On December 16, 2011 the Foundation for European Progressive Studies (FEPS) with the support of Freedom and Solidarity Foundation (FSF) held the discussion forum “State support for science-intensive development of Latvian economy – vital requirement or non-affordable luxury?”. More than 90 participants from various scientific research and government institutions, non-governmental organizations and universities gathered at the venue – Free Trade Unions House in Riga. Several hundred people watched the discussion on-line on one of the leading Latvian news websites tvnet.lv.

The forum was opened by short introductory speeches of Mr Maris Grinvalds, Board Member of FSF, and Mr Gatis Krumins, Chairman of the Board of the Association of Latvian Young Scientists (ALYS), which took active part in organization of the event. Both speakers outlined main problems and issues for discussion, such as the role of the science in the concept of “knowledge society”, the role of state and private initiatives in strengthening the science as foundation for enhanced national intellectual capacity, as well as the role of responsible policies for improvement of infrastructure of scientific research.

The expert presentations section of the forum was started by Mr Arnolds Ubelis, National NCP Coordinator of Latvia. According to his data, comparing to situation shortly after restoration of independence (1992), when investments in balanced (both fundamental and applied) science was around 2% of GDP and scientific capacity of Latvia was even better than that of Finland, general development dynamics of Latvian science during last 20 years has been mostly negative. Financing for science had been reduced to just 0.3-0.5% of GDP (for reference – Finland’s now is around 4%), relative amount of investment per scientist is 10 times smaller than the figures of the best states, there is a constant reduction of export capacity of technologies (even comparing to neighbours), the number of young scientists of natural (hard) sciences is non-significant and science has almost no role in economic profit-making. Although generally backwardness of Latvia has increased during Research Framework Programme 7 (FP7), there are some positive things, too – there’s still demand for Latvian scientists by research consortiums, which has resulted in big number of established international contacts. Despite small number of project applications, success rate is sufficient and there are good perspectives in those research fields, where reputation has been strengthened thanks to still operating institutes of existing infrastructure. However, it becomes more apparent that Latvian scientists are overloaded, having no reserves and replacement specialists in line. It means that in order to keep system afloat, Latvia will have to import these resources, which can be attracted through support for researcher mobility and by competitive salaries. Mr Ubelis noted that investments in science and technologies are necessary to get Latvia out of poverty trap and intellectual degradation. But Latvian input even in relative figures pales in the light of EU policies, which ensured 1.5 times increase of funding during each of last couple of FPs. Thanks to lack of political will and narrow-minded thinking, several promising projects hadn’t attracted state financing. Also reduced base financing for science meant losing mid technical personnel, without which any normal laboratory cannot exist. Nevertheless, there is still hope in scientific community, which can deliver, for instance, by attracting of millions of Lats for such projects as “Fotonika” (photonics). But even that could be more impressive, if the state would demonstrate more flexibility in investment and repayment policies.

Continuing some of the findings of Mr Ubelis, as well as providing different view on the problematic issues of Latvian science support was Mr Gatis Krumins, Chairman of ALYS. In his presentation, which was focused on research within applied sciences, it was noted that before identifying any development paths it wouldn’t be bad to assume the current state of Latvian science, including the comparison to the best examples. Latvia is in a very unfortunate position, if we consider both the size of our country and economy and its place in the global context, as well as current financing for science development. Mr Krumins suggested to look back in recent history and to learn from two most successful development periods in the last 100 years – shortly before World War I (as part of Tzarist Russia) and during 70ties and 80ties of XX century (as part of USSR). In both cases it was manufacturing and industrial sector which shaped the development of science and research. And in this light, according to Mr Krumins, EU support programmes are non-sustainable and alternative approach should be evaluated, i.e., to gather and structure information about available scientific potential and infrastructure (for instance, as on-line Internet database), which could allow to offer locally carried out scientific research as a service for European and global manufacturers. In this way, by strengthening the research foundation, Latvia could kick-start its own competitive modern industry, thus creating extra income for the budget and extra demand for services. The main obstacles for such approach, as stated by Mr Krumins, are difficulties in obtaining information from government, lack of political will, non-existent national support programme for post-doctoral research, non-enthusiastic work on necessary legislative changes, inflexible tax and non-liberal language policies, as well as number of others. Unfortunately, there seems to be no other viable options, as directly opposite approach – state diktat and “following the single guideline” – is impossible in Latvia because of traditions and democratic governance.

