Research agreement signed pegging R&D spending to gross domestic product
The leaders of Estonia's political parties as well as research institutions and business associations signed the so-called research agreement in Tallinn on Wednesday. The agreement fixes public sector investment into research and development to at least 1% of Estonia's gross domestic product.
The agreement was signed at the Office of the President in Kadriorg. Press representatives stressed that the idea is to also maintain spending on R&D at the prescribed level in the future.
In practice, this means that the Riigikogu will have to include this aim in the coming budgets, which means that next year's budget strategy will have to be changed accordingly. As the agreement was signed by the chairwomen and chairmen of all of Estonia's political parties, a potential change of government after the general election on 3 March next year likely wouldn't derail the plan.
Public sector spending on R&D will then be increased to reach 1% of GDP over the next three years. The contribution of Estonia's research institutions will be to provide the sort of infrastructure and administrative organisation needed to purposefully invest the additional funds, and to support the creation of ties between businesses and the public sector to make this possible.
The allocation of public sector funds in this context needs to be to actual research projects rather than institutional budgets, and also keep in line with priorities set out for the Estonian economy and society.
Lack of private sector investment in R&D bigger issue
With the signing of the research agreement, Estonia's business associations declare their readiness to commit to making the economy more innovative and to also work towards a more effective cooperation with Estonia's science research institutions.
President of the Estonian Academy of Sciences, Tarmo Soomere, pointed out earlier this week (link in Estonian) that what is actually needed is for the private sector to increase its contribution to R&D.
Of all the money invested into research, