost exhausted its
available space and mainly hosts firms that have been there from the beginning of its
185 Ribickis, L. (2001) “Problems of Technology Transfer and RTD Activities in Latvia: Role of Universities,
Research Institutes and Innovation Support Structures”. Paper presented to conference “Baltic Dynamics 2001”,
establishment. The operating firms are mostly not inclined to think about moving to other
premises, except if they are expanding to an extent where they can open up their own production
sites. Firms have strong roots where they are now located as well as developed and adapted
infrastructure, and are not in a hurry to move away, even after the expiry of the initial support
period. Of course, not all tenant firms manage to develop successfully. Just as in off park
environments, there are firms that perish and are liquidated, though the success rate in TC/Ps is
higher. There are also firms that leave LTC due to various reasons that either continue to operate
on their own or are liquidated after some time of operation outside the centre. Some firms move
to other premises due to expansion or attraction of stable investors or co-operation partners. The
firm rotation in LTP is estimated around 20% per year with 6-7 firms leaving and coming in. Contributing factors
When comparing different IISOs, the operation time factor should also be taken into
consideration, since it takes some time for them to initiate their operation and present their first
results. In our cases, this factor is also of importance, since there is a 3-year lag between the
establishment of LTC and LTP. Besides, the infrastructural factor has to be taken into account as
well. Alongside the unfavourable financial bases compared to LTC, LTP was also in an inferior
position as to infrastructural conditions a condition, which has also contributed to their slower
and more burdensome development. As admitted by LTP former director Ribickis, “of course,
new and rational LTP infrastructure with modern buildings is an important factor for firm
attraction”.186 This leads to the perspective that there are certain steps that have to be passed in
the progress of IISOs. The basic prerequisite for this kind of organisation is inevitably the
Riga, Latvia, September 14-16.
186 Grinberga, H. (1997), op cit.
infrastructure, based on which one can further develop essential, services, etc. If one successfully
tackles infrastructure creation, readjustment or arrangement, then one can move to the next step
with extra service provision. The latter might have been initiated already in the first step, but
without enough time or financial resources.
As can be inferred from the two cases, there are various ways to tackle with the first step. For
LTC, the infrastructural factor was not such a burden, as it has turned out to be for LTP, since
they had premises that had not been abandoned and were in much better condition, plus they had
the necessary funding from the state budget to implement the basic reconstruction works, etc.
Thus, making the first step was easier and not so time consuming as in the case of LTP, which
has had to find other solutions to more acute infrastructural problems. Their problem solving
strategy involves the postponement of introducing intended firm selection criteria, in favour of
making the first step. On the other hand, LTC is now starting to face problems with lack of
premises for prospective new firms. Moreover, it can’t offer production premises, thus making
firms geographically split their operations, which might become a certain drawback. This is why
LTC is starting to consider some expansion options within a new science park project that is
currently being actualised on a policy level. This would also involve expansion of the services
now available to the tenant firms. Management
As noted in the first part of the thesis, the attention in science park research has recently turned to
their management structures, which are seen as highly important for their successful operation.
Regarding this research, it could be argued that this factor has also been influential in these cases.
The first aspect is the stability of the management team. In this regard, there are two observations
that have to be taken into consideration when dealing with these two cases. The first one is the
fact that the managing director of LTC has been the same from its establishment and up till now,
while in LTC there have been three of them in the course of its operation. To speculate, this
might be one factor contributing to their different development routes, since more stable
management also provides certain stability to the operation mode of the organisation. Besides, the
leading people are expected to be progressive in their thinking and they have to be the so-called
“science managers”. At the same time, one single managing director can’t guarantee the whole
success or failure. It is, after all, a matter of teamwork, since a lot of work is done by other people
from the park or centre management.
Ideally, the managing director should be the one co-ordinating the whole enterprise on a more
general level, with project managers dealing with specific issues and working more closely in
relation to the tenant firms. In the case of LTC, this turns out to be a problem, as perceived by
tenant firms, since lately comparatively limited interaction has been taking place between the
management and firms. As noted by the president of one of the interviewed LTC tenant firms, a
certain shift in LTC’s operation occurred with a change of managing staff and the death of one
particular employee. In her opinion, the new employees conduct their jobs rather formally,
without personal involvement and initiative, and are more involved in different European projects
than in work with individual tenant firms, whereas previously the firms were being invited to
different events and received frequent telephone calls from the management. The basic problem
is perceived as the lack of a co-ordinator who would be constantly present and available, a “live”
person. Certain similarities can also be seen from the interviews with LTP tenant firms, where
personal involvement, attention and initiative of the leading managers is seen as crucial in
keeping mutual contacts between the firm and the management. Thus, the human factor seems to
play a crucial role in the intensity and quality of interactions within the park or centre.
