RIO country report 2015 : Lithuania.
Date: 2016-05-31
Institutions: Institute for Prospective Technological Studies
Subjects: EU research policy, Lithuania, innovation, organisation of research, private investment, public investment, research and development, research policy, research report, scientific cooperation

RIO COUNTRY REPORT 2015: 
Lithuania 

Agnė Paliokaitė 

Pijus Krūminas 

Blagoy Stamenov 

2016 

EUR 27882 EN 

 
 
This publication is a Science for Policy Report by the Joint Research Centre, the European Commission’s in-house 
science service. It aims to provide evidence-based scientific support to the European policy-making process. This 
publication,  or  any  statements  expressed  therein,  do  not  imply  nor  prejudge  policy  positions  of  the  European 
Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible 
for the use which might be made of this publication. 

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EUR 27882 EN 

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ISBN 978-92-79-57881-6 

ISSN 1831-9424 

doi:10.2791/049440 

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How to cite: Agnė Paliokaitė, Pijus Krūminas, Blagoy Stamenov; RIO Country Report 2015: Lithuania;  
EUR 27882 EN; doi:10.2791/049440 

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Abstract 
The 2015 series of RIO Country Reports analyse and assess the policy and the national research and innovation 
system developments in relation to national policy priorities and the EU policy agenda with special focus on ERA 
and Innovation Union. The executive summaries of these reports put forward the main challenges of the research 
and innovation systems.  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents 

Foreword ................................................................................................................. 4 

Acknowledgments ..................................................................................................... 5 

Executive summary ................................................................................................... 6 

1. 

Overview of the R&I system .............................................................................. 13 

1.1 

1.2 

Introduction ................................................................................................ 13 

Structure of the national research and innovation system and its governance ....... 15 

1.2.1 

Main features of the R&I system ............................................................... 15 

1.2.2 

Governance ........................................................................................... 15 

1.2.3 

Research performers .............................................................................. 16 

2. 

Recent Developments in Research and Innovation Policy and systems ..................... 18 

2.1 

2.2 

2.3 

2.4 

National R&I strategy ................................................................................... 18 

R&I policy initiatives ..................................................................................... 19 

European Semester 2014 and 2015 ................................................................ 21 

National and Regional R&I Strategies on Smart Specialisation ............................. 22 

2.5  Main policy changes in the last five years ........................................................ 23 

3. 

Public and private funding of R&I and expenditure ................................................ 24 

3.1 

3.2 

Introduction ................................................................................................ 24 

Smart fiscal consolidation .............................................................................. 25 

3.2.1 

Economic growth, fiscal context and public R&D ......................................... 25 

3.2.2 

Direct funding of R&D activities ................................................................ 26 

3.2.3 

Indirect funding – tax incentives and foregone tax revenues ........................ 29 

3.2.4 

Fiscal consolidation and R&D .................................................................... 29 

3.3 

Funding flows .............................................................................................. 30 

3.3.1 

Research funders ................................................................................... 30 

3.3.2 

Funding sources and funding flows ........................................................... 30 

3.4 

Public funding for public R&I .......................................................................... 32 

3.4.1 

Project vs. institutional allocation of public funding ..................................... 32 

3.4.2 

Institutional funding ............................................................................... 33 

3.4.3 

Project funding ...................................................................................... 34 

3.4.4 

Other allocation mechanisms ................................................................... 35 

3.5 

Public funding for private R&I ........................................................................ 36 

3.5.1 

Direct funding for private R&I .................................................................. 36 

3.5.2 

Indirect financial support for private R&I ................................................... 37 

3.5.3 

Public procurement of innovative solutions ................................................. 38 

3.6 

Business R&D .............................................................................................. 39 

3.6.1 

The development in business R&D intensity ............................................... 39 

3.6.2 

The development in business R&D intensity by sector .................................. 40 

3.6.3 

The development in business R&D intensity and value added ........................ 43 

3.7 

Assessment ................................................................................................. 45 

4. 

Quality of science base and priorities of the European Research Area ...................... 47 

2 

 
 
4.1  Quality of the science base ............................................................................ 47 

4.2  Optimal transnational co-operation and competition .......................................... 48 

4.2.1 

Joint programming, research agendas and calls .......................................... 48 

4.2.2 

RI roadmaps and ESFRI .......................................................................... 49 

4.3 

4.4 

International cooperation with third countries ................................................... 50 

An open labour market for researchers ............................................................ 50 

4.4.1 

Introduction .......................................................................................... 50 

4.4.2 

Open, transparent and merit-based recruitment of researchers ..................... 52 

4.4.3 

Access to and portability of grants ............................................................ 54 

4.4.4 

Doctoral training .................................................................................... 55 

4.4.5 

Gender equality and gender mainstreaming in research ............................... 56 

4.5  Optimal circulation and Open Access to scientific knowledge ............................... 56 

4.5.1 

e-Infrastructures and researchers electronic identity ................................... 56 

4.5.2 

Open Access to publications and data ........................................................ 57 

5. 

Framework conditions for R&I and Science-Business cooperation ............................ 59 

5.1  General policy environment for business .......................................................... 59 

5.2 

5.3 

5.4 

5.5 

5.6 

5.7 

Young innovative companies and start-ups ...................................................... 59 

Entrepreneurship skills and STEM policy .......................................................... 60 

Access to finance ......................................................................................... 61 

R&D related FDI ........................................................................................... 63 

Knowledge markets ...................................................................................... 63 

Public-private cooperation and knowledge transfer ............................................ 65 

5.7.1 

Indicators ............................................................................................. 65 

5.7.2 

Policy Measures ..................................................................................... 70 

5.8 

5.9 

Regulation and innovation ............................................................................. 72 

Assessment of the framework conditions for business R&I .................................. 73 

6. 

Conclusions ..................................................................................................... 75 

6.1 

Emerging structural challenges of the national R&I system ................................. 75 

6.2  Meeting structural challenges ......................................................................... 75 

References .............................................................................................................. 80 

Abbreviations .......................................................................................................... 82 

List of Figures .......................................................................................................... 84 

List of Tables ........................................................................................................... 85 

Annex 1 – List of the main research performers ............................................................ 86 

Annex 2 – List of the main funding programmes ........................................................... 87 

Annex 3 – Evaluations, consultations, foresight exercises ............................................... 89 

3 

 
 
 
Foreword 

The  report  offers  an  analysis  of  the  R&I  system  in  Lithuania  for  2015,  including  relevant 
policies  and  funding,  with  particular  focus  on  topics  critical  for  EU  policies.  The  report 
identifies  the  main  challenges  of  the  Lithuanian  research  and  innovation  system  and 
assesses  the  policy  response. It  was  prepared  according  to  a  set  of  guidelines  for 
collecting  and  analysing  a  range  of  materials,  including  policy  documents,  statistics, 
evaluation reports, websites etc. The quantitative data is, whenever possible, comparable 
across  all  EU  Member  State  reports.  Unless  specifically  referenced  all  data  used  in  this 
report are based on Eurostat statistics available in February 2016. The report contents are 
partly based on the RIO country report, 2014 (Paliokaite, 2015a). 

4 

 
 
 
 
Acknowledgments 

The  report  draft  has  benefited  from  comments  and  suggestions  of  Kristina  Babelytė-
Labanauskė  and  Ramunė  Rudokienė  from  the  Ministry  of  Education  and  Science  of  the 
Republic  of  Lithuania,  Jovita  Surdokienė  and  Aurelija  Kazlauskienė  from  the  Ministry  of 
Economy,  and  Kristina  Masevičiūtė  from  the  Research  and  Higher  Education  Monitoring 
and Analysis Centre (MOSTA).  

Comments from DG RTD are gratefully acknowledged. 

Peter  Fako,  Lorenzo  Isella  and  Athina  Karvounaraki  produced  the  statistics  and  the 
analytical assessments for sections 3.2 and 3.6 of the report. 

We  would  like  to  thank  Sophie  Bodart  for  her  assistance  in  preparing  this  report  for 
publication.  

Authors' affiliation: 

Agnė Paliokaitė: Visionary Analytics UAB (Vilnius, Lithuania) 

Pijus Krūminas: Visionary Analytics UAB (Vilniu, Lithuania) 

Blagoy  Stamenov,  European  Commission,  Directorate-General  Joint  Research  Centre, 
Directorate  J  -  Institute  for  Prospective  Technological  Studies,  Innovation  Systems 
Analysis unit (Brussels, Belgium) 

5 

 
 
 
 
 
 
Executive summary  

This  report  was  prepared  according  to  a  set  of  guidelines  for  collecting  and  analysing  a 
range  of  materials,  including policy  documents,  statistics,  evaluation  reports,  websites, 
etc. The quantitative and qualitative data is, whenever possible, comparable across all EU 
Member  State  reports.  The  report  also  provides  up  to  date  overview  of  Lithuania’s  R&I 
system for 2015, including relevant policies and funding, taking into account the priorities 
of the European Research Area and the Innovation Union. 

Context 

Lithuania is a small country with less than 0.6% of the total EU28 population (almost 3m 
inhabitants in 20151), located on the eastern border of the EU. After being heavily hit by 
the recession of 2009, its economy was one of the fastest growing in the EU (6.1% GDP 
growth  in  2011),  however  the  rate  of  GDP  growth  decreased  in  recent  years  (1.6%  in 
2015 according to the Central Bank of the Republic of Lithuania).  

As  the  2008-09  economic  crisis  hit  Lithuania  very  hard  the  country  was  under  extreme 
pressure  to  pursue  fiscal  austerity  measures.  Those  measures  were  implemented  across 
the board, including R&D allocations. During the post-crisis fiscal consolidation in 2011-12 
both GBAORD and government funded GERD stagnated nominally and as a share of total 
government  expenditures,  but  decreased  as  a  share  of  GDP.  The  post-crisis  fiscal 
consolidation  process  had  a  negative  impact  on  public  support  to  the  Lithuanian  R&D 
expenditures  but  the  evidence  is  not  strong  enough  to  conclude  that  it  came  at  the 
expense of it. It was mainly due to the high share of EU funding that the country kept its 
R&D budget growing in the post-crisis years. 

Lithuania  ranks  25th  in  the  Innovation  Union  Scoreboard  (European  Commission,  2015a) 
with no clear catching up with more advanced members of the EU. It can be considered a 
lower  income  country  with  specialisation  in  labour  intensive  traditional  industries,  facing 
the need for upgrading. The R&D effort is predominantly ensured by the public sector. At 
the  same  time  there  have  been  serious  obstacles  for  public  R&D  commercialization  and 
systemic  collaboration  (reflecting  some  path-dependencies):  overdependence  on  basic 
science, outdated public R&D base and unattractive research careers, lack of social capital 
and  network  failures,  weak  innovation  diffusion  system,  and  low  motivation  to  learn 
(Visionary  Analytics,  2015).  The  private  sector,  in  its  current  specialisation,  does  not 
perceive innovation as a critical factor to long-term competitiveness. This leads to limited 
capacities to absorb public R&D investments.  

Changes  in  R&D  spending  were  not  significant  in  the  previous  years,  however  in  2014 
GERD increased to 1.01% of GDP (from 0.95%), and the long-stagnating business funded 
R&D  increased  to  0.32%  (from  0.26%).  Despite  this  increase,  achieved  partly  due  to 
significant efforts to improve business R&D data collection, there is little chance that GERD 
and BERD targets set in Europe 2020 and national policy documents will be met. 

There  has  been  limited  change  in  the  structure  of  the  national  R&I  system  and  its 
governance  since  2012.  The  Ministry  of  Education  and  Science  and  the  Ministry  of 
Economy  remain  the  two  main  bodies  responsible  for  R&I  policy,  while  several  agencies 
distribute funding. The system as a whole is dominated by R&I funded and performed by 
public  agents.  The  R&I  policy  remains  fragmented.  There  is  a  main  general  strategic 
document,  Lithuania  2030,  which  includes  research  and  innovation.  However,  regarding 
the  R&I  policy  specifically,  the  two  above-mentioned  ministries  issued  separate 
programmes  which  leads  to  some  overlaps  (e.g.  both  programmes  cover  R&D  or 
education).  The  structure  of  funding  flows  remains  rather  similar  to  that  of  the  previous 
years,  and  is  dominated  by  the  EU  structural  and  investment  funds  (ESIF).  Expectations 
for change are triggered by several recent initiatives: 

1 If not indicated otherwise, the source of the data is Eurostat [09-2015]. 

6 

 
 
                                          
  The smart specialisation strategy development over 2013-2015 provided a cooperation 
framework  for  stakeholders  from  different  institutions.  Since  both  the  Ministry  of 
Education  and  Science  and  the  Ministry  of  Economy  will  implement  this  strategy,  a 
more  collaborative  approach  is  expected.  Moreover,  the  monitoring  and  evaluation 
system was being developed in 2015 and involved both sides of the policymakers. 
  Two  initiatives  of  law  making  were  started.  The  heavily  revised  Law  on  Higher 
Education and Science has been approved by the Government and is pending approval 
of the Parliament. The Ministry of Economy initiated a Law on Innovation Promotion. It 
was assessed externally in 2015, but further steps for its governmental approval were 
not taken. 

  The  years  2014-2015  have  seen  several  evaluations  and  a  benchmarking  exercise, 
which is a positive sign. It indicates that there is more and more willingness to adopt 
evidence-based  approach  to  policy  making.  One  of  the  key  evaluation  initiatives  in 
2015 was the R&I system review carried out by the OECD, to be published in 2016. 

Lithuania  still  has  to  make  progress  in  aligning  with  some  ERA  policies.  The  country  has 
made  some  progress  in  creating  open  labour  market  for  researchers,  but  there  is  still 
considerable  room  for  improvement.  As  a  general  rule,  competition-based  national 
research grants and research fellowships are open to non-residents from the EU and third 
countries  but  funding  is  not  portable  outside  Lithuania.  The  level  of  transnational  co-
operation  in  joint  activities  with  EU  member  states  is  rather  low  and  the  country  is  not 
very  active  in  developing  R&I  cooperation  with  third  countries.  In  general,  the  research 
system suffers from insufficient internationalisation. 

The  Lithuanian  R&I  policies  have  been  focused  in  the  recent  years  on  technology 
upgrading  and  creation  of  public  R&D  infrastructure.  Business  access  to  venture  capital 
markets  have  increased  dramatically  during  2011-2014.  Although  there  were  measures 
targeting  innovative  and  young  companies,  this  has  not  been  enough  to  promote  higher 
business involvement in R&D. Furthermore, the direct financial support for collaboration of 
science  and  business  in  joint  R&D  projects  has  been  relatively  low,  compared  to  other 
policy  instruments,  but  there  are  new  policy  measures  in  the  pipeline  (such  as  Joint 
initiatives) that aim to address this issue. 

All in all, Lithuania‘s R&I system is behind the targets that were set for it both in terms of 
funding  and  in  terms  of  framework  conditions  for  R&I  activities.  The  more  specific 
structural challenges are the following: 

research  competencies,  mainly 

  First,  building  private  R&D  capacity.  The  2007-2014  innovation  policy  mix  mainly 
focused on two routes: a) strengthening mature R&D performers and b) strengthening 
in  R&D 
public  sector 
infrastructure.  There  is  no  evidence  that  any  of  it  has  been  successful  in  leveraging 
business R&I capacities or restructuring the economy (Visionary Analytics, 2015). This 
means that a more tailor-made approach to the R&I capacity building is needed taking 
into  account  that  the  current  capacity  levels  and  the  potential  to  move  up  in  the 
‘competence  ladder’  (from  basic  to  R&D  based  skills)  largely  differ  within  the  target 
groups.  A  more  balanced  policy  mix  is  needed,  for  example,  focused  on  newcomers 
(start-ups,  spin-offs,  knowledge-based  foreign  investors)  and  encouraging  previously 
non-innovative  companies  to  transform  their  businesses  towards  higher  value  added 
activities. 

investments 

through 

  Second,  skills  supply  and  demand  mismatches  and  availability  of  skilled  human 
resources  are  pressing  key  obstacles  for  innovation.  Companies  lack  specialists  with 
skills  important  for  innovating (Visionary  Analytics,  2014). Despite a high numbers of 
graduates,  Lithuania  witnesses  depreciation  of  higher  education  quality.  A  key 
challenge  is  to  substantially  improve  education  and  training  of  skilled  specialists,  and 
to design smart talent attraction policies. The education system needs to integrate the 
critical, entrepreneurial, creativity thinking and social capital skills from an early age. 
  Third,  low  commercialisation  of  public  research.  Most  of  Lithuania’s  universities  have 
limited capacities and motivation for commercialisation efforts. The innovation culture 

7 

 
 
and  skills  in  universities  and  institutes  need  to  be  urgently  developed.  The 
collaboration between the business and the public research sector will not work unless 
the  current  researchers’  career  system  and  the  public  R&D  institutional  funding 
mechanism  are  changed.  The  current  system  does  not  encourage  public  sector 
researchers  to  focus  on  commercialising  R&D  results  or  providing  R&D  services  for 
businesses.  The existing public R&D services network (open access centres etc.) has 
to be better exploited. 

  Fourth,  high  policy  fragmentation  and  limited  policy  capacities,  including  lack  of 
coordination  at  all  levels,  is  an  “old”  problem.  Absence  of  a  systemic  R&I  policy 
approach  has  contributed  to  a  fragmented  mix  of  policies,  policy  instruments  and 
implementation structures.  Governance failures result in limited efficiency and missed 
opportunities. A number of systemic changes have been recommended over the years 
by  experts  and  evaluators  (Visionary  Analytics,  2014,  2015;  Technopolis  Group  and 
Ernst&Young, 2014, among others), for example to assign responsibility for developing 
and  co-ordinating  strategic  intelligence  on  the  basis  of  monitoring  and  ex-post 
evaluation to a single body and to align the mix of instruments, e.g. supply side with 
demand side policies, grants and reimbursable aid, national and transnational funding. 
Furthermore,  such  a body  should  not  be  dependent  on  other  stakeholder  institutions, 
such as ministries, but be established at a higher level. 

The  new  policy  mix  for  the  financing  period  2015-2020  aims  to  tackle  some  of  these 
challenges.  It  is  too  early  to  tell  how  successful  the  designed  measures  will  be. 
Furthermore, from mid-term perspective, the R&I system’s dependence on EU ESIF poses 
a  significant  future  challenge  for  Lithuania.  It  is  likely  that  in  the  following  programming 
period  there  will  be  a  significant  decrease  of  funds  provided  by  the  Commission.  In  this 
case,  R&D  expenditure  will  drop  significantly  and  such  a  shock  can  prove  detrimental  to 
the  whole  R&I  system.  Therefore,  in  the  following  five  years  the  Government  should 
ensure that R&I funding sources become more diverse. 

R&I Challenges 

Challenge 1: Building private sector R&I capacity  

All R&D and innovation performance indicators related to the business sector (e.g. BERD), 
as noted throughout the report, remain well below the EU-28 average. The private sector, 
in its current specialisation, does not perceive innovation as a critical factor for long-term 
competitiveness.  This  leads  to  limited  capacities  to  absorb  public  R&D  investments 
indicating the need for capacity building in the private sector. Export and competitiveness 
in  Lithuania  are  highly  dependent  on  relatively  large  (total  share  in  value  added  and 
employment  —  up  to  40%  in  2013)  traditional  sectors  such  as  transport  and  logistics, 
retail,  agriculture,  construction,  manufacture  of  food  products,  beverages  and  tobacco 
products  and  manufacture  of  furniture.  The  number  of  existing  research  and  innovation 
performers is rather limited. Therefore it is logical to focus on newcomers (start-ups, spin-
offs,  knowledge-based  foreign  investments)  and  to  encourage  previously  non-innovative 
companies to transform their businesses towards higher value added activities.  

The 2007-2014 innovation policy mix mainly focused on two routes: strengthening mature 
high-tech  firms  and  public  sector  research  competencies  and  commercialisation.  There  is 
no evidence that any of it has been very successful. For example, it is unlikely that ERDF 
policies had a significant effect on the development of high technology sectors in Lithuania 
(based on the results of MOSTA, 2015a; BGI Consulting, 2014; CSIL, Visionary Analytics, 
2015). Direct support for business R&D over 2007-2015 reached merely 157 high/medium 
high technology firms (Visionary Analytics, 2015). It is also unlikely that direct support for 
business R&D had a significant effect on overall business R&D indicators, partly because of 
the high administrative load. Policy additionality has been achieved in about only 30-40% 
of  the  funded  projects  (Visionary  Analytics,  2015).  Finally,  there  is  no  evidence  of 
significant  economic  impact  of  the  clusterisation  promotion  or  the  investments  in  the 
innovation  promotion  infrastructures  (Visionary  Analytics,  2015).  Innovation  promotion 
intermediaries had limited effect on the collaborative behaviour of SMEs due to the focus 

8 

 
 
on investment in “hard” infrastructure. A warning sign is that as a direct response to the 
policy instruments there are now more than 40 clusters in a country as small as Lithuania. 
Thus the next period’s challenge is to create incentives for merging the clusters working in 
similar  sub-sectors  and/or  technology  fields.  A  positive  development  is  that  public 
procurement  for  innovation  and  other  demand-led  policy  instruments  have  started  to  be 
discussed and pre-commercial procurement was approved in 2015. 

In Lithuania, the “low-hanging fruit” is starting to disappear. During the last decade, there 
has  been  a  strong  appreciation  of  the  real  effective  exchange  rate  (35%,  compared  to 
21% in the EU27) indicating a loss in cost and price competitiveness. Nominal unit labour 
costs have increased by 26% between 2000 and 2010, compared to an increase of 14% in 
the  EU27  and  20%  in  the  Euro  area.  While  labour  productivity  per  hour  worked  has 
gradually  increased  over  the  last  decade,  it  is  still  about  45  percentage  points  below  the 
EU27  average.  This  indicates  the  need  to  increase  productivity  further  and  to  find  new 
sources for competitiveness and growth. It’s not anymore so easy to do business based on 
low cost and operating in the least profitable parts of the value chain. The labour costs are 
rising and competition is going up. The challenge is moving up the value chain - either by 
upgrading  the  position  in  the  international  value  chain,  or  by  starting  to  invest  more  in 
R&D  and  developing  own  products,  becoming  a  brand  owner  and  investing  in  marketing 
and sales. This requires not only technological, but also managerial skills. 

The key challenge for Lithuania, thus, instead of focusing on the few existing R&D based 
innovators,  is  to  promote  the  structural  change  of  the  economy  by  providing  a 
transformation  agenda  for  diversification  of  existing  (incl.  traditional)  sectors  and 
transition  to  new  knowledge  based  activities.    It  would  help  upgrading  the  role  of  the 
Lithuanian industry in the global value chains. Importantly, a more tailor-made approach 
to the R&I capacity building is needed  taking into account that the current capacity levels 
and  the  potential  to  move  up  in  the  ‘competence  ladder’  largely  differ  within  the  target 
groups  (mature,  new  and  potential  innovators).  The  country  should  take  maximum 
advantage of its Smart specialisation strategy and use it as a basis to create a favourable 
environment  for  supporting  entrepreneurship  and  fostering  emerging  technologies  in 
export-oriented and high value added market segments where Lithuania has the capacity 
to attain a potential competitive advantage. 

Challenge 2: Skills supply and demand mismatches  

A key emerging bottleneck for the development of a knowledge intensive business sector 
(see  challenge  1)  is  the  availability  of  skilled  human  resources  for  innovation  creation. 
High  outward  migration  and  low  quality  of  education  (from  basic  education  to  lifelong 
learning2) lead to mismatches in skills demand and supply as well as general shortage of 
skilled labour.  This problem has a number of dimensions. 

First, negative demographic tendencies with an increase by more than 67% since 1990 of 
the  share  of  the  population  aged  above  64  years  and  high  economic  migration  steadily 
reduce  the  supply  of  labour.  This  puts  future  economic  growth  at  risk.  Second,  since 
joining the EU, Lithuania has lost a substantial part of its labour force which has migrated 
to  work  in  other  EU  Member  States.  According  to  Eurostat,  the  majority  of  Lithuanian 
economic  migrants  (73%)  are  15–44  years  old.  If  the  current  trends  are  not  reversed, 
according  to  the  European  Commission's  Ageing  Report  (2012),  in  2030  Lithuania  will 
have  384,000  less  people  of  working  age  (15-64  years)  compared  to  2010,  the  labour 
force (in the 20-64 years group) will reduce to 1.376m, and the number of pensioners will 
increase to almost 1m.  

Third,  the  current  education  system  has  a  number  of  flaws.  Despite  a  large  number  of 
higher education institutions in the country, none of the Lithuanian universities are in the 
top 500 world universities according to QS World University Rankings 2015/2016. Lifelong 

2 According to Eurostat, with respect to reading literacy performance of pupils Lithuania ranked only 20th out of 26 
countries where data is available, in 2012. The country was also 21st in EU-28 with respect to lifelong learning. 

9 

 
 
                                          
learning is also comparatively low in Lithuania. In 2014, only 5% of persons aged 25 to 64 
received  education  or  training  in  the  four  weeks  preceding  the  corresponding  Eurostat 
survey. The EU28 average was 10.7% in the same year. These factors lead to lower level 
of  skills  compared  to  other  EU  countries  (also  see  Martinaitis  et  al.,  2014)  and  low 
acquiring of skills at later age. 

Studies  confirm  the  increasing  mismatch  between  supply  and  demand  of  specialists  in 
technology fields. For example, a survey of manufacturing companies (Visionary Analytics, 
2014)  revealed  that  one  third  of  the  surveyed  firms  lacked  engineers,  technology 
designers,  technologists  and  technology  project  managers  for  pursuing  their  innovative 
ideas.  This  bottleneck  was  perceived  as  more  critical  than  the  lack  of  technology 
development related innovation services provided by public R&D infrastructures.  

To  address  this  issue,  the  Ministry  of  Education  and  Science  increased  funding  of  higher 
education  in  technology  fields  in  2014.  More  than  one  third  of  total  funding  allocated  for 
university  and  college  education  for  first  year  students  is  channelled  to  technology  fields 
(€2.78m  of  the  total  of  €8.02m  allocated  per  one  study  year),  hoping  to  increase  the 
attractiveness  of  technology  education.  However,  this  measure  is  clearly  not  sufficient  to 
address the emerging challenge of ageing society and skills mismatches. It is important to 
ensure  that  there  will  be  no  shortage  of  skilled  workers  that  are  needed  for carrying  out 
R&D  activities  and  other  knowledge  based  activities,  for  initiating  innovation  ideas  and 
creating  innovative  start-ups.  A  key  challenge  here  is  to  substantially  improve  education 
and training of skilled specialists, and to design smart talent attraction policies. Based on 
Scandinavian  examples,  the  education  system  needs 
the  critical, 
entrepreneurial, creative thinking and social capital skills from early age. 

integrate 

to 

Also,  as  foreign  students  and  researchers  might  be  a  considerable  source  for  knowledge 
transfer  from  abroad  and  bring  in  diversity,  the  internationalisation  policy  of  higher 
education  and  R&I  should  also  be  linked  with  the  smart  specialisation  (Paliokaitė  and 
Kubo, 2013). This, at least at the policy document level, is addressed in Lithuania’s smart 
specialisation  strategy.  In  addition,  public  R&D  and  higher  education  systems  need  to 
open  up  more.  This  means  they  should  adjust  their  staffing  policies  and  dismantle 
language barriers to attract talent from abroad and ensure equal opportunities to foreign 
researchers not only in theory but in practice as well. 

Challenge 3: Commercialisation of public research results  

The  majority  of  the  overall  modest  R&D  efforts  in  Lithuania  are  funded  by  the  public 
sector,  i.e.  national  budget  and  EU  funds,  and  performed  by  public  research  institutions. 
Despite the huge potential, weak capacity to commercialise and exploit public research for 
economic benefits becomes more evident after heavier investments in research production 
(€400m invested in RIs alone3). The research output achieved is substantially weaker than 
in most EU Member States regardless of the heavy investments. For example, in terms of 
international co-publications, Lithuania is 24th in the EU (324 international co-publications 
per million, according to IUS 2015). In terms of scientific publications among the top 10% 
of  the  most  cited  publications  worldwide  as  percentage  of  total  scientific  publications  of 
the country, Lithuania was 22nd in the EU28 over 2000-2013. Moreover, in 2013 Lithuania 
had  only  5.7  public-private  co-publications  per  million  of  population  compared  to  29  for 
the  EU-28.  The  number  of  EPO  patent  applications  per  million  of  inhabitants  (6.09)  was 
almost  18  times  below  the  EU28  average  (108.05)  in  2012.  Furthermore,  according  to 
WIPO, in 2013 Lithuania was 22nd in the EU28 by the PCT patent applications per million of 
inhabitants (46.1). Moreover, according to the innovation output indicator scores in 2010 
and 2011, Lithuania has a second lowest score in EU-27 and is just above Bulgaria.  It  is 
unlikely  that  Lithuania  will  bridge  this  gap  in  the  short  or  medium  term.  Thus,  there 
remains  a  need  for  subsequent  efforts  to  encourage  research  commercialisation.  This 

3 It should be noted that two large infrastructure centres (National Centre of Physical and Technological Sciences and Joint 
Centre for Life Sciences) were only opened in the beginning of 2016 so returns cannot be expected yet. 

10 

 
 
                                          
could be achieved through spin-offs and knowledge transfer to the private sector through 
dedicated  R&D  services,  and  ensuring  productive  cross-sectoral  (including  science-
industry) collaboration.  

The  starting  point,  however,  is  rather  weak.  Clusters  could  provide  arenas  for  related 
cross-sector links internally (in the region) and externally. However, the cluster formation 
is  in  its  early  phase  in  Lithuania  and  few  of  the  first  results  of  the  respective  support 
programmes  are  encouraging.  The  way  the  clusters  were  initiated  didn’t  support 
effectively  enough  the  cross-sectoral  approach  and  connections  with  the  local  knowledge 
sources  (institutes  and  universities  at  the  so-called  ‘valleys’)  and  with  the  ones  outside 
Lithuania.  As  a  result,  clusters  are  rather  sector  based,  inward  looking,  operating  as 
‘private clubs’ with 5-7 members and with limited inter-regional connections.  

The policy makers are trying to address these issues in the new programming period. The 
OP  for  2014-2020  plans  to  finance  "joint  initiatives",  i.e.  two  or  more  complementary 
collaboration  projects  which  involve  R&D  activities  and  have  the  aim  of  creating  market-
oriented  commercially  viable  prototypes  of  technologies  and  products  with  high  value 
added. In addition, the newly proposed Law on Higher Education and Research introduces 
the concept of "industrial doctorate" which would be another step forward in strengthening 
the ties between science and industry. The degree of success of these initiatives is to be 
seen in the next few years. 

An increasing concern in Lithuania is how to deal with the issue of funding public research 
as  an  opportunity  to  strengthen  ‘demand  steering’,  putting  more  focus  on  the  industry 
capabilities and needs and the economic return on investments. So far, the policy results 
have been positive but weak (see Chapter 5.7). Universities and their research institutes 
are  mainly  dedicated  to  the  roles  of  teaching.  Applied  research  accounts  only  for 
approximately half of R&D performed in the higher education sector in 2013. Experimental 
development only made 12% of all R&D activities in this sector in the same year. In order 
to  achieve better results of  innovation  performance, Lithuania needs  to  shift the  focus  of 
the  national  R&I  system  from  basic  science  to  innovation  (Paliokaitė  and  Kubo,  2013). 
From this perspective there remain several issues.  

First,  the  entrepreneurial  culture  in  the  Lithuanian  universities  needs  to  be  urgently 
developed. It requires a change of the mind-set at the universities via incentive systems, 
e.g. modifications in the research funding rules (e.g. more focus on the outcomes of R&D) 
and  researchers’  career  criteria,  university  IPR  policies,  development  of  the  knowledge 
transfer offices, and entrepreneurial training. Substantial factors limiting the collaboration 
of  public  sector  researchers  with  companies  are  the  researcher's  career  rules 
(overdependence  on  academic  publications,  and  little  attention  to  R&D  results)  and  the 
lack of motivation at the institutional level.  

Second,  a  related  objective  is  to  exploit  the  already  created  R&D  infrastructures  for 
commercialisation  and  technology  transfer.  There  is  extensive  fragmentation  of  various 
innovation  support  institutions.  The  State  should  review  the  current  existing  innovation 
promotion  structures.  Attention  should  be  placed  on  solving  “soft”  issues  such  as 
exploitation  of  the  open  access  centres,  science  and  technology  parks,  clusters and  their 
infrastructures,  and  creation  of  related  capacities  and  human  resources.    A  virtual  R&D 
infrastructure  network  could  allow  for  developing  innovation  from  idea  to  pilot 
manufacturing.  In  addition,  all  public  research  institutes  and  research  centres  with  a 
mandate to engage with industry, and especially the open access centres in the ‘valleys’, 
should  develop  a  distinctive  industry-focused  culture.  They  have  to  become  better  at 
marketing their research to the business sector.  

Challenge 4: Reducing fragmentation and improving policy capacities 

Fragmentation  is  a  keyword  to  describe  the  current  situation  in  R&I  governance  in 
Lithuania. There is fragmentation of policy priorities, programmes, funds and institutions, 
and  insufficient  leverage  of  different  funds  as  well  as  few  synergies  between  measures. 
Efforts to concentrate funds and create connections have so far been able to deliver only 

11 

 
 
very  limited  effect.  Governance  failures  result  in  lack  of  efficiency  and  missed 
opportunities.  One  example  of  limited  synergies  and  high  fragmentation  is  the  failure  to 
re-align  the  science  “valleys”,  science  and  technology  parks  (STP)  and  industry  clusters.  
As  a  result,  Lithuania  has  40+  clusters,  20+  ‘open  access  centres’,  9  science  and 
technology parks, and several agencies with overlapping functions. Links between agents 
remain  the  weakest  part  of  the  innovation  system,  making  it  difficult  to  transform 
innovation inputs into outputs efficiently.  

Policy  fragmentation  between  the  Ministry  of  Education  and  Science  (covering  higher 
education  and  public  R&D  policies)  and  the  Ministry  of  Economy  (responsible  for  private 
R&D and innovation policies) is often reinforced by discord between these two ministries. 
Although there is a background for cooperation in the process of implementation of smart 
specialisation, this remains a critical issue, considering the planned policy mixes of the two 
ministries.  Collaboration  across  all  the  relevant  funding  and  development  agencies  and 
funding sources has to be ensured to facilitate a streamlined implementation of RIS3 and 
to implement the holistic “whole of government” approach by integrating innovation policy 
into other policies. 

