The features of economic growth in the case of Latvia and Lithuania

Abstract

Innovation based growth and development is a hot topic in all economies of the world. Openness of mind, openness of businesses and openness of innovation are the key characteristics and success factors of the global world today. Growth and development strategies are becoming smarter transforming economy towards creation of higher added-value products, services and more effective use of resources. Such a high-priority aim may be achieved by R&D activities, which raise the innovation growth and, positively influence productivity, thus providing a platform for sustainable growth and development. Productivity is perceived as the ability to properly use the production factors to create value-added, implement innovations and to maintain the country's competitiveness. In the macroeconomic researches of different scholars (Solow, Saliola, Seker, Kathuria, Puharts etc.) special attention is given to the quantitative measurement of the various factors of growth and development. These researches have shown that one of the more accurate methods of the productivity measurement is a calculation of total factor productivity (TFP). TFP notion is closely related to the innovation concept as proved by many empirical researches. Industry and firm-level studies concluded that R&D investments to a great extent determine TFP growth. The aim of this research is to calculate the total factor productivity by industry both in Latvia and Lithuania for better understanding of economic growth and development perspectives in those countries.

Sources of Economic Growth: A Global Perspective

“…It can therefore be concluded that the initially lower level of development is conducive to higher dynamics of GDP growth. The variables found in the second and third positions of the ranking, that is, X 2 , gross national savings, and X 12 , gross fixed capital formation, respectively, refer to a similar subject, which can have a considerable impact on the dynamics of economic growth, both theoretically and in practice (Matuzeviciute and Butkus [69], Danileviciene and Lace [70]). Gross fixed capital formation directly demonstrates the proportion of GDP that is further invested, and the gross national savings, understood in the Keynesian approach, can be also ultimately treated as an investment, which is axiomatic in closed economies.…”

Sustainability and Continuous Improvement of Organization: Review of Process-Oriented Performance Indicators

“…Many studies address the organizations' sustainable performance and openness to innovation as important requirements for continuous development [5,6,68]. Some authors focus on implementation of standards or total quality management practices as the foundation for building an organizational environment appropriate for implementing innovations [65].…”

“…There is a wide range of ways how organizations could measure their performance regarding sustainability. Many studies address the organizations' sustainable performance and openness to innovation as important requirements for continuous development [5,6]. It also depends on what level of performance the organization is looking at-organizational, process or performer level [7].…”

“…Each of these dimensions consists of a set of performance indicators that could be measured and analysed in terms of organizational and process levels. From a different perspective, some organizations use economic indicators, such as productivity regarding the use of resources and creating value for the customer to measure the performance [6]. Often organizations use predefined models to measure the overall performance from different perspectives, including corporate social responsibility and sustainability.…”

Competences for Strengthening Entrepreneurial Capabilities in Europe

“…The fields the entrepreneurs represented were manufacturing, business consulting, IT, and interior design. While the sectors of economy do not make a great impact on the dynamics of the domestic GDP and are not as productive as construction or electricity supply industries [66], development of the right skills set could significantly improve the productivity of an enterprise. One competence was separately distinguished from the EntreComp list, namely, activating the market which is the ability to be able to create demand for the product, to be knowledgeable about the market and to use this knowledge for the benefit of the start-up.…”