In dynamic, technology-driven economies, policy makers operate under bounded rationality resulting in adaptive policy making. This paper claims that the collective benchmarking of policies is useful in facilitating policy learning and, therefore, improving the effectiveness of adaptive policy making by guiding the search for successful policies and exploiting various learning sources. However, the necessary condition for increasing performance is the implementation of the new policy understanding in the participant countries. Recently, the Organisation for Economic Cooperation and Development and the EuropeanUnion have applied benchmarking to support policy learning in their member countries.
The growth prospects of the Estonian economy depend on transforming the former ‘socialist’ industrial R&D into competitive business‐sector innovation activities, establishing interactions between firms and other research units, and accelerating international diffusion. An additional task, specific for a transition country, is intensive utilization of the inherited human capital. The results of a business survey conducted in Tallinn in the summer of 1996 indicate that favourable restructuring of industrial R&D and the development of new innovation capacities are indeed taking place. The regression models indicate, however, that while the results seem to be mostly successful, some detailed support is needed. Firstly, further qualitative changes seem to be necessary in the state‐owned and privatized electronics firms. And secondly, newly emerging firms need easier access to the capital market and management expertise.
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