At  the  strategic  level,  the  lack  of  systematic  (ex  post  and  ex  ante)  evaluation  hinders 
policy  learning  and  does  not  allow  improvements  in  the  design  and  implementation  of 
policies.  The  smart  specialisation  process  has  shown  that  policy-makers  have  limited 
understanding  of  how  regions  in  principle  diversify  into  new  growth  paths,  and  to  what 
extent public policy may affect (or has affected) this process. Monitoring and evaluation of 
smart  specialisation  strategy  by  MOSTA  and  the  Ministry  of  Economy  should  partially  fill 
this gap. Nonetheless, it should be noted that access to business data may be difficult to 
get. 

At  the  operational  level,  there  is  a  relatively  high  administrative  load  (formal,  technical 
and  lengthy  procedures,  excessive  bureaucracy,  limited  flexibility)  for  the  applicant 
companies.  For  example,  the  “paper-based”  application  procedure  provides  an  incentive 
for  firms  to  hire  consulting  companies  to  draft  grant  applications  that  appeal  to  the 
reviewers  but  favour  form  over  substance.  In  addition,  the  public  support  system  has 
developed  a  culture  of  risk-aversion,  biased  against  early-stage  and  high  risk  innovation 
ventures.  Moreover,  the  staff  of  implementation  agencies  faces  a  set  of  constraints 
stemming from the overly legalistic approach to programme management. Emphasising on 
the EU’s legal framework, the Lithuanian administrative law and procurement regulations 
often  make  civil  servants  reluctant  to  allocate  public  resources  to  projects  that  may  not 
immediately  result  in  commercially  viable  products  and  services.  In  so  doing,  they  are 
avoiding risk in an industry which by definition must be focused on stimulating risk-taking 
among innovative enterprises. The new programming period has provided agencies with a 
window of opportunity to review their approaches. It remains to be seen if this opportunity 
will  be  exploited.  The  Ministry  of  Economy  (and  LVPA)  intends  to  adopt  a  more  flexible 
approach in applying the R&D concept by acknowledging the “D” (development) part when 
selecting the projects. 

Looking  further  to  the  mid-term  future,  the  post-2020  period  will  bring  new  governance 
challenges. This includes optimisation of the network of agencies and institutions that are 
currently focused on the administration of ESIF, more emphasis on policy impacts (hence 
– strategic intelligence, especially ex post evaluation) and even better coordination due to 
the need to exploit policy synergies for achieving more with less. Lithuanian policy makers 
have the responsibility to use the 2016-2020 period to prepare for these challenges and to 
develop the necessary capacities. 

12 

 
 
 
1.  Overview of the R&I system 

1.1  Introduction 

Lithuania  is  a  small  country  with  less  than  0.6%  of  the  total  EU28  population  (almost  3 
million inhabitants in 20154), located on the eastern border of the EU. After the recession 
of  2009,  its  economy  started  to  recover  and  was  one  of  the  fastest  growing  in  the  EU. 
However the rate of GDP growth recently decreased (from 6.1% in 2011 to 1.7% in 2015 
with 2.6% GDP growth expected in 2016, according to the Central Bank of the Republic of 
Lithuania). 

Despite high growth level, Lithuania is still lagging behind the EU average in terms of GDP 
per capita. In 2014 the difference was still more than twofold. The gap in absolute terms 
was  diminishing  very  gradually  over  the  last  three  years  (the  difference  was  €15.300  in 
2012  and  €15,000  in  2014).  Although  in  2012-2014  the  rate  of  GDP  growth  was 
decreasing, over the whole period it was consistently positive and above the EU average. 
Thus,  Lithuania  was  recovering  from  the  economic  crisis  quicker  than  other  EU  Member 
States  (MS)  on  average.  Positive  trends  in  the  economy  are  also  reflected  by  decreasing 
Lithuania’s budget deficit. It shrank from -3.1% of GDP in 2012 to -0.7% of GDP in 2014. 
This may indicate both lower public spending and lower public borrowing. The EU average 
in 2014 was -3.0%, i.e. on average the deficit in EU MS was higher than in Lithuania. In 
terms  of  unemployment  Lithuania  also  shows  recovery  from  the  crisis.  While  in  2012 
unemployment  rate  was  13.4,  by  2014  it  diminished  to  10.7%,  and  approached  EU 
average (10.2% in 2014). 

Concerning  the  structure  of  the  economy,  Lithuania’s  economy  mostly  relies  on  services, 
and  the  knowledge-intensive  sector5 accounts  for  32.8%  of  total  employment  (2014).  In 
2012  gross  value  added  from  knowledge-intensive  high-tech  services  amounted  to  5.4% 
of total gross value added. Additional 7.5% added by knowledge-intensive market services 
excluding  high-tech  and  financial  intermediation.  High-tech  and  medium-high-technology 
manufacturing  accounted  for  1.9%  of  total  gross  value  added.  Data  for  low  tech 
manufacturing is confidential and, thus, not available. The agriculture sector’s importance 
for the economy is diminishing. In 2012 agriculture still accounted for 4.4% of total gross 
value added, but in 2014 the figure fell to 3.5%. The gross value added of agriculture in 
terms  of  absolute  numbers  is  also  diminishing,  even  though  employment  in  the  sector 
increased in 2014. 

Nominal  GERD  increased  from  €298.4m  in  2012  to  €369.83m  in  2014.  Compared  to  the 
country’s  GDP,  the  indicator  is  quite  low  –  1.02%  of  GDP  in  2014.  In  EU28,  GERD  as 
percentage of GDP was 2.03%. Growth in GERD per capita (from €99.3 in 2012 to €125.6 
in 2014) reflects both increase in total volume of GERD and diminishing population of the 
country. In terms of GERD per capita Lithuania is about 4.4 times below the EU average 
(€558.4  in  2014),  and  ranks  only  21st  in  EU28.  Thus,  in  terms  of  R&D  expenditure 
Lithuania is significantly behind the EU average and current trends do not show possibility 
of rapid convergence. National targets for GERD and BERD as percentage of GDP were set 
for  2020.  For  GERD  the  figure  is  1.9%  (set  in  the  Europe  2020  Strategy),  for  BERD  – 
0.9%  (set  in  the  National  Development  Strategy  2014-2020).  Without  radical  changes  in 
current R&D expenditure trends, these targets will not be reached, especially considering 
that  the  majority  of  government  R&D  expenditures  come  from  EU  ESIF.  BERD  remained 
approximately constant in 2011-2013, around 0.24% of GDP. GERD increased from 0.9% 
in 2012 to 0.95% in 2013 and to 1.02% in 2014. In 2014 BERD increased to 0.3% of GDP, 
but a major breakthrough in stimulating BERD is required to approach the due targets by 
2020. 

4 If not indicated otherwise, the source of the data is Eurostat [12-2015]. 
5 For economic activity sectors that are defined as knowledge-intensive services refer to Eurostat (n.d.). 

13 

 
 
                                          
Turnover from innovation is only half of the EU average. In 2012 it accounted for 5.5% of 
total  turnover,  whereas  in  the  same  year  in  Europe  the  figure  was  11.9%.  The  turnover 
from innovation reached a peak in 2006 (12.4%) and since then was decreasing (6.6% in 
2010). Due to low data availability it is impossible to assess change in the last two years. 
However judging by trends in GERD, it is doubtful that the situation could have improved 
significantly,  unless  the  initial  decrease  was  caused  by  the  economic  crisis.  This  would 
mean  that  recovery  might  have  led  to  increase  in  turnover  from  innovation,  but  lack  of 
data does not show it yet. 

Indicator 
GDP per capita 

2012 
11,200 

2013 
11,800 

2014 
12,400 

Table 1 Main R&I indicators 2012-2014 

GDP growth rate 

3.8 

3.5 

3.0 

Budget deficit as % of GDP 

-3.1 

-2.6 

-0.7 

Government debt as % of GDP 

39.8 

38.8 

40.7 

Unemployment rate as percentage 
of the labour force 

13.4 

11.8 

10.7 

GERD in €m 

298.37 

332.43 

369.83 (p) 

GERD as % of the GDP 

0.9 

0.95 

1.02 (p) 

GERD (EUR per capita) 

99.3 

111.9 

125.6 (p) 

Employment in high- and medium-
high-technology manufacturing 
sectors as share of total 
employment  
Employment in knowledge-intensive 
service sectors as  
share of total employment  
Turnover from innovation as % of 
total turnover  
Value added of manufacturing as 
share of total value added 
Value added of high tech 
manufacturing as share of total 
value added 

1.8 

1.8 

1.9 

33.6 

33.1 

32.8 

5.5 

23.7 

0.8 

NA 

22.9 

0.9 

NA 

NA 

NA 

Source: EUROSTAT 

EU average 
2014: 27,400 
2013: 26,700 
2012: 26,500 
2014: 1.4 
2013: 0.2 
2012: -0.5 
2014: -3.0 
2013: -3.3 
2012: -4.3 
2014: 86.8 
2013: 85.5 
2012: 83.8 
2014: 10.2 
2013: 10.9 
2012:  10.5 
2013: 9,806 
2012: 9,649 
2014: 2.03 (p) 
2013: 2.03 
2012: 2.01 
2014: 558.4 (p) 
2013: 54 
2012: 534.4 
2014: 5.7 
2013: 5.6 
2012: 5.6 

2014: 39.8 
2013: 39.4 
2012: 39.3 
2012: 11.9 

2012: 26.2 

2012: 2.5 

14 

 
 
 
 
 
1.2  Structure of the national research and innovation system and 
its governance  

1.2.1  Main features of the R&I system 

R&I  system  in  Lithuania  is  centralized  and  regional  governance  plays  little  role  in  public 
policy  of  this  area,  since  R&I  policy  decisions  are  made  at  the  national  level.  Comparing 
funding  sources,  the  Lithuanian  R&I  system  is  mainly  funded  from  the  EU  ESIF  and  the 
national  budget.  In  2014,  total  funding  from  abroad  was  34.24%  of  GERD.  Public  sector 
funded 33.84% of GERD (government – 33.68%, higher education – 0.2%). The business 
enterprise  sector  funds  only  31.69%  of  all  R&D  performed  and  the  private  non-profit 
sector – 0.2%. 

The  14  State  universities  form  the  backbone  of  the  Lithuanian  research  system  (the 
remaining  8  private  universities  are  not  focused  on  R&D).  The  majority  of  governmental 
research institutes merged with the State universities in 2009-2011. The higher education 
sector  is  the  main  R&D  performer:  HERD  accounted  for  53.11%  of  GERD  in  2014.  The 
government  sector  in  2014  performed  roughly  17.36%  of  all  R&D.  The  share  of  R&D 
performed  by  the  Business  sector  in  2014  constituted  approximately  29.54%  of  total 
GERD. Private companies which carry out R&D are mostly high-tech SMEs of local origin. 

1.2.2  Governance 

Lithuania  has  a  stable  centre-of-government  R&I  structure,  which  provides  predictable 
policy and budgetary framework. Approved legislative documents define how R&I funding 
will  be  distributed,  so  there  is  less  uncertainty  about  budgetary  procedures.  Policy 
orientation  is  broadly  defined,  although  it  tends  to  change  (e.g.  joint  research 
programmes  which  accompanied  the  creation  of  scientific  valleys  were  abandoned),  but 
even  if  revised,  broad  direction  of  policy  is  always  indicated.  The  Smart  Specialisation 
Strategy  provides  broad  direction  for  Lithuanian  R&I  policy  development  in  the  coming 
years until 2020. 

Creation  of  Smart  Specialisation  Strategy  and  identification  of  priority  areas  serves  as  a 
good  example  of  involvement  of  relevant  stakeholders.  All  priorities  were  identified  with 
the  help  from  governmental,  research  and  business  sectors.  Representatives  of  each 
group  participated  in  discussions  and  consultations  to  help  shape  Lithuanian  Smart 
Specialisation Strategy, including drafting policy roadmaps that were used as basis for the 
Action Plans for the implementation of priorities.6 

For  a  small  country  such  as  Lithuania  the  institutional  system  for  the  formation  and 
implementation of research and innovation policy is rather fragmented. The two principal 
governing  bodies,  shaping  R&D  and  innovation  policy  in  Lithuania,  are  the  Ministry  of 
Economy,  which  is  responsible  for  innovation  policy,  and  the  Ministry  of  Education  and 
Science, responsible for higher education and (mainly public) R&D policy. The role of R&I 
Council  is  played  by  the  Strategic  Council  for  Research,  Experimental  Development  and 
Innovation  (SMIT).  The  five  main  agencies  (MITA,  LVPA,  ESFA,  LMT,  CPVA)  are 
responsible for funding of research and innovation. 

Advisory  bodies  that  help  policymakers  to  shape  R&I  policy  were  established.  The 
Lithuanian Research Council (LMT) formally serves as an advisory body to the Seimas (the 
Parliament)  and  the  Government.  Changes  to  the  legal  base  in  2008  gave  the  LMT  the 
status  of  a  functioning  agency  responsible  for  the  competitive  funding  of  research 
programmes.  Therefore,  it  now  serves  a  dual  role  both  as  an  advisory  and  a  funding 
institution,  with  the  latter  dominating  the  former  (European  Science  Foundation,  2014). 
The  Research  and  Higher  Education  Monitoring  and  Analysis  Centre  (MOSTA)  is  an 
analytical and advisory body to the Ministry of Education and Science. Although there were 

6 For more information refer to MOSTA (n.d.). 

15 

 
 
                                          
discussions about establishing a similar advisory body under the Ministry of Economy, no 
such centre was established in 2015. 

The  R&I  policy  evaluation  system  is  in  development.  In  December  2009  MOSTA  began 
implementing MOSTAF  project.  Its  purpose was to  create  and  test a  research and higher 
education  monitoring  and  analysis  system,  which  to  some  extent  was  achieved.  The 
project  ended  in  October  2015.  During  the  time  various  studies  of  the  Lithuanian  R&I 
system were carried out. This includes evaluation of return on public  investment in R&D, 
international  benchmarking  of  research  institutions,  foresight  analysis,  annual  reviews  of 
the  state  of  Lithuanian  research,  etc.  Some  of  the  developed  tools  are  already  used 
systematically,  some  were  only  introduced  and  have  not  been  used  regularly  so  far. 
Formally,  outputs  of  these  activities  were  not  necessarily  used  as  grounds  for  policy 
change,  but  served  as  an  idea  and  advice  pool  for  policymakers.  For  example,  based  on 
evaluation  of  strengths  of  industry  and  science  in  Lithuania,  smart  specialisation  priority 
areas and concrete priorities were identified. From 2015 on, monitoring and evaluation of 
smart  specialisation  implementation  in  Lithuania  has  started.  As  of  the  second  half  of 
2015,  a  specific  system  has  been  developed  by  MOSTA  and  the  Ministry  of  Economy.  It 
should cover output indicators, interim evaluation, impact analysis, foresight exercise, etc. 
This monitoring and evaluation system will be used for an interim review of the Lithuanian 
smart specialisation strategy implementation and to plan R&I policy after 2020. Therefore, 
the  role  of  monitoring  and  evaluation  of  R&I  programmes  will  increase  in  the  nearest 
future, and systemic annual updates will be provided to policymakers. By 2015 Lithuania 
did  not  have  an  accepted  macroeconomic  model  that  would  assess  R&I  impact  on 
economic  growth  specifically,  although  macroeconomic  models  are  used  to  monitor  and 
forecast the development of the country’s economy. 

1.2.3  Research performers 

HEIs7 and public research organisations perform the majority of research activities in the 
country. In addition to research HEIs provide post-secondary teaching services. Although 
there are lower level post-secondary education institutions, HEIs remain the most popular 
choice  for  continuing  education  (MOSTA,  2014a).  The  activities  of  research  and  teaching 
are not always separated which leads to a major issue with researchers working full-time 
or  part-time  at  HEIs.  They  often  must  both  teach  and  carry  out  research.  Therefore, 
teaching-related activities consume significant share of the researcher’s timeand research-
related activities suffer or must be done after working hours (MOSTA, 2015b and related 
reports). The same applies to third mission activities. 

Data  on  research-oriented  private  sector  structure  is  difficult  to  come  by,  due  to 
confidentiality  issues.  However,  it  can  be  stated  that  40.7%  of  companies  introduced 
innovations  in  2012-2014,  a  noticeable  increase  compared  to  30%  in  2010-2012 
(Statistics  Lithuania,  2016).  The  sector  that  was  the  most  innovative  was  ICT  (63.3%  of 
enterprises).  Lowest  innovativeness  was  found  in  construction  (30.3%  of  enterprises). 
Although  nearly  all  sectors  saw  increase  in  the  share  of  innovative  enterprises,  this 
indicator  fell  by  8.8  p.p.  in  the  finance  and  insurance  sector.  The  highest  increase  in 
innovative  companies  was  observed  in  mining  and  quarrying  (30.9  p.p.).  Medium  and 
high-tech  industry  and  knowledge  intensive  services  are  the  principal  R&D  investment 
sectors. The private sector research community is dominated by small and medium sized 
high-tech indigenous firms (Visionary Analytics, 2015). 

7 Mainly universities and research institutes, as colleges perform research only at a small scale. 

16 

 
 
 
                                          
Figure 1 Overview of Lithuania’s research and innovation system governance structure 

Source: Developed by the authors, based on Paliokaite (2015a)

17 

 
 
 
 
2.  Recent Developments in Research and Innovation Policy 
and systems 

2.1  National R&I strategy 

Concerning  R&I  policy,  there  is  no  single  specific  strategic  document.  However,  the 
National  Progress  Strategy  ‘Lithuania  2030’  which  broadly  defines  the  direction  of  the 
country’s  development  also  covers  R&I  even  if  in  general  terms.  Overall,  six  key  long-
term and midterm policy documents were introduced or revised since 2012: the National 
Progress  Strategy  ‘Lithuania  2030’,  the  National  Progress  Programme  for  Lithuania  for 
the  period  2014-2020  (NPP),  the  Programme  for  Development  of  Studies  and  R&D  for 
2013-2020,  the  updated  Concept  of  the  Establishment  and  Development  of  Integrated 
Science, Studies and Business Centres (Valleys), the Lithuanian Innovation Development 
Programme  for  2014-2020  and  the  Programme  on  the  Implementation  of  the  R&D&I 
Priority  Areas  and  Their  Priorities  which  comes  together  with  separate  Action  Plans  for 
each priority. This Programme sets out the Lithuanian smart specialisation priority areas 
and their priorities and discusses some elements of the implementation and monitoring 
instruments.  Its  development  incorporated  foresight  analysis,  review  of  Lithuanian 
market developments and strengths in research. The priorities will be reviewed in 2017-
2018.  The  principles  of  coordination  and  monitoring  provide  that  a  Coordination  Group 
formed  by  key  stakeholders  will  be  established  to  monitor  and  coordinate  the 
implementation of the priorities. 

The  Ministry  of  Economy  launched  an  update  of  the  broad  Lithuanian  Innovation 
Strategy  for  2010-2020  and  replaced  it  by  a  new  strategic  document  in  the  form  of 
Lithuanian  Innovation  Development  Programme  for  2014-2020  which  was  approved  by 
the  Government  in December 2013. The  strategic  aim of  the Programme  is  to promote 
Lithuania’s  global  competitiveness  by  establishing  an  effective  innovation  system.  Also 
the  Programme  sets  four  specific  objectives:  1)  to  educate  innovative  society  by 
developing  new  knowledge  and  its  application  –  the  main  goal  is  to  properly  use  the 
intellectual  potential  and  to  promote  researchers;  2)  to  increase  business  innovation 
potential  by  promoting  business  R&D  investment;  3)  to  promote  science-business 
collaboration,  clusters  development  and  global  cooperation;  4)  to  establish  an  effective 
innovation policy and to foster public sector innovations.  

Overall,  there  remains  large  fragmentation  of  policy  institutions  and  policy  documents, 
despite there  being  an overarching  strategy ‘Lithuania 2030’ and  a  smart  specialisation 
strategy  which  provide  a  common  direction  for  R&D&I.  Some  of  these  documents  (for 
example,  the  Innovation  Development  Programme  2014-2020)  encompass  research, 
innovation  and  education  aspects,  and  some  treat  them  separately  (for  example,  the 
Programme  for  Development  of  Studies  and  R&D  for  2013-2020  relates  to  public  R&D 
and  higher  education,  which  also  addresses  frontier  science,  i.e.  basic  research).  The 
Ministry  of  Economy  and  the  Ministry  of  Education  and  Science  cooperated  in  the 
development  of  the  Programme  on  the  Implementation  of  the  R&I  Priority  Areas  and 
their  Priorities.  Still,  differences  in  approaches  of  the  two  ministries  are  clear.  This,  for 
example was shown during establishing of the monitoring and evaluation mechanism for 
the smart specialisation programme. 

Proposals for new laws or their revisions were made in 2015. The Ministry of Education 
and  Science  drafted  a  new  Research  and  Studies  Law  which  was  approved  by  the 
Government  and  was  considered  in  the  Parliament  but  not  yet  adopted  in  2015.  The 
planned Law on Innovation Promotion (led by the Ministry of Economy) seems to be put 
aside.  

The  main  changes  over  the  last  three  years  were:  a)  increased  attention  to  strategic 
planning  (a  number  of  new  planning  documents  were  approved);  b)  development  of 
Lithuania’s Smart Specialisation Strategy in 2013-2015 coordinated by the Coordination 
group,  established  by  the  two  ministries  and  MOSTA;  c)  proposed  revisions  to  the  Law 
on  Research  and  Studies  in  2015  (still  to  be  approved  by  the  Parliament  as  of  January 

18 

 
 
2016).  Regarding  the  latter,  main  revisions  affect  higher  education,  i.e.  contracts  with 
higher  education  institutions,  studying  fees,  etc.  However,  the  revised  law  also 
introduces the concept of industrial doctorate. Other less significant developments in the 
R&I area are discussed in the various chapters throughout this report. 

The  adopted  strategies  shape the actually  implemented  policies  to  some  extent. This is 
especially  the  case  with  the  Lithuanian  Smart  Specialisation  Strategy.  R&D&I measures 
for  2014-2020  EU  ESIF  financing  period  were  based  on  this  strategy.  This  also  shows 
that  policy  is  shaped  in  line  with  EU  priorities  since  significant  amount  of  R&D&I  funds 
come from the European Commission, and Europe 2020 targets are referred to in policy 
documents.  However,  lesser  attention  is  paid  to  leveraging  private  investment  from 
public  spending.  International  cooperation  is  mentioned  among  priorities  in  strategy 
documents,  especially  stressing  the  importance  of  joining  international  innovation  and 
research infrastructure networks. 

2.2  R&I policy initiatives 

As  discussed  in  section  2.1,  there  is  still  large  fragmentation  of  policy  initiatives,  as  is 
the case with policy documents. Some of them cover research, innovation and education 
in an integrated manner, while others treat them separately. Sometimes the objectives 
of  documents  overlap.  Since  just  a  general  national  strategy  document  exists  but  two 
ministries are responsible for these policy areas, it is not surprising that there is a lack of 
coordination among policies covering research, innovation and education. 

Policy  initiatives  deal  not  only  with  ‘soft’  R&I  activities,  but  also  cover  research 
infrastructure  (RI).  The  OP  for  2014-2020,  under  the  Investment  priority  1  ‘Enhancing 
research  and  development  and  innovation  (R&D&I)  infrastructure  and  capacities  to 
develop  R&D&I  excellence  and  promoting  centres  of  competence,  in  particular  those  of 
European  interest’  and  its  specific  objective  ‘Enhancing  R&D&I  infrastructure  and 
capacities to develop excellence of research’, foresees financial support for ‘Investments 
into  the  information,  communication  and  other  non-technological  infrastructure  in  the 
research  infrastructures’.  For  example  support  is  planned  for  the  development  of 
publications  databases,  ICT  infrastructure  and  licences  acquisition,  and  organisational 
and  management  innovations  and  capacities  that  are  expected  to  improve  the  capacity 
to  market  and  commercialise  the  research  results.  In  April  2014  the  government 
updated  the  Concept  of  the  Establishment  and  Development  of  Integrated  Science, 
Studies and Business Centres (Valleys) which specifically covers RI development in five 
centres,  and  the  possibility  to  establish  new  similar  ‘valleys’,  although  no  specific 
investment  was  planned.  The  concept  was  updated  to  show  the  potential  synergies 
between ‘valleys’ and smart specialisation. In August 2015 the Ministry of Education and 
Science  approved  its  General  Action  Plan  of  the  Programme  on  the  Implementation  of 
the R&I Priority Areas and Their Priorities which also includes research infrastructure. It 
aims  at  finishing  the  development  of  the  RI  system,  empowering  RI,  encouraging 
international  cooperation,  and  integrating  RIs  into  international  networks.  However, 
investment  was  still  on  hold  at  the  beginning  of  2016  because  some  of  the  proposed 
infrastructure was not thematically in the RIS3. In the same year, it also drafted a new 
Law  on  Higher  Education  and  Research  which  was  approved  by  the  government  in  July 
2015, however it was not yet approved by the Parliament in 2015. The planned Law on 
Innovation Promotion (initiative led by the Ministry of Economy) seems to have been put 
aside and was not reconsidered in 2015. 

Despite welcome initiatives in R&I policy, there is no coherent and integrated framework 
for  fostering  innovation,  and  strengthening  the  knowledge  base  and  fundamental 
research.  Furthermore,  since  R&I  policy  is  in  the  domain  of  two  separate  ministries,  it 
sometimes  leads  to  institutional  collisions.  These  collisions  might  be  strengthened  by 
coalition  politics  if  the  Ministers  are  appointed  by  different  parties.  Nevertheless,  since 
two  ministries  are  responsible  for  the  implementation  of  the  Smart  Specialisation 
Strategy,  it  is  possible  that  the  amount  of  cooperation  will  increase,  and  policy  will 
become more integrated, leading to the creation of a more coherent framework. 

19 

 
 
Evaluations, consultations, foresight exercises 

During 2014-2015 several evaluations and consultations were carried out. The process of 
identifying  national  R&I  priorities  and  drafting  the  Smart  Specialisation  Strategy  for 
2014-2020  is  the  key  analytical  consultation  initiative  launched  in  2013.  It  continued 
throughout 2014 and into 2015. As a result, a list of 6 R&I policy priority areas, with 20 
specific  priorities  were  identified  within  them.  Groups  involving  stakeholders  prepared 
implementation  roadmaps.  The  list  of  R&I  priorities  will  be  used  as  a  background  for 
practical  implementation  of  national  R&I  and  industrial  policies.  The  ‘policy  roadmaps’ 
developed  for  each  specific  priority  describe  targets  (technologies  to  be  developed), 
policy  measures,  technology  development  stages,  etc.  These  roadmaps  became  the 
basis  for  thematic  R&I  priority  development  programmes.  The  priorities  Action  Plans 
were  approved  by  early  2015.  Furthermore,  it  is  expected  that  the  consensus-building 
discussions  should  contribute  to  the  development  of  innovative  partnerships  between 
businesses  and  S&T  and  education  communities.  The  consensus  on  the  R&I  priorities 
development was achieved in the course of expert panels and other activities. It should 
create  a  platform  for  further  concerted  actions  and  policies  that  are  consistent  not  just 
with  national  strategies  but  could  be  shared  by  all  parties  involved  in  their 
implementation. 

In  2014,  the  High  Technologies  Development  Feasibility  study  was  launched  by  the 
Ministry  of  Economy.  Key  conclusions  of  this  Study  (Visionary  Analytics,  2014)  stated 
that:  a)  in  the  new  2015-2020  period  the  policy  spotlight  has  to  move  from  ‘hard’ 
infrastructure development to capacity strengthening and acceleration of new ideas;  b) 
the already created public (including the clusters) R&D infrastructure has to be smartly 
exploited  by  connecting  all  infrastructures  into  one  professionally  managed  virtual  R&D 
and  innovation  services  network;  c)  the  key  emerging  problem  is  availability  of  skilled 
human  resources  for  innovation,  particularly  –  engineers,  technologists  and  technology 
designers;    d)  R&D  policy  is  dominated  by  basic  research;  e)  business  and  public 
research  sectors  collaboration  will  not  work  unless  the  researchers’  career  system  and 
public R&D institutional funding mechanism are modified; f) lack of coordination has led 
to  huge  fragmentation  of  instruments,  programmes,  institutions  and  infrastructures.  In 
addition  to this study, the Ministry  of  Economy  and MITA  launched a  special  project  on 
innovation  statistics  in  2015  to  examine  and  improve  the  situation  with  business 
R&D/innovation statistics. The impact of the proposed Law on Innovation Promotion was 
also  assessed  ex-ante  by  an  external  organization.  It  indicated  that  the  law  should  be 
oriented towards greater coherence with the Law of Research and Higher Education and 
the Law of Small and Medium Enterprises (Baltic Legal Solutions Lithuania, 2015). 

A  4-year  long  project  aimed  at  the  monitoring  and  analysis  of  the  integrated  science, 
studies and business ‘valleys’ ended in March 2015. The project, coordinated by MOSTA 
and  implemented  by  Technopolis  Group  and  Ernst&Young,  provided  a  series  of 
recommendations  on  the  monitoring  of  the  ‘valleys’,  their  R&D  infrastructure  projects 
and the joint research programmes, knowledge transfer programmes etc.  

In 2014 MOSTA contracted two separate research studies to develop methodologies for 
calculating  the  return  on  State’s  investment  in  R&D  and  higher  education.  The 
methodology on estimating the return on public investments in R&D should also serve as 
the  impact  assessment  methodology  for  smart  specialisation.  The  pilot  study  on  the 
return  on  State’s  investments  into  R&D  was  finished  by  June  2015  and  covered  High 
Technology  Development  Programme  (for  years  2011-2013)  as  well  as  Intellect  LT 
measure.  The  study  combined  surveys,  case  studies  and  counterfactual  analysis,  and 
laid  ground  to  a  monitoring  and  evaluation  system.  The  main  indicative  findings  of  the 
study  were  that  the  second  call  of  Intellect  LT  had  positive  impact  on  employment. 
Evaluation  of  High  Technology  Development  Programme  (for  years  2011-2013) 
suggested  that  it  had  small  positive  impact  on  employment,  contributed  to  increased 
private  R&D  expenditures,  and  increased  organisations’  capacities  to  perform  R&D  and 
innovation (MOSTA, 2015a). 

20 

 
 
Furthermore,  MOSTA  conducted  a  Research  Assessment  Exercise  in  Lithuania,  which 
took place from April 2014 to April 2015. MOSTA coordinated the exercise in consultation 
with  the  LMT  according  to  a  methodology  prepared  by  Technopolis  Group.  The  key 
element  of  the  exercise  was  international  peer  review  of  research  in  universities  and 
research  institutes.  The  exercise  was  based  on  broad  disciplinary  panels  composed  of 
international top-level experts. The results were published in the first half  of 2015, and 
were  widely  discussed  with  the  stakeholders  (Ministry  of  Education  and  Science,  LMT, 
universities  and  research  institutes.  Results  position  different  research  units  in  the 
international context. The results indicate that despite good infrastructure and niches of 
excellence  there  is  also  high  fragmentation  with  overlaps  and  thematic  duplication  in 
different  research  units,  low  management  skills,  lacking  internationalisation  and 
incentives for performing research. (MOSTA, 2015b). 

Meanwhile  LMT  finished  its  triennial  assessment  of  institutional  research  output  in 
November,  2015.  Its  results  will  be  used  for  allocation  of  institutional  research  funding 
by  the  Ministry  of  Education  and  Science.  A  review  of  the  methodology  of  institutional 
assessment is proposed, but no results were available by the end of 2015. 

In  2015,  the  Ministry  of  Economy  and  Knowledge  Economy  Forum  prepared  an  initial 
assessment of the Lithuanian innovation policy in relation to Lithuania preparing to join 
OECD. The OECD should also publish its Review of Innovation Policy: Lithuania in 2016. 

2.3  European Semester 2014 and 2015 

In May 2015, the Commission has published country-specific recommendations for each 
Member State and issued Research and Innovation related recommendations for some of 
the countries, among which Lithuania was not included. 

Lithuania’s National Reform Programme (NRP) 2015 includes several measures related to 
R&I. These are (Government of the Republic of Lithuania, 2015): 

  Commercialisation  and  application  of  science  in  business,  mainly  through  scientific 
valleys  and  open  access  centres,  but  also  through  innovation  vouchers  and  other 
means; 

  Accrediting laboratories; 
  Protecting intellectual property;  
  Promoting clusterisation; 
  Renewing the concept of science and technology parks. 

This list somewhat updates measures discussed in NRP 2014, although they share some 
similar  goals  (such  as  measures  to  strengthen  business-science  cooperation).  Most 
measures  listed  in  NRP  are  related  to  R&I  challenges  identified  in  the  2015  European 
Semester Country Report. The main challenge is the lack of business involvement in R&I 
activities.  Another  important  issue  is  the  lack  of  coherent  strategy  for  knowledge 
transfer.  Valleys  and  parks  can  be  important  drivers  of  business-science  cooperation, 
however,  a  lot  still  needs  to  be  done  in  empowering  these  centres.  Protection  of 
intellectual property (IP) can contribute to knowledge transfer and the support measure 
to  promote  protection  of  IP  rights  have  already  started  to  show  the  results  (European 
Patent  Organisation  reported  that  the  number  of  patent  applications  by  Lithuanian 
representatives  increased  by  60%  in  2015  and  reached  the  number  of  39).  However 
these measures have not achieved so far their most important aim – increasing business 
investment in R&D. Furthermore, significant part of new funding is on hold due to lag in 
launching  new  instruments.  The  National  Reform  Programmes  2014  and  2015  mention 
one target with R&I relevance – the gross domestic expenditure on R&D (GERD) should 
reach  1.9%  of  GDP  by  2020.  Lithuania’s  composite  innovation  index  is  increasing 
(European Commission, 2015b) and R&I funding indicators demonstrated positive trends 
over  the  last  three  years.  However  this  target  will  not  be  met  if  the  rate  of  progress 
remains the same (the increase of GERD as % of GDP was from 0.9% in 2012 to 0.95% 
in 2013 and 1.02% in 2014).  

21 

 
 
 
2.4  National and Regional R&I Strategies on Smart 
Specialisation 

The  Lithuanian  Government  approved  the  Programme  on  the  Implementation  of  the 
R&D&I  Priority  Areas  and  Their  Priorities  in  April  2014,  and  Action  Plans  for  Priorities 
during the first half of 2015. By August 2015 a General Action Plan for this Programme 
as  relates  to  measures  coordinated  by  the  Ministry  of  Education  and  Science  was  also 
approved. The six priority areas and the twenty priorities are listed in Table 28. 