In order to provide better understanding of the role of science in the context of structural state reforms, the opinion of the Ministry of Education and Science was presented by Ms Ineta Kurzemniece. She admitted that current state support for scientific activities is insufficient, but there’s hope that planned structural reforms would help to establish the grounds for improvement of existing situation. Among the main intended tasks are: the consolidation of regional science institutions, establishment of nine national research centers, as well as deeper synergy between Latvian infrastructure and European research environment within the framework of 5 to 6 strategically important science fields. During the course it is necessary to evaluate Latvian science and innovation policies in the context of EU 2020 and Horizon 2020 programmes, to perform objective and independent (involving also foreign experts) assessment of scientific institutions, taking into account also practical results of scientific work (during last 3 years, incl. results of FP projects) and its relevance to the needs of society. It is expected that results of such assessment (not later than November 30, 2012) will become the basis for sorting out proposals for improved legislation in order to change criteria for establishment of scientific institutions, to review conditions under which state financing could be attracted (considering the competitiveness of institution), as well as to set procedures for dealing with ineffective institutions. According to the Ministry, it is important to save the best out of the already shrinking and scattered scientific potential of Latvia. It was encouraging to hear from Ms Kurzemniece that strategic research areas where harmonized with the programme of centers of business competence supported by the Ministry of Economy. However, it was underlined that the level of Latvia’s involvement in EU infrastructure projects will depend on financial capacity of the state. Probably in some of the areas “involvement” will mean just taking care of some separate tasks within the bigger project.

High class scientific research is an important condition for economic and social welfare of the nation. There is a strong correlation between the amount of investment in science and development and growth of economy. Considering the enormous role EU funds have in Latvian economy and science, Mr Werner Wobbe, representative of DG Research and Innovation of the European Commission, informed about European science support initiatives, which currently are very important issues in various discussions about the perspectives of EU development. As an agreement on the next financial planning period (2014-2020) is reached, Mr Wobbe presented main ideas and principles of Horizon 2020 – sub-programme, which was designed to support science for innovative development, social importance and tackling social challenges (aging, health support, viable alternative energy sources etc). As it was presented by Mr Wobbe, Horizon 2020 has three main priorities. The first – excellence in science, meaning that Research Council should fund the best applications that had won in open competition. The second – industrial leadership, meaning that science should foster the development of technologies and products and that there should be support for specific and innovative small and middle enterprises. And the third – tackling social challenges, meaning that science should serve the society and the people. For social sciences to get EU support they should deliver on promoting inclusive, innovative and secure societies. Reflecting on some of the proposals of previous speakers, Mr Wobbe suggested Latvian colleagues and politicians to seriously consider the idea of smart specialization: “You shouldn’t do everything, build up the critical mass of competences and resources that could be significant on international level”. Slovenia with its national programme for support of innovative doctoral studies was mentioned as good example. In conclusion, providing an answer to concerns about unbalanced regional distribution of funds for Horizon 2020 programme, Mr Wobbe explained the two basic ways of EU funding – via structural funds, which also have cohesion role and where member states set their own priorities, or via FPs, where funds are being assigned for the most competitive ideas and projects (incl. those being developed in consortiums). That is a way for EU to balance resource diversification and regionalization approach and adapt it to challenges brought up by more centralized and seemingly better governed developing nations (for example, China and India).