Further, tenant firms tend to be rather resistant to addressing the management (with some
exceptions regarding the accountant at LTC) with their problems and assistance requests, trying
to cope on their own. Sometimes, they are too passive in finding out the possibilities within the
park or centre. This behaviour can, of course, be interpreted either as a lack of information or as a
lack of initiative on the one side or the other. In many cases, the problem turns out to be the
general nature of the available services or information, which does not meet the particular and
specific needs and interests of a company. They would expect the management to have a deeper
understanding of particular needs and problems of the firm, both in the initial point of starting off
their business by evaluating their business plan more profoundly and during later periods of
operation. In this respect it is also admitted that, e.g., LTC, carries out a more resumptive
function that is directed more to the operation of the centre as such in regard to establishing
common contacts and finding financial resources for its continuing operation than to the support
of individual firms. Thus, more training, individual management, and marketing support is hoped
for. Even if some training is provided, it is usually for those at an advanced level, without
providing the basics for those not familiar with the relevant issues. At the same time the services
that are provided and firms have used - e.g., support for participation at exhibitions, external
advertising, and seminars - seem in many cases to be either taken for granted or not considered to
be of essential assistance, since frequently they don’t bring the expected results.
One more thing that has to be added in regard to management factors concerns the personal
involvement of the LTC managing director in policy developments in this sphere. This
engagement opens extra space for indirect advertising and prestige of the represented
organisations. During the operation time of LTC, he has been defending science-based
enterprises and has continuously explained the role and nature of innovations, thus gaining
respect from scientifically oriented entrepreneurs and making his views heard by officials.187 In
turn, this has also led to recognition on an international level, which demonstrates itself in the
involvement of LTC in different EU projects that are not directly linked to LTC tenant firms and
its incubation function, but provide additional advantages to this organisation. This is also a
certain survival strategy for LTC, with additional formal, informal, and financial resources that
come with such involvements. In this regard, LTC is positively considered to be more aggressive
in its activities, which might be another factor in LTC’s comparatively successful development.
But this aspect has also to do with the above discussed operation time factor, since, according to
LTP director Stabulnieks, his main function during the initial 3-4 years was advice provision and
firm encouragement, while now the situation has changed, with firms having accumulated
experience and LTC functions having expanded considerably. The latter is due to wider
international involvement in these developments, through participation in different associations
and conferences, thus expanding LTC’s contact and action area. At the same time, no less
importance has to be given to the reverse advertising where the name and the quality of a tenant
firm provides prestige and additional advertising for the support organisation. Tenant firm co-operation
Internal co-operation between tenant firms is not homogeneous, since for some firms it depends
more on common business interests and not that much on opinion exchange or informal contacts,
187 Lapina, A. (2000) “Advocate of science-based companies Janis Stabulnieks” (in Latvian). Dienas Bizness, May
while for others the informal communication predominates. Some of the firms even admitted that
they are not aware of the number and profile of all the tenant companies, and that basically this
interaction depends on personal initiative. In the case of LTC, it was noted that there are several
common events for all tenant firms, like New Year’s Eve celebration, or common participation in
conferences and exhibitions. However, it seems that more frequent gatherings would promote
closer internal contacts.