Table 2 R&D&I priorities identified in Lithuania’s smart specialisation strategy 

LT smart 
specialisation 
priority areas 

Health 
technologies and 
biotechnologies 
Agro-innovation 
and food 
technologies 
Energy and 
sustainable 
environment 

Transport, 
logistics and 
information and 
communication 
technologies 

Inclusive and 
creative society 

New processes, 
materials and 
technologies 

LT smart specialisation priorities 

  Molecular technologies for medicine and biopharmaceutics  
  Advanced applied technologies for individual and public health 

Advanced medical engineering for early diagnostics and treatment 

  Sustainable agro-biological resources and safer food Functional food 
 

Innovative development, improvement and processing of biological 
raw materials (biorefinery) 

  Smart systems for energy efficiency, diagnostic, monitoring, metering 
and management of generators, grids and customers Energy and fuel 
production using biomass/waste and waste treatment, storage and 
disposal Solar energy equipment and technologies for its use for the 
production of electricity, heat and cooling Technology for the 
development and use of smart low-energy buildings – digital 
construction 

  Smart transport systems and information and communication 
technologies Models/technologies for the management of the 
international transport corridors and integration of modes of transport 
  Advanced electronic contents, content development technologies and 

information interoperability Information and communications 
technology infrastructure, cloud computing solutions and services 

  Modern self-development technologies and processes 
 

Technologies and processes for the development and implementation 
of breakthrough innovations 
Photonic and laser technologies 
Functional materials and coatings 

 
 
  Structural and composite materials 
 

Flexible technological systems for product creation and production 

Source: Ministry of Economy, 2016 

Specific  financial  requirements,  including  those  for  structural  co-funding,  are  to  be 
described in detail when specific instruments are approved. It is already established that 
some  instruments  will  require  projects  to  be  co-financed  and  sums  of  expected  private 
sector  investments  are  calculated.  For  example,  the  new  ‘Intellect  LT.  Joint  science-
business  projects’  expects  over  €126.6m  of  participant  contribution.  The  aim  to 
stimulate private investment is also present, and Priority Action Plans list co-financing as 
the  means  to  achieve  this.  However,  in  2015,  the  strategy  and  the  action  plans  were 
approved  but  policy  instruments  of  the  first  priority  of  the  OP  were  only  partially 
approved  and  first  calls  for  R&D&I  funding  opened  only  in  October-December  2015. 
Therefore, the strategy is not yet being implemented and it is impossible to assess how 
it will shape policy initiatives. 

8 Agnė  Paliokaitė  was  member  of the  International  Independent  Experts  Group  (2012-2014)  responsible  for  identifying 
Lithuanian  smart  specialisation  (R&D  and  innovation)  priorities  and  their  implementation  roadmaps.  She  was  also  the 
Project Director of the project “Services of the Preparation of Research and Innovation priorities for Smart Specialisation 
Strategy  Development  in  Lithuania”  (07/  2013  –  04/2014)  contracted  by  MOSTA.  The  services  of  the  latter  project 
involved methodological supervision of the Lithuanian smart specialisation (R&D and innovation) priorities’ identification 
process.  

22 

 
 
                                          
Two institutions will be responsible for monitoring and evaluation of the implementation 
of the Programme on the Implementation of the R&I Priority Areas and Their Priorities – 
MOSTA  (delegated  by  the  Ministry  of  Education  and  Science)  and  the  Ministry  of 
Economy.  This  reflects  the  sharing  of  responsibility  for  Lithuania’s  smart  specialisation 
implementation  between  the  two  ministries.  It  is  planned  that  the  monitoring  and 
evaluation  system  will  include  mixed  methods.  The  approach  is  expected  to  follow  the 
study on returns on public investment in R&D, carried out by MOSTA (2015a). It should 
cover  resource  allocation,  project  and  instrument  implementation,  developed  products, 
knowledge  transfer,  results  of  instruments/projects  funded  in  the  context  of  smart 
specialisation and impact of such instruments/projects. In addition to this, counterfactual 
analysis  is  also  included  in  the  mechanism  and  it  will  be  used  to  assess  the  impact  of 
several instruments used in the programme after its end. There are plans to carry out a 
foresight  exercise  in  order  to  find  out  whether  priority  areas  and  priorities  remain 
relevant by 2017-2018. The Programme itself includes the possibility to modify priorities 
based on acquired evidence. Overall, the planned monitoring and evaluation mechanism 
is balanced and the included measures cover the main aspects of RIS3. A lot will depend 
on  how  successfully  the  two  institutions  responsible  for  monitoring  and  evaluation  will 
manage  to  cooperate  and  whether  there  will  be  enough  political  will  to  modify  policy 
based on evidence. 

Lithuania’s  smart  specialisation  strategy  also  includes  R&I  infrastructures  through  both 
competitive  and  planned  funding.  The  priorities’  Action  Plans  include  instruments  for 
developing R&I and studies infrastructure. Some instruments are general (e.g. ‘Intellect 
LT. Joint science-business projects’, which supports developing R&I infrastructure as well 
as R&D activities of businesses), while others are aimed at specific infrastructures (e.g. 
Centre  of  Applied  Chemistry  and  Biopharmacy  at  Kaunas  University  of  Technology 
(KTU)).  

2.5  Main policy changes in the last five years 

Main Changes in 2011 
- 
Main changes in 2012 
Concept of the Establishment and Development of Integrated Science, Studies and Business 
Centres (Valleys) updated. 
National Development Strategy ‘Lithuania 2030’ approved. 
National Development Strategy 2014-2020 approved. 
Main changes in 2013 
Strategic Council for R&D and Innovation established 
Approval of the smart specialisation priority areas and their specific priorities 
Lithuanian Innovation Strategy 2010-2020 updated into the Lithuanian Innovation Promotion 
Programme 2014-2020 
Main Changes in 2014 
Approval of the OP for 2014-2020. 
Approval of the concept of clusters development in Lithuania. 
Approval of the R&D and Innovation priority areas and their priorities implementation Programme. 
Main Changes in 2015 
Approval of Action Plans for smart specialisation priorities and inclusion of STEM education into the 
Smart Specialisation Strategy. 
Approval of monitoring and evaluation mechanism for Smart Specialisation Strategy. 
Approval  of  description  for  the  development  of  Joint  Studies,  Research  an  Experimental  (socio-
cultural) development and Innovation initiatives. 
Government approved an updated concept for the development of science and technology parks. 
Government’s approval of amended Law on Research and Higher Education (still to be approved by 
the Parliament). 
Governmental approval of Pre-Commercial Procurement Schedule of Procedures. 

23 

 
 
3.  Public and private funding of R&I and expenditure 

3.1  Introduction 

R&I  funding  indicators  demonstrated  positive  trends  during  the  last  several  years.  The 
intensity of R&D funding in Lithuania measured as the GERD percentage of GDP in 2013 
increased by 6.3% (from 0.95% in 2013 to 1.01% in 2014). According to Eurostat data, 
total GERD in Lithuania increased by around €87m over 2011-2014. GERD funded by the 
business  enterprise  sector  as  a  percentage  of  total  GDP  did  not  fluctuate  much.  It  was 
0.26% in 2011, then 0.24% in 2012 and again 0.26% in 2013, but increased to 0.32% 
in 2014. R&D expenditure in all sectors funded by government sector fell from 0.38% in 
2011 to 0.33% of GDP in 2013, and increased to 0.34% in 2014.  

In 2014, R&D expenditure funded by the government sector as a percentage of GDP in 
Lithuania  (0.34%  or  €124.61m  in  total)  was  below  the  EU28  average  (0.68%  in  2013, 
n.d. for 2014). Moreover, in terms of this expenditure per capita, Lithuania with €38.6 in 
2013  was  sharply  below  the  EU28  average  (the  Eurostat’s  estimate  is  €177  per 
inhabitant  in  2013).  The  contrast  in  terms  of  GERD  funded  by  the  business  enterprise 
sector was much sharper: in Lithuania it made 0.32% of total GDP in 2014, which was 
significantly  below  the  EU28  average  (1.28%  of  the  total  GDP  in  2013,  n.d.  for  2014). 
The per capita figure for this indicator was even more pronounced: €30.7 per inhabitant 
in  Lithuania  in  2013  compared  to  estimated  €298.2  per  inhabitant  on  average  in  the 
EU28  in  2013.  In  terms  of  GERD  per  capita,  in  2013  Lithuania  (with  €111.9  per 
inhabitant)  is  only  above  Cyprus  (€99.4),  Poland  (€90.3),  Croatia  (€83.2),  Latvia 
(€69.1),  Bulgaria  (€36.6)  and  Romania  (€27.9)  and  falls  far  behind  the  EU28  average 
(€536). In summary, if a similar trend continues the R&D expenditure targets for 2020 
will not be met. 

Since  the  OP  of  2007-2013  ended  but  most  measures  included  in  the  OP  2014-2020 
were  not  launched  in  2015,  there  was  a  significant  time  gap  in  funding  of  projects. 
Although some of the projects were still being implemented no new projects funded from 
EU  ESIF  could  be  started.  This  caused  dissatisfaction  in  both  business  and  public 
research sectors because ESIF comprise the majority of project-based funding. 

The  2009-2011  economic  crisis  has  had  a  slight  impact  on  public  R&I  funding  in 
Lithuania  (there  was  decrease  of  GERD:  €258m  in  2008,  €223m  in  2009,  €  220m  in 
2010,  €283m  in  2011),  but  the  key  funding  sources  and  plans  generally  remained 
unchanged. The majority of R&I funding comes from the EU ESIF based on multiannual 
planning.  Hence,  the  research  and  innovation  budgets were  ‘secured’  in  2010–2014.  In 
total, for the last OP (2007-2013) Lithuania was allocated from EU ESIF: 

  €115.98m  for  strengthening  of  capacities  of  researchers  and  scientists  in  human 
resources  development  programme.  Additional  €9.29m  were  to  be  allocated  from 
other sources, including national budget. 

  €512.09m  through  direct  and  indirect  assistance  to  R&D  and  innovations  and 
investment  promotion  in  OP  Economic  Growth.  Additional  €60.51m  were  to  be 
allocated from other sources, including national budget. 

  €570.97m were  allocated  to  activities  which do not  necessarily  constitute  R&D from 
priority ‘increasing business productivity and improving business environment’ in OP 
Economic  Growth.  Additional  €38.2m  were  allocated  from  other  sources,  including 
national budget. 

The  total  budget  from  EU  sources  for  Lithuanian  participants  for  FP6  was  €26.03m,  for 
FP7 – €53.67m. 

24 

 
 
 
Indicator 

2011 

2012 

2013 

2014 

2015 

Table 3 Basic indicators for R&D investments 

EU 
average 
(2014) 
2.03 
558.4 

92,828.15 
1.12 (2013) 

0.03 (2013) 

0.66 (2013) 

0.02 (2013) 

0.2 (2013) 

23.5 

12.5 

0.9 
92.6 

0.9 
99.3 

0.95 
111.9 

1.02 
125.6 

126.216 
0.26 

119.613 
0.24 

125.639 
0.26 

125.985 
0.32 

0 

0.38 

0.01 

0.26 

0 

0.36 

0 

0.3 

0.01 

0.33 

0 

0 

0.34 

0 

0.35 

0.35 

54.21 

53.49 

54.71 

53.12 

19.58 

19.58 

19.83 

17.32 

NA 
NA 

NA 
NA 

NA 

NA 

NA 

NA 

NA 

NA 

GERD (as % of GDP) 
GERD (Euro per 
capita) 
GBAORD (€m) 
R&D funded by BES 
(% of GDP) 
R&D funded by PNP 
(% of GDP) 
R&D funded by GOV 
(% of GDP) 
R&D funded by HES 
(% of GDP) 
R&D funded from 
abroad 
R&D performed by 
HEIs (% of GERD) 
R&D performed by 
government sector 
(% of GERD) 
R&D performed by 
business sector (% 
of GERD) 

26.22 

26.93 

25.46 

29.56 

NA 

64 

3.2  Smart fiscal consolidation9 

Source: Eurostat 

3.2.1  Economic growth, fiscal context and public R&D 

Lithuania has  been  extremely  strongly  hit  by  the  crisis,  facing  a  14.8%  drop  of  its  real 
GDP in 2009. However, the country demonstrated a remarkable adjustment capacity and 
its  regained  competitiveness  contributed  to  strong  growth  (3.4%  p.a.  on  average  in 
2012-14). The export-led growth has gradually changed into a domestic demand driven 
one  amid  rising  wages  and  disposable  income,  falling  unemployment  and  low  inflation. 
Real growth is estimated to fall to 1.7% in 2015 due to a significant drop in exports to 
Russia  and  to  pick  up  during  2016-17  (2.9-3.4%)  driven  by  strong  household 
consumption  (supported  by  robust  real  wage  growth),  investment  and  increasing 
exports. 

Public finances in Lithuania were strong before the crisis. The headline deficit was below 
1% and the steadily decreasing public debt (2008: 14.6% of GDP) was one of the lowest 
in  the  EU  (Figure  2).  In  spite  of  the  fiscal  contraction  the  deficit  increased  to  8.9%  of 
GDP  in  2009  due  to  the  even  steeper  fall  in  the  GDP.  Subsequent  fiscal  consolidation 
efforts based on severe expenditure cuts during 2011-2014 have successfully decreased 
the  deficit  to  0.7%  of  GDP  in  2014.  The  Commission  expects  a  halt  in  the  fiscal 
improvement  in  2015  (deficit:  0.9%)  and  2016  (deficit:  1.2%)  due  mainly  to  higher 
defence expenditures compensated only partially by revenue measures. An improvement 
in 2017 (deficit down to 0.4%) is foreseen thanks to robust economic growth and limited 
increase of the expenditures. The structural deficit is expected to fall gradually to 1.0% 
of GDP by 2017. Public debt doubled during the crisis due to fiscal stimuli needed to re-
launch  the  economic  recovery.  It  slowly  increased  further  reaching  40.7%  of  GDP  in 
2014.  The  Commission  forecast  sets  public  debt  at  40-42%  of  GDP  in  2016-17.  Long-
term fiscal sustainability is challenged by the impact of population ageing, as the country 

9 Smart fiscal consolidation is defined as public budget cost-cutting programmes aimed at establishing a foundation for 
long-term growth. This public policy strategy is based on a trade-off between the need to safeguard growth enhancing 
elements (including R&D) from budgetary cuts and the need to reduce public spending in a context of economic crisis. For 
reference  see  Kolev  and  Matthes  (2013)  and  Veugelers  (2014).  The  conclusions  in  our  analysis  focus  only  on  the  R&I 
aspect of Smart Fiscal Consolidation. 

25 

 
 
                                          
has not so far taken decisive legislative measures needed for a comprehensive reform of 
the pension system. 

Figure 2 Government deficit and public debt 

Data source: Eurostat 

Total GERD in Lithuania was 332.4 MEUR in 2013. There are three main sources of R&D 
funding:  the  business  sector  (91.3MEUR),  the  government  (114.8  MEUR),  and  foreign 
funding (123.4 MEUR). Direct funding from the government goes to business enterprises 
(2.4 MEUR), the government (29.3 MEUR) and the higher education sector (83.2 MEUR). 

Table 4 Key Lithuanian R&D Indicators 

GBAORD, % of gov. exp. 
GERD, % of GDP 
out  of  which  GERD  to  public,  %  of 
GDP 
Funding from GOV to, % of GDP 
   Business 
   Public (GOV+HES) 
   Total 
EU funding, % of GDP 

2007  2009  2013 
1.42  1.16  1.05 
0.80  0.83  0.95 

0.58  0.62  0.71 

0.01  0.01  0.01 
0.37  0.43  0.32 
0.38  0.44  0.33 
0.15  0.09  0.30 

Source: Eurostat 

3.2.2  Direct funding of R&D activities 

The  sources  of  R&D  funding  according  to  the  Frascati  manual  are:  Government  sector 
(GOV),  Higher  education  sector  (HES),  Business  enterprise  sector  (BES),  Private  non-
profit sector (PNP) and Abroad (including EC). In this analysis the public sector as source 
of  funds  is  given  by  the  GOV  part  of  GERD,  whereas  the  public  sector  as  a  sector  of 
performance  is  the  aggregation  of  GOV  and  HES.  Figure  3  below  shows  the  historical 
evolution of GERD financing in current prices in Lithuania. 

Figure 3 Development of government funding of the total GERD 

Total  GERD  in  Lithuania  has  been  on  an  ascending  path  throughout  2005-14.  Although 
the government has been the most important contributor to GERD funding in this period, 

Data source: Eurostat 

26 

 
 
 
 
  
 
 
 
 
 
private  sources  gradually  acquired  more  importance,  especially  in  the  2010-14  post-
crisis period when they registered a cumulated growth of more than 30%. Government 
direct support is practically stagnating at its 2011 level (i.e. a decrease in real terms). 

During  2008-10,  direct  public  financing  of  R&D  from  government  dropped  by  about 
€40m (i.e. by ca. 30%). EU funding played an important role in this period, especially in 
2010,  when  it  was  the  main  funding  source  thanks  to  which  the  country  succeeded  to 
avoid further declines in GERD. Further to this, its 2011 doubling contributed the most to 
the recovery of GERD to its pre-crisis levels. 

3.2.2.1 

Direct public funding from the government 

Figure  4  shows  that  military  R&D  appropriations  were  practically  absent  during  2005-
2014. This is not surprising for a country without extensive military base. 

Figure 4 R&D appropriations and government funded GERD in millions of national currency, as % 
of GDP and as % of government expenditure 

Data source: Eurostat 

Both  government  appropriations  for  R&D  (GBAORD)  and  government  funded  GERD 
increased  significantly  in  the  pre-crisis  period  in  nominal  terms  (Figure  4,  upper  left). 
This was not the case when considering them as a share of GDP (Figure 4, upper right) 
due  to  the  strong  GDP  growth  of  the  same  period.  As  already  mentioned,  the  crisis  hit 
Lithuania  very  hard.  Public  R&D  appropriations  and  spending  were  cut  significantly 
(Figure 4, down). 

Fiscal consolidation in Lithuania started to bear fruit in 2011-12 when the deficit started 
to  decline  both  nominally  and  in  structural  terms  (Figure  6).  Since  then  both  GERD 
funded by government and GBAORD have practically stagnated both nominally and as a 
share  of  total  government  expenditures  (Figure  4).  However,  as  a  share  of  GDP  they 
seem to follow a decreasing path due to the rapid GDP growth. 

3.2.2.2 

Direct public funding from abroad 

Based  on  Table  5,  below,  EU  funding  has  been  the  major  external  source  of  financing 
throughout  the  last  decade.  Since  2007  the  share  of  other  external  funding  sources 
(business sector, international organizations, etc.) is only 10-15%. The vital importance 
of  EU  funding  is  further  emphasized  by  its  gradually  increasing  proportion  compared  to 
total  government  funded  GERD,  reaching  70%  in  2012,  representing  one  third  of  total 
GERD.  As  Bruegel  policy  contribution (Veugelers,  2014) highlights,  in countries such as 
Lithuania (and for that matter for most Central and Eastern European states) ‘Structural 

27 

 
 
 
 
Funds for research and innovation are of the same magnitude as national R&I budgets, 
meaning  that  Structural  Funds  (almost)  double  the  volume  of  government  R&I  funding 
included in GBAORD data for the country’. This observation is also relevant for the other 
two Baltic States – Estonia and especially Latvia. 

Table 5 Public Funding from Abroad to Lithuanian R&D (in millions of national currency) 

Source from 
abroad 

Total 

BES 

EC 

GOV 

HES 

International 
Organizations 
Total as % 
GERD 

EC as % 
GOVERD 

2005  2006  2007  2008  2009  2010  2011  2012 

2013 

2014 

16.51  27.31  45.56  39.97  29.08  43.76  80.28  98.99  123.35  126.68 

4.32 

5.30 

1.77 

2.58 

2.61 

2.61 

1.71 

8.83 

14.45 

9.96  18.97  42.20  35.13  24.76  38.55  76.23  83.35  106.09 

0.26 

0.26 

0.06 

0.12 

0.32 

0.90 

0.70 

0.06 

0.17 

0.12 

0.26 

0.12 

0.29 

0.12 

1.80 

2.32 

1.07 

1.30 

1.13 

0.75 

1.42 

2.17 

1.62 

10.52  14.34  19.59  15.50  13.01  19.93  28.40  33.18 

37.11 

34.25 

10.11  18.58  38.68  24.94  21.03  38.14  63.87  70.37 

92.38 

Based on data from European Commission DG REGIO, the total Structural Funds for the 
period  2007-2013  for  Lithuania  amounts  to  6.8  billion  Euros  of  which  0.5  billion  is 
dedicated  to  'Core'  R&D  activities 10.  As  a  share  of  the  total  Structural  Funds  for  the 
country Lithuania is the 21st among the EU28. 

Distribution of public funding  

Figure  5,  below  shows  how  the  distribution  of  public  funding  to  sectors  of  performance 
over time. 

Figure 5 Government intramural expenditure by sectors of performance 

Data source: Eurostat 

The  public  sector  is  clearly  the  main  beneficiary  of  public  funding  and  the  share  that 
goes  to  businesses  is  practically  insignificant.  Although  with  some  fluctuations,  public 
funding is relatively stable nominally. However, in constant 2005 prices it has an almost 
steady downward sloping trend with a ca. 20% total decrease throughout 2005-13. 

10 The definition of 'Core' R&D activities is provided in European Commission (2011). 

28 

 
 
  
  
  
  
  
  
  
  
  
  
 
 
 
                                          
3.2.3  Indirect funding – tax incentives and foregone tax revenues 

The  Corporate  Tax  Law  of  Lithuania  allows  for  a  300%  super  deduction  of  the  costs  of 
scientific  research  and  experimental  development  (except 
for  depreciation  or 
amortisation of fixed assets) when calculating the corporate income tax base for entities 
where scientific research and/or experimental development works carried out are related 
to the usual or intended activities of the entity which generate or will generate income or 
economic  benefit  (Tax  Guide  Lithuania,  n.d.).  This  arrangement  exists  since  2008.  The 
second  available  fiscal  instrument  incentivising  R&D  spending  in  Lithuania  is  the 
accelerated depreciation scheme. Existing since 2008, the scheme allows for R&D capital 
assets  to  be  written  off  over  a  very  short  period  (2  years  or  less)  (European 
Commission, 2014). 

However,  only  a  very  small  proportion  of  companies  in  the  high  and  medium  high 
technology  sector  and  knowledge  intensive  services  have  used  these  incentives  (2012: 
0.79%). In 2013, only about 3 companies per thousand registered in Lithuania used the 
R&D  tax  incentive.  Therefore,  it  can  be  concluded  that  tax  incentives  are  underutilised 
and do not play a major part in the overall policy mix. According to the Lithuanian reply 
to  the  ERAC  Survey  2013  the  amounts  of  forgone  tax  revenues  provided  in  2011-12 
were  altogether  ca.  €3m,  which  is  a  marginal  amount.  The  European  Commission  DG 
TAXUD estimated that public expenditure on R&D tax incentives as percentage of GDP is 
0.01%. 

3.2.4  Fiscal consolidation and R&D 

Figure 6, below shows the scatterplot of the structural balance and GBAORD as % GDP, 
first panel as well as GERD as % GDP, second panel11: 

Figure 6 Fiscal consolidation and R&D 

Data source: AMECO, Eurostat 

11 Structural balance data comes from the AMECO database the other indicators were taken from Eurostat. 

29 

 
 
 
 
 
                                          
Lithuanian fiscal consolidation started to yield results in 2011-12 when the deficit started 
to  decline  monotonously  both  nominally  (see  Section  3.2.1)  and  in  structural  terms 
(Figure  6).  As  we  have  seen  on  Figure  4,  although  in  nominal  terms  both  R&D 
appropriations  (GBAORD)  and  government  funded  GERD  were  relatively  stable  during 
2011-2014,  both  of  them  decreased  in  relative  terms  by  ca.  0.05%  of  GDP  (Figure  6). 
Therefore,  it  can  be  argued  that  post-crisis  fiscal  consolidation  had  a  small  negative 
impact  on  direct  public  support  to  R&D.  Indirect  funding  through R&D  tax  incentives  in 
Lithuania  are  of  a  very  low  level.  Adding  them  to  direct  support  does  not  change  the 
overall trend. Based on the right panel of Figure 6, EU funding is extremely important for 
the  public  funding  of  the  Lithuanian  R&D  expenditures. In  the  period  2011-2014  it  was 
so  high  that  it  compensated  for  the  losses  in  the  government  funded  GERD  and 
stabilised the total public support to R&D. 

In conclusion,  the post-crisis fiscal consolidation process had a small negative impact on 
public  support  to  the  Lithuanian  R&D  expenditures,  but  the  evidence  is  not  strong 
enough to conclude that it came at the expense of it. It was due to the high share of EU 
funding that the country kept its R&D budget growing in the post-crisis years. 

3.3  Funding flows 

3.3.1  Research funders 

The  Ministry  of  Education  and  Science  directly  allocates  funding  to  public  HEIs  and 
research institutes for R&D activities. Additionally, there are five main institutions which 
are  responsible  for  funding  of  research  and  innovation.  Overall  funding  situation  is  as 
follows: 

  Ministry of Education and Science directly funds public HEIs and research institutes. 

In 2014 it allocated €61.8m12 (Ministry of Education and Science, 2014); 

  MITA provides both funding from the national budget and EU ESIF. In 2014 it spent 

€8.6m (MITA, 2015); 

  LMT provides competitive funding for research from the national budget, EU ESIF and 
also  international  programmes  (e.g.  with  Switzerland).  In  2014  it  allocated  €29.9m 
(LMT, 2015); 

  LVPA  administers  project-based  funding  from  EU  ESIF  to  business  R&D  performers. 

In 2014 it administered €30.1m (LVPA, 2015); 

  ESFA  administers  project-based  funding  from  EU  ESIF  for  strengthening  capabilities 

of researchers. In 2014 it administered €24.6m (Ministry of Finance, 2015); 

  CPVA  administers  project-based  funding  from  EU  ESIF  for  large  R&D  infrastructure 

projects. In 2014 it administered €62.9m (Ministry of Finance, 2015). 

Private non-for-profit funding of R&D constituted only 0.01% of GDP in 2013 (€2.33m), 
which is 11th result in the EU28. This sector does not play important role  in R&I, which 
makes it difficult to identify the main funders. 

3.3.2  Funding sources and funding flows 

Funding  from  EU  ESIF  still  accounts  for  the  most  significant  part  of  public  R&D 
expenditures.  With  respect  to  EU  FP7  funding  Lithuania  is  26th  in  the  EU  according  to 
budget  share  (European  Commission,  2015c).  Transnational  programmes  were 
implemented  (e.g.  through  LMT  or  MITA)  but  only  form  a  negligible  part  of  total  R&D 
expenditure. In 2013, funds from abroad accounted for 37.1% of GERD, but the majority 
of  it  (86%)  came  from  the  EC.  R&D  funds  from  foreign  business  amounted  to  4.4%  of 
GERD, and non-EC and non-business funds from abroad made less than 1% of GERD. 

12 However, it should be noted that some of these funds might go not directly to R&D activities, but also to cover related 
expenses. 

30 

 
 
                                          
During  the  implementation  of  the  OP  for  2007-2013,  research  was  mainly  supported 
through  the  priorities  ‘strengthening  of  capacities  of  researchers  and  scientists’  and 
‘research  and  development  for  economy’s  competitiveness  and  economic  growth’.  For 
the  former,  €115.98m  were  allocated  from  EU  ESIF,  and  as  of  19  January  2016, 
€120.57m were allocated to projects, out of which €115.9m were already paid.13 For the 
latter  priority,  €512.09m  were  allocated  from  EU  ESIF.  As  of  19  January  2016, 
€496.92m were allocated to projects and €480.55m were paid.14 Therefore, within these 
priorities  absorption  rates  of  ESIF  are  99.9%  and  93.8%  respectively.  Within  separate 
measures  absorption  rate  varies  significantly.  As  of  March  2015,  it  was  between  51% 
(Inogeb  LT-3)  and  97%  (Inogeb  LT-1)  for  measures  that  specifically  target  R&D  in 
business.  Average  absorption  rate  of  these  measures  was  69%  (Visionary  Analytics, 
2015). Among the reasons for the rather low absorption rate already well into 2015, one 
can  distinguish  a)  long  and  restrictive  public  procurement  procedures;  b)  late  calls  for 
funding; c) long periods of time required for implementing R&D activities. By the end of 
2015  absorption  rate  should  be  higher.  However,  other  factors,  such  as  lengthy  public 
procurement procedures also have negative effect on absorption of ESIF. 

Comparing  actual  R&I  expenditure  from  the  national  budget  and  EU  ESIF  in  2014,  the 
latter  plays  a  major  role.  €130.43m  were  provided  for  R&I  measures,  out  of  which 
€118.44m came from EU ESIF and the rest €11.99m from other government sources.15 
Meanwhile, the Ministry of Education and Science distributed €36.98m to public HEIs and 
research  institutes  for  R&D  activities  as  well  as  €24.85m  for  administrative  activities. 
Additional  non-ESIF  €17.84m  were  distributed  through  LMT  and  €3.54m  through  MITA. 
Thus, government sources contributed €95.2m to R&D activities which is lower than the 
total  funding  from  the  EU  ESIF.  Additional  €0.1m  came  from  the  Lithuania-Switzerland 
cooperation programme (allocated through LMT). Table 6 presents the main R&I related 
funds that were distributed to beneficiaries in 2014 based on their objectives.  

The  share  of  R&D  funded  by  business  has  been  mostly  constant  and  fluctuated  in  the 
bounds of 0.24%-0.26% of GDP in 2011-2013. However, in 2014 it increased to 0.32%. 
R&D performed by business enterprise also increased from 0.24% to 0.3% in 2014. This 
is  however  still  significantly  below  the  EU28  average  and  indicates  the  problem  with 
private financing of R&D. Private sector innovation heavily depends on public funds. Co-
financing  in  projects  funded  by  EU  ESIF  is  required  in  some  policy  instruments  (e.g. 
Intellect  LT),  national  budget  programmes  also  aimed  at  attracting  business  R&D 
investment 
through  co-financed  projects  (e.g.  High  Technology  Development 
Programme).  It  remains  to  be  seen  whether  new  similar  programmes  will  take  their 
place.  Some  data  is  available  for  private  co-funding  in measures  of  the  OP  2007-2013. 
As  of  April  2015  private  investment  amounted  to  €112.1m  in  the  projects  funded 
through  the  Ministry  of  Economy  in  the  priority  'Direct  and  Indirect  Assistance  to  R&D 
and  Innovations  and  Investment  Promotion'  in  the  OP  Economic  Growth  (Visionary 
Analytics, 2015).16 

13 In total, including domestic co-funding, €135.27m were allocated to projects in this priority, out of which €135.22m 
were already paid by 19 January 2016. 
14 In total, with domestic co-funding €552.56m were allocated to projects in this priority, out of which €534.75 were 
already paid by 19 January 2016. 
15 This includes priority ‘Strengthening of capacities of researchers and scientists’ from OP ‘Human Resources 
Development’ and priority ‘Research and development for economy’s competitiveness and economic growth’ from OP 
‘Economic Growth’. 
16 Only those measures, where private co-funding is one of the monitoring indicators are included (i.e. Idea LT, Intellect 
LT, Intellect LT+, Inocluster LT+, Ino-vouchers LT). 

31 

 
 
 
                                          
Table 6 Main R&I related funds transferred to the beneficiaries, 2014 

Classification 

Measures  

€m 

% of total 
funds 

Target group – business companies. Managing agencies: LVPA, MITA 

R&I FUNDING 

Innovation-friendly 
environment  

Technology and 
knowledge transfer 
and cluster 
cooperation 

  Innovation support services and investments 
into institutional/absorptive capacity (Inogeb 
LT group of measures),   

  Assistant-2 (construction of technology and 

art incubators) 

  R&D Quality and Training of Experts 
  Inocluster LT/ LT+, R&D thematic networks 

and associations 

  Innovation vouchers 

11.24 

7.58% 

7.56 

5.10% 

R&D in firms 

  Idea LT, Intellect LT, LT+ 

16.61 

11.20% 

RESEARCH FUNDING 

Target group – mainly HEIs and PROs and their researchers. Managing agencies: LMT, 
CPVA, ESFA, MITA 

R&D Infrastructure  

  Economy Growth OP, Priority 1, investments 

62.94 

42.43% 

National and 
international 
programmes for 
(mainly) basic 
research 

Human Resources 
for research  

into the development and upgrade of research 
infrastructures in the science, studies and 
business 'valleys' 

  National Research Programmes,  
  Bilateral and multilateral research 

programmes, 

  Researchers groups projects, 
  Mobility funding, 
  Institutional funding due to unused funds 
  ‘Global grant’, research mobility and other 
measures under the HR Development OP, 
Priority 3, including the funding for R&D 
governance and policy analysis, thematic 
networks etc. 

15.66 

10.56% 

34.33 

23.14% 

Total 

~€148.34 

100% 

Source: based on Paliokaite (2014a), www.esparama.lt 

Additionally, many instruments from OP Economic Growth measure ‘Increasing business 
productivity and improving business environment‘ were aimed at creation and growth of 
enterprises. Although not directly targeting R&I, they are related to increasing business 
innovation  activities.  In  2014,  €47.78m  were  transferred  through  such  instruments. 
Furthermore,  controlling  and  guarantees  funds  were  functioning,  and  an  instrument  for 
compensation of SME’s credit interests was implemented. 

3.4  Public funding for public R&I 

3.4.1  Project vs. institutional allocation of public funding 

In 2015 competitive institutional funding for public HEIs and research centres amounted 
to approximately €41.59m for R&D and €27.10m for administrative activities (Ministry of 
Education  and  Science,  2014).  Concerning  project  based  funding  (from  both  domestic 

32 

 
 
 
and  ESIF  sources),  around  €29.9m  were  allocated  through  LMT  and  €8.6m  through 
MITA. 

With the EU ESIF, in OP 2007-2013, the project funding for public R&D constituted about 
€112.4m (68% of the total public R&D funding, excluding the public funding for business 
R&D),  which  includes  state  planning  based  funding  for  public  R&D  infrastructures  (see 
Table 6). State planning is a funding method which falls between block and competitive 
project-based  R&D  funding.  The  state  pre-selects  important  infrastructure  projects  and 
funds  them  from  both  domestic  and  ESIF  sources.  In  theory,  best  R&D  infrastructures 
are  funded,  however  in  Lithuania  it  cannot  be  verified  that  the  selection  followed  the 
international  standards  of  project 
funding  (international  peer  review,  rigorous 
procedures,  clear  selection  criteria,  etc.).  Some  of  the  EU  ESIF  will  be  allocated  in  a 
similar  pre-selective  manner  during  the  2014-2020  programming  period.  However,  in 
this case ex-ante conditions for funds’ allocation had to be followed, and the assessment 
is  pending.  The  Ministry  of  Education  and  Science  already  provided  a  list  of  selected 
infrastructures in its General Action plan approved in August 2015. 