In conclusion of the first panel a report on the problems of support policies framing Latvian scientific research and innovation was presented by prof. Ivars Kalvins, Academician of Latvian Academy of Sciences and Director of Latvian Institute of Organic Synthesis. The tone of the presentation was set by reminder that “knowledge that is not used or shared with others, has no value” and that “science transforms money into knowledge, but innovation is a tool for transforming knowledge into money”. It was also added that Latvian policies do not conform to these principles and this fact may provide an explanation for the inadequate state of conditions in the field of science and research in Latvia. According to data shown by Mr Kalvins the science support budget has been reduced more than 2 times during last two years and it is around just 0.45% of GDP (comparing to 1.5% that was planned earlier). Even more – taking out the EU funds part, it leaves just 0.13% of national support. The speaker also outlined the main absurdities of state policies. For example, all rights for everything created or discovered under state funding belongs to state, which means that scientific institution cannot use developed products or discovered technologies for its own purposes. Authors of achievement even do not receive any royalties. In addition, almost all scientific resources (including funds) are being concentrated in universities, where most students study social sciences, but the number of students of natural sciences have shrank two times during last 10 years. The number of doctorate students and their distribution among scientific fields has no meaning in terms of economic needs. Only 8.7% of them enter real economy sectors, absolute majority stay in public sector. Latvian technology transfer infrastructure that could be used for innovation (mainly in applied sciences research) is outdated. Mr Kalvins said he had an impression that Ministry of Education and Science is not planning to build the infrastructure for scientific production, quite the contrary – there’s intention to cut and reduce. As these cuts are made after assessment procedures, Mr Kalvins declined the idea to measure the quality of scientific work only by number of publications, ignoring contribution to applied research, where the main evaluator within competitive environment is customer. Expert suggested looking for the ways to attract private funds to science, by taking example from Lithuania, where such investors have proportional tax benefits. Moreover, according to calculations of Mr Kalvins, by taking away a million of Lats as co-funding (15%) from a project, the state loses 3 million as income in state budget in the form of taxes. To add more credibility to his statements, at the end of his presentation he thoroughly described and explained the work of Latvian success story – Latvian Institute of Organic Synthesis, which is capable to function on its own and has ambitious plans to become a Center of Excellence of European level in Organic Medical Chemistry Research by consolidating resources with specialists in Lithuania and Estonia.

In the second part of the forum representatives of various political parties, as well as experts held an open debate on the problems mentioned in the first part of the event in order to outline at least the most urgent and obvious solutions to some of them.

Ms Ina Druviete, member of “Vienotība” (Unity) and Head of Science, Culture and Education Commission of the Parliament, said that not only the lack of financial resources is the reason for insufficient funding, we should also take in mind the attitude of society and inadequate legislation. She mentioned a number of currently prepared changes in various existing laws (even those having no direct relation to science and research, but which nevertheless may have a positive impact on situation in general), as well as proposals for unified and encompassing law on higher education and science. Ms Druviete was quite optimistic about chances to substantially increase funding starting with 2013, but she also added that that would require “radical revision of budget making principles”. But until then the government would try harder to make private investors more motivated to invest in (market oriented) research. Even if she supported the idea of setting priorities for certain sectors of economy and areas of scientific development on the national level, as well as specialization of science, she also defended the rights of scientists with exceptional abilities in different fields to be also supported by state.

Mr Ivars Zarins was the voice of parliamentary opposition – the Concord Center. In contrast to most of the previous speakers, he focused on psychological reasons for problems Latvia faces in general and in science support issues in particular. According to Mr Zarins, the main problem of Latvian people is disbelief in personal and national strength and abilities. That results in fear from responsibility about smart investment in growth during hardships of financial crisis. That explains lack of planning policies of national development. And that takes away motivation from students to dedicate their lives to those fields of science, which, despite being abandoned in Latvia (due to lack of state support), are promising and have priority status in a lot of other countries. Not being ready to announce any concrete alternative numbers for science support proposed by his political faction for the latest state budget, Mr Zarins explained that instead of hardcore consolidation, funding for science should be increased up to 3% of GDP.

Representative of National Union, which is a part of current ruling coalition, as well as member of Education, Culture and Science Commision Ms Vineta Porina has convinced the audience that even research in social sciences can provide innovation of economic importance. However, she also stated that too much innovative people could also be a threat to the state (system). Unfortunately, she didn’t provide any further explanation of this statement. Nevertheless, she agreed with Ms Druviete and supported the idea of prioritization of some sectors of economy (and science), which could improve the situation with insufficient human resources in institutions of natural sciences. To correct mistakes of her colleague Mr I. Paradnieks (also Member of Parliament), she agreed to study the proposals of ALYS for changes in current public procurement law.