According to location observations, mutual interaction is also not facilitated by the spatial
dislocation of the premises. In LTP, first of all, there is no interaction between firms located in
and out of the park. Secondly, the firms in LTP are located in several buildings, which also limits
their everyday contacts. The same is partly true in regard to LTC, as well, since firm offices and
laboratories are located in long and darkish corridors on different floors of the building. There is
also no common room where firms can interact in an informal atmosphere. However, it is
admitted that existing contacts are more active than they would be if the firms were not located in
the same building. The close location is also considered to be a factor of convenience in case of
certain consultation or purchase issues. The LTC director holds the view that the common
location has a psychological effect, since “every tenant firm is a discrete juridical person
independently solving its problems, but they work at a small distance, communicate, enrich
themselves with new ideas” and thus don’t feel as strangers, which is of high importance.188 International co-operation
There is a certain degree of co-operation with foreign firms, either in raw material purchase or in
common projects. Mainly, existence or non-existence of these contacts is also determined by the
product specificity that is, whether it is developed purely for the local market or has wider
application possibilities. In the case of LTC, the management is aware that the main problem for
the tenants is “not to create or introduce a new product or technology, but to manage the
company and to find market niches and co-operation partners in foreign countries”, with
managerial and international networking skills needing to be improved.189
Expanding to foreign markets is often seen as an additional burden for a firm, since that involves
a lot of organisational and managerial capabilities and overcoming the different local
requirements and bureaucratic procedures of a particular country. Besides, it requires substantial
financial base that is often not developed or achieved yet. There is also disbelief in successful
prospects of competing with local products that are likely to be given preference by local
customers. There are more collaborative bonds with the former USSR or soviet block countries,
due to a more common situation and already established contacts in the soviet period. Another
holdback in more rapid penetration in foreign markets is related to the processing of different
certificates, accreditation and meeting the set standards either on local or European level, which
again involves considerable financial investments. However, despite all these hindering factors,
about 1/3 of LTC firms have found co-operation partners in Europe and the number of export
countries of tenant firms is also growing. Role of innovation support organisations
Finally an issue might rise about the necessity and optimal number of IISOs in Latvia. In this
regard, rather different views were expressed. Some admitted that joining LTC helped the firm to
188 Ozols, J. (2001) “Does Latvia belong to the new economy?” (in Latvian). Biznesa Partneri, April, p. 20.
189 Stabulnieks, J. (2001), op cit, p. 103.
survive, while several respondents both from LTP and LTC considered that they would also have
pulled through and developed without this support - of course, at the same time not denying the
benefits they’ve had from location in a park or centre. They tend to argue in favour of bottom-up
instead of top-down initiatives with firms making their own way and being capable of surviving
on their own. Most of the respondents also argued that they don’t see their presence in LTC or
LTP as an additional argument or prestige factor in dealing with their business partners. The
former aspect, however, might be partly explained by the fact that this view was voiced by one
LTP firm not located in its territory and not utilising any services provided by the park, and by
LTC firms that were already in operation before joining the centre. Secondly, this might simply
be explained by human self-esteem, i.e., not admitting one’s inability to deal with certain
As to the necessity of more organisations of this kind, one LTP tenant firm director held the view
that the capacity would decrease with every new park or centre, since their creation doesn’t
automatically generate more professionals. In several interviews, the view was voiced that
actually there are not so many active scientists. Many developed inventions are still from soviet
times. This issue is also closely related to the fact that the average age of scientists is critically
high, with no new potential replacements joining the academy, due to the bad financial situation
in science. At the same time, according to the estimations of Leonids Ribickis, there are on
average 2-3 people per month coming to LTP with their ideas. Words and deeds
The final, resumptive, research question of this work and altogether one of the most essential
ones, concerns the ‘words and deeds’ of the selected IISOs, as regards their declared aims and
services and their actual implementation and provision. As can be partly inferred already from the
preceding analyses, it has to be admitted that neither of the two IISOs adheres fully to its
According to the information provided in sections 5.1.2 and 5.1.3 on LTC, the following
reference points can be distinguished for a consistency test. As to their aim to promote and
support the establishment of technologically oriented SMEs, it is partly fulfilled it is consistent
in regard to the size of tenant firms (SMEs) and their technological orientation, but many firms
are not newly established when joining LTC but are rather ones that have already operated for a
couple of years. An explanation for this can be sought for in the fact that LTC was established
only in 1993, while ‘surviving’ academic firms were formed right after the collapse of USSR in
1990-1991 and moved to LTC as soon as this option became available. Thus, LTC is providing
more support for development, rather than establishment, of this kind of firm. Furthermore, this
tendency is also supported by the firm selection criteria, which includes the status of a registered
firm with a developed business plan, instead of assisting potential firms to be formed. Apart from
this, other selection criteria seem to be fully in line with the postulated ones. As to LTC’s service
provision, this is also more or less in line with the postulated services, though one could discuss
the quality of some services offered i.e., their scope, efficiency and utilisation by the tenant
firms. Speaking of some other aims, promotion of co-operation between firms and higher
education organisations, and scientific units on the one side and production on the other might be
questioned, since no production sites are allocated or assisted with for tenant firms, and hardly
any concrete assistance is given in individual partner search on behalf of LTC. As to the
promotion of international collaboration, some efforts are being made, though they are not always
followed by practical results, which again puts into question the focus to be taken, either on the
initiative per se or its efficiency in determining (in)consistency.