Concerning the institutional and project funding during 2012-2015, the money allocated 
to  projects  financed  from  EU  ESIF  diminished  by  2014,  since  the  financing  period  for 
2007-2013  was  already  ending.  Thus  project-based  funding  decreased.  This  resulted  in 
dissatisfaction of researchers who experienced a financing gap due to the belated launch 
of  measures  included  in  the  OP  2014-2020  (first  calls  were  opened  only  by  the  end  of 
2015).  Meanwhile,  institutional  funding  in  years  2013-2015  constantly  increased  from 
€36.77m  in  2013  to  €41.59m  in  2015  allocated  to  institutions  for  R&D  activities  and 
from  €21.57m  to  €27.1m  allocated  for  administrative  activities  (Ministry  of  Education 
and  Science,  2014).  Yet,  even  though  the  share  of  institutional  funding  increased,  the 
funding  is  dominated  by  project-based  allocation.  Concerning  competitively  and  non-
competitively  allocated  institutional  funding,  the  majority  of  the  funds  are  distributed 
competitively.  In  fact,  most  funding  that  conforms  to  the  definition  of  block  funding  is 
allocated through projects (e.g. ‘valley’ projects were financed from EU ESIF, but funding 
decisions were not based on some competition between projects). 

3.4.2  Institutional funding  

The  Government  decision  (adopted  in  2009  and  subsequently  amended  in  2010,  2012 
and  2014)  on  the  method  for  allocation  of  budgetary  appropriations  for  R&D  for  public 
higher  education  and  research  institutions  stipulated  that  higher  share  of  institutional 
funding should be linked to research performance. The Decision established that 40% in 
2010 and 50% in 2011 and subsequent years of institutional funding will be allocated to 
public  HEIs  and  research  institutions  on  the  basis  of  results  of  assessment  of  R&D 
activities.  The  remaining  50%  as  of  2011  are  allocated  on  the  basis  of  ‘normative 
number  of  staff’  that  is  approved  for  each  institution  by  the  decree  of  Minister  of 
Education and Research. 

The  competitive  half  of  institutional  funding  from  2012  onwards  is  reallocated  every 
three  years  taking  into  consideration  the  results  of  assessment  of  R&D  activities.  The 
ministerial  decree  adopted  in  November  2012  stipulates  that  assessment  of  R&D 
activities is based on four criteria: a) funding received from participation in international 
research projects; b) funding received from R&D contracts with business companies; c) 
public funding from participation in joint R&D projects with business companies (funding 
of  business  subcontracts);  d)  results  of  evaluation  of  research  production.  The  latter 
focuses  on  publications  and  patents  and  is  carried  out  by  LMT  every  three  years  to 
assess  annual  performance  in  accordance  with  the  principles  of  international  peer 
review.  These  criteria  are  given  unequal  weights  for  assessment  of  R&D  activities  in 
different fields of science. For example, results of evaluation of research production are 
given the highest weight in social sciences and humanities (80%) as well as physical and 
biomedical  sciences  (55%).  Assessment  of  R&D  activities  in  other  fields  of  science 
mostly  depends  on  institutions’  capacities  to  attract  funding  from  privately  and 
internationally  funded  R&D  projects.  It  was  expected  that  linking  public  institutional 

33 

 
 
funding  with  the  capacity  to  attract  additional  funding  should  create  incentives  for 
institutions to increase the relevance of their research programmes. 

The implementation of the institutional funding mechanisms has been amended several 
times  in  the  last  5  years.  Therefore  it  is  too  early  to  discuss  the  consistency  and 
efficiency  of  implementation.  LMT  should  finish  evaluation  of  R&D  in  public  HEIs  and 
research  institutes  by  November  2015.  The  evaluation  should  also  be  used  to  allocate 
institutional funding to these institutions. 

3.4.3  Project funding 

After  the  heavy  public  research  and  education  funding  and  the  governance  reforms 
carried  out  in  2008-2011  (see  Erawatch  country  reports  for  2010-2012),  the  share  of 
project  funding  of  research  has  increased.  The  share  of  ESIF  funding  has  increased  in 
2013-2014, and the share of project funding has therefore increased as well. 

The  Law  on  Higher  Education  and  Research  (adopted  in  2009)  and  the  accompanying 
bylaws  led  to  considerable  increase  in  the  share  of  funds  that  are  allocated  through 
competitive  procedures.  As  of  2009  LMT  acquired  the  functions  of  a  funding  agency.  It 
provides  grants  to  research  projects  through  competitive  calls  for  proposals  that  are 
subject to peer review. The funding is allocated through a number of programmes, e.g. 
‘Promotion of High-Level International Scientific Research’ approved in 2012, Projects of 
Scientists’ Groups, National Research Programmes and others.  

The  peer-review  process  in  allocating  competitive  research  funds  is  mainly 
organized  and  managed  by  LMT.  It  is  based  on  the  scientific  projects  funding 
methodology  (LMT,  2010).  The  peer  review  is  applied  systematically  in  the  following 
areas:  

  Competitive calls for proposals for national and international research grants; 
  Evaluation  of  research  production.  The  results  of  evaluation  have  an  impact  on 
institutional  funding  of research  carried  out  in  public  HEIs  and  research  institutions. 
The  first  evaluation  was  completed  in  2010.  Feedback  from  stakeholders  led  to 
modifications  in  assessment  methodology  and  the  most  recent  evaluation  was 
completed in 2015; 

  Long term R&D programmes of public HEIs and research institutions.  

The  experts’  selection  to  conduct  the  peer-review  in  LMT  is  based  on  internal  LMT 
decisions. Experts are chosen by the LMT committees from the confidential LMT experts’ 
database  and/or  other  suggested experts.  Explicit  LMT  rules  for experts’  selection  were 
finalised in May 2014. In principle, the participation of international peers is not limited 
as  experts  can  be  any  qualified  researchers  and  specialists,  Lithuanian  and  foreign 
citizens  working  in  Lithuania  or  abroad.    However,  in  practice  the  LMT  chooses  experts 
according  to  the  financial  value  of  calls.  The  Global  Grant  programme  is  systematically 
assessed  by  international  experts  (in  natural  and  technical  sciences  international  peer 
review covers 100% of calls, while in humanities and social Sciences – 2/3 of calls) as it 
is  designed  to  support  world-class  scientists  and  researchers’  projects  (Paliokaitė, 
2014b). Other project experts’ evaluation is organised according to the funding amount 
of calls: if a call assigns less than €29,000, then usually it is reviewed by local experts. 
In  other  cases  LMT  hires  Lithuanian  experts  working  abroad  or  international  experts.  A 
majority of grant proposals are submitted in Lithuanian language (with a short summary 
in  English),  which  poses  linguistic  barriers  to  participation  of  international  reviewers. 
However,  some  instruments,  such  as  National  Research  Programmes,  require  that 
proposals are submitted both in Lithuanian and in English. That is, when a project grant 
(e.g. Global Grant programme) is considered significant, LMT asks for submission of both 
language  versions  of  the  proposal,  which  facilitates  the  international  peer-review. 
Another  obstacle  is  experts’  availability.  Local  experts  usually  nominate  themselves  to 
LMT,  while  foreign  experts  are  approached  by  LMT.  Another  institution  providing 
institutional  funding, MITA,  also hires  experts  from both Lithuania and  abroad. Yet,  the 
requirements  for  researchers  imposed  by  MITA  are  somewhat  lower  than  those  of  LMT 

34 

 
 
(e.g.  minimum  number  of  articles  in  case  of  LMT  is  15  (or  10  if  published  in  Web  of 
Science)  and  in  case  of  MITA  the  number  is  only  5  (or  3  if  published  in  WoS)).  This 
might  be  due  to  the  more  specific  focus  of  MITA  on  technological  development,  thus 
evaluation criteria differ. 

In summary, the Lithuanian public bodies responsible for allocating competitive research 
funds  apply  the  core  principles  of  international  peer  review  to  a  large  extent,  i.e. 
research  excellence  criteria  are  applied  and  the  funding  agencies  are  rigorous  in  their 
peer review procedures (Paliokaitė, 2014b).  Using Lithuanian language in the forms and 
applications  in  most  cases  precludes  using  international  peer  reviewers  for  evaluating 
projects  (Paliokaitė,  2014b),  but  both  LMT  and  MITA  hire  international  experts  to 
evaluate projects, especially if they are large. 

The success rate of proposals varies from programme to programme and even between 
calls  of  the  same  programme  (e.g.  the  first  call  of  the  High  Technology  Development 
Programme  saw  success  rate  of  57.7%,  while  the  second  call  of  the  same  programme 
saw  success  rate  of  only  13.9%)  (MOSTA,  2015a).  While  it  is  difficult  to  compare 
programmes due to different focus and target groups, or even differences between calls, 
the  various  success  rates  might  indicate  that  information  about  financing  opportunities 
spreads  sometime  after  the  initial  launch  of  a  programme  or  an  instrument.  Generally, 
success rate is around 50%, although there is variation (e.g. Intellect LT (success rate of 
50.88%),  Intellect  LT+  (42.31%),  public  grant  to  researchers  (30.37%),  etc.).  It  is 
important to stress that in some cases projects are not financed because proposals are 
technically  inadequate  or  lack  R&D  activities  (e.g.  in  Intellect  LT  instrument  12.8%  of 
non-financed  proposals  were  rejected  due  to  administrative  issues,  83.3%  due  to 
ineligibility  (e.g.  lack  of  R&D  activities  in  the  project)  (see  MOSTA,  2015a)).  Therefore 
only a small number of projects get rejected during project benefit-quality assessment, 
and there might be little competition among proposals with respect to the quality of their 
content. 

In  2007-2013  individual  grants  were  usually  not  awarded  directly.  Instead,  resources 
were  allocated  through  project-funding  to  institutions  which  then  provided  grants  for 
individual  researchers,  e.g.  as  in  the  measure  ‘Support  of  scientists  and  researchers 
mobility  and  students  scientific  work’.  Eleven  projects  were  run  by  institutions  which 
then  distributed  funds  to  individual  researchers.  The  exception  is  the  instrument 
‘Support to the scientific work of scientists and other researchers (Global Grant)’, where 
scientists and other researchers could apply for funding directly, if they worked at HEIs 
or  research  institutions.  €33.2m  were  allocated  in  this  way,  106  out  of  349  proposals 
were  approved.  LMT  funded  post-docs  through  the  measure  ‘Support  of  scientists  and 
researchers  mobility  and  students  scientific  work’  funded  from  EU  ESIF  and  national 
budget. €2.4m were allocated to post-doc training in 2014. 

3.4.4  Other allocation mechanisms 

Although  most  R&D  funding  is  either  institutional  or  project-based,  new  allocation 
mechanisms are being introduced. In summer 2015 LMT introduced ‘Purposive research 
orders’.  Its  aim  is  to  finance  applied  research  based  on  topics  put  forward  by  state 
institutions, which want to address societal issues. Institutions provide specific research 
question  for  researchers  who  then  propose  solutions.  The  best  proposal  is  chosen  from 
several  candidates  based  on  proposals.  Therefore,  while  this  measure  is  innovative,  it 
has  many  similarities  with  project  based  funding  with  the  exception  that  it  is  demand-
led.  For  2015-2016  9  projects  were  financed  and  were  allocated  €0.49m  in  total. 
Meanwhile,  the  Ministry  of  Economy  introduced  pre-commercial  procurement  procedure 
which is another demand-led policy measure (see more in section 3.6). 

35 

 
 
 
3.5  Public funding for private R&I 

3.5.1  Direct funding for private R&I 

Funding  of  private  R&I  activities  mostly  comes  from  EU  ESIF  through  instruments 
administered  by  the  Ministry  of  Economy.  During  the  2007-2013  financing  period 
different instruments were used for separate steps of the innovation process (e.g. Idea 
LT    for  developing  initial  ideas  for  R&D  activities,  Intellect  LT+  for  acquiring 
infrastructure needed for planned R&D activities, Intellect LT  for carrying out ‘soft’ R&D 
activities).  Only  a  small  part  of  total  budgets  were  annually  dedicated  directly  for 
business R&I activities. In total 270 SMEs were supported, out of which 157 were from 
the  high  /  medium  high  technology  sector  (Visionary  Analytics,  2015) 17.  However,  a 
variety  of  funding  instruments  were  available  for  SMEs  in  Lithuania,  including  clusters 
promotion and innovation vouchers, as well as co-financing of business R&D investments 
(Idea LT, Intellect LT) and acquisition of R&D equipment (Intellect LT+). These measures 
over the 2007-2013 period mainly focused on the research part of the R&D activities in 
business. They did not cover the full innovation development cycle, for example, support 
for development and validation of prototypes was not available. Lessons were learnt and 
the measures for SME innovation designed for the 2014-2020 period are covering the full 
innovation  cycle  from  idea  to  the  market.  Separate  steps  of  innovation  creation  were 
merged in the renewed Intellect LT instrument. Action Plans for the ‘R&D&I priority areas 
and their priorities’ implementation programme include measures aimed at encouraging 
prototype  development  and  product  commercialisation.  However,  the  success  of  these 
measures will only be seen well into the next financing period. 

There  is  not  much  initiative  at  the  institutional  (university)  level.  Universities  generally 
lack clear spin-off creation and/or IPR protection strategies and policies. A key problem 
is a lack of motivation at the institutional and researchers’ level to commercialise R&D. 
Another  substantial  factor  limiting  public  sector  researchers’  collaboration  with 
companies  are  the  researcher's  career  rules  (overdependence  on  academic  publications 
and teaching, and little or no attention to the economic R&D results). 

Some  instruments  set  specific  amount  of  funds  to  be  contributed  by  businesses.  For 
example 55-75% of the whole project budget, depending on the size of a firm, had to be 
contributed in Intellect LT. Although under specified conditions it could have been as low 
as  30%  for  very  small  and  small  enterprises;  Inocluster  LT  could  provide  50%  of  the 
whole  budget  of  a  project,  etc.).  Some  measures  also  required  or  stimulated  public-
private  cooperation  (e.g. the  Innovation  Vouchers  instrument  stimulated  it  by  requiring 
funded companies to carry out R&D activities in HEIs). All in all, measures from the first 
priority  of  OP  Economic  Growth  attracted  €112.1m  of  private  investment.  Other 
measures  related  to  SMEs  but  not  targeting  R&D  directly  attracted  €646.7m,  with 
attracted private investment totalling €758.8m (Visionary Analytics, 2015). 

Project  evaluation  involves  peer  review,  and  in  some  measures  many  projects  are 
rejected based on technical or conceptual inadequacy (i.e. proposal lacks R&D activities), 
rather than on the perceived benefits and quality of the idea. For the latter evaluation of 
proposals  clear  guidelines  are  provided  in  the  description  of  project  funding  conditions. 
Priorities are also identified. Although the support schemes are relatively well targeted to 
the needs of SMEs (BGI Consulting, 2014), the efficacy of public support is also reduced 
by  the  formal,  technical  and  ‘desk-top’  selection  procedure.  The  ‘paper-based’ 
application  procedure  provides  incentive  for  firms  to  hire  consulting  companies  to  draft 
grant applications that appeal to the reviewers but favour form over substance. The long 
evaluation  procedures  and  the  difficult  process  of  making  changes  to  the  project  plan 

17 This number covers policy instruments that are more selective. That is, those instruments which have more elaborate 
criteria  for  applications  (e.g.  activity  sector,  cooperation  with  public  research  organisations,  etc.).  These  instruments 
include Idea LT, Intellect LT and Intellect LT+. If less specific instruments were included (Leader LT, E-business Lt, Process 
LT,  New  opportunities,  Compensation  of SMEs'  credit interests),  the  number  of funded  SMEs  would  be  6600  (Visionary 
Analytics, 2015). 

36 

 
 
                                          
also  add  to  the  high  administrative  load  for  beneficiaries  and  reduce  experimentation. 
Hence,  public  support  may  be  replacing,  rather  than  complementing,  private 
expenditures on innovation and R&D. In the survey of beneficiaries, carried out in 2011, 
69% of beneficiary firms that received support for R&I, concluded that they would have 
implemented the funded projects even without the public support (although to a smaller 
extent or in a longer timeframe) (Paliokaitė et al. 2011). A similar tendency was noted in 
evaluation of the impact of the High Technology Development Programme (2011-2013) 
(MOSTA, 2015). The Ministry of Economy has taken some steps in addressing this issue, 
for  example  a  staged  approach  of  submitting  applications  may  be  introduced  (i.e.  first 
submission  of  the  project  idea,  then  the  full  application).  Similar  two-step  approach  is 
now also used by LMT in Purposive Research Projects. 

There  are  measures  which  take  into  account  the  needs  of  companies  (e.g.  lower 
requirements might be set for SMEs, larger part of the project budget might be publicly 
funded,  etc.).  Some  (e.g.  Technostart  LT)  also  promote  establishing  new  enterprises 
(start-ups) that carry out R&I activities. Creation of spin-offs is also one of the indicators 
of implementation included in R&I priorities’ Action Plans. 

Several  additional  issues  with  measures  run  through  OP  for  Economic  Growth  were 
apparent. Firstly, many of them were launched at the same time. Since companies  had 
to  provide  their  own  funds  in  many  of  these  measures,  they  had  to  choose,  where  to 
participate  and  where  not.  This  might  have  hindered  their  opportunities  to  implement 
projects  in  a  step-by-step  manner.  Secondly,  the  implementation  of  some  measures 
(e.g.  Inocluster  LT)  was  delayed  due  to  their  complexity.  This  led  to  low  demand  for 
such support (Visionary Analytics, 2015). 

Funding  schemes  are  evaluated  at  least  once  per  implementation  period.  Although  it  is 
not  a  standard,  MOSTA  carried  out  an  evaluation  of  socio-economic  impact  of  the 
measure  Intellect  LT  (see  more  in  section  2.2.1).  However,  benchmarking  against 
comparable schemes in other countries is not done.  

During the preparation for implementation of RIS3 in 2014-2020 international meetings 
between  representatives  of  governments  and  agencies  from  member states took  place. 
For  example,  concerning  the  monitoring  and  evaluation,  some  networks  were 
established. 

Public procurement and other demand-led policy instruments have not been used so far 
in  Lithuania.  The  overly  restrictive  interpretation  of  public  procurement  rules  has  been 
discriminating  against  demand-led  innovation,  especially  among  SMEs.  Lithuania  also 
lacks developed administrative culture of organizing tenders around innovative ideas (for 
instance, technologies for the transformation of public administration buildings into zero 
emission  establishments).  The  Lithuanian  innovation  system  has  relied  mainly  on 
innovation supply side instruments. Since 2012, however, policy debate shifted towards 
demand-side  oriented  measures  and  the  Ministry  of  Economy  in  cooperation  with  MITA 
has  drafted  the  description  of  pre-commercial  procurement  which was approved  by  the 
government  in  July  2015.  More  information  on  the  implementation  of  the  innovative 
public  procurement  and  the  pre-commercial  procurement  instruments  can  be  found  in 
Section 3.6. 

There were no lead market initiatives in Lithuania as of 2015. 

3.5.2  Indirect financial support for private R&I 

During  2007-2013  both  direct  and  indirect  support  to  private  R&I  was  provided.  The 
former was provided through measures discussed in 3.5.1 and other direct means. The 
latter  was  provided  through  corporate  profit  tax  R&D  incentive  and  corporate  profit  tax 
incentive  for  investments  into  new  technologies.  While  direct  support  to  business  R&I 
was  used  for  a  reasonable  time  already,  the  R&D  tax  incentive  was  introduced  only  in 
2008.  It  allows  companies  to  subtract  three  times  the  value  of  R&D  expenditure  for  a 
given financial period from its taxable income. The tax incentive for investment into new 
technologies can reduce taxable profit by up to 50%. 

37 

 
 
However,  tax  incentives  did  not  reach  the  expected  level  of  use.  For  the  period  2014-
2020 both direct and indirect support measures will again be combined, as the plans for 
new  instruments  indicate.  However,  only  a  very  small  proportion  of  companies  have 
used these incentives (0.79% of companies in the high-medium high technology sector 
and knowledge intensive services in 2012). Therefore, tax incentives do not play a major 
part  in  the  overall  policy  mix,  compared  to  subsidies  or  venture  capital.  This  might  be 
due to a low number of companies which have R&D investment and low gains from tax 
relief  due  to  small  scale  of  activities.  In  2013,  only  about  3  companies  per  thousand 
registered in Lithuania used the R&D tax incentive. Since the number of companies using 
R&D  tax  incentives  is  low,  the  foregone  tax  revenues  should  also  be  low.  According  to 
the  State  Tax  Inspectorate,  revenue  deductions  due  to  tax  incentives  were  €78.6m  in 
2009,  while  by  2013  it  fell  to  €36.3m  (State  Tax  Inspectorate,  2014).  Data  on  the 
specific amount of foregone tax revenues is unavailable. 

3.5.3  Public procurement of innovative solutions 

Legal Public Procurement framework 

Public  procurement  in  Lithuania  is  regulated  by  a  number  of  laws  and  decrees 
transposing  the  relevant  European  legislation.  The  Law  on  Public  Procurement  of  the 
Republic  of  Lithuania  (adopted  in  1996,  last  amendments  in  2015)  sets  the  general 
framework for the public procurement regime. 

The  main  legal  acts  regulating  issues  on  procurement  of  R&D  services  are  (Soloveičik, 
2015): 

  Decree No 709 of the Government of the Republic of Lithuania of 1 July 2015 on the 
Approval  of  the  Procedures  for  Pre-commercial  Procurement  (hereinafter  –  the 
Approval of the Procedures for Pre-commercial Procurement).  

  Resolution  No VII-85 of  the  Research  Council  of  Lithuania  of  21 November 2011  on 
the  Approval  of  the  Procedures  for  the  Evaluation  of  the  Technical  Part  of  the  R&D 
Supplies, and the Selection of the R&D Services and the Suppliers of such Services.  

  Decree  No  772  of  the  Government  of  the  Republic  of  Lithuania  of  22  April  2011  on 
the  Approval  of  the  Procedures  for  Procurement  of  R&D  Services  other  than  those 
where the Benefits Accrue Exclusively to the Contracting Authority for its Use in the 
Conduct  of  its  own  Affairs,  on  Condition  that  the  Services  Provided  are  Wholly 
Remunerated by the Contracting Authority. 

The  Ministry  of  Economy  has  prepared  in  2015  and  submitted  to  the  Government  for 
consideration a  new draft of the Law on  Public Procurement. New EU Procurement 
directives and consequently the new draft of the Law on Public Procurement of Lithuania 
establish  a  new  Innovation  Partnership  procurement  procedure  to  help  contracting 
authorities  to  use  public  procurement  for new  product  development  and  its  subsequent 
acquisition.  After  the  approval  by  the  Government  in  2015,  the  updated  Law  will  be 
submitted  to  the  Parliament  for  consideration.  The  new  Law  on  Public  Procurement  of 
Lithuania is expected to come into force in the spring of 2016. 

The PCP/PPI landscape in Lithuania 

The  Lithuanian  innovation  system  has  relied  mainly  on  innovation  supply  side 
instruments  and  has  neglected  possibilities  to  link  innovation  demand  with  knowledge 
producing  capacities.  However,  since  2012,  policy  debate  shifted  towards  the  demand-
side  oriented  measures.  The  National  Progress  Programme  for  Lithuania  for  the  period 
2014-2020  (approved  in  2012)  contains  a  set  of  demand-side  innovation  policy 
measures,  e.g.  innovative  public  and  pre-commercial  procurement,  regulation,  financial 
and  tax  incentives  for  innovation  consumers.  The  OP  for  2014-2020  as  well  as  the 
Lithuanian Innovation Development Programme 2014-2020 contains measures aimed at 
fostering  markets  for  innovation  (firstly,  pre-commercial  procurement  is  foreseen, 
purposive research projects might play a similar role). The strategy for the Development 
and  Improvement  of  the  Lithuanian  Public  Procurement  System  for  2009-2013  and  the 

38 

 
 
Lithuanian Innovation Development Programme 2014-2020 set a target for the share of 
innovation procurement to account for 5% of all public procurement in Lithuania. 

The  Ministry  of  Economy  has  led  the  debate  on  how  to  increase  the  implementation  of 
the  innovative  public  procurement  and  the  pre-commercial  procurement  instruments. 
The  Ministry  of  Economy  in  cooperation  with  the  Lithuanian  Agency  for  Science  and 
Technology  (MITA)  has  drafted  the  description  of  pre-commercial  procurement  and  it 
come  into  force  in  2015.  It  intends  to  implement  pilot  actions  of  pre-commercial 
procurement  and  to  conduct  a  survey  of  other  ministries  on  the  demand  for  the 
innovative  public  procurement  as  well  as  for  the  pre-commercial  procurement.  In  July 
2015,  the  Government  approved  the  procedure  of  pre-commercial  procurement,  which 
allows  three  types  of  such  process  –  when  only  a  trial  run  of  the  product  is  ordered, 
when  prototype  creation  is  also  ordered,  and  when  in  addition  to  the  two  mentioned 
stages,  developing  of  the  concept  is  also  ordered  by  the  buying  organisation.  The 
document  also  presumes  that  MITA  (contracting  authority)  is  entrusted  with  organising 
and  implementing  pre-commercial  procurement.  It  should  co-finance  pre-commercial 
procurement, consult potential beneficiaries, and disseminate the information about this 
instrument.  

PCP/PPI initiatives in Lithuania 

MITA  as  a  coordinating  authority  will  provide  co-financing  for  Lithuanian  procurers  to 
start pre-commercial procurements, but so far no resources were allocated to them. It is 
expected  that  ‘Pre-commercial  Procurement  LT’  will  enable  the  implementation  of  pre-
commercial procurement. Projects are currently under preparation but not yet launched 
in 6 key areas (Soloveičik, 2015): 

  Development and production of drones; 
  Health care; 
  Agricultural sector; 
  National defence; 
  Waste management; 
  Energy consumption. 

3.6  Business R&D 

3.6.1  The development in business R&D intensity 

As  one  can  see  from  Figure  7,  BERD  intensity  doubled  between  2005  and  2014. 
However, the actual value (2014) of 0.3% of GDP is still one of the lowest in the EU. The 
highest  BERD  spenders  were  the  manufacturing,  business  services  and  the  healthcare 
industry. In 2010 manufacturing BERD intensity dropped and business services became 
the  most  important  sector  in  this  respect.  When  turning  to  Figures  9  and  10  we  can 
observe that BERD in ICT (mostly telecommunications and computer programming) and 
Professional,  scientific  and 
technical  activities  (mostly  scientific  research  and 
development)  (J61,  J62,  M72  sectors)  increased  significantly,  but  none  of  the 
manufacturing  top  sectors  (in  terms  of  BERD)  are  responsible  for  the  drop  in 
manufacturing  BERD.  This  drop  is  instead  due  to  a  decrease  in  R&D  spending  in  the 
sectors of paper products, fabricated metal products (except machinery and equipment) 
and in repair and installation of machinery and equipment. Also, BERD in healthcare has 
practically ceased by 2013. 

39 

 
 
 
 
Figure 7 BERD intensity broken down by most important macro sectors (C= manufacture, 
G_N=services, Q=Human health and social work activities) 

The  private  sector  is  the  main  funder  of  the  Lithuanian  BERD  and  up  until  2011  it  was 
the main driver of its changes (Figure 8). However, in 2012-13 a slight drop of funding 
from  domestic  private  resources  has  been  compensated  by  external  resources,  notably 
EU  funding  (based  on  Eurostat  data)  that  has  gradually  gained  importance  since  2008, 
when  a  number  of  SF-funded  measures  targeting  the  business  sector  were  introduced. 
Funding  from  government  sources  was  of  marginal  importance  throughout  the  whole 
period under scrutiny. 

Figure 8 BERD by source of funds 

3.6.2  The development in business R&D intensity by sector 

Based on Figure 9, below, the highest BERD spenders in manufacturing are medium high 
(chemicals)  and  high-technology  sectors  (computer,  electronic  &  optical  products,  as 
well  as  pharmaceuticals).  None  of  them  seem  to  be  negatively  affected  by  the  crisis  in 
terms of R&D expenditure. 

One  of  the  most  profitable  Lithuanian  industries  has  been  the  chemical  industry  which 
mainly  produces  nitrogen  and  phosphate  fertilizers.  Among  the  key  players  in  the 
chemical industry in Lithuania are Achema, which is the largest fertilizer producer in the 
Baltic  states  and  Lifosa,  a  phosphate  industry  company.  The  chemical  industry  in 
Lithuania  exports  about  80%  of  its  products  and  is  among  the  main  manufacturing 
export sectors (Pekarskienė and Susnienė, 2013). 

40 

 
 
 
 
 
In the pharmaceutical sector there are some successful examples of exploiting FDI (e.g. 
by  Teva  and  Valeant)  to  generate  new  knowledge-based  growth  over  2006-2013.  For 
example,  ‘SICOR  Biotech’,  a  local  manufacturer  of  biotechnological  pharmaceuticals 
joined the Teva Group, one of the world’s largest producers of generic pharmaceuticals. 

Computer  &  electronics  BERD  shows  a  stable  growth  with  a  compound  average  growth 
rate  (CAGR)  of  10.5%  between  2008  and  2013.  Lithuania  has  over  50%  of  the  world 
market  for  high-energy  picosecond  lasers  and  is  a  leader  in  global  production  of  ultra-
fast  parametric  light  generators 18.  Lithuanian  lasers  companies  were  among  the  first 
ones  in  the  world  to  transfer  fundamental  research  into  manufacture.  The  country 
exports  laser  technologies  and  devices  to  Europe,  USA,  Japan  and  Israel,  mostly  for 
universities  and  corporate  laboratories  for  scientific  research  purposes  (International 
Business  Publications,  2015).  An  example  for  a  company  active  in  laser  manufacturing 
(part of the electronic and optical products sector - C26) is EKSPLA. 

The other two sectors were practically stagnating with small fluctuations throughout the 
period except for a  very  strong  one-off  increase  in chemicals  BERD in  2012 most  likely 
due  to  investments  in  more  environmentally  friendly  production  processes  (e.g. 
greenhouse  gas  emission  mitigation  in  the  nitric  acid  manufacturing  process). 19  This 
increase  has  been  maintained  somewhat  one  year  later  and  in  2013  the  chemical 
industry together with the computer, electronics and optics are the most R&D intensive 
sectors  in  Lithuania.  Manufacturing  of  furniture  (C31,  not  depicted)  also  comes  close. 
This  sector  has  grown  in  double  digit  numbers  in  the  recent  years.  The  biggest 
companies  in  this  field  cooperate  with  IKEA,  which  owns  one  of  the  biggest  wood 
processing companies in Lithuania (International Business Publications, 2015). Lithuania 
is the fourth biggest supplier for IKEA after Poland, Italy and Germany.20 

Figure  9 BERD, top sectors in manufacturing (C20=chemicals and chemical products; C21=basic 
pharmaceutical  products  and  pharmaceutical  preparations;  C26=computer,  electronic  and  optical 
products). 

18 For more extensive overview see: https://ec.europa.eu/digital-agenda/en/news/lithuania-leading-light-laser-technology  
19 In 2012, Achema won the ‘Green Company of the Year' award among Lithuanian businesses and in 2013 it was the 
winner of ‘Environmental Protection Achievements 2012’ nomination ‘Most Environment Friendly Process’ for greenhouse 
gas emission mitigation in the nitric acid manufacturing process. 
20 As reported in the media, cf. http://en.delfi.lt/lithuania/economy/lithuanian-furniture-makers-among-ikeas-biggest-
suppliers.d?id=69498850  

41 

 
 
 
 
 
                                          
In  the  business  services  sector  professional,  scientific  and  technical  activities,  ICT,  as 
well  as  the  financial  and  insurance  activities  sector  are  the  top  BERD  spenders  (Figure 
10). 

One of the fastest internet speeds in the world, well-educated workforce and one of the 
most  developed  information  technology  infrastructures  in  Central  and  Eastern  Europe 
have helped Lithuania turn into an IT business attraction centre in the region. Lithuania 
is  gaining  a  position  as  a  regional  centre  of  excellence  for  smaller  software  and  games 
start-ups, but also for larger ICT operations.21 Foreign investment in the ICT sector has 
grown  by  10.5%  between  2010  and  2013,  but  fell  in  2014  (Statistics  Lithuania,  2015). 
Companies  such  as  Google  and  Nasdaq  are  investing  in  Lithuania  but  there  is  also  a 
surge in the number of local IT start-ups.22 

As  far  as  the  professional,  scientific  and  technical  activities  sector  is  concerned,  in  the 
recent years Lithuania’s life sciences industry has developed in a quick pace and is now 
regarded  as  one  of  the  most  advanced  in  Central  and  Eastern  Europe.  Annual  growth 
within the biotechnology and pharmaceutical research and production sector is 22%, and 
it  has  80%  of  its  output  exported23.  With  a  scientific  heritage  that  dates  back  to  the 
Soviet  times,  Lithuania’s  biotechnology  industry  is  outpacing  developments  in  many 
larger Central and Eastern European countries due to the country’s highly skilled talent 
pool  and  especially  due  to  FDI  from  companies  such  as  Moog,  Sicor/Teva  group, 
Biotechfarma and Thermo Fisher. In addition, one of the ‘valleys’ provides an extensive 
support network for life sciences. 

While  both  professional  and  scientific  activities  (in  particular  scientific  research  and 
development, mostly in biotech and renewable energy) as well as the ICT sector (and in 
particular  the  telecommunications  and  computer  programming  subsectors)  BERD  faced 
impressive  growth  between  2009  and  2013  due  to  inflows  of  FDI  in  these  sectors  and 
due to well-developed IT infrastructures and centres of excellence, financial sector BERD 
is  on  a  declining  path  since  2008.  This  may  be  explained  by  the  contraction  of  the 
activity (loan portfolios) of banks and other financial institutions active in Lithuania after 
the severe financial crisis of 2008-9. 

Figure 10 top service sectors (J=information and communication, K= financial and insurance 
activities, M=professional, scientific and technical activities). 

