In Estonia, 73 percent of the polled companies said they planned to invest in innovations during 2015, while a year ago 60 percent were planning to do so. Significant surge of innovation plans is observed in Lithuania: in 2015, 69 percent of SMEs plan to engage in innovation activities while a year ago only 42 percent had plans to innovate. However, in Latvia there is an opposite trend: the number of Latvian companies who are planning to innovate has fallen from 48 percent to 39 percent during last year.
"Through innovations, companies in Estonia, Latvia, and Lithuania aim at increasing competitiveness both in the domestic and international markets, especially as the low-cost production advantage of Baltic markets is gradually diminishing. Companies are aware that after investing in innovations, fewer resources are required in production or provision of services, which will have a positive impact on company finances. However, it is clear that inactivity of Latvian SMEs in terms of investment in new technologies and new products is a negative trend. In medium-term this attitude could lead to decreased competitiveness and diminished export capacity of Latvian companies," said Ieva Tetere, member of the board of SEB Bank of Latvia.
Product or service innovation is the preferred field, with 46 percent of Lithuanian, 36 percent of Estonian, and 26 percent of Latvian SMEs opting for that. 24 percent of all polled SMEs in Estonia, 14 percent in Lithuania, and only 6 percent in Latvia plan to invest in employee development. 11 percent of Estonian, 5 percent of Lithuanian, and 3 percent of Latvian SMEs have plans to change their business model next year.