The situation with LTP is slightly different. Based on their aims and service provision statements
summarised in sections 5.2.2 and 5.2.3, it can be concluded that their actual implementation is
substantially further removed from the aspirations than that established in LTC. For LTP, these
statements are currently more of a potential and expected character than of a realistic ‘state-of-
the-art’ nature. These statements should be considered as the condition that is striven for, a sort of
ideal type that it will be attempted to realise with earlier or later results, depending on the pace of
development and the level of support received. This inconsistency can be clearly seen in the firm
selection criteria currently dictated by the developmental conditions of LTP already discussed
above, with one exception as to the tenant firm size with predominating SMEs. This is also true
of LTP’s aim to promote commercialisation of science through modern technologies, which is
not yet possible for the same reasons. Some efforts are being made to secure consistency in
regard to service provision, though still a lot of services are still unavailable to tenant firms. Summary
In summary, it can be concluded that development of IISOs in Latvia is still in an early stage with
only some first attempts being made, thus determining rather specific conditions for the analysis
of these cases. Transition from the planned to the market economy required a substantial change
in the mentality of the involved actors, and a shift in the organisational set-up towards a more
dynamic one. There is not much direct experience to be learnt from, which implies a ‘trial’ mode
on the part of these first initiatives. Their success is largely dependent on the support received for
their implementation. As can be seen from the both cases, support on behalf of the government is
essential under conditions where private initiative in this field is not yet well developed. Besides,
in the case of Latvia these organisations are primarily needed in order to restore the former
potential and keep it from perishing, rather than promoting the development of new firms, etc.,
which is only lately being actualised. Available funding, infrastructure, the range of offered
services, management capacity, and operation time are of rather decisive importance for a
stronger or weaker development of the IISO cases analysed here. However, these factors do not
yet constitute the bases for preference on behalf of the tenant firms, since the choice options are
not so many yet, and do not allow firms to pose strict requirements as to a preferential site and
conditions. Nevertheless, there is still a lot of space for potential improvements in the operation
of these IISOs, depending, of course, on their position with regard to the degree of intervention
into the activities of their tenant firms and the willingness of these firms to be taught, guided and
assisted. For the time being, there exists a smaller or more profound discrepancy between the
postulated and actual operation principles of LTC and LTP.
Both the contents of theoretical approaches and concepts applied in this research and their
relation to the empirical study have given way to a number of focused reflections on both
theoretical and empirical levels. From the theory aspect, it can be concluded, that in analysing the
IISOs, the SI and TH approaches are complementary rather than mutually exclusive, though there
are certain differences in their scope, focus and the underlying assumptions. With their divergent
perspective levels, where SI takes a macro view and TH is primarily concentrated on a meso
level, these approaches cover different aspects of the same phenomenon, thus adding to its more
profound insight. The same is true as to their respective demand and supply side actor
examination, providing us with puzzle pieces that put together make a more clear outlook.
It must be acknowledged, that the selected theories and concepts have turned out to be useful
both for structuring this research and also for their application in the empirical examination,
although a challenge was posed in applying them to the comparatively specific context of a post-
soviet country. Nevertheless, all of these approaches and concepts have been, to a larger or
smaller extent, useful analytical tools for investigating the specific processes involved in a
gradual shift in the direction of innovative development. They have served as ‘ideal types’ for
examining the specific characteristics of the particular cases. Though one could hardly argue in
favour of a highly developed NSI in the CEECs, systems approach has provided ground for
highlighting the substantial differences between socialist S&TS and the systems formed in the
western world. The NSI perspective has turned out to be particularly important in understanding
the extent to which historical and socio-economic context matters. The former and existing
competencies, the organisational and infrastructural set-up inherited from the soviet period, and
the newly emerging incentives provide a specific background and conditions for the formation
and evolution of an NSI and Triple Helix roles in Latvia. These developments point to these
concepts as unfixed entities allowing of changes, modifications and transformations.
As to IISOs, the possibility and adequacy of comparisons between developed and transitional
countries on equal terms is somewhat limited for the time being, due to different paces and stages
of development. In this respect, IISO mutual comparison within the same socio-economic and
historical context is initially more adequate for comparative purposes, in order to examine more
closely their operation principles and efficiency. Nevertheless, this does not imply that theoretical
models elaborated in developed countries could not be applied to such research, as is also the
case with the ‘word & deed’ method, or the so-called ‘popular conceptualisation’, which also
turned out to be a useful tool.
The methodology