21 https://www.lietuva.lt/en/business/investment_and_trade_profile/attractive_sectors 
22 A non-exhaustive list of innovative companies in the ICT sector in Lithuania can be found here: 
http://www.inovacijos.lt/gate2inno/lt/inst_paieska/type/ent13/   
23 https://www.lietuva.lt/en/business/investment_and_trade_profile/attractive_sectors 

42 

 
 
 
 
                                          
3.6.3  The development in business R&D intensity and value added 

When  looking  at  the  contribution  of  the  various  sectors  to  the  total  gross  value  added 
(GVA), we notice that wholesale and retail trade, manufacturing as well as construction 
were the top three sectors providing the highest GVA to the Lithuanian economy in 2014 
(Figure 11, below). The first two are the largest economic sectors with a share between 
15-20%  in  the  GVA.  They  are  followed  by  construction,  real  estate  and  the  public 
administration  sector  with  a  share  of  ca.  5-7%  in  total  GVA  each.  Other  sectors  are 
below  5%.  The  levels  of  Lithuanian  manufacturing,  wholesale  and  retail  trade  and 
construction GVA are well above the EU-28 levels.  

Comparing  Figures  9,  10  and  11  one  observes  that  manufacturing  is  both  a  top 
contributor to GVA and a top receiver of BERD. However, large BERD spender business 
services sectors like ICT or professional and scientific activities fail to be among the top 
GVA  contributors.  Real  estate,  wholesale  &  retail  and  construction,  which  are  not 
extremely  important  for  the  Lithuanian  BERD  expenditure,  are  nevertheless  among  the 
top sectors in terms of GVA.  

Figure 11 economic sectors as percentage of the total GVA. 

Top  6  sectors  in  decreasing  order:  1)  manufacture;  2)  wholesale  and  retail  trade  and  repair  of 
vehicles and motorcycles; 3) Construction; 4) Real estate activities ; 5) Public administration and 
defence; compulsory social security; 6) Education. 

The  manufacture  of  food,  beverages  and  tobacco  appears  to  be  the  leading 
manufacturing  sector  in  terms  of  GVA  accounting  for  ca.  4.5%  of  total  GVA  in  2013 
(Figure  12).  The  food  processing  sector  is  also  among  the  leading  ones  in  Lithuanian 
exports  -  Lithuanian  dairy  products  are  well  known  in  the  neighbouring  countries 
(International  Business  Publications,  2015)..  Although  the  food  sector's  contribution  in 
BERD  as  a share  of  GVA  is  comparatively  low,  it  is  still  an  important  R&D  performer  in 
the Lithuanian economy.24 

The food and beverage sector is followed by the furniture and the chemical sectors, both 
of  which  have  been  traditionally  profitable  sectors  for  Lithuania  with  high  shares  of 
exports. While furniture sector continues to increase exports, the chemical sector seems 
to fluctuate more.25. Consistently with its importance in manufacturing in terms of BERD, 
the  chemicals  sector  appears  to  be  important  also  in  the  GVA.  On  the  contrary,  the 
pharmaceutical  and  the  computer  &  electronics  sectors  fail  to  be  among  the  top  GVA 
contributors. In terms of technological intensity in the top 6 sectors contributing to GVA 
we  find  both  low  as  well  as  medium  high  sectors.  One  observes  some  medium  to  high 
tech  sectors  among  the  top  ones,  but  with  a  clear  dominance  of  the  low-tech  sectors 
with a cumulated share of 6.2% of total GVA vs. the 3.4% of the medium high and high-
tech sectors (in 2012). This is in line with the structure of the national economy. 

24 In 2013 the total amount of BERD by the food sector (€2.6m) was above the amount of BERD contributed by 
pharmaceuticals (€2.4m). 
25 Versli Lietuva (2015). 

43 

 
 
 
                                          
The  relatively  high  –  compared  to  other  industrial  sectors  –  value  added  of  low-tech 
sectors  and,  simultaneously,  the  relatively  lower  importance  of  many  of  the  R&D-
intensive  sectors  in  Lithuania  can  partially  explain  the  low  intensity  of  the  Lithuanian 
business R&D. Other structural issues potentially explaining the low levels of BERD in the 
country  include the scarcity  of  large  manufacturing  FDI serving  developed  markets  and 
the  lack  of  critical  mass  -  indigenous  companies  are  very  small  and  unavailable  to  pull 
resources for high impact innovations in a relatively small market. 

Figure 12 GVA in manufacturing. 

Top 6 manufacturing sectors: 1) food products; beverages and tobacco products; 2) manufacture 
of  furniture;  other  manufacturing;  3)  chemicals  and  chemical  products;  4)  textiles,  wearing 
apparel, leather and related products; 5) Manufacture of wood and of products of wood and cork, 
except furniture; manufacture of articles of straw and plaiting materials; 6) Manufacture of rubber 
and plastic products. 

In  line  with  the  above  discussion,  professional,  scientific  and  technical  activities,  ICT, 
financial  and  insurance  activities  as  well  as  manufacturing  of  chemicals  are  the  top 
sectors  in  terms  of  VA  at  factor  cost  (Figure  13).  Their  VA  showed  a  similar  behaviour 
throughout  the  analysed  period:  ascending  up  until  the  crisis,  although  to  various 
extents,  but  generally  hit  and  decreasing  during  the  crisis  and  being  on  a  recovering 
path  afterwards.  Unsurprisingly,  financial  and  insurance  activities  (K)  were  hit  the 
hardest  during  the  crisis.  Contrary  to  these  sectors,  pharmaceuticals  and  computer, 
electronics & optical products, i.e. two high-tech sectors, had a rather stable VA at factor 
costs indicating that companies in these sectors managed to maintain their sales during 
and after the crisis thanks to their innovativeness (for example, laser technology). 

Figure 13 value added at factor cost for the leading manufacture and service sectors in Figures 9 
and 10 

44 

 
 
 
 
 
Finally, employment in the most innovative manufacturing sectors has slightly decreased 
between 2008 and 2013 but the employment in the most innovative service sectors (ICT 
and  Scientific  research  and  development)  has  been  on  the  rise  in  line  with  the  quick 
development  of  IT  (software  and  games)  and  biotech  in  Lithuania  in  the  recent  years 
(based on Eurostat). 

3.7  Assessment  

One  of  the  main  issues  in  Lithuania’s  R&I  system  is  its  dependence  on  EU  ESIF.  With 
time this source of funding will significantly diminish (most likely by 2020 with the new 
programming period) and the already low level of R&I activities may either stagnate or 
recede.  Therefore,  the  Government  must  use  the  five  coming  years  to  solve  this 
problem. 

Institutional funding combines block funding and competitive funding which allows both 
targeting specific issues and providing incentives for organisations in the R&I system to 
compete for support. The  criteria  for institutional  block  funding  are  based  on  both  R&D 
performance  and  size  of  an  organisation,  which  provides  a  good  basis  for  funding 
distribution. 

The  funding  system  itself  aims  to  incentivise  certain  behaviours.  For  example,  in  the 
case  of  institutional  competitive  funding  of  public  HEIs  and  research  institutes,  the 
government incentivises publishing. Although high quality publications earn more points, 
several low quality publications might outweigh the benefit gained from top-quality ones. 
Such  wording  also  incentivises  establishing  new  local  peer-review  journals  that  could 
publish papers from local institutions. Thus, the quantity of articles and scientific outlets 
become  inflated,  although  the  quality  might  be  low.  However,  additional  measures  are 
introduced, such as lists of journals with high level of self-citation which are not counted. 
Patenting is also encouraged, although it does not seem to work. In areas of agricultural, 
biomedical  and  technology  sciences  points  awarded  for  patent  registered  at  the 
European  Patent  Office,  United  States  Patent  and  Trademark  Office  or  Japan  Patent 
Office  equal  the  number  of  points  awarded  for  two  quires  in  a  scientific  monograph 
published by an internationally renowned publisher. Therefore, incentives could be better 
structured and relying more on high quality outputs. 

Overall,  the  system  of  incentives  is  perverse  to  some  extent.  For  example,  businesses 
are  discouraged  from  high-risk  projects,  since  the  state  is  rather  risk  averse  and 
unwilling to invest in riskier R&I activities. As learned from researchers during evaluation 
of returns on investment in R&D, project managers are also incentivised to achieve the 
aims of a project no matter what, or at least to prolong a project for as long as possible. 
In such way funding is continued for a prolonged period of time, instead of abandoning a 
failing project immediately and thus saving resources. Funding agencies should provide 
incentives  to  terminate  a  project  as  soon  as  research  shows  that  expected  results  are 
impossible  to  achieve  due  to  scientific  reasons.  In  addition,  some  of  the  requirements 
(e.g.  for  publications)  do  not  set  the  quality  bar  high  enough  which  leads  to  high 
quantity  of  output,  but  low  quality.  However,  too  detailed  regulations  imposed  by 
funding  organisations  may  lead  beneficiaries  to  aim  at  conforming  to  formal 
requirements rather than increasing the quality of the output. While there are initiatives 
to  change  the  allocation  mechanism  so  that  it  would  favour  quality  over  quantity  (e.g. 
the  February  2015  amendment  to  the  evaluation  of  public  HEIs  and  research  institutes 
procedure  might  impact  institutional  funding  and  incentivise  researchers  to  produce 
higher quality output), it remains to be seen if changes will be profound enough. 

Although  co-funding  requirements  are  in  place  and  supported  enterprises  must 
contribute their own resources to publicly funded R&I activities, some evaluation studies 
report  substitution  effect  (i.e.  crowding  out)  and  claim,  for  example,  that  policy 
additionality has been achieved in about only 30-40% of the funded projects (Visionary 
Analytics,  2015).  Therefore,  measures  of  direct  public  support  to  business  R&I  are  not 
very effective in augmenting businesses expenditure in this area. Indirect support, such 
as tax incentives for R&D activities also show decrease both in the number of businesses 

45 

 
 
applying  for  tax  deduction  and  in  the  amount  of  R&D  expenses  that  are  qualified  as 
deducible.  This  might  partly  be  due  to  a  restrictive  definition  of  R&D  that  is  used  by 
policymakers. Therefore, not all activities related to R&D guarantee tax reduction. 

2012-2014  did  not  see  any  significant  changes  in  funding  allocation  mixes.  However, 
starting in 2015, new policy instruments will be launched and might include differences 
in funding allocation mechanisms. It is still too early to tell what the exact changes will 
be  and  what  the  outcome  of  newly  introduced  or  modified  measures  will  be.

46 

 
 
4.  Quality of science base and priorities of the European 
Research Area  

4.1  Quality of the science base 

Table 7 Main science output indicators 

Indicator 
Number of publications per thousand 
of population 
Full counting – 0.92 
Fractional counting – 0.71  
Share of international co-publications 
Full counting – 36.2% 
Number of international publications 
per thousand of population 
Full counting – 0.33 
Percentage of publications in the top 
10% most cited publications 
Full counting – 6.8% 
Fractional counting – 4.94% 
Share of public-private co-publications 
(based on SciVal, 2011-2013) 
0.7% 

Year 
2013  

2013 

2013 

EU 
Full counting – 1.43 
Fractional counting – 1.22 

Full counting – 36.4% 

Full counting – 0.52 

2000-2013 

Full counting – 11.29% 
Fractional counting – 10.55% 

2011-2013 

1.8% 

Source: JRC IPTS RIO elaboration on Scopus data collected by Sciencemetrix in a study for the 
European Commission DG RTD (Campbell, 2013). The share of public-private co-publications is 
derived from the Scival platform and is also based on Scopus data (September 2015). SciVal ® is 
a registered trademark of Elsevier Properties S.A., used under license. The data on public-private 
co-publications is not fully compatible with the data included in the IUS, due to differences in the 
methodology and the publication database adopted. 

Total scientific output of Lithuania in terms of publications per thousand of population is 
significantly  below  the  EU28  average  (64.3%  of  EU28)  and  is  above  only  several 
countries. This indicates that generally there is a lack of scientific knowledge produced in 
the country. Moreover, Lithuania is also lagging behind in terms of quality of publications 
(22nd  in  the  EU  with  respect  to  percentage  of  publications  in  the  top  10%  most  cited 
publications). Thus, both the quantity and the quality of publications are lower than the 
EU  average.  International  collaboration  in  publishing  and  international  publication  in 
general  is  lower  than  the  EU28  average  as  well  (24th  in  the  EU  in  both  cases).  This 
means  that  either  publication,  especially  in  top  quality  journals,  is  not  incentivized,  or 
there  are  serious  issues  with  the  quality  of  human  resources,  as  a  consequence  of 
limited funding, lack of internationalisation policies etc. (see section 3.8). 

Low  share  of  public-private  co-publications  (26th  in  the  EU)  reflects  the  generally  bad 
situation  with  public-private  cooperation  with  relation  to  R&I  activities.  This  indicator 
could improve if collaboration of science and business could be enhanced in general. As 
long  as  measures  do  not  bring  satisfying  results,  it  is  naïve  to  expect  sudden  surge  in 
public-private  co-publications.  Therefore,  while  co-publications  should  be  encouraged 
through  measures  that  support  joint  projects,  the  main  attention  should  be  given  to 
establishing and developing ties between business and science more generally. 

If analysed over time, there is a trend of increase of the share of publications in top 10% 
of  the  most  cited  publications.  However,  the  gap  between  Lithuania  and  most  of  the 
other EU countries remains. Meanwhile, Estonia outperforms Lithuania with respect to all 
of the discussed indicators, while Latvia is mostly behind with the exception of the share 
of  private-public  co-publications.  Neighbouring  but  much  larger  Poland  produces  more 
publications  per  capita,  but  the  share  of  top  10%  most  cited  publications  is  lower  than 
that of Lithuania. The share of public-private co-publications is higher in Poland than in 
Lithuania. All in all, it seems that this lack of successful cooperation between public and 

47 

 
 
 
private  sectors  is  one  of  the  main  issues  with  the  Lithuanian  R&I  system  even  when 
compared to neighbouring countries. 

Low patenting (6.1 patent applications for EPO per million inhabitants in 2012 (MOSTA, 
2015c))also  indicates  a  challenge  that  must  be  overcome,  as  it  shows  that  successful 
commercialisation  of  research  results  meets  obstacles.  Even  though  specific  measures 
were introduced in 2007-2013, e.g. through MITA, they did not lead to significant initial 
increase  neither in  number of  patents nor in  patent  applications.  However,  in  2015  the 
number of EPO patent applications increased by 60% compared to 2014. In 2016-2020 a 
special  instrument  Inopatent  LT  will  be  launched  specifically  to  support  international 
patenting in identified R&I priorities. €3.04m will be allocated (amount dedicated to each 
priority may differ). 

All in all, it is evident that Lithuania does not unlock its research potential and does not 
manage to significantly improve the quality of its science base, as indicators on research 
outputs  and  their  commercialisation  indicate.  Without  improvement  in  this  area  it  is 
difficult to expect that other research outputs will improve. 

4.2  Optimal transnational co-operation and competition 

4.2.1  Joint programming, research agendas and calls 

Even  though  there  have  been  fragmented  actions  to  implement  joint  research  agendas 
(for example, the education and science ministers of Lithuania, Latvia and Estonia have 
held  a  meeting  in  2013  discussing  potential  collaboration  in  R&D,  without  concrete 
outcomes),  financial  commitments  to  joint  research  agendas  are  rather  limited  and 
national research programmes are only implicitly aligned with research priorities pursued 
at  ERA.  The  Lithuanian  Ministry  of  Economy  actively  seeks  participation  in  the 
international  innovation  programmes  which  support  international  innovation  networks, 
especially  in the  Baltic  Sea Region.  For  instance,  starting with  2012,  it has  been  acting 
as an administrating institution of the Green Industry Innovation Programme, conducted 
in  cooperation  with  Norway.  The  Ministry  of  Education  and  Science  is  also  active  in 
cooperating  with  foreign  institutions.  It  signed  agreements  with  the  majority  of  EU 
Member  States,  as  well  as  Asian,  South  and  North  American  countries,  40  in  total 
(MOSTA, 2015). 

Joint  programming  process  was  launched  in  2008,  and  in  2010  Lithuania  joined  two  of 
the  joint  programming  initiatives  (JPIs),  namely  ‘Cultural  Heritage:  A  Challenge  for 
Europe’  and  ‘Healthy  and  Productive  Seas  and  Oceans’.  In  the  initiative  on  cultural 
heritage LMT joined ERA-NET plus project ‘Heritage Plus’ in 2013. In the same year pilot 
call  for  projects  was  run.  Lithuania  provided  €0.1m  to  the  budget  of  the  project  (total 
budget  –  €3m).  Seven  of  the  proposals  included  partners  from  Lithuania,  one  of  them 
was  funded.  In  the  JPI  on  Productive  Seas  and  Oceans  in  December  2014  call  for 
proposals on microplactics was launched but Lithuania did not contribute to the budget. 

LMT is also involved in Science Europe, and Lithuania has a representative in European 
Science  Foundation  in  the  programme  European  Network  for  Gastrointestinal  Health 
Research.  In  2014,  Lithuania  and  the  European  Space  Agency  (ESA)  signed  an 
agreement  which  allows  Lithuanian  researchers  to  participate  in  ESA  programmes.  One 
of the new national research programmes, namely ‘Towards Future Technologies’ is also 
aimed  at  strengthening  Lithuanian  research,  development  and  innovation  capacities 
needed for greater cooperation with ESA. 

There  are  intentions  to  take  into  account  R&I  policy  trends  in  neighbouring,  EU28  and 
third  countries  and  modify  policy  based  on  the  findings  of  smart  specialisation 
monitoring  and  evaluation  system  This  would  allow  coordinating  national  smart 
specialisation  strategy  according  to  R&I  and  market  trends  in  both  neighbouring 
countries  and  globally.  In  2015  separate  evaluations  of  joint  transnational  R&I 
cooperation were not carried out. So far, in the Baltic Sea region the BONUS programme 
covers R&D area (for the period 2010-2017). In Lithuania LMT and MITA are responsible 
for  its  implementation.  A  BONUS  programme  call  ‘Sustainable  ecosystem  services’  was 

48 

 
 
opened in  2014.  Out  of  16 projects  involving  partners from Lithuania,  2  were  allocated 
financing. 

All  in  all,  the  level  of  transnational  co-operation  in  joint  activities  with  EU  MS  is  rather 
low. Lithuania joined only two JPIs and contributed to one call so far. In addition, there 
is lack of policy coordination with neighbouring countries and possible synergies are not 
pursued.  With  the  OP  of  2014-2020,  more  transnational  coordination  could  take  place 
and new routes of cooperation might open. 

4.2.2  RI roadmaps and ESFRI 

The original national RI roadmap prepared in 2011 provided detailed information on RI in 
humanities  and  social  sciences  (e-resources  of  the  Lithuanian  language,  databases, 
heritage  and  historical  research),  biomedical  science  (computer,  structural  and  system 
biology, human biology resources, databases and standardisation, metobolomic ecology, 
experimental animals, aerobiology), as well as physical and technology sciences (lasers, 
semiconductors, spectrometric characterisation, ultrasound experiments and diagnostics, 
astronomical  observatory,  Lithuanian  GRID  and  calculation  network).  The  RI  roadmap 
also identified international infrastructure, where Lithuanian RI could be integrated (e.g. 
CESSDA, BBMRI, ESS, etc.). In 2015, the process of Lithuania joining CERN also began. 
The roadmap itself does not define funds required by listed projects. 

In  2014  and  2015,  LMT  updated  this  RI  roadmap  and  provided  a  new  list  of 
infrastructure  projects,  which  should  be  prioritized  with  the  aim  of  connecting  to 
European  RIs  according  to  the  ESFRI  roadmap  and  other  international  RIs  that  are 
important  to  Lithuania.  In  addition  to  new  RI  projects  in  the  already  existing  science 
fields,  RI  for  agricultural  science  was  added  (plant  genetics  and  biotechnology). 
Humanities  and  social  sciences  RI  was  supplemented  with  European  social  survey; 
biomedical  sciences  RI  with  Biobank  LT;  physical  and  technology  sciences  RI  with 
innovative  chemistry,  mechatronics,  micro-  and  nanotechnology,  applied  chemistry  and 
biopharmacy. LMT also provided €0.2m to international RIs through competitive funding 
in 2014 (LMT, 2015). 

In  2007-2013  huge  investments  were  made  in  developing  RIs,  by  creating  specialised 
scientific valleys, which replaced the outdated RI. The largest Lithuanian RI centres are 
five valleys: Santara and Saulėtekis in Vilnius (biotechnologies, medicine, biopharmacy, 
light,  materials,  nanotechnologies, 
ecosystems,  sustainability,  ICT, 
semiconductors,  civil  engineering),  Nemunas  and  Santaka 
(agro 
biotechnologies,  bioenergy,  forestry, 
food,  safety  and  wellness,  chemistry  and 
pharmacy,  mechatronics,  energy  and  ICT),  and  Maritime  Valley  in  Klaipėda  (maritime 
technologies  and  environment) (MITA,  2014).  The  two  largest  RI  centres will  only start 
operating in March 2016. Since the creation of valleys was funded from public sources, 
they  guarantee  open  access  to  external  agents,  including  foreign  research  institutions 
and foreign private sector organisations. 

lasers  and 

in  Kaunas 

There are plans to use cohesion funding for 2016-2020 for integration into the European 
RIs,  especially  those  in  the  ESFRI  roadmap.  Lithuania’s  Smart  Specialisation  Strategy 
includes  the  measure  ‘R&D  infrastructure  development  and  integration  into  European 
infrastructures’ with €188.0m allocated to it. However, specific financial support for this 
measure  is  not  precise  yet,  as  it  is  funded  together  with  several  other  RI  development 
projects.  These  are  partly  related  to  areas  selected  in  the  national  RI  roadmap.  The 
ESFRI roadmap was approved in 2010 and in 2014 a process of revising it was started, 
and  results  were  published  in  2016.  The  national  RI  roadmap  and  the  ESFRI  roadmap 
are  well  aligned.  Lithuania’s  RI  roadmap  lists  international  infrastructures  from  ESFRI 
that  are  important  to  Lithuania and  ideally  should  be  joined.  As  of  2014  Lithuanian  RIs 
were  members  of  the  following  international  RIs  from  ESFRI:  CLARIN  ERIC,  ESS  ERIC. 
LIDA  (archive  for  Lithuanian  humanities  and  social  sciences  data)  considers  becoming 
full member of CESSDA, and HUMRE (RI for human wellbeing and development) was in 
the process of joining SHARE ERIC in 2015, although final decisions were not yet taken 
by  the  Ministry  of  Education  and  Science.  In  areas  other  than  humanities  and  social 

49 

 
 
sciences  there  were  no  full  members  of  ESFRI  infrastructures,  although  either 
negotiations  were  underway  or  collaboration  took  place  (LMT,  2014).  The  government 
will  support  joining  other  ESFRI  infrastructures  in  2016-2020.  However,  it  is  not  clear 
which ones will be approved by the responsible Ministry, as available funds do not allow 
full integration into all ESFRI infrastructures listed in the national RI roadmap. 

4.3  International cooperation with third countries 

By  2015  there  was  no  single  national  strategy  that  focused  specifically  on  cooperation 
with  third  countries  in  the  R&I  area,  but  international  cooperation  is  emphasized  in 
programmes such as the National Progress Programme for Lithuania for the period 2014-
2020  (NPP).  At  the  same  time,  bilateral  or  multilateral  agreements  as  well  as 
programmes  with  third  countries  are  in  force,  both  in  Europe  and  outside.  Most  policy 
documents apply similar measures towards R&I cooperation with EU and third countries. 
In  addition,  instruments  such  as  Smartinvest  LT  will  be  used  to  attract  foreign 
investment,  while  instruments  targeting  foreign  researchers  will  include  those  from 
outside the EU as well. 

MITA  administers  EUREKA  and  EUROSTARS  programmes,  which  include  many  non-EU 
countries. In the case of BILAT projects, Lithuania took part in BILAT-UKR*AINA project 
which  was  successfully  finished  on  30  June  2015.  Even  though  interinstitutional 
agreements were signed, Lithuania did not have funding programmes aimed at Ukrainian 
R&I agents. With respect to SFIC, Lithuania is also not active, although several cases of 
involvement exist (e.g. participation in Korean programmes). Additionally, Lithuania has 
intergovernmental  cooperation  programmes  with  Belarus,  China  (together  with  Latvia), 
Ukraine. 

Although  the  major  part  of  Lithuania’s  international  cooperation  takes  place  within  the 
EU boundaries, there are initiatives with third countries as well. Perhaps the most well-
known programme is the Lithuania-Swiss programme ‘Research and development’ which 
aims at promoting cooperation in R&D, deepen scientific knowledge, and improve social 
and  economic  development  in  Lithuania.  In  total  around  €9m  were  allocated  to  this 
programme by the Swiss government. Lithuania also participates in the Nordic and Baltic 
countries  cooperation  programme  LILAN,  coordinated  by  NordForsk.  While  this  includes 
countries  that  belong  to  the  EU,  third  countries,  such  as  Norway,  also  participate. 
Lithuanian  State  scholarships  are  available  to  researchers  from  Ukraine,  Georgia  and 
other countries. Furthermore, there is an agreement for cooperation with the USA in the 
field of science and technology (to be revised), and an agreement with NASA on student 
internships.  

All  in  all,  on  the  policy  level  Lithuania  is  not  active  in  developing  R&I  cooperation  with 
third countries within the EU framework/activities. Even though there are research visits 
to and from third countries, the cooperation could be much stronger if Lithuania involved 
itself deeper into various programmes offered by the EU and non-EU states. 

4.4  An open labour market for researchers 

4.4.1  Introduction 

Historically,  Lithuania  had  a  centrally  regulated  system  of  higher  education  (HE). 
Lithuania has made  some  progress  in  creating  open  labour  market  for  researchers,  but 
there is also considerable space for improvement. In 2009 Lithuania witnessed a major 
HE reform. In terms of Clark’s (1983) ‘triangle of HE governance’, the reform represents 
a  move  from  a  mixture  of  bureaucratic-academic  oligarchy  models  towards  the  (quasi) 
market.  With  the  view of  fostering  competition  among  HEIs reform focused on few  key 
areas.  Firstly,  reform  sought  to  introduce  a  quasi-market  for  HE  by  introducing  a 
voucher-based system as a primary mean for funding HEIs. Secondly, as a result of the 
reform,  an  increasing  proportion  of  research  funding  is  allocated  through  competitive 
schemes. Thirdly, management structures of public universities have changed. The right 
to  elect  rectors  and  make  strategic  decisions  has  shifted  from  Senates,  comprised  of 

50 

 
 
members  of  academic  community,  to  Councils,  composed  of  external  stakeholders  and 
academic  community.  All  public  universities  and  colleges  organise  their  work  according 
to  their  Statute  and  guidelines  set  in  the  Law  on  Higher  Education  and  Research.  They 
are  granted  freedom  in  decision-making,  the  right  to  own  property  and  to  manage 
property  entrusted  to  them  by  the  State.  With  passing  of  the  new  Law  on  Higher 
Education  and  Research  in  2009,  the  main  decision-making  body  became  the  Council, 
with less than half of the members proposed by the ministry. Private universities can be 
organised  as  public  or  private  entities  and  their  operations  are  defined  by  university 
constituent acts. Lastly, the reform aimed at reducing the scope and depth of regulation 
governing personnel policy, financial management,  admissions and fees, introduction of 
new  study  programmes  and  other  areas.  Hence,  in  terms  of  Verhoest,  Verschuere  and 
Bouckaert  (2007),  the  reform  sought  to  ‘make  managers  manage’  by  strengthening 
competition  and  a  system  of  incentives  and  ’allow  managers  manage’  by  increasing 
managerial autonomy.  

Yet,  University  Autonomy  in  Europe  Scorecard  (Estermann,  Nokkala  and  Steinel,  2011) 
ranked  the  level  of  autonomy  of  Lithuanian  HEIs  as  ‘medium  low’  in  financial  and 
academic  spheres,  ‘medium  high’  in  organisational  autonomy  and  ‘high’  in  staffing 
autonomy. In comparison to other European countries Lithuanian HEIs have particularly 
low  autonomy  in  the  following  criteria:  term  of  office  of  executive  head  (part  of 
organisational  autonomy),  ability  to  keep  surplus  and  own  buildings  (financial 
autonomy),  introduction  of  programmes  at  Bachelor  and  Master  levels  and  selection  of 
quality assurance mechanisms and providers (Martinaitis, Gaušas and Paliokaitė, 2014). 

The  Ministry  of  Education  and  Science  initiated  a  revision  of  the  Law  on  Research  and 
Studies  so  that  some  changes  might  take  place  in  2016.  In  July  of  the  same  year 
Lithuanian  Government  approved  the  amendments  and  passed  the  law  project  to  the 
Parliament),  however,  it  is  still  too  early  to  say  whether  changes  with  respect  to 
institutional autonomy will be implemented.  

In total there were 18083 researchers (8557 FTE) in Lithuania in 2013 (about 0.98% of 
active population). The EU28 average in 2013 was 1.12% of active population (0.72% if 
compared  to  FTE).  The  number  of  researchers  increased  significantly  by  4,200  from 
2009 to 2013. In 2014, the majority of researchers (76.9%) in Lithuania worked in the 
public sector, while only 23.1% of researchers belong to the business enterprise sector. 
On  the  other  hand,  some  studies  (e.g.  Visionary  Analytics,  2014)  discuss  that  the 
statistics on researchers in business might be inaccurate due to the narrow definition of 
‘researcher’ and limited incentives for business to report this data. Hence, in reality the 
number  of  researchers  in  business  could  be  larger.  At  the  same  time  it  should  be 
mentioned that while the supply of researchers increased (by 4,200 in 2009-2013), the 
demand  for  researchers  increases  more  slowly  (FTE  of  researchers  increased  by  67  in 
2009-2012).  These  different  trends  in  supply  and  demand  are  also  evident  in  annual 
data,  which  also  allows  analysing  the  impact  of  the  crisis.  Absolute  number  of 
researchers constantly increased at least since 2004 (first data point), and the average 
annual  growth  amounted  to  5.2%  in  2004-2013.  The  most  significant  change  in  the 
number  of  researchers  took  place  in  2011,  when  the  growth  of  the  number  of 
researchers in a year was by 23.5% (MOSTA, 2014c). This might partly reflect people’s 
willingness to apply for PhD programmes during the crisis, since PhD studies guaranteed 
a stable source of income. At the same time, joining the field of research, especially in 
public  institutions,  even  if  part-time,  could  offer  more  safety  in  times  of  uncertainty  in 
the  market.  Having  in  mind  that  significant  part  of  R&D  expenditure  comes  from  EU 
ESIF,  which  is  allocated  on  a  multiannual  basis,  research  in  publicly  funded  projects 
becomes more attractive. Nonetheless, separate analysis is required to test whether this 
hypothesis  is  correct.  Meanwhile,  the  number  of  FTE  researchers  has  changed  in  the 
opposite direction. Average annual growth was 1.8% in 2004-2013. Most importantly, in 
the  years  2010-2012  the  number  of  FTE  researchers  decreased  by  5.5%  (MOSTA, 
2014c).  Therefore,  it  could  be  stated  that  during  the  crisis  the  supply  of  researchers 
increased, while the demand decreased and only in 2013 reached the level of 2009. This 

51 

 
 
may  also  reflect  the  limited  amount  of  funding  that  is  allocated  for  research.  However, 
even  though  the  overall  number  of  FTE  researchers  decreased,  this  number  should  be 
taken with a grain of salt when interpreted with respect to demand of researchers due to 
several  reasons:  a)  the  number  of  FTE  researchers  decreased  only  in  government  and 
higher education sectors for two years, while the decrease in the business sector lasted 
only one year, was less drastic and the subsequent increase was much more rapid; b) in 
the  private  sector  researchers  are  often  called  technologists,  engineers,  etc.  and 
employers  indicate  that  there  is  a  lack  of  such  employees  (Visionary  Analytics,  2014), 
thus  there  are  indications  that  demand  for  researchers  in  the  private  sector  is  higher 
than their supply. Point b) also applies when discussing the total number of researchers 
with  respect  to  supply.  Some  employees  may  be  doing  research,  but  have  differently 
titled  positions.  On  the  positive  note,  Lithuania  enjoys  the  trend  of  researchers  getting 
younger (MOSTA, 2014c), hence ageing of researchers is not a serious problem.  

4.4.2  Open, transparent and merit-based recruitment of researchers 

The  Law  on  Higher  Education  and  Research  establishes  necessary  conditions  for  open, 
transparent  and  merit  based  recruitment  of  researchers.  Public  universities  have 
freedom  to  decide  on  their  academic  structures  and  conduct  recruitment  of  their 
academic staff. In 2012 LMT adopted the specification of the Description of the minimum 
qualification  requirements  for  positions  of  research  staff  at  public  higher  education  and 
research  institutions  (for  instance,  the  number  of  articles  published  in  international 
science  publications).  Universities  are  autonomous  to  stipulate  salaries  for  their 
academic and scientific staff. However, the managerial positions (rectors) recruitment in 
public  HEIs  is  regulated  by  law.  Rectors  must  hold  a  doctoral  degree,  demonstrated 
managerial  competencies  and  experience  in  pedagogy.  Moreover,  external  members  in 
governing  bodies  are  appointed  not  only  by  the  university,  but  also  by  the  Ministry  of 
Education. 

Public  HEIs  and  public  research  institutes  are  legally  obliged  to  publish  information  on 
vacancies  on  relevant  national  online  platforms,  publish  job  vacancies  on  relevant 
Europe-wide  online  platforms  (e.g.  EURAXESS),  establish  selection  panels,  publish 
selection  criteria,  provide  adequate  time  period  (three  months)  between  vacancy 
publication  and  submission  of  applications,  offer  the  right  of  appeal,  etc.  A  recruitment 
commission  which  evaluates  candidates  for  the  position  of  teaching  staff  members  and 
research staff members is set up in accordance with the procedure laid down by higher 
education  and  research  institutions.  Not  less  than  one-third  of  the  members  of  the 
recruitment commission must be persons who do not work in this higher education and 
research institution. In addition, vacancy positions of Heads of public Research Institutes 
should be published in English. When making arrangements for a competition to fill the 
position of a chief research staff member or professor, at least one international expert 
must be in the recruitment commission. 73.9% of researchers were employed on fixed-
term contracts in 2012 (European Commission, 2013). 

Private  HEIs  have  their  own  recruitment  procedures  that  should  be  consistent  with  the 
Lithuanian Labour Law. For instance, the vacancy notice is valid until suitable candidates 
are found, without establishing time period between vacancy publication and submission 
of applications.  