Being one of the most prominent experts on these issues in Latvia, Mr Ivars Kalvins continued with sharp criticism of current state policies. He said that even good initiatives of the state, for instance – recently established technology transfer contact points of universities, have no practical meaning, because there is no content to be transferred and there is no defined goal of social significance to reach. Similarly, there is no point to assign exclusive status to some of the fields, if there is no funding to support such claims. Mr Kalvins pointed to the result of such approach – there are almost no scientists left in Latvian private sector, thus, entrepreneurs and scientists had lost common language not just because they do not understand each other, but they also are not motivated to find common grounds. Even society in general does not feel added value provided by scientists, and it keeps them silent when they should be defending the interests of scientists for the common good. Despite some bright previous periods in the past, activities of last two ministers (Mr Broks and Mr Kilis) do not bring in any hope – Mr Kalvins remained highly skeptical about possibility of fundamental changes in attitudes and thinking of the government during hard times of crisis (just austerity). He concluded that due to weak planning in the modern age of globalization Latvia considerably fails in competition with those countries that have already implemented thorough and targeted policies.

Expert of Ministry of Education and Science, Ms Ineta Kurzemniece had no doubt that the problem of Latvia is not the lack of ideas, but the lack of financial resources, because the number of good project applications surpassed the number of accepted with the ratio of 5:1. She tried to defend against the criticism of the Ministry by the fact that it is not them (incl. Science Council) planning less funding, but rather the Cabinet of Ministers, which has final word in decision on the budget. She backed Ms Druviete in her claims to increase the amount of funds already in 2013. To help her colleague, another representative of the Ministry, Ms Inta Svirksta stepped in and commented on the assessment criteria, explaining that multi-factor evaluation of previous scientific achievements is already happening at least in the framework of EU structural funds available for Latvia – in addition to publications, the amount of previously attracted funding, as well as work efficiency (attracted funding per scientist) are being evaluated, too.

Ms Ilze Beinare, expert of the Ministry of Economy, agreed with her colleague Ms Kurzemniece that Latvia’s problem was not the quality of ideas. For that she described some of the methods the Ministry is using to select the best ideas and motivate innovation, such as Ideas Cup and Export and Innovations Prize. Nevertheless, she admitted that certain breach exists between the business and scientists and informed about the programme of the Centers of Competence, which was developed together with all interested and responsible parties, and which should complement already existing state support initiatives, for instance, in favor of export-oriented and manufacturing companies.

Main conclusions of the forum:

Experts at the forum confirmed (or didn’t object) that there is a strong correlation between the amount of investment in science and development and economic growth of the state. With some exceptions Latvia still has sufficient scientific potential to support rapid growth if favourable and targeted state policies are in place,
All involved parties responsible for support of science and research have clear understanding that support for this area in Latvia (in comparison to almost any developed state) is highly inadequate and that due to lack of meaningful and focused policy during last 20 years national scientific and research infrastructure has been brought on the brink of survival. Being aware that increase of financing and improvement of the general situation is politically, economically and socially complex issue, representatives of political parties made a commitment to fight for substantial improvement of financial situation in this field already in 2013,
In addition to pledged support for improvements in financial situation, politicians promised immediate alignment and development of legislation, which is highly unfriendly not just for science and research, but also for successful implementation of a set of planned mechanisms in this area (transfer of knowledge/technologies, research for innovative industries, attraction of private co-financing funds and so on),
Existing economic, political and social environment is not suitable for breaking changes in the content of proposed structural reforms, i.e., consolidation and assessment of scientific institutions will be continued for eventual optimization of infrastructure,
Open and intensive dialogue between all involved parties should be established to evaluate and reach an agreement on feasibility of smart specialization concept in Latvia,
Immediate and essential update to criteria of quality and conformity assessment of (previous) scientific activities in the framework of state financed projects should be done,
Feasibility study for creation of single on-line database of available national science and research infrastructure should be carried out. Such database could be used to promote commercially available local scientific services for large international manufacturers, thus, strengthening certain scientific competences and stimulating both transfer of production facilities to Latvia or creating new ones locally.

After initial assessment and analysis of information gathered in the forum, FSF and invited experts will prepare the paper of proposals addressed to the Parliament, Ministry of Education and Science, as well as Cabinet of Ministers – to improve the understanding of the problematic issues by elected representatives and government officials, and to promote long-awaited changes in Latvian science and research area.

The forum was organized by FEPS, with the support of FSF and an active involvement of ALYS.

All available visual and written electronic records of the forum are available on-line on the Internet website of FSF at www.bsf-latvija.lv (Latvian version).