In  2009,  a  Government  Decree  was  introduced  to  reduce  differences  between 
researchers’  salaries.  After  several  amendments  a  new  Decree  was  approved  and 
entered  into  force  in  2014.  Public  universities  are  autonomous  to  stipulate  salaries  for 
their  academic  and  scientific  staff.  Project  funding  schemes  offer  top-performing 
researchers  the  possibility  of  increasing  their  salaries.  The  Programme  for  Increasing 
Remuneration  of  Employees  of  Research  and  Higher  Education  Institutions  2009-2012 
foresaw  an  increase  in  researchers’  salaries,  although  the  programme  was  criticized  by 
trade unions for remaining unimplemented. Minimum salaries (as for other professions) 
are regulated by law in Lithuania. Private universities are free to decide on researchers’ 
remuneration as far as it is consistent with the Lithuanian Labour Law. As a general rule, 

52 

 
 
they  offer  a  competitive  salary  (for  Lithuanian  standards  of  living)  that  is  subject  to 
employee-employer bargain. 

However, in practice, the implementation of transparent recruitment in public institutions 
remains problematic. There are no reliable statistics, but anecdotal evidence has it that 
the number of applications for a vacancy rarely exceeds one. This could be due to poor 
carrier  prospects  (wage,  working  conditions,  etc.)  and  the  willingness  of  institutions  to 
employ  their  own  PhD  graduates  /  extend  contracts  with  current  staff.  Low  level  of 
competition could be also related to the rather widespread belief that actual recruitment 
decisions  are  taken  before  formal  recruitment  procedure.  Inconsistencies  in  the 
recruitment  process  could  also  hinder  openness  and  transparency.  For  instance,  some 
institutions  provide  only  15  days  for  submission  of  applications  after  publication  of 
vacancy. Hence, while legal requirements seek to ensure openness and transparency of 
the recruitment process, there is in practice considerable room for improvement. 

Lithuania  has  not  yet  implemented  the  Scientific  Visa  package.  At  the  national  level 
there  is  little  tailoring  of  Article  17  of  regulation  1408/71  for  researchers  through 
bilateral  agreements.  No  tax  incentives  exist  to  facilitate  the  participation  in 
supplementary  pension  schemes.  After  the  European  Council  Directive  No.  2005/71/EB 
was issued, the Lithuanian Parliament issued an amendment in 2008 to the Law on the 
Legal  Status  of  Foreigners  that  provided  regulation  on  the  issuing  of  residence  permits 
for  foreign  researchers  having  a  contract  with  a  Lithuanian  research  institution. 
According to the Law, a temporary residence permit is issued for one year and it is not 
necessary to apply for a work permit. 

Resources  from  mainly  international  sources  (e.g.  Erasmus,  EU  ESIF)  are  increasingly 
available  for  mobility  of  Lithuanian  researchers.  However,  inward  mobility  of  foreign 
researchers  is  hampered  by  obstacles  in  accessing  national  grants  and  lack  of 
transparency  in  institutional  recruitment  of  outsiders  (including  a  dysfunctional 
EURAXESS centre). Higher standards for new PhD programmes introduced in 2010 have 
led  to  increased  national  and  international  cooperation  in  the  provision  of  doctoral 
training. 

According  to  MOSTA  (2014b),  there  is  a  mismatch  between  inward  and  outward  brain 
circulation in Lithuania. For example, the ratio of Lithuanians seeking PhD degree abroad 
and foreigners seeking PhD degree in Lithuania is 10 versus 1. It is one of the indicators 
showing the limited international attractiveness of the Lithuanian research and education 
system. 24% of Lithuanian PhD researchers go for short term mobility visits abroad (EU-
28 average is 18%). 

The  market  is  generally  stable  for  the  younger  generation.  Although  during  the  crisis 
there  was  a  decrease  in  the  number  of  FTE  researchers,  in  2013  the  market  for 
researchers  reached  the  level  of  2009.  Furthermore,  the  total  number  (supply)  of 
researchers significantly increased. It is a common practice that a university in which a 
student  enrols  for  PhD  programme  also  contracts  him/her  whether  it  is  teaching, 
research  or  project-based  work.  Therefore,  entering  a  PhD  programme  quite  often 
guarantees a part-time job which serves as a first career step. 

Measures  to  attract  foreign  researchers  are  used  (e.g.  instrument  ‘Strengthening 
capacities of scientists and other researchers, promoting mobility and student research’ 
included  this  as  one  of  its  aims).  Nonetheless,  the  focus  is  often  concentrated  on  local 
researchers. Therefore, the measures taken are not as successful as they could be. One 
of  the  reasons  why  it  is  difficult  to  attract  more  foreign  researchers  is  the  low  salary  if 
compared  to  EU15  or  advanced  countries  outside  the  EU.  The  MORE2  cross-country 
report on researcher remuneration found that by 2013 Lithuanian first stage researchers 
(R1)  earned  only  approximately  15.6%  of  what  first  stage  researchers  (R1)  earned  in 
Germany, when measured in 2011 PPP €. Similar differences are found across different 
groups  of  researchers  as  well.  In  Lithuania  PhD  stipends  were  approximately  44.8%  of 
those  in  Germany  but  only  19.9%  of  those  in  Denmark  (Idea  Consult  et  al.,  2013). 
However,  since  October  2015  the  stipends  were  increased  by  25%.  There  are  plans  to 

53 

 
 
make  further  increases  in  2017.  Even  within  Lithuania  salary  differences  are  high. 
Researchers in the high education sector earn 43% less than researchers in the private 
sector  (Paliokaitė,  2015).  It  is  also  one  of  the  reasons  for  emigration  of  young 
researchers.  Language may  also be  a barrier  for young  researchers,  especially  in  some 
science  areas,  such  as  humanities  or  social  sciences.  However,  in  general,  English 
language  is  enough  to  communicate  within  the  academic  community.  Among  the 
measures  which  aim  at  attracting  foreign  researchers,  Lithuania’s  Smart  Specialisation 
Strategy  includes  separate  instruments  administered  by  LMT  –  ‘Foreign  Scientist 
Attraction  and  R&D  Activities’  and  ‘Brain  Attraction  and  Reintegration’  –  which  target 
foreign  (or  emigrant  Lithuanian)  researchers  and  aims  at  bringing  them  to  Lithuania. 
€20.3m from EU ESIF are allocated to these instruments. Another instrument – ‘Doctoral 
Studies  Financing  and  Development  (Attraction  of  Youth  from  Abroad)’  –  targets  both 
Lithuanian  and  foreign  PhD  candidates,  or  youth  willing  to  enter  PhD  studies.  This 
instrument  was  supposed  to  be  financed  both  from  the  EU  ESIF  (€23.2m)  and  the 
national  budget  (€62.2m).  Both  cover  priority  areas  and  priorities  distinguished  in 
Lithuania’s  smart  specialisation  strategy.  However,  current  measures  implementation 
plan does not include these measures. Several other measures have attraction of foreign 
researchers as one of their objectives. 

Lithuanian EURAXESS is barely functional. For example, as of 7th September 2015, there 
were only five job offers placed for incoming researchers in English. Meanwhile, the LMT 
webpage  provided  26  open  job  offers  in  the  Lithuanian  language.  Therefore,  there  is  a 
discrepancy  between  theoretic  provision  of  equal  opportunities  to  foreign  researchers 
and its practical implementation, where language barrier makes it difficult to access job 
offers and enter the Lithuanian research market. 

4.4.3  Access to and portability of grants 

As  a  general  rule,  competition-based  national  research  grants  and  research  fellowships 
which  are  provided  by  LMT  are  open  to  non-residents  from  the  EU  and  third  countries. 
However, funding is not portable outside Lithuania. The Lithuanian Government has not 
put in place any specific measures supporting the portability of grants. 

In principle researchers from EU and non-EU countries can apply for grants administered 
by  LMT.  Non-resident  researchers  affiliated  in  foreign  institutions  can  also  apply,  but 
these  researchers  should  then  come  back  to  Lithuania  and  do  their  research  in  one  of 
the  national  institutions.  Enhancement  of  transnational  mobility  is  an  objective  of  the 
‘Researchers Career Programme’ (RCP) under OP for Human Resources Development for 
2007–2013  (also  valid  in  2014  and  2015).  It  foresees  funding  for  the  following 
measures:  grants  for  international  level  researchers  (including  non-nationals);  support 
for reintegration of researchers that used to work abroad; post-doctoral fellowships and 
internships; promotion of scientific work of PhDs (support for research, funding scientific 
internships, PhD scholarships). However, the number of participating foreign researchers 
remains  limited.  There  is  a  legal  requirement  that  beneficiaries  of  grants  have  to  be 
employed  in  a  Lithuanian  institution.  Therefore,  even  though  national  grants  are 
awarded  to  a  specific  managing  institution,  they  are  portable  inside  Lithuania  (if 
institutions  agree,  a  researcher  can  change  managing  institution  inside  Lithuania). 
However,  a  researcher  cannot  transfer  a  grant  to  other  institutions  abroad.  It  is 
impossible  as  the  R&D  funding  programmes  aim  at  increasing  interest  in  Lithuanian 
research  areas  and  stimulating  progress  and  competitiveness  of  Lithuanian  research 
activities.  Moreover,  it  can  be  the  case  that  currently  Lithuanian  institutions  are 
uncompetitive  in  the  international  arena,  so  that  considerable  amount  of  R&D  funding 
may leave the country if international grant portability is introduced. 

Under the Global Grant measure, foreign researchers – project managers - can lead the 
team in Lithuania remotely. It encourages world-class foreign researchers to collaborate 
with  Lithuanian  institutions  without  leaving  their  home  institution.  There  have  been  no 
specific developments in this area over 2011-2014. Since details of instruments for the 

54 

 
 
OP for 2014-2020 are not yet clear, it is too early to tell whether portability of grants will 
be introduced. 

4.4.4  Doctoral training 

The  Regulation  on  Doctoral  Training  (the  Law  on  Higher  Education  and  Research  of 
2009) established the way for a new approach to PhD training in Lithuania. The right to 
provide  doctoral  training  is  granted  by  the  Minister  of  Education  and  Science. 
Universities  and  research  institutes  have  a  joint  right  to  train  PhDs.  Coordination 
between  universities  and  research  institutes  increases  the  quality  of  doctoral  training, 
and fosters openness and transparency in the research system. LMT supervises doctoral 
training  and  evaluates  research  activities.  PhD  studies  are  evaluated  every  three  years 
based on self-assessment by a group of experts who are appointed based on rules set by 
LMT.  The  group  is  coordinated  by  an  employee  of  LMT.  The  European  University 
Association’s  University  Autonomy  Tool  evaluates  the  indicator  ‘Introduction  of 
programmes  at  doctoral  level’  only  at  40%  due  to  the  fact  that  not  all  academic  units 
can  open  new  doctoral  programmes  (European  University  Association,  2015).  As  a 
general rule, researchers are encouraged to spend time abroad during their PhD. 

The Decree  of  the Minister of Education  and Science  on procedures for establishing  the 
right  to  offer  PhD  studies  adopted  in  2011  by  the  Minister  of  Education  and  Science 
stipulates  that  institutions  willing  to  register  new  PhD  studies  have  to  comply  with 
considerably  more  stringent  requirements  in  terms  of  excellence  of  research,  relevance 
of  proposed  research  programmes,  human  and  physical  resources,  etc.  As  a  result,  an 
increasing  number  of  Lithuanian  institutions  establish  joint  PhD  programmes,  with  the 
view  of  pooling  intellectual  resources  and  research  infrastructure.  Furthermore,  several 
universities  have  started  Joint  international  doctorates  (some  of  them  funded  by 
Erasmus Mundus). 

On  the  agency  level,  LMT  implements  programmes  to  support  activities  related  to 
doctoral  training:  the  promotional  scholarships  for  doctoral  candidates  (doctoral 
scholarship  and  support  for  (doctoral)  academic  visits),  competition  based  doctoral 
training,  funding  of  research  visits,  the  project  funding  of  short-term  researcher  visits 
(including  participation  in  doctoral  degree  process,  holding  seminars  or  cycles  of 
seminars  in  Lithuanian  science  and  education  institutions,  performing  of  scientific 
research,  participation  in  international  science  events),  funding  of  scientific  events, 
financial  support  for  the  publication  of  research  results,  and  support  for  students’ 
research  activities  (including  support  for  PhD  students’  internships).  The  programme 
calls  are  popular,  resulting  in  high  amount  of  applicants.  Additionally,  the  Education 
Exchanges  Support  Foundation  (ŠMPF)  organises  competitions  to  distribute  grants  by 
foreign governments which are also provided to Lithuanian doctoral candidates for study 
and research visits abroad. 

The  industrial  doctoral  training  was  not  introduced  before  2014  because  it  was 
considered  that  Lithuanian  companies,  in  general,  do  not  have  sufficient  internal 
resources  to  develop  their  own  doctoral  placement.  In  2014,  the  Ministry  of  Education 
and  Science  was  preparing  to  introduce  the  industrial  doctorate  concept,  although  it  is 
not mentioned in the smart specialisation policy documents. It is included in the project 
of  the  revised  Law  on  Higher  Education  and  Research.  The  revised  law  would  allow 
organisations  other  than  HEIs  or  research  institutes  to  implement  doctoral  studies 
together with HEIs or research institutes, if these organisations perform high-level R&D 
activities. How the level of R&D activities would be assessed is not clear yet. Industrial 
doctorate  should  help  young  researchers  become  more  entrepreneurial  and  better 
understand  what  research  is  needed  by  industry.  Researchers  who  receive  industrial 
PhDs  could  become  intermediaries  between  business  and  science  by  translating  the 
needs of business to science and the possibilities of science to business. 

55 

 
 
 
4.4.5  Gender equality and gender mainstreaming in research 

Women  are  relatively  well-represented  among  researchers  in  Lithuania.  In  2011, 
Lithuania  and  Latvia  were  the  leading  countries  in  women  representation  among 
researchers (20% above the EU average) (MOSTA, 2014b). However, two key problems 
remain significant in Lithuania: a) women are not proportionally represented in all fields 
of  science; b) women are  considerably  under-represented  in  senior academic  positions. 
Undertaken  steps  to  fight  gender  inequality  are  insufficient  to  counter  historically 
embedded  barriers  to  gender  equality  in  research.  Already  at  the  undergraduate  level, 
female students are the exception in engineering, technology and physics fields. As the 
career  progresses,  their  share  approaches  zero  in  these  fields.  In  general,  women 
participation is low in mathematical and technological fields (although the share (33%) is 
above  the  EU  average  (less  than  30%  for  countries  with  available  data)  (MOSTA 
(2014b)). Moreover, the share of women is insufficient in better paid research leadership 
positions both in senior academic positions and managerial positions (here the numbers 
are lower than the EU average). This is well illustrated by the gap in the annual average 
salary  between  men  and  women  as  it  increases  with  experience.  A  Strategy  on  Equal 
Opportunities was adopted in 2008. It provides legal foundations for the introduction of 
‘Gender  equity  and  gender  mainstreaming’  as  a  horizontal  principle  in  other  strategies 
and programmes (e.g., the Researchers Career Programme). 

In the R&I area horizontal gender equality and non-discrimination policy was applied in 
OP  2007-2013.  However,  the  annual  report  of  ESIF  monitoring  committee  to  European 
Commission for 2013 on the ‘Human resource development’ OP indicates that the impact 
of  the  priority  ‘Strengthening  capabilities  of  researchers’  on  improving  gender  equality 
was  felt  only  at  project  level  (Ministry  of  Finance,  2014).  For  example,  the  Lithuanian 
Academy of Sciences (LMA) carried out a project ‘Promoting gender equality in research’, 
and  €0.58m  were  allocated  to  it  (LMA,  n.d.).  The  project  was  coordinated  by  the  LMA 
partners which included: LMT, the association BASNET Forum and the National Union of 
Student  Representations  of  Lithuania.  Gender  equality  in  research  committees,  boards 
and governing bodies could be promoted better via establishment of systemic approach 
or  legal  regulations.  Still,  there  are  no  legal  restrictions  on  female  academic  and 
administrative careers. Generally, all EU funded projects from the Ministry of Education 
and  Science  are  assessed  with  respect  to  ensuring  non-discrimination.  There  were  no 
additional requirements concerning gender for projects in 2007-2015. 

4.5  Optimal circulation and Open Access to scientific knowledge  

4.5.1  e-Infrastructures and researchers electronic identity 

By 2015 MITA developed a portal ‘e-Science Gate’ that could provide e-services to public 
research  institutions  and  private enterprises.  The  overall  objective of  the  initiative is  to 
facilitate  commercialisation  of  ideas  generated  in  research  institutions  and  foster 
cooperation  between  public  and  private  sectors.  The  ‘Lithuanian  virtual  university 
programme  2007-2012’  has  been  running  since  2007.  It  provides  Lithuanian  HE  and 
research institutions with access to academic e-library and distance learning platforms. A 
new programme for 2013-2016 was approved in 2012. 

Although  descriptions  of  R&I  policy  instruments  related  to  e-infrastructures  for  2016-
2020  are  not  yet  available,  they  are  non-competitive  and  project  implementers  are 
already  announced  (e.g.  public  HEIs).  An 
for  development  of  e-
infrastructures  –  ‘Development  of  Information  Infrastructure  for  Research  and  Higher 
Education’  is  already  being  prepared.  KTU  will  implement  this  project,  which  will  be 
financed from EU ESIF (€4.3m). Another instrument which is related to development of 
digital  research  services  is  the  subscription  to  databases  that  are  needed  for  R&I 
activities (for this €30m come from EU ESIF). 

instrument 

It  is  a  general  rule  that  publicly  funded  infrastructure  (including  e-infrastructure)  must 
be open access. That is, it can be accessed by external agents both from Lithuania and 
abroad. Access to infrastructure is also not limited to researchers from the public sector; 

56 

 
 
private sector is eligible to use it. There are no national strategies or policies related to 
electronic  identity  that  would  facilitate  researchers’  access  to  transnational  digital 
research services. Even though there is no uniform e-identity, use of e-infrastructure is 
possible through e-Government gates. As of August 2015 there is no support for identity 
federation  communities.  There  are  also  discussions  concerning  personal  data  security, 
privacy  on  the  internet  and  similar  issues,  but  they  are  rather  sketchy  and  do  not 
concentrate specifically on e-security issues in the research field. 

4.5.2  Open Access to publications and data 

The  Law  on  Higher  Education  and  Research  (adopted  in  2009,  revision  expected  to  be 
adopted in 2016) stipulates that results of all publicly funded research in both public and 
private research and higher education institutions must be publicly available unless they 
are  limited  by  intellectual  property  or  other  requirements.  However,  implementation  of 
these  principles  remains  problematic  due  to  several  reasons.  First,  institutions  and 
researchers do not have sufficient incentives to ensure open access to research results. 
This is due to formal evaluation of R&D activities focusing on monographs, ISI journals, 
patents and other products subject to intellectual property rights. As a result, less than 
half  of  institutions  encourage  researchers  to  provide  open  access  to  publications  and 
data  and  less  than  20  %  have  internal  procedures  relating  to  open  access  and 
preservation of scientific information/data (Tautkevičienė, 2011).  

Secondly, there is an increasing number of public databases, for example: database on 
students’  theses  and  dissertations  (http://etd.library.lt),  academic  electronic  database 
(http://www.elaba.lt/),  Lituanistika  database  in  research  in  social  sciences  and 
humanities  (http://www.lituanistikadb.lt/en/home.html),  Lithuanian  humanities  and 
social  science  data  archive  (LiDA)  (http://www.lidata.eu/).  There  also  are  more 
specialised  databases  covering  specific  disciplines  or  publishers.  However,  these 
databases  have  not  reached  critical  mass  yet  –  they  include  just  a  fraction  of  research 
outputs (publications and data) and generally do not provide access to full-text sources 
contained  elsewhere.  In  2011  €4.3m  were  allocated  to  Vilnius  University  for 
implementation  of  the  project  ‘National  open  access  archive  of  research  information 
(MIDAS)’. It seeks to provide infrastructure for preservation and open access to research 
data up to five petabytes, and there are plans to integrate it with other databases. The 
project  is  already  launched  (http://www.midas.lt),  but  by  the  end  of  2015  only  22 
studies  were  published  there.  Also,  not  all  data  is  open  access.  Access  is  sometimes 
restricted to owners of research. 

With  the  view  of  addressing  these  challenges  the  Minister  of  Education  and  Science  in 
2012  approved  the  Programme  for  Development  of  Lithuanian  Research  and  Studies 
Informational  Infrastructure  for  2013-2016  (total  budget  €18m).  It  seeks  better 
integration  of  previously  developed  databases  and  increased  accessibility  of  research 
outputs (publications, etc.) and data. The target is that 40% of publications and at least 
10% of collected data should be publicly available free of charge by 2016. 

On  the  agency  level,  LMT  has  applied  a  rule  ensuring  that  since  a  research  project  is 
finalised in 3 years’ time period, empirical project data should be provided to a managing 
research  institution  and  scholarly  society.  However,  as  LMT  started  to  provide  grants 
only in 2009, the rule has not been applied yet. Moreover, LMT makes publicly available 
all  project  summaries  and  reports  (green  access  initiative).  No  other  initiatives  are 
planned  for  the  near  future.  In  2013,  the  Ministry  of  Education  and  Science  appointed 
LMT  to  be  responsible  for  open  access  development  in  Lithuania.  LMT  studies 
alternatives  to  make  all  publications  that  receive  funding  publicly  available  through  a 
local database. In 2014 LMT became a partner in the project PASTEUR4OA. 

According  to  Archambault  et  al.  (2014),  green  open  access  is  least  used  in  Lithuania 
(4.5%),  similarly  to  in  Malta  (5.0%),  Croatia  (5.2%),  and  Romania  (5.3%),  while 
publishing  in  gold  OA  journals  is  much  more  frequently  encountered  (12.8%).  One 
hypothesis  is  that  researchers  in  these  countries  may  use  Gold  journals  because  they 
more frequently allow publishing in languages other than English. 

57 

 
 
LMT supports the publication of research results since 2012. The support is intended for 
Lithuanian  researchers  to  publish  their  scientific  articles  in  high  level  scientific  journals 
as well as independent scientific books. In order to get this support, researchers are not 
asked  to  provide  open  access  to  their  scientific  works.  As  a  general  rule,  the  support 
does not cover costs associated with ensuring open access to scientific works if access to 
databases  is  available  in  Lithuanian  institutions.  In  addition,  since  2009  LMT  has  been 
developing  the 
‘Lituanistika’  accumulating  and 
disseminating  verified  information  on  the  most  current  Lithuanian  studies.  MITA  has 
been  managing  Science  and  Research  Open  Access  (MITAP)  project  (€1.16m  for  2012-
2015).  It  addressed  3  main  challenges:  public  access  to  the  R&D  activities  results; 
centralised promotion of open access centres’ activity; technology transfer organisation  
and implementation through open access centres.

international  scientific  database 

58 

 
 
Framework conditions for R&I and Science-Business 

5. 
cooperation 

5.1  General policy environment for business 

In  terms  of  the  overall  business  environment,  over  the  past  few  years  it  has  become 
much more favourable for starting and accelerating business in Lithuania. For example, 
in 2013-2014 Lithuania made starting a business easier by eliminating the need to have 
a  company  seal  and  speeding  up  the  value  added  tax  registration  at  the  State  Tax 
Inspectorate. It also made dealing with construction permits easier by reducing the time 
required  for  processing  building  permit  applications.  In  addition,  Lithuania  made 
enforcing contracts easier by introducing an electronic filing system for court users. As a 
consequence, Lithuania has high ranking in several of the World Bank’s Doing Business 
Rank  2015  categories.  It  ranks  24th  (10th  in  the  EU28)  with  respect  to  ease  of  doing 
business.  In  starting  a  business  Lithuania  is  11th  (2nd  in  the  EU28),  and  in  registering 
property – 9th (2nd in EU28) (World Bank Group, 2015). 

However,  with  respect  to  resolving  insolvency  Lithuania  ranks  only  67th  (27th  in  EU28). 
The  European  Commission  has  set  out  a  series  of  common  principles  for  national 
insolvency procedures for businesses in financial difficulties. The objective is to shift the 
focus away from liquidation towards encouraging viable businesses to restructure at an 
early stage so as to prevent insolvency. These recommendations are not yet accepted in 
Lithuania.  Although  Lithuania’s  score  on  commencement  of  proceedings  index  is  high 
(2.5 out of 3) and management of debtor’s assets score is also rather high (4 out of 6), 
other  areas are  evaluated  much  less  positively.  Reorganisation  proceedings  scores  only 
0.5  out  of  3  and  creditor  participation  1  out  of  4.  Concerning  the  extent  to  which 
entrepreneurs  may  begin  anew  after  failing,  the  main  obstacles  are  that:  a)  a  debtor 
cannot  obtain  credit  after  insolvency  proceedings  have  commenced;  b)  post-
commencement credit is not prioritized (World Bank Group, 2015). 

5.2  Young innovative companies and start-ups  

The number of start-ups in Lithuania has been steadily increasing. An analysis of 42 IT 
and  life  sciences  start-ups  carried  out  by  Enterprise  Lithuania  found  that  before  2011 
only one or two were established per year. However, 2011 six were established, another 
11  in  2012  and  20  in  2013  (Versli  Lietuva,  2014).  The  same  can  be  said  about 
investment. In 2014 €46m were invested by venture capital, nearly three times as much 
as in 2013 (Startup Highway, 2015). This tendency follows the general trend of business 
in Lithuania. Over the past five years there has been a stable increase in the number of 
established enterprises in general as well (62,889 in 2012, 79,840 in 2016). 

Direct funding for innovative and science based entrepreneurship has been relatively low 
in Lithuania, compared to technology upgrading and creation of public R&D infrastructure 
(including  buildings).  Generally,  the  SF-funded  measures  Inogeb  LT1-3  provided 
assistance to entrepreneurs and young innovative companies. These measures aim to: 

  Support  the  creation  and  development  of  new  business  incubators,  in  order  to 
improve  the  conditions  for  start-up  creation  and  development.  They  are  mainly 
focused on investment into infrastructure; 

  Support public business support service providers (STPs, incubators and MITA) in 
improvement of the services and information quality and ensuring their relevance 
to  business,  and  improve  business  conditions  for  SME’s  and  natural  persons 
willing to start a business. 

Since  2012,  MITA  has  been  active  in  promoting  science-based  and/or  high  tech 
innovative  start-ups.  The  first  MITA  initiative  on  the  ’Commercialisation  of  R&D  results’ 
was  launched  in  2012.  The  main  goal  of  this  initiative  was  to  encourage  scientists, 
researchers and students to establish start-up or spin-off companies. By the end of 2015 
four calls were made in total. In 2014, 42 proposals were received. Out of them 18 were 

59 

 
 
funded. Participation of KTU was significant. It implemented 8 out of those 18 projects. 
Newly established enterprises created 19 new products and 9 services, created 35 jobs 
(MITA, 2015). With the fourth call 13 new projects were funded in 2015.  

After the success of this initiative, two Inogeb-LT3 funded projects followed: ‘Innovative 
business  promotion  (INOVEKS)’,  €2.8m,  and  ‘Incubation  of  new  technology  companies 
(Technostart)’,  €1.35m.  Both  projects  were  implemented  by  MITA  and  targeted 
innovative companies’ creation and innovative ideas pipeline building. 

The  task  of  the  INOVEKS  project  was  to  create  opportunities  for  students  and  young 
researchers  to  establish  new  companies.  The  project  was  implemented  by  MITA  in 
partnership with several universities and STPs, which (a) run a selection process of the 
best  ideas  from  undergraduate,  post-graduate  and  PhD  students  and  young  scientists 
and based on their ideas teams will establish SME enterprises, and (b) help to clarify and 
test  existing  business  ideas,  provide  advice  on  prototypes  and/or  models  creation,  as 
well as  opportunities to get additional funding or R&D services for the  development of  
the  products,  help  to  develop  high-quality  investment  proposals  needed  to  support  the 
young  enterprises.  Within  INOVEKS  411  new  technology  ideas  were  selected  and  71 
companies were established in 2014 alone. 

The  Technostart  project  aims  at  generating  a  pipeline  of  innovative  ideas  coming  from 
students  or  researchers,  which  will  be  evaluated  by  expert  teams,  and  acceleration 
support  will  be  provided  to  the  best  ideas.  The  most  promising  ideas  will  be 
commercialised,  and  acceleration  and  mentoring  services  will  be  provided  at  the  initial 
stages  of  the  innovative  companies’  creation.  Then  the  best  companies  will  be 
channelled to other support and funding providers – Startup.lt or venture capital funds. 
The project selected 100 technology ideas suitable for commercialisation, established 45 
new  technology  companies,  and  provided  expert  consultations  to  45  SMEs.  Newly 
established enterprises introduced 15 new products/services to the market. 21 start-ups 
were established in Vilnius, 15 in Kaunas and 3 in Klaipėda. 

Spin-off creation will be encouraged in 2016-2020 as well. Such indicator is included in 
the  smart  specialisation  programme.  However,  it  remains  to  be  seen  how  the  support 
will be actually implemented. 

5.3  Entrepreneurship skills and STEM policy 

A number of financial (funded from EU SF) measures as well as higher education sector 
reforms (discussed at the beginning of this chapter) were implemented over 2007-2014. 
They promote excellence in education and ensure a sufficient supply of (post)graduates 
in  science,  technology,  engineering  and  mathematics  and  an  appropriate  mix  of  skills 
among  the  population  (including  through  strong  vocational  and  education  and  training 
systems)  in  the  medium-to-longer  term.  However  education  and  training  curricula  in 
Lithuania  insufficiently  focus  on  equipping  people  with  the  capacity  to  learn  and  to 
develop  transversal  competences  such  as  critical  thinking,  problem  solving,  creativity, 
teamwork, and  intercultural  and  communication  skills.  Increasingly,  attention  is  paid  to 
addressing  innovation  skills  gaps.  To  solve  these  issues  the  Ministry  of  Education  and 
Science  aims  at  promoting  STEAM  education  both  by  providing  required  infrastructure 
(400  secondary  education  institutions  were  provided  with  equipment)  and  by 
encouraging  STEAM  teaching  activities.  The  Ministry  of  Education  and  Science  is 
preparing  an  action  plan  for  STEAM  education.  In  October  2015  it  informed  that  there 
will be 10 STEAM education centres in Lithuania. The Smart Specialisation Strategy also 
includes a measure for establishing open access centres of research and development in 
STEAM areas which would be suitable for students at the secondary education level. The 
plan indicates allocation of €5.8m to this measure. 

The  Global  Monitor  of  Entrepreneurship  (GEM)  asked  national  experts  to  evaluate  the 
state  of  entrepreneurship  education  in  various  countries,  including  Lithuania.  The  GEM 
2014  Global  Report  identified  that  on  a  5-point  Likert  scale  Lithuania  got  2.37  with 
respect to basic school entrepreneurial education and training (17th out of 73 evaluated 

60 

 
 
countries)  and  3.07  points  with  respect  to  post-school  entrepreneurial  education  and 
training  (22nd  out  of  73)  (Singer,  Amorós  and  Moska  Arreola  2015).  Nevertheless, 
entrepreneurship  education  and  training  is  not  yet  widely  available  or  included  in 
curricula.  Partnerships  between  formal  education  and  other  sectors  are  not  sufficiently 
promoted to that end. However, several ongoing initiatives address this issue. The State 
Education  Strategy  2013-2022  was  approved  in  2013.  One  of  its  objectives  is  to 
strengthen  the  ‘non-formal’  education  at  schools,  especially  focused  on  leadership, 
creativity,  entrepreneurship.  In  addition,  Junior  Achievement  Lithuania  cooperates  with 
the  Ministry  of  Economy  and  the  Ministry  of  Education  in  promoting  entrepreneurial 
education.  In  2014,  pupils’  visits  to  the  Ministry  of  Economy  and  competition  of 
entrepreneurial  ideas  of  pupils  were  organized.  A  report  on  entrepreneurship  among 
youth in Lithuania identified that Junior Achievement in Lithuania plays an important role 
in strengthening this type of training (OECD and European Commission, 2015). 

In  addition  to  teaching  entrepreneurial  skills  in  the  education  sector,  the  measure 
‘Human  resource  development  in  companies’  was  implemented  in  2007-2013  by  the 
Ministry  of  Social  Security  and  Labour.  In  total,  240  projects  were  funded  and  €54m 
were  allocated  to  them.  This  measure  included  teaching  employees  and  employers, 
qualifications  development,  teaching  in  the  workplace,  creation  and  implementation  of 
personnel  management  systems,  new  work  organisation  forms,  assessments  of  the 
needs to develop qualifications. 

5.4  Access to finance 

Business access to venture capital markets has increased dramatically during 2011-2014 
in Lithuania. In 2010 the risk capital fund ‘Business Angels Fund I’ was founded by the 
European  Investment  Fund  for  investments  into  innovative  and  export  oriented 
companies  in  Lithuania.  The  Establishment  Agreement  of  the  Fund  is  signed  under  the 
project  ‘JEREMIE  the  controlling  fund’.  As  of  early  2013,  Lithuania  introduced  new 
venture  capital  measures  aiming  to  boost  investments  in  early  stage  innovative 
companies  in  Lithuania.  The  European  Investment  Fund  (EIF)  together  with  Estonia, 
Latvia  and  Lithuania  launched  the  Baltic  Innovation  Fund  (BIF)  -  a  ‘fund  of  funds’  that 
will invest €100m into the private equity and venture capital funds operating in the Baltic 
countries. It is expected to encourage risk capital investments in SMEs.  

EIF  and  Practica  Capital  established  an  initial  stage  venture  capital  fund  (Practica  Seed 
Capital  Fund,  €6m)  and  Practica  Venture  Capital  Fund  (€15.7m)  that  will  invest  in 
Lithuanian  SMEs.  The  deal  has  been  signed  under  the  local  JEREMIE  initiative  (Joint 
European Resources for Micro to Medium Enterprises). The main purpose of the Practica 
Seed  Capital  Fund  is  to  develop  new  businesses  by  financing  and  incubating  the 
prospective ideas and help them to develop at the pre-seed and seed stages. The funds 
invest  in  early-stage  (seed,  start-up)  development  of  high-potential  business  ideas  and 
later-stage  expansion  of  established  businesses  in  Lithuania.  Practica  Capital  funds 
invest  in  equity  (minority  or  majority  share  capital)  or  quasi-equity  instruments 
(convertible debt and similar) seeking return on invested capital. Investments vary from 
€3,000 to €2m per project. A ‘business accelerator’ under the name of Startup.lt actively 
supports  the  founding  process  of  new  companies  throughout  their  early  life  cycle  from 
their  launch  to  incorporation,  thereby  filling  the  gap  start-ups  experience  in  Lithuania. 
The  ‘business  accelerator’  provides  vital  services  such  as  business  advice,  office  space, 
networks  and  other  services  including  bookkeeping,  legal  and  intellectual  property 
advice. In parallel, the Practica Venture Capital Fund could potentially provide follow-up 
investments  for  the  ideas  developed  under  the  Seed  Fund,  but  will  also  invest  into 
existing  high-growth  companies.  Both  funds  are  managed  by  the  Practica  Capital  team 
which  consists  of  well  reputed  successful  entrepreneurs  and  financial  professionals 
brought together through this initiative. 

LitCapital  is  another  growth  capital  fund,  established  in  cooperation  with  the  European 
Investment  Fund  in  2010  under  the  JEREMIE  initiative.  The  fund  size  is  €25m.  It  is 
aimed at investing in small - medium-size enterprises in Lithuania. The fund is aimed at 

61 

 
 
long  term  investments  in  the  authorized  capital  of  private  enterprises  seeking  faster 
growth and expansion. The investment horizon is between 4 and 6 years. 

In  addition,  as  of  31st  December  2014,  the  INVEGA  fund  attracted  €180.6m  of  private 
investment (support was provided to 2,874 SMEs). JEREMIE attracted €15.43m (support 
was  provided  to  77  SMEs)  (Visionary  Analytics,  2015).  INVEGA  aims  at  promoting 
growth  and  competitiveness  of  Lithuanian  SMEs  through  loans,  guarantees,  partial 
compensation  of  interest,  and  support  for  first  job26.  INVEGA  provides  guarantees  for 
credits aimed at investment, turnover funds and refinancing. Guarantees may cover up 
to 80% of the total project value. Since 2016 INVEGA guarantees can also be provided 
to  large  enterprises.  EU  funds  are  also  used  to  finance  SMEs’  credits.  In  the  financing 
period of 2007-2013, €16.22m were allocated to such activities. A similar instrument is 
planned for 2014-2020, with initial allocation of €4.34m. 

According  to  the  Lithuanian  Private  Equity  and  Venture  Capital  Association  (LT  VCA)27, 
European  Union  funds  under  the  JEREMIE  initiative  enabled  Lithuanian  venture  capital 
funds  to  invest  in  56  companies  with  a  total  investment  size  of  €95.3m.  According  to 
Visionary Analytics (2015, p. 31), the business and economic performance indicators of 
JEREMIE holding fund’s portfolio companies increased significantly28: 

  Turnover  of  the  portfolio  companies  increased  by  66%  from  the  beginning  of 

investment to 2013, and reached €96.92 million in 2013. 

  Export of the portfolio companies grew by 31% from the beginning of investment29 to 

2013 and was €44.5 million in 2013. 

  Number  of  employees  increased  by  14%  from  the  beginning  of  investment  to  2013 

and was 1,559 in 2013. 

  The additional private investment attracted was 2.5 times higher than EU SF support 

until 2013. 

In addition, qualitative evidence of JEREMIE Holding fund’s indirect impact on the overall 
financial market ecosystem is observed: 

  Formation  of  venture  capital  ecosystem.  Until  2010  (when  the  JEREMIE  venture 
capital  funds  started  to  operate)  venture  capital  market  was  dominated  by  foreign 
investors and was not stable. Now there are 5 venture capital funds operating under 
JEREMIE  roof  and  one  private  venture  capital  fund.  In  addition,  the  regulatory 
system  of  venture  capital  funds  was  also  slightly  improved  (improvements  were 
made in the legal and tax base – see the last paragraph of this section). 

  Private venture capital funds entered the market. In 2013 the private venture capital 

fund ‘Nextury Ventures’ was established. 

  The  network  of  private  investors  is  developing.  Now  there  is  a  business  angels 
network of approximately 100 angels (BGI Consulting, 2014), private pension funds 
(e.g.  Swedbank,  SEB  pension  funds)  and  foreign  investors  (e.g.  Intel  Capital,  Accel 
Partners, Nokia Ventures) are investing into venture capital funds. 

In  addition  to  the  above  mentioned  achievements  of  venture  capital  funds,  mentoring, 
advice,  contacts  and  other  help  provided  via  these  funds  created  benefits  for  the 
supported  SMEs.  The  main  challenge  faced  by  venture  capital  funds  relate  to  the 
restrictions  of  the  funds'  investment  opportunities.  Firstly,  each  fund  has  a  ceiling  for 
investment  per  SME.  In  some  cases,  especially  in  the  later  investment  stage,  a  larger 
investment is needed (e.g. for the acquisition of infrastructure). This is the problem also 

26 For more specific information, see Visionary Analytics (2015), p.29. 
27 LT VCA unites 8 full members and 13 associate members who support and advise investors and entrepreneurs in the 
structuring and management of their partnerships. LT VCA serves as a central platform for representation and promotion 
of the venture capital business to institutional investors, opinion leaders, and public policy makers. 
28 This data has been collected via survey of beneficiaries, counterfactual evaluation was not performed. 
29 Here and below the beginning of investment refers to the launch of each fund. Practica Seed Capital Fund was launched 
in 2012; Practica Venture Capital Fund was launched in 2012; Lithuania SME Fund was launched in 2010; LitCapital I was 
lauched in 2010; Business Angels fund was launched in 2010. 

62 

 
 
                                          
for early stage investment (seed capital fund) as the maximum amount of investment at 
this stage is only EUR 0.2 million. As a result, the majority of investments are made in 
the ICT sector as this sector does not require capital-intensive investments in the early 
stages  of  business.  Secondly,  the  funds  can  invest  only  in  Lithuania’s  territory.  This 
restriction  makes  it  harder  to  attract  private  investors,  as  the  risk  of  investing  only  in 
Lithuania  is  higher  than  investing  in  e.g.  all  three  Baltic  States.  This  is  especially 
important for the seed capital funds as they are riskier than the later stage investment 
funds  and  it  is  more  difficult  to  manage  such  funds.  In  addition,  only  one  seed  capital 
fund is available in the whole venture capital ecosystem (and it was launched at the very 
end of the programming period). On the other hand, according to the interviewees, there 
are not so many good ideas to be supported.  

In  sum,  currently  the  key  venture  capital  funds  in  Lithuania  are  dependent  on  EU 
investments (e.g. the JEREMIE umbrella). However, a positive sign is the emergence of 
100%  privately  owned  venture  capital  funds,  such  as  Nextury  Ventures,  established  in 
2014.  Investment  funds  are  not  taxed  in  Lithuania,  if  they  are  established  under 
Lithuanian  law.  There  is  no  incremental  tax  for  domestic  investors,  and  no  VAT  on 
management  fees  at  a  fund  level  is  introduced.  However,  companies  are  taxed  both  at 
firm  and  at  employee  levels.  Domestic  and  foreign  investment  differs  in  that  there  is 
more transparency in the former than in the latter (EVCA, 2013). 

5.5  R&D related FDI 

The majority of FDI is attracted into the domestically oriented services and infrastructure 
sectors  and  export  oriented  cost-effective  manufacturing  functions.  However  there  are 
also  several  encouraging  success  stories  in  how  to  exploit  FDI  to  generate  new 
knowledge-based  growth  areas,  notably  in  the  pharmaceuticals  and  biotechnology 
sectors.  Investments  of  ThermoFisher  Scientific,  Teva,  MOOG  Medical  and  Valeant  over 
2006-2013 have made Lithuania an emerging hotspot for the life sciences in Central and 
Eastern Europe. 

However,  no  data  was  available  on  the  volume  of  R&D  intensive  FDI  investments.  This 
lack  of  collected  data  might  be  related  to  the  fact  that  in  2007-2013  no  specific 
measures  were  devoted  solely  to  attracting  R&D  intensive  FDI.  The  indicator  on  which 
data is available is R&D funded by business enterprise sector from abroad. The amount 
of such funds increased from 0.01% of GDP in 2007 to 0.03% of GDP in 2012.  

Lithuania’s  smart  specialisation  strategy  includes  several  measures  to  attract  R&D 
related  FDI  in  the  Action  Plans  of  R&I  priorities.  These  include  Smartinvest  LT  (€5.8m) 
and  Smartinvest  LT+  (€28.96m  with  anticipated  similar  investment  attracted  from  the 
private sector). Another measure, Smartpark LT will be used to attract FDI to industrial 
sites  in  all  of  the  smart  specialisation  priorities  .  The  Ministry  of  the  Economy  plans  to 
allocate €13m through Smartpark LT. 

5.6  Knowledge markets 

The  basic  regulatory  framework  for  intellectual  property  is  in  place,  but  its 
implementation  at  the  institutional  level  (the  universities  and  research  institutes)  is 
lagging. Pursuant to the Law on Research and Higher Education (2009), researchers are 
guaranteed with the copyright to their intellectual work products. The HEIs are granted a 
share  of  economic  IP  rights  under  the  agreements  with  creators  of  intellectual  work 
products. The extent to which the IP rights to design and patent could be the property of 
a researcher when the research is carried out within the HEI or PRO is not fully defined, 
but  1/3  of  profit  gained  from  exploitation  of  intellectual  property  belongs  to  authors, 
unless  agreed  differently  in  contract  between  HEI  and  researcher.  In  December  2009, 
the  Minister  of  Education  and  Science  approved  a  set  of  Intellectual  Property 
Management  Recommendations  (guidelines)  for  the  HEIs  and  PROs.  In  these 
Recommendations, the organisations are advised to organise IP management strategies 
in a way that creates more incentives for knowledge commercialisation, for example:  

63 

 
 
  HEI or PRO must include the IP management principles in its long-term strategy 
and  foresee  its  implementation  framework  and  monitoring  strategy,  exploitation 
and dissemination strategy;  

  An institution is advised to delegate the functions of IP management to a specific 

employee or establish a separate entity – a technology transfer centre;  

  Contracts between the institution and its employees and students should include 
issues  related  to  IP  rights  when  intellectual  work  products  are  created  during 
working/leisure time, using institution property, etc.;  

  HEI  or  PRO  should  ensure  that  the  framework  for creation  of  research  results  is 
clear; the exploitation of new knowledge is simple; the results of intellectual work 
created are publicly announced without violating the IP rights;  

  If a spin-off company is created as a result of an R&D partnership agreement, it 

is recommended that the HEI/PRO seeks to acquire part of its shares;  

  A HEI/PRO should establish a methodology for distributing the profit acquired as 
a result of commercialising intellectual work products, between the HEI structural 
department and its employee/student/group. 

The  newly  proposed  revision  to  the  Law  on  Higher  Education  and  Research  does  not 
make  any  significant  changes  to  treatment  of  intellectual  property.  It  is  still  stipulated 
that  intellectual  property  belongs  to  researchers  although  financial  rights  belong  to  the 
institution  in  which  the  intellectual  product  was  created.  The  researcher  is  entitled  to 
receive  at  least  one  third  of  the  total  revenue  gained  from  the  product  (before  this 
revision it was at least one third of profit). Otherwise, everything remains unchanged. 

Some universities (KTU being the one leading progress in this area) already have clearly 
developed  spin-off  strategies  and  internal  intellectual  property  policies,  clearly  outlined 
(e.g.  specified  in  an  annex  to  the  researcher’s  employment  contract).  Lack  of  IPR 
policies at the institutional levels lead to lack of motivation to commercialise public R&D 
as  well  as  lack  of  trust  between  the  universities  and  their  researchers.  However  the 
situation is improving, as more universities are starting to address these matters. To this 
end,  MITA  funds  R&D  commercialisation  feasibility  studies  and  awareness  raising 
activities  by  universities  and  research  institutes,  including  specialised  trainings  on 
technology transfer and patenting. The universities and research institutes had to submit 
their  applications  by  October 2014.  As  of  2015 13 out of  14 proposals  were  funded for 
R&D commercialisation activities. Total funding was €0.35m.  

Financial support from national sources (provided by the Ministry of Economy) is ensured 
for  legal  entities  who  aim  to  protect  intellectual  property  rights.  Eligible  institutions 
(private  companies  and/or  research  and  education  institutions)  can  apply  for  a  grant 
covering from 50% (for companies) to 95% (for research and education institutions) of 
patenting  expenses  (up  to  €14,481).  Applications  are  submitted  via  calls  for  proposals 
procedure with fixed deadlines. Applications are evaluated by the workgroup launched by 
MITA.  In  2011-2014  MITA  allocated  €1.44m  to  258  intellectual  property  projects.  190 
projects covered patenting inventions, the rest 68 – registering design. Both the number 
of  projects  and  allocated  funds  increased  each  year.  In  2008  the  Ministry  of  Economy 
introduced  new  instruments  to  support  the  acquisition  of  patents  –  prepayment  and 
payment  on  accounts.  After  the  introduction  of  prepayment  and  payment  on  accounts 
procedures,  the  numbers  increased  dramatically.  The  knowledge  markets  for  patents 
and licencing, according to our best knowledge, are not coordinated transnationally. 

The  Action  Plans  of  the  priorities  set  out  in  Lithuania’s  Smart  Specialisation  Strategy 
include measures (InoPatent LT and Inocertification) which specifically aim at stimulating 
patenting  and  certification  of  new  inventions,  designs  and  products.  The  Ministry  of 
Economy  planned  to  allocate  €8.7m  to  SMEs  through  Inocertification  and  €3m  to  all 
types  of  enterprises  through  InopatentLT.  However,  these  measures  have  neither  been 
launched,  nor  included  in  the  plan  of  priority  implementation  in  2015  as  separate 
measures. 

64 

 
 
 
5.7  Public-private cooperation and knowledge transfer 

5.7.1  Indicators 

Funding: BES-funded/publicly performed R&D 

Figure 14 BES-funded public R&D in LITHUANIA as % of GERD (in €MLN) and % of GDP 

65 

12.33%5.34%4.61%3.75%3.28%10.48%10.79%11.75%10.51%8.71%9.88%11.48%9.51%0510152025303540450%2%4%6%8%10%12%14%2002200320042005200620072008200920102011201220132014Public R&D financed by BES as % of GERD and millions of euroMillions ofEUR% of GERD0.081%0.035%0.035%0.028%0.026%0.084%0.085%0.098%0.082%0.079%0.088%0.109%0.096%0510152025303540450.00%0.02%0.04%0.06%0.08%0.10%0.12%2002200320042005200620072008200920102011201220132014Public R&D financed by BES as % of GDP and millions of euroMillions ofEUR% of GDP0%2%4%6%8%10%12%14%LTROLVNLDEHRELBEESHUBGEU28SKSIPLUKEEFIFRATSECZITDKPTLUIEMTCYPublic R&D financed by business enterprise sector as % of GERD in 2013 
 
 
 
 
 
Figure 15 BES-funded public R&D as % of GERD and as % of GDP in 2013 in Member States30 

The high level of privately funded public R&D in Lithuania is difficult to explain based on 
the information available. 

30 2013 was chosen as the latest data series providing a full comparison within EU-28.  

66 

0.000%0.020%0.040%0.060%0.080%0.100%0.120%DELTNLBEFISIEU28ATLVSEHUESFRROEEUKHRDKELCZSKPLBGITPTLUIEMTCYPublic R&D financed by business enterprise sector as % of GDP in 2013 
 
 
 
 
                                          
Funding: Structural funds devoted to knowledge transfer 

Figure  16 Structural Funds for core R&D activities 2000-2006, 2007-2013 and 2014-202031.  We 
use the categories: 182 (2000-2006), 03 and 04 (2007-2013) and 062 (2014-2020) as proxies for 
KT activities. 

31 Figure  16  provides  the  Structural  Funds  allocated  to  Lithuania  for  each  of  the  above  R&D  categories.  The  red  bars 
show the categories used as proxies for KT. Please note that the figures refer to EU funds and they do not include the 
part  co-funded  by  the  Member  State.  The  categories  for  2000-2006  include:  18.  Research,  technological  development 
and  innovation  (RTDI);  181.  Research  projects  based  in  universities  and  research  institutes;  182.  Innovation  and 
technology transfers, establishment of networks and partnerships between business and/or research institutes; 183. RTDI 
infrastructures; 184. Training for researchers. 
The categories  for  2007-2013  include:  01.  R&TD  activities  in  research  centres;  02.  R&TD  infrastructure  and  centres  of 
competence in specific technology; 03. Technology transfer and improvement of cooperation networks; 04. Assistance to 
R&TD particular in SMEs; 74. Developing human potential in the field of research and innovation. 
The categories  for  2007-2013  include:  01.  R&TD  activities  in  research  centres;  02.  R&TD  infrastructure  and  centres  of 
competence in specific technology; 03. Technology transfer and improvement of cooperation networks; 04. Assistance to 
R&TD particular in SMEs; 74. Developing human potential in the field of research and innovation. 
The categories for 2014-2020 include: 002. Research and Innovation processes in large enterprises; 056. Investment in 
infrastructure, capacities and equipment in SMEs directly linked to Research and Innovation activities; 057. Investment in 
infrastructure,  capacities  and  equipment  in  large  companies  directly  linked  to  Research  and  Innovation  activities;  058. 
Research  and  Innovation  infrastructure  (public);  059.  Research  and  Innovation  infrastructure  (private,  including  science 
parks);  060.  Research  and  Innovation  activities  in  public  research  centres  and  centres  of  competence  including 
networking;  061.  Research  and  Innovation  activities  in  private  research  centres  including  networking;  062.  Technology 
transfer  and  university-enterprise  cooperation  primarily  benefiting  SMEs;  063.  Cluster  support  and  business  networks 
primarily benefiting SMEs; 064. Research and Innovation processes in SMEs (including voucher schemes, process, design, 
service  and  social  innovation);  065.  Research  and  Innovation  infrastructure,  processes,  technology  transfer  and 
cooperation of enterprises focusing on the low carbon economy and on resilience to climate change. 

67 

0.00.027.951.320.80.054.09.613.423.00.07.67.223.26.313.714.817.53.95.90.00102030405060181811821831840102030474002056057058059060061062063064065SF 2000-2006SF 2007-2013SF 2014-2020%Distribution of SF allocated amounts among Core R&D&I categories (%)Lithuania 
 
 
 
 
                                          
Lithuania  has  allocated  17.5%  of  its  structural  funds  for  core  R&D  activities  to 
’Technology  transfer  and  university-enterprise  cooperation  primarily  benefiting  SMEs’ 
(compared to 27.9% for 2000-2006 and 23% in the 2007-2013 programming period). It 
is  slightly  higher  than  the  EU  average  of  15.7%  (the EU average  was  26.1% for 2000-
2006  and  30.1%  for  2007-2013).  Most  of  it  was  invested  into  infrastructure  -  the 
competence centres/open access centres of public universities (the so called ‘valleys’). 

Cooperation: Share of innovative companies cooperating with academia 

Figure 17 CIS survey 2012 – share of enterprises cooperating with academia 

According  to  CIS  2012,  in  Lithuania  44.5%  of  companies  engaged  in  any  type  of 
cooperation,  which  is  higher  than  the  EU  average  of  31.3%.  Slightly  less  than  half  of 
those innovative companies (i.e. 18.9%  of the total sample) cooperate with universities 
and higher education institutions compared to almost 7.7% in LV and 10.8% in EE. A bit 
less  –  11.7%  cooperate  with  government  or  public  or  private  research  institutes 
(compared  to  7.4%  in  LV  and  5%  in  EE).  Still,  looking  at  the  impressive  rate  of 
cooperation  in  Finland  -  one  of  the  innovation  leaders    (26%  of  innovative  companies 
that  work  with  higher  education  institutions  and  23%  with  government  or  public  or 
private research institutes), one can see  the space for intensifying cooperation  between 
innovative Lithuanian enterprises and academia.  

Cooperation: Technology Transfer Offices (TTOs), incubators and technological 
parks 

Lithuania,  25  Open  Access  Centres,  9  Science  and  Technology  Parks.  Technology 
transfer is also becoming more important for universities, so that they start establishing 
Technology  Transfer  Offices.  However,  to  date  the  involvement  of  enterprises  in  these 
projects  has  been  limited  and  overall  the  investments  resulted  in  the  modernisation  of 
public research infrastructures rather than research-enterprise collaboration. In addition, 
all  these  institutions  compete  for  scarce  funding,  making  it  difficult  to  provide 
professional services or to attract qualified professionals. 

The  new  Operational  Programme  2014-2020  plans  to  finance  operation  of  new 
technology  transfer  offices  in  universities  as  well.  The  20+  Open  Access  centres  (R&D 
laboratories,  which  should  provide  R&D  services  for  business  and  other  interested 
applicants for a particular price) have been established in the framework of the ‘valleys’. 
7 of the 9 science and technology parks are operating in the ‘valleys’ and some of them 
include technology incubators. Some of the science and technology parks are very active 
in start-ups promotion, regularly organise business plans competitions etc. (for example, 

68 

 
 
 
the  North  Town  STP),  but  are  not  exclusively 
entrepreneurship. 

focused  on  science-based 

Cooperation: Share of public-private co-publications 

Figure 18 Co-publications by field 2003-2013 in Lithuania. Scopus database 

Figure  18  shows  the  2003-2013  average  percentages  of  academia-industry  co-
publications  by  field  in  Lithuania  compared  to  the  European  average.  Scopus  data 
indicate  that  the  percentage  of  co-publications  has  not  changed  much  in  the  last  eight 
years (2006-2013), with 0.6% of academia-business publications in 2013. Moreover, in 
2013  Lithuania  had  only  5.7  public-private  co-publications  per  million  of  population 
compared  to  29  for  the  EU-28  (and  6.4  for  LV,  28  for EE)32.  The  domains  with  highest 
percentage  of  co-publications  (excluding  multidisciplinary  publications)  are  immunology 
and microbiology, pharmacology and medicine. 

Cooperation:  Patenting  activity  of  public  research  organisations  and 
universities together with licensing income 

In  2013,  public  research  organisations  submitted  31  patent  applications  to  the  State‘s 
Patent Office, of which 23 applications were submitted by universities (about 26%  of all 
patent applications in Lithuania in 2013).  

No data could be found on licensing income from these patents, neither on co-patenting 
activity of academia and business sector. 

Cooperation: Companies 

Since 2012, the Agency for Science, Innovation and Technology (MITA) has been active 
in  promoting  science-based  and/or  high  tech  innovative  start-ups.  The  first  MITA 
initiative on the commercialisation of R&D results was launched in 2012. The main goal 
of this initiative was to encourage scientists, researchers and students to establish start-
up  or  spin-off  companies.  Four  calls  were  already  made  in  2012-2015.  In  2014,  42 

32 RIO elaboration based on Scopus data. 

69 

 
 
 
                                          
proposals  were  received  and  out  of  those  18  were  funded.  Participation  of  Kaunas 
University of Technology was significant – it implemented 8 out of those 18 projects. The 
newly established enterprises created 19 new products, 9 services and 35 jobs. With the 
fourth call 13 new projects were funded in 2015. 

After the success of this initiative, two Inogeb-LT3 funded projects followed: ‘Innovative 
business  promotion  (INOVEKS)’  and 
‘Incubation  of  new  technology  companies 
(Technostart)'.  Within  INOVEKS  411  new  technology  ideas  were  selected  and  71 
companies  were  established  in  2014.  The  Technostart  project  selected  100  technology 
ideas  suitable  for  commercialisation  and  established  45  new  technology  companies. 
Newly established enterprises introduced 15 new products/services to the market. 

It  should  be  stressed  that  creation  of  spin-offs  has  not  been  incentivized  enough  and 
neither  HEIs  nor  research  institutes  had  precise  strategies  for  spin-off  creation.  This 
issue is partly addressed in Lithuania’s Smart Specialisation Strategy covering the period 
of  2014-2020,  where  indicators  covering  spin-off  creation  are  included  there  is  aim  to 
encourage it. 

5.7.2  Policy Measures 

There have been a number of measures strengthening the cooperation between science 
and industry introduced by Lithuania in the recent years.  

One  incentive  for  HEIs  is  the  shift  to  a  more  result-based  university  funding  model 
whereby  more  value  is  attributed  to  R&D  contracts  with  industry.  The  Government 
Decision (adopted in 2009 and subsequently amended in 2010 and 2012) on the method 
for  allocation  of  budgetary  appropriations  for  R&D  for  public  higher  education  and 
research  institutions  stipulates  that  higher  share  of  institutional  funding  (50%  since 
2011) should be linked to research performance. Two out of the four assessment criteria 
are  directly  related  to  knowledge  transfer:  funding  received  from  R&D  contracts  with 
private  establishments  and  public  funding  from  participation  in  joint  R&D  projects  with 
private establishments. 

The  direct  financial  support  for  collaboration  of  science  and  business  in  joint  R&D 
projects  and  cluster  development  projects  comprises  a  group  of  measures  mostly 
financed  by  the  EU  structural  funds:  the  ’Integrated  science,  studies  and  business 
centres  –  Valleys’,  the  investments  in  innovative  clusters  development  (Inocluster  LT, 
Inocluster  LT+,  and  Inogeb  LT-3),  and  the  Innovation  vouchers  scheme  that  was 
launched  in  2010.  Newly  planned  measures  in  the  2014-2020  programming  period 
include ‘Industrial doctorates’ and ‘Joint initiatives’. 

‘Integrated  science,  studies  and  business  centres  –  Valleys’  constituted  the  most 
important  instrument  (worth  around  €400m) for fostering  open  innovation  and transfer 
of knowledge between public research and private enterprises. The goal of the concept is 
promoting  rapid  development  of  valleys,  which  would  meet  international  standards, 
enabling  training  of  world-class  professionals,  creating  new  internationally  competitive 
high-added  value  knowledge  and  products,  promoting  high-tech  businesses,  advanced 
technologies  and  innovation  in  high-tech  industries  and  traditional  sectors  of  the 
economy, culture and social environment. On the 1 of April, 2014 the Government of the 
Republic of Lithuania approved the new edition of ’The concept of the establishment and 
development  of  integrated  science,  studies  and  business  centres (valleys)’.According  to 
the  Lithuanian  National  Reform  Program  2015,  the  implementation  of  4  projects  within 
the  ‘Valleys’  programme  was  completed  in  2014  and  some  use  of  research  equipment 
obtained through financed valleys in business can already be observed: 25 open access 
centres have been established, businesses are created, contracts for the performance of 
research  are  signed  with  foreign  companies.  However,  to  date  the  involvement  of 
enterprises in these projects has been limited and overall the investments resulted in the 
modernisation  of  public  research  infrastructures  rather  than  research-enterprise 
collaboration. 

70 

 
 
Innovative  clusters  development  comprises  a  set  of  measures:  Inocluster  LT  and  LT+ 
and Inogeb LT-3. The Inocluster set of measures started in 2010 with the aim to support 
cluster  infrastructure  development  activities  in  order  to  promote  open  innovation  and 
ensure  knowledge  and  technology  transfer.  The  cluster is  defined as the  agglomeration 
of at least five private legal entities, connected in the value chain and sharing common 
economic interests. Investments were earmarked for the support of activities related to 
the  formation  of  clusters  in  identified  technological  ‘breakthrough’  areas.  Among  the 
foreseen  support  areas  are  investment  into  the  cluster’s  training  and  research 
infrastructure, the cluster’s joint (open source) R&D infrastructure (laboratories, testing 
labs),  marketing  of  the  cluster  in  order  to  attract  new  members  (Paliokaite,  2014a). 
Positive examples of open innovation, when several companies establish an R&D cluster 
based around one export-oriented product is the Photovoltaic Technology Cluster which 
aims  at  developing  solar  energy  products  based  on  elements  produced  by  different 
companies. 

The  Inogeb  LT  group  of  measures  aimed  at  improvong  the  environment  for  knowledge 
and technology transfer and to facilitate science and business R&D cooperation. Inogeb 
LT-1  provided  support  services  for  SMEs,  Inogeb  LT-2  –  support  for  science  and 
technology park  infrastructure,  and  Inogeb  LT-3  promoted  innovative  business  creation 
and  entrepreneurship  (INOVEKS,Technostart).  The  measure  is  administered  by  the 
Lithuanian Business Support Agency (LVPA) and runs until 2015 (Paliokaite, 2014a). 

The  pilot  Innovation  vouchers  scheme  was  launched  in  2010  and  after  the  confirmed 
success  was  upgraded  to  the  Ino-vouchers  LT  scheme  in  2012  (the  annual  budget  is 
€1.65m).  The  value  of  one  innovation  voucher  is  up  to €5,792  (de minimis support  of 
80%). The voucher enables an SME to buy R&D expertise or knowledge from a research 
or  higher  education  institution.  Supported  activities  include industrial  or  applied 
research,  technological  development  (experimental  or  development,  design  and 
technological  works),  technical  feasibility  studies.  989  inno-vouchers  (€3.6m)  were 
funded in the period 2010-2014. 

The  State  also  implemented  a  SF-funded  measure  which  finances  researchers’ 
placements in SMEs through ’High qualification employee employment in enterprises’. 17 
researchers  and  four  companies  benefited  from  the  academia-industry  research 
placement/exchange  contracts  funded  by  this  measure.  Start-ups  (mostly  initiated  by 
in  an  ESIF-funded  project 
university 
‘Commercialisation  of  R&D  results’  aimed  at  fostering  commercialisation  of  public 
research results or initiating innovative start-ups. 

launched  by  MITA 

students)  were 

As  regards  newly  planned  measures,  ’Industrial  doctorates’  to  stimulate  intersectoral 
mobility  is  introduced  in  the  revised  Law  on  Higher  Education  and  Research  which  is 
pending  approval  in  the  Parliament.  The  Ministry  of  Economy  is  planning  to  launch  a 
measure aimed at compensation of the PhD process cost for private companies (e.g. in 
the  cases  when  an  SME  provides  a  supervisor),  and  the  Ministry  of  Education  tested  in 
2015 the revised Competitive Doctorate programme, whereby PhDs can be prepared in 
cooperation between a university and a company. Also, the Operational Programme for 
2014-2020  (1st  priority  –  ‘R&D  and  innovation  promotion’)  plans  to  finance  ’Joint 
initiatives’,  i.e.  two  or  more  complementary  collaboration  projects  which  involve  R&D 
activities  and  have  the  aim  of  creating  market-oriented  commercially  viable  prototypes 
of  technologies  and  products  with  high  value  added.  The  Ministry  of  Education  and 
Science has the instrument ‘Joint research-business projects’ to support projects eligible 
for  joint  initiatives  (allocated  €35.92m),  while  the  Ministry  of  Economy  adds  to  joint 
initiatives through the ’Intellect LT. Joint science-business projects’ instrument (planned 
funding €139m), which saw its first call launched in December 2015. However, it should 
be  noted  that  projects  will  be  implemented  in  two  separate  stages  which  increases  the 
risk  of  lack  of  complementarities  between  activities  carried  out  by  research  institutions 
and businesses. 

71 

 
 
 
Assessment 

Lack  of  a  proper  legal  base  for  commercialisation  of  scientific  projects,  information 
asymmetry, low research quality, and especially the insufficient in-house capabilities and 
the  passive  and  bureaucratic  stance  adopted  by  universities  combined  with  a  lack  of  a 
collaboration  projects  pipeline  led  to  below  average  cooperation  between  science  and 
business  (Paliokaitė  et  al.,  2011).  Despite  the  establishment  of 
intermediary 
organisations,  cooperation  between  industry  and  research  organisations  remains  at  a 
rather low level and success stories of technology transfer or commercialisation of public 
R&D are rare. Evaluation results (e.g. Paliokaitė et al, 2011; Visionary Analytics, 2014) 
have demonstrated that business-science collaboration is often more formal (in order to 
meet the eligibility criteria for funding) than real. The involvement of business partners 
in the valleys development process and especially in the valleys governance system has 
been  rather  limited.  The  existing  legal  framework  does  not  allow  private  enterprises  to 
become  stakeholders  in  the  newly  constructed  ‘open  access’  research  infrastructures, 
even though they can use them for R&D activities.  

Despite a large number of strategic documents and different measures, there is a lack of 
consensus  on  the  overall  logic  of  intervention  for  fostering  open  innovation  and 
knowledge  transfer.  Instead,  different  strategies  (and  their  institutional  ‘owners’)  focus 
on  separate  elements,  which  imply  a  risk  of  fragmentation.  One  problem  is  that  the 
‘clusters’  approach  fostered  by  the  Ministry  of  Economy  was  not  coordinated  with  the 
‘valleys’ approach encouraged by the Ministry of Education and Science. As a result, (a) 
there is a huge fragmentation  - 45 business clusters in a country as small as Lithuania 
(most  comprised  by  less  than  10  companies),  and  (b)  science  valleys  are  mainly 
university projects. 

Studies  (Technopolis  Group  and  Ernst  &  Young,  2014;  Paliokaitė  et  al,  2011,  among 
others)  reveal  that  the  current  measures  are  not  effective  enough  and  universities, 
research  institutes  and  their researchers  still  lack  motivation  to  commercialize  research 
and  work  with  industry.  One  negative  factor  is  a  huge  teaching  workload  of  the 
researchers, so they do not have time for R&D activities. The career system of university 
researchers  also  does  not  support  knowledge  transfer  to  industry.  This  system  rather 
supports indicators such as teaching hours, academic papers and similar, which does not 
provide incentives for researchers to build relationships with the industry. 

Successful  implementation  of  the  E-Science  Gate  services  should  contribute  to  the 
knowledge flows between the academia and the private sector. Concerning intersectoral 
mobility,  one  important  indicator  showing  the  lack  thereof  is  the  share  of  researchers 
working  in  the  public  sector  (76.9%  of  the  total  number  of  researchers  in  2014) 
(MOSTA,  2015c).  This  disproportion  alone  shows  that  the  mobility  of  researchers  from 
the public to the private sector and vice versa cannot be high. Yet, due to the definition 
of  researcher,  actual  number  of  employees  carrying  out  R&D  activities  in  the  private 
sector might be higher (see also section 4.4.2). However, with the planned introduction 
of  industrial  doctoral  studies  the  things  might  change  for  the  better  and  stimulate 
intersectoral mobility. 

5.8 

 Regulation and innovation 

Local level government is not responsible for R&I policy and therefore does not analyse 
the  impact  of  regulation  on  innovation.  Meanwhile,  the  central  government  more  often 
assesses impacts of specific funding programmes than the impact of regulation. Although 
certain  laws  require  ex-ante  assessment  of  their  effects  (e.g.  the  new  Law  on  Higher 
Education  and  Research),  the  process  of  assessment  is  not  always  transparent.  On  the 
other hand, the proposed Law on Innovation Promotion had ex-ante assessment carried 
out  by  Baltic  Legal  Solutions  Lithuania,  which  indicated  the  need  for  an  overarching 
regulation  of  R&D&I.  There  are  no  specific  requirements  to  assess  the  regulation  on 
innovation impacts ex-post, and usually only EU funded measures are evaluated. MOSTA 
consults  the  Ministry  of  Education  and  Science  concerning  the  impact  of  regulations  on 
research, but so far this is not highly systematic. Suggestions on how innovation policy 

72 

 
 
can be improved are suggested (as, for example, in the case of the development of the 
smart specialisation strategy), and at times these proposals are implemented. 

5.9  Assessment of the framework conditions for business R&I 

The  Law  on  Research  and  Higher  Education  defines  the  terms  R&D,  science  and 
technology  parks,  integrated  science,  studies  and  business  centres  (‘valleys’),  R&D 
institutes,  and  regulates  funding  and  governance  of  R&D.  The  Ministry  of  Economy 
started  a  debate  that  this  Law  and  the  subsequent  implementing  acts  apply  a  narrow 
and  inaccurate  definition  of  R&D  activities  (equated  with  ‘research’  only).  It  impacts  on 
the  related  policy  measures  and  institutional  as  well  as  competitive  R&D  funding.  As  a 
consequence, the experimental development (especially at the 6-9 technology readiness 
levels  (TRL),  i.e.  prototype  testing  and  pilot  manufacturing)  is  often  missing.  Studies 
(Visionary  Analytics,  2014)  note  that  companies  lack  the  financial  and  technological 
services  related  to  TRL  6-9.Also,  inaccurate  definition  of  R&D  may  have  led  to  ignoring 
important  parts  of  the  R&D  process  in  businesses,  therefore  leading  to  inaccurate 
statistics  of  business  R&D  expenditure  and  researchers  in  business.  One  proxy  proving 
drawbacks  of  the  narrow,  basic  research  dominated  definition  of  R&D  could  be  the 
decreasing number of companies using the R&D tax incentives (from 226 companies in 
2009  to  181  companies  in  2013)  and  the  decreasing  sums  which  are  considered 
deductible.  In  2013,  about  3  companies  per  one  thousand  registered  in  Lithuania  have 
used the R&D tax incentive.  

The Ministry of Economy took the argument that the promotion system is responsible for 
the extremely limited innovation results. It initiated the Innovation Promotion Law which 
was aimed at tackling the mentioned problems. The working group under the Lithuanian 
Government,  consisting  of  the  representatives  of  key  ministries  and  interested  parties, 
was formed in January 2015 to discuss the need for this new Law and the reform of the 
national  innovation  system,  but  actions  concerning  governmental  and  parliamentary 
approval of the Innovation Promotion Law were not taken. 

In  terms  of  the  overall  business  environment,  over  the  past  few  years  it  has  become 
much more favourable for starting and accelerating a business in Lithuania. For example, 
in 2013-2014 Lithuania made starting a business easier by eliminating the need to have 
a  company  seal  and  speeding  up  the  value  added  tax  registration  at  the  State  Tax 
Inspectorate. As a consequence of this and other measures, Lithuania ranks 24th (10th in 
the  EU-28)  in  the  World  Bank’s  Doing  Business  Rank  2015  and  11th  with  respect  to 
starting a business (2nd in the EU-28).  

The joint formulation, coordinated implementation and systemic evaluation of innovation 
policies  is  however  still  an  issue.  Strengthening  one  individual  factor  does  not  bring 
direct  benefits  if  the  whole  innovation  system  or  its  existing  relationships  and 
interactions  are  not  effective.  Not  only  the  institutional  structure  or  the  incentive 
structure  has  an  effect  on  the  productivity  of  the  innovation  system  productivity,  but 
also its’ actors, their skills and cultural features - trust, cooperation, openness level, the 
so-called  ‘social  capital’  (Visionary  Analytics,  2014).    Especially  the  implementation  of 
smart  specialisation  requires  a  systematic  approach  and  a  policy  mix  stepping  outside 
the boundaries of a single public policy. The Smart specialisation coordinating group has 
made  steps  in  a  good  direction,  as  it  provided  a  platform  where  stakeholders  had  to 
decide  on  the  new  policy  mix.  However,  so  far  it  is  not  clear  how  successful  such 
discussions  were,  since  interinstitutional  quarrels  played  a  role  in  drafting  the  policy. 
Nonetheless,  this coordination  group  will  continue  to  work  throughout  the  whole  period 
of  2015-2020  which  might  help  advance  co-ordination  of  R&I  policy  between  different 
institutions.  The  Strategic  Council  for  Research,  Experimental  Development  and 
Innovation  (SMIT),  which  also  serves  as  an  important  high-level  inter-institutional 
platform, may also aid in increasing cooperation. 

As  concluded  by  Visionary  Analytics  (2014),  lack  of  coordination  leads  to  huge 
fragmentation of instruments, programmes, institutions and infrastructures. As a result, 
the various institutions play (at least according to their official functions) a similar role - 

73 

 
 
for  example,  science  and  technology  parks,  technology  transfer  centres,  open  access 
centres, MITA, Lithuanian Innovation Centre and so on. All these institutions compete for 
scarce  funding,  making  it  impossible  to  provide  professional  services  or  to  attract 
qualified  professionals.  There  is  a  similar  fragmentation  of  functions  at  the  national 
agencies  level  (LVPA,  CPVA,  MITA,  LMT,  and  ESFA).  The  instruments  and  programmes, 
implemented over 2007-2013, were in general not coordinated, despite continued efforts 
to  do  so.  Therefore,  their  complementarity  was  relatively  limited.  There  was  lack  of 
effective  and  systematic  programme  management  mechanisms.  For  example,  even 
though  the  renewal  of  research  infrastructure  was  a  prerequisite  for  greater  industry-
academia  cooperation,  the 
in  an 
uncoordinated  manner  and  depended  on  the  universities’  interests  and  abilities.  Failure 
to  create  programme  management  capacities  for  the  implementation  of  smart 
specialisation  (i.e.  a  team/teams  in  one  of  the  implementing  bodies  responsible  for 
supervising  the  implementation  of  individual  priorities,  encouraging  cooperation, 
monitoring,  and  project  pipeline  development  and  so  on)  is  likely  to  lead  to  the  same 
problems in the new 2015-2020 period.  

‘valleys’  development  essentially  took  place 

In  2014,  the  joint  programming  processes  were  initiated  in  order  to  prepare  the  smart 
specialisation priorities’ implementation plans which define specific policy mixes per each 
priority.  It  is  too  early  to  say  if  the  joint  programming  goal  has  been  achieved.  For 
example,  the  Programme  on  the  Implementation  of  the  R&I  Priority  Areas  and  Their 
Priorities  provides  for  the  programming  of  ‘joint  initiatives’  (programming  a  pipeline  of 
several  related  R&D,  education,  infrastructure  projects  funded  by  several  sources)  in 
implementing  the  priorities.  In  February  2015,  the  joint  initiatives’  implementation 
procedure  was  approved  (amended  in  August  2015).  This  allows  launching  instruments 
that are based on joint initiatives logic, where a partnership between HEI/research 
institute and private sector/public body is a requirement.

74 

 
 
6.  Conclusions 

6.1  Emerging structural challenges of the national R&I system 

Most of the structural challenges of the Lithuanian R&I system remain unchanged since 
2014.  However,  new  critical  challenges  are  emphasized  in  this  report  –  the  need  to 
diversify  R&D  funding  sources,  and  skills  mismatches  (also  due  to  the  ageing  society) 
that  are  becoming  a  threat  to  the  innovative  economy  and  long  term  sustainability. 
Concerning  the  future  outlook  in  medium-long  term,  one  particular  challenge  seems  to 
be  emerging.  In  recent  years,  the  increase  in  R&D  expenditures  was  very  small,  and 
targets  set  in  Europe  2020  will  most  likely  not  be  met  unless  significant  changes  take 
place. It was projected that GERD should reach at least 1.9% of GDP by 2020. However, 
with the current rate of growth in R&D expenditure, it is not likely that Lithuanian GERD 
will meet the target in the said year. The target for BERD (0.9%) set in national policy 
documents  will  most  likely  not  be  met  either  by  2020.  Overall,  this  is  an  issue  for 
concern not only because the aim will not be achieved, but because business investment 
in  R&D  is  stagnating  at  around  0.25%  -  0.3%  of  GDP.  Without  increasing  business 
investment it is doubtable that outputs of R&I activities will increase both in quality and 
in  quantity.  Furthermore,  the  main  burden  of  financing  R&I  will  lie  on  the  national 
government, which is prone to budgetary constraints especially during economic shocks. 
A key driver of the problem for Lithuania in this area is its dependence on EU funds. As 
shown in chapter 3, this source of funds plays a very important role with respect to total 
R&D  expenditures  in  the  country.  Over-reliance  on  EU  ESIF  and/or  resources  from  the 
national  budget  can  lead  to  stagnation  of  the  R&I  system  in  the  long-run.  Lithuania’s 
GDP  per  capita  is  approaching  75%  of  the  EU  average.  2020  may  mark  a  possible 
tipping  point  after  which,  due  to  decreased  funds  from  the  Commission,  R&I  activities 
might  not  only  stagnate  but  diminish.  Therefore,  it  is  important  that  the  policy  mix  for 
2015-2020 actually manages to increase R&D funding from sources other than EU ESIF, 
be it business, private non-profit sector or international funds other than ESIF. 

For  example,  funds  from  abroad  (other  than  ESIF)  can  give  significant  push  both  to 
intensifying R&I activities and finding new areas for research. However, the public R&D 
system  can  be  characterised  as  rather  closed  with  limited  institutional  incentives  and 
targets  for internationalisation.  Additional  support  mechanisms  could be  needed for the 
research pools to encourage further collaboration with European peers. Equally, Horizon 
2020  can  offer  more  value  for  the  emerging  high-growth  potential  fields/companies  to 
increase  their  international  competitiveness.  This  future  challenge  is  closely  related  to 
more  pressing  challenges  that  are  discussed  in  the  executive  summary  section  of  the 
report.  If  solutions  to  them  are  found,  it  is  likely  that  by  2020  the  lack  of  funds  for 
research will not be as severe as it could be if these current challenges are not solved. 

6.2  Meeting structural challenges 

As discussed above, there is an emerging future challenge of significant decrease in R&I 
funding by 2020, and measures should be taken to prevent this. R&I policy should aim 
at stimulating R&D investments from the non-governmental sectors, especially the funds 
coming from local and foreign business and international sources other than ESIF. Such 
diversification requires separate measures targeting separate types of economic agents. 
Local  business  should  be  encouraged  to  spend  more  on  R&D,  private  R&D  activities 
should  complement  rather  than  displace  private  investment.  However,  successfully 
meeting the more pressing challenges would also help reduce this future challenge. The 
following table provides the assessment on the remaining gaps in the current policy mix. 

75 

 
 
 
Table 8 Assessment of the Lithuanian R&I policy mix 

Challenges  

Policy  addressing 
the challenge 

1. Private 
sector R&I 
capacity 
building 

Restructuring the 
economy towards 
higher value 
added creating 
sectors is the 
overarching R&I 
policy objective.  

Grants to 
business R&D 
(Idea LT, Intellect 
LT/LT+) 

Inogeb 
LT1/LT2/LT3 

Tax incentives for 
R&D intensive 
companies. 

JEREMIE co-
funded VCs 

2. Skills 
supply and 
demand 
mismatches 

Upgrade of study 
programmes 

Researchers 
placements 

Competence 
maps and 
forecasts 

in 

Assessment 
effectiveness,  with 
recommendations 

terms  of  appropriateness,  efficiency  and 
remaining  gaps  and  policy 

focus  on 

Although  some  of  the  measures  in  the  new  policy  mix  aim  at 
achieving  (some  of)  these  goals,  there  is  not  much  difference 
from  the  policy  mix  of  2007-2013.  One  key  novelty  is  planned 
implementation 
policies. 
Recommendations: 
 Establish a more balanced policy mix by increasing the focus on 

innovation 

demand 

side 

of 

extending the number of R&D and innovation performers 
among companies - focus on newcomers (start-ups, spin-offs, 
knowledge-based foreign investments), and encouraging 
previously non-innovative companies to transform their 
businesses towards higher value added activities. 

 Different types of policy interventions at different pace (‘two-

tier’ process). While the potential innovators (e.g. companies in 
traditional industries looking for new business models) would 
benefit from ‘soft’ innovation support and smaller 
experimentation projects, mature innovators (larger R&D based 
SMEs, e.g. biotech or laser tech companies) could immediately 
start with larger and more long term innovation projects 
combining various funding sources. 

 This means that in the new period the policy spotlight has to 

move from ‘hard’ infrastructure development to ‘soft’ capacity 
strengthening. ‘Soft’ innovation promotion services, innovation 
brokering/scouting, platforms for rapid experimentation 
(demonstrations, piloting, etc), mentoring and pipeline 
facilitation via technical assistance and support are necessary 
preconditions for higher absorptive capacities of potential 
innovators.  

 To speed up the development of the high tech sector, 

innovation policies need to open for newcomers through start-
ups, spin-offs acceleration, mentoring and start-up/seed 
funding as well as targeted FDI attraction. Start-up policies 
should be based on private funds with strong mentorship 
assistance. Preserving ineffective systems (e.g. science parks, 
incubators) is sometimes more costly than giving the funds for 
the market (e.g. in the form of vouchers). 

 Implement smart demand-side policies and ensure capacity 

building (awareness raising, training and pilot-testing). LMT has 
already started implementing demand-led Purposive Research 
Projects, and pre-commercial procurement is also planned in 
the period of 2015-2020. 

 Also, new innovation forms (not only hard technological, but 

also managerial service organisational innovations) need to be 
accepted and related innovation management skills need to be 
strengthened. 

 Structural reform of the education and research system, e.g. 
systemic review of the study programmes (starting with basic 
education, also in line with STEAM policies), introduce 
incentives for optimizing the number of universities, opening up 
public R&D and HE systems and staffing policies at the 
institutional levels to attract talent (researchers, lecturers, PhD 
students) from abroad, and introducing serious incentives for 
life-long learning. The new policy mix for 2015-2020 involves 
attracting researchers, PhD students, academics from abroad, 

76 

 
 
 
Challenges  

Policy  addressing 
the challenge 

STEAM 
programme by 
the Ministry of 
Education and 
Science 

3. 
Commercializi
ng public 
sector 
research 
results 

 Technology 
transfer 
centres, 
technology 
incubators and 
S&T parks. 
 Support for 
protecting 
intellectual 
property.  
 Innovation 
vouchers 
 Support for 

clusters 

 Valleys (open 

access centres, 
S&T parks etc) 
 Joint initiatives  

in 

Assessment 
effectiveness,  with 
recommendations 

terms  of  appropriateness,  efficiency  and 
remaining  gaps  and  policy 

focus  on 

and attracting R&D related FDI. 
 Liberalization of labour relations. 
 Implement business researchers’ (incl. engineers, 

technologists) international training and apprenticeships 
measures.  

 Encourage postgraduate student placements in enterprises. 

Implement Industrial Doctorates programmes. New policy mix 
and proposed amendments to the Law on Higher Education and 
Research attempt to do this. Specific measures aim at 
attracting foreign researchers (albeit mostly to public HEIs and 
research institutes), and the concept of industrial PhD is 
pending parliamentary approval.  

 At the same time, given the demographic challenges and the 
limited supply of high quality labour force, Lithuania should 
start designing smart immigration policies, e.g. attracting 
specialists and business from abroad. Encourage foreign 
researchers and high-level specialist recruitment at the 
Lithuanian companies, clusters and R&D institutions. 

 The State should review existing innovation support structures. 
For example, some clusters can become part of the existing 
science and technology parks (STPs). In some cases, science 
parks could lead the activities of clusters. The strongest 
organization can become a project leader of ‘joint project’ or 
‘joint initiative’. Institutions should substantially strengthen 
their human resources. The proactive approach needs to be 
employed. Clusters’ R&D infrastructure should become available 
to all interested parties. 

 The new R&D infrastructure investments should be limited 

strictly with the requirement for the actual and strategic R&I 
collaboration between research and business community, incl. 
demonstration of strong industry commitment. The new policy 
mix includes several infrastructures that will get investment in a 
non-competitive way. For competitive funding of RI, both 
business and public RIs will be financed, however, it is not clear 
whether synergies will be sought with these measures or not. 
 Development of RIs or technology/competence centres should 

be more clearly linked to the clusters projects and soft 
measures for networks, R&I collaboration and capacity building. 
In order to achieve economies of scale by using funding of 
various state institutions, it is advisable to focus on larger 
rather than small-scale projects. It is currently not clear if this 
will be implemented in the new policy mix. Although there are 
measures aiming at capacity development and joint business-
science projects, it is not yet clear how successful will they be 
and whether they will differ in scope from those of the previous 
programming period. It is still not clear what specific role will be 
played by ‘valleys’. 

 Researchers’ contracts should specify the allocation of time 

between teaching and R&D as well as remuneration options in 
case of successful applied R&D or R&D commercialisation. The 
researcher should be able to choose between two career 
directions: teaching and performing R&D (with possible division 
between scientific research and experimental development). 
The researchers’ career rules and performance requirements 
should be revised accordingly. A similar change should occur 

77 

 
 
Challenges  

Policy  addressing 
the challenge 

in 

Assessment 
effectiveness,  with 
recommendations 

terms  of  appropriateness,  efficiency  and 
remaining  gaps  and  policy 

focus  on 

throughout the institutional level, i.e. institutional funding 
criteria should be updated. It is necessary to change the basic-
science/science push dominated approach and revise the 
definition of R&D in the official legislation. No such changes are 
expected in the nearest future, and the problem of time division 
between teaching, research and administrative activities will 
further be a burden for researchers. 

4. Reduce 
fragmentation 
and improve 
policy 
capacities 

National Progress 
Programme 
2014-2020. 

Strategic 
Research and 
Innovation 
Council (SMIT) 
and Innovative 
Economy Council 
(IET). 

Smart 
Specialisation 
process 2013-
2014. 

The Strategic 
Planning 

Introduction of SMIT or a list of strategies does not automatically 
solve the policy coordination problems. The structure of the mid-
term  policy  documents,  policy  measures  and  agencies  remains 
very  fragmented.  A  systemic  and  consistent  initiative  has  to  be 
taken  to address this challenge.  Sound  and  inclusive governance 
set-up  should  allow  for  orchestrated  implementation  of  a  2014-
2020 smart specialisation policy framework: 
 Interinstitutional coordination of smart specialisation strategy 

should be used to strengthen ties and open collaboration 
between different institutions. This especially applies to the 
Ministry of Education and Science, and the Ministry of Economy 
which often have distinct positions towards R&I policy. RIS3 
strategy might not be enough; it also needs supportive 
governance processes. In practice, it also means that there has 
to be one coordinating centre assigned with a responsibility to 
monitor synergies and review how successful are the different 
priorities in moving from stage to stage in the implementation 
process. Currently, a coordinating group manages the whole 

78 

 
 
Challenges  

Policy  addressing 
the challenge 

Methodology. 

Analyses and 
Evaluations and 
studies 
performed by 
MOSTA and 
MITA. 

in 

Assessment 
effectiveness,  with 
recommendations 

terms  of  appropriateness,  efficiency  and 
remaining  gaps  and  policy 

focus  on 

smart specialisation process. However, it does not manage 
instilling cooperation rather than simply serving as a forum for 
identification of consensus position.  

 Orchestration of policies affecting R&I performance in the 

priority areas would require both strengthened policy 
coordination and informed policy design processes. R&I 
monitoring and analysis of innovation performance (esp. on the 
business side), ex ante and ex post policy evaluation capacity, 
foresight capacity need to be increased substantially and 
assisted by consultations with the main stakeholders and actors 
in the innovation system. MOSTA and the Ministry of Economy, 
responsible for monitoring and evaluation of Lithuania’s smart 
specialisation strategy implementation are still developing the 
methodology, but impact evaluation is one of its cornerstones. 
 Sufficient attention and adequate resources should be granted 
to effective programme management. The focus should be on 
simplification, reducing administrative load, abandoning the 
risk-averse and process-oriented approach, strengthening the 
implementation capacity in the agencies (strong programme 
management skills - teams responsible for the implementation 
of the smart specialisation priorities and supervision of project 
pipeline initiation). 

 Systemic review of the existing agencies and coordination 

model and related functions (especially taking into account the 
approaching challenges of post-2020 period). Decisions have to 
be made in order to optimize the network of 
agencies/institutions, to reduce fragmentation and to install 
strong strategic capacities such as effective coordination, 
strategic intelligence and systemic programme management.  

Sources: Paliokaitė (2015a, 2015b), Visionary Analytics (2014, 2015). 

79 

 
 
 
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81 

 
 
 
Abbreviations 

BERD  –  Business  Expenditures  for  Research  and  Development  /  Verslo  sektoriaus 
išlaidos MTEP 
BES – Business Enterprise Sector / Verslo sektorius 
BIF – Baltic Innovation Fund / Baltijos investicijų fondas 
BSR – Baltic Sea Region / Baltijos jūros regionas 
CPVA – Central Project Management Agency / Centrinė projektų valdymo agentūra 
EIF – European Investment Fund / Europos investicijų fondas 
ERA – European Research Area / Europos tyrimų erdvė 
ERA NET – European Research Area Network / Europos tyrimų erdvės tinklas 
ESA – European Space Agency / Europos kosmoso agentūra 
ESFA – European Social Fund Agency / Europos socialinio fondo agentūra 
ESIF  –  European  Structural  and  Investment  Funds  /  Europos  struktūriniai  ir  socialiniai 
fondai 
ESFRI  -  European  Strategy  Forum  on  Research  Infrastructures  /  Europos  strateginis 
mokslinių tyrimų infrastruktūrų forumas 
ETC – European Territorial Cooperation / Europos teritorinis bendradarbiavimas 
EU – European Union / Europos Sąjunga 
EU28  –  European  Union  Including  28  Member  States  /  Europos  Sąjunga  apimant  28 
Valstybes Nares 
EUSBSR  –  European  Union  Strategy  for  the  Baltic  Sea  Region  /  Europos  Sąjungos 
strategija Baltijos jūros regionui 
FDI – Foreign Direct Investment / Tiesioginės užsienio investicijos 
FP – Framework Programme / Bendroji programa 
FP7 – 7th Framework Programme / Septintoji bendroji programa 
FTE – Full-Time Equivalent / Visos dienos ekvivalentas 
GBAORD  –  Government  Budget  Appropriations  or  Outlays  on  R&D  /  Valstybės  biudžeto 
asignavimas ar išlaidos MTEP 
GDP – Gross Domestic Product / Bendrasis vidaus produktas 
GEM – Global Entrepreneurship Monitor / Pasaulinė verslumo stebėsena 
GERD – Gross Domestic Expenditure on R&D / Visos išlaidos MTEP 
GOV – Government sector / Valdžios sektorius 
HEI – Higher Education Institution / Aukštojo mokslo institucija 
HERD – Higher Education Expenditure on R&D / Aukštojo mokslo išlaidos MTEP 
HES – Higher Education Sector / Aukštojo mokslo sektorius 
ICT – Information and Communication Technologies / Informacinės ir ryšių technologijos 
IP – Intellectual Property / Intelektinė nuosavybė 
IPR – Intellectual Property Rights / Intelektinės nuosavybės teisės 
IUS – Innovation Union Scoreboard / Inovacijų sąjungos švieslentė 
JPI – Joint Programming Initiative / Jungtinio programavimo iniciatyva 
KEF – Knowledge Economy Forum / Žinių ekonomikos forumas 
KTU – Kaunas University of Technology / Kauno technologijos universitetas 
LMA – Lithuanian Academy of Sciences / Lietuvos mokslų akademija 
LMT – Research Council of Lithuania / Lietuvos mokslo taryba 
LIC – Lithuanian Innovation Centre / Lietuvos inovacijų centras 
LT  VCA  –  Lithuanian Private  Equity  and  Venture  Capital  Association  /  Lietuvos rizikos  ir 
privataus kapitalo asociacija 
LVPA – Lithuanian Business Support Agency / Lietuvos verslo paramos agentūra 
MITA  –  Agency  for  Science,  Innovation  and  Technology  /  Mokslo,  inovacijų  ir 
technologijų agentūra 
MOSTA  –  Research  and  Higher  Education  Monitoring  and  Analysis  Centre  /  Mokslo  ir 
studjų stebėseno ir analizės cetnras 
MS – European Union Member State / Europos Sąjungos valstybė narė 
NCP – National Contact Points / Nacionaliniai kontaktai kreipimuisi 
NPR – National Reform Programme / Nacionalinė reformų darbotvarkė 
OP – Operational Programme / Veiksmų programa 

82 

 
 
PNP – Private Non-Profit Sector / Privatus pelno nesiekiantis sektorius 
PRO – Public Research Organisation / Vieša mokslinių tyrimų organizacija 
R&D – Research and Development / Moksliniai tyrimai ir eksperimentinė plėtra 
R&I – Research and Innovation / Moksliniai tyrimai ir inovacijos 
RI – Research Infrastructure / Moskslinių tyrimų infrastruktūra 
RIS3 – Research and Innovation Strategies for Smart Specialisation / Mokslinių tyrimų ir 
inovacijų strategijos Sumaniai specializacijai 
S&T – Science and Technology / Mokslas ir technologijos 
SME – Small and Medium-Sized Enterprises / Mažos ir vidutinio dydžio įmonės 
SMIT  –  Strategic  Council  for  Research  and  Innovation  /  MTEP  ir  inovacijų  strateginė 
taryba 
STEAM – Science, Technology, Engineering, Arts and Mathematics / Matematika, gamtos 
mokslai, technologijos, inžinerija ir kūrybiškumas 
STP – Science and Technology Park / Mokslo ir technologijų parkas 
TRL – Technology Readiness Level / Technologijų parengtumo lygis 

83 

 
 
List of Figures 

Figure  1 Overview of Lithuania’s research and innovation system governance structure
 ....................................................................................................................... 17 

Figure 2 Government deficit and public debt ......................................................... 26 

Figure 3 Development of government funding of the total GERD .............................. 26 

Figure  4  R&D  appropriations  and  government  funded  GERD  in  millions  of  national 
currency, as % of GDP and as % of government expenditure ................................... 27 

Figure 5 Government intramural expenditure by sectors of performance ................... 28 

Figure 6 Fiscal consolidation and R&D .................................................................. 29 

Figure  7  BERD  intensity  broken  down  by  most  important  macro  sectors  (C= 
manufacture, G_N=services, Q=Human health and social work activities) .................. 40 

Figure 8 BERD by source of funds ....................................................................... 40 

Figure  9  BERD,  top  sectors  in  manufacturing  (C20=chemicals  and  chemical  products; 
C21=basic  pharmaceutical  products  and  pharmaceutical  preparations;  C26=computer, 
electronic and optical products). ........................................................................... 41 

Figure  10  top  service  sectors  (J=information  and  communication,  K=  financial  and 
insurance activities, M=professional, scientific and technical activities). ..................... 42 

Figure 11 economic sectors as percentage of the total GVA. ................................... 43 

Figure 12 GVA in manufacturing. ........................................................................ 44 

Figure  13 value added at factor cost for the leading manufacture and service sectors in 
Figures 9 and 10 ................................................................................................ 44 

Figure 14 BES-funded public R&D in LITHUANIA as % of GERD (in €MLN) and % of GDP
 ....................................................................................................................... 65 

Figure  15 BES-funded public R&D as % of GERD and as % of GDP in 2013 in Member 
States .............................................................................................................. 66 

Figure  16  Structural  Funds  for  core  R&D  activities  2000-2006,  2007-2013  and  2014-
2020. We use the categories: 182 (2000-2006), 03 and 04 (2007-2013) and 062 (2014-
2020) as proxies for KT activities. ........................................................................ 67 

Figure 17 CIS survey 2012 – share of enterprises cooperating with academia ........... 68 

Figure 18 Co-publications by field 2003-2013 in Lithuania. Scopus database ............. 69 

84 

 
 
 
 
List of Tables 

Table 1 Main R&I indicators 2012-2014 ................................................................ 14 

Table 2 R&D&I priorities identified in Lithuania’s smart specialisation strategy ........... 22 

Table 3 Basic indicators for R&D investments ........................................................ 25 

Table 4 Key Lithuanian R&D Indicators ................................................................. 26 

Table 5 Public Funding from Abroad to Lithuanian R&D (in millions of national currency)
 ....................................................................................................................... 28 

Table 6 Main R&I related funds transferred to the beneficiaries, 2014 ....................... 32 

Table 7 Main science output indicators ................................................................. 47 

Table 8 Assessment of the Lithuanian R&I policy mix ............................................. 76 

85 

 
 
 
 
 
Annex 1 – List of the main research performers 

Main public R&D performers, based on publications 

Rank 

Institution 

Vilnius University 
1. 
Kaunas University of Technology 
2. 
Vilnius Gediminas Technical University 
3. 
Mykolas Romeris University 
4. 
Vytautas Magnus University 
5. 
Lithuanian University of Health Sciences 
6. 
Šiauliai University 
7. 
Klaipėda University 
8. 
Aleksandras Stulginskis University 
9. 
10-11.  Centre for Physical Sciences and Technology 
10-11.  Lithuanian University of Educational Sciences 

Source: MOSTA (2014b) 

Number of 
publications33 
8191 
4957 
3809 
3360 
2655 
2633 
1647 
1408 
1336 
1145 
1145 

33 Number of publications is taken from MOSTA (2014b) and covers 2009-2013. Due to total publication count being 
aggregated from data on separate fields of science, some publications might be counted more than once. 

86 

 
 
 
 
                                          
Annex 2 – List of the main funding programmes 

Name of the funding 
programme 

Technoinvest 
Smartinvest LT 
Smartinvest LT+ 

Innovation vouchers 
Intellect LT. Joint 
science-business 
projects 
Process LT 
R&D infrastructure 
development and 
integration into 
European 
infrastructures 
R&D results’ 
commercialisation and 
internationalization 

Competence centre 
and innovation and 
technology transfer 
centre promotion 
Development of 
competences centres 
Purposive research in 
smart specialisation 
areas 

Independent R&D 
projects 

Strengthening of 
capabilities of 
scientists and other 
researchers’ groups 
Support for activities 
of scientists, other 
researchers, and 
students’ research 
Improving 
qualifications of 
scientists and other 
researchers in 
knowledge-intensive 
enterprises 
Intellect LT 
Promotion of High-
Level International 
Scientific Research 
Support of scientists 
and researchers 
mobility and students 
scientific work 
Improvement of the 
Qualifications and 

Timeline 

Budget 

Target group 

2016- 
2016- 
2016- 

2016- 
2016- 

2016- 
2016- 

€17.6m 
€5.8m 
€43.4m 

€10.1m 
€139.0m 

€8.7m 
€188.0m 

2016- 

€13.0m 

2016- 

€26.1m 

2016- 

2016- 

2016- 

2016- 

€8.7m 

€44.9m 

€35.9m 

€43.0m 

2016- 

€68.4m 

2016- 

€2.9m 

2008-2015 
2008-2015 

€60.3 m 
€13.8m 

2008-2015 

€36.7m 

2008-2015 

€21.2m 

87 

Enterprises 
Enterprise Lithuania 
Foreign enterprises, 
enterprises controlled 
by foreign business 
Private legal entities 
Private legal entities 
(public legal entities in 
special cases) 
SMEs 
Research and higher 
education institutions, 
three budgetary 
entities 

Research and higher 
education institutions, 
private legal entities if 
research and higher 
institution is its 
stakeholder 
Research and higher 
education institutions 

Research and higher 
education institutions 
Public legal entities 
acting in the field of 
research and higher 
education 
Research and higher 
education institutions, 
university hospitals 
LMT, KTU, MITA, LMA, 
MOSTA 

Public legal entities 
acting in the field of 
research and higher 
education or education 
SMEs 

Individual enterprises 
Public  research and 
higher education 
institutions 
Public  research and 
higher education 
institutions, Lithuanian 
Research Council 
Higher education 
institutions, Lithuanian 

 
 
Name of the funding 
programme 

Competencies of 
Scientists and 
Researchers (scientific 
databases, e-
documents) 
Support to the 
scientific work of 
scientists and other 
researchers (Global 
Grant) 
National  Research 
Programme ‘The State 
and the Nation:  
Heritage and Identity’ 
National Research 
Programme ‘Social 
Challenges to National 
Security’ 
National Research 
Programme ‘Chronic 
non-infectious 
diseases’ 
National Research 
Programme ‘Future 
Energy’ 
National Research 
Program ‘Ecosystems 
in Lithuania: climate 
change and human  
impact’ 
National Research 
Programme ’Healthy 
and safe food’ 
National Lituanistics 
development 
programme for 2009-
2015 
Idea LT 

Timeline 

Budget 

Target group 

Research Council and 
Lithuanian Research 
Library Consortium 

2008-2015 

€33.2m 

Researchers 

2010-2014 

€4.8m 

2010-2014 

€2.8m 

2010-2014 

€5.8m 

2010-2014 

€5.0m 

2010-2014 

€5.8m 

2011-2016 

€4.6m 

2009-2015 

€9.7m 

Public  research and 
higher education 
institutions 

Public  research and 
higher education 
institutions 

Public  research and 
higher education 
institutions 

Public  research and 
higher education 
institutions 
Public  research and 
higher education 
institutions 

Public  research and 
higher education 
institutions 
Public  research and 
higher education 
institutions 

2008-2015 

€4.3 m 

SMEs 

Intellect LT + 
Inocluster LT 
Inocluster LT+ 
Inogeb LT-1 
Inogeb LT-2 
Inogeb LT-3 
Ino-vouchers LT  

2008-2015 
2008-2015 
2008-2015 
2008-2015 
2008-2015 
2008-2015 
2012-2015 

€69.8 m 
€3.6 m 
€18.9 m 
€6.4m 
€35.2 m 
€9.3m 
€3.5 m 

Individual enterprises 
Individual enterprises 
Individual enterprises 
Technology parks 
Technology parks 
Technology parks 
SMEs and research 
institutions 

88 

 
 
 
 
 
Annex 3 – Evaluations, consultations, foresight exercises 

1.  The  process  for  identifying  the  national  R&I  priorities  and  drafting  the  Smart 
Specialisation Strategy for 2014-2020. More at: http://www.mosta.lt/en/reports-
and-analyses  

2.  Visionary Analytics (2014). The High Technologies Development Feasibility study. 
3.  Technopolis Group and Ernst&Young (2014). The valleys project reports. 
4.  MOSTA  (2015).  Evaluation  of  Social  and  Economic  Return  on  Investment  in 

Research and Development. 

5.  MOSTA  and  LMT  (2015).  Lithuania:  Research  Assessment  Exercise.  More  at: 

http://www.mosta.lt/en/research-assessment-exercise  

6.  Ministry  of  Economy,  KEF  (2015).  Initial  Assessment  of  Lithuanian  Innovation 

Policy report. Not published 

7.  Baltic Legal Solutions Lithuania (2015). Ex-ante Assessment of the Impact of Law 

on Innovation Promotion project on Business Conditions. 

89 

 
 
 
 
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doi:10.2791/049440 

ISBN 978-92-79-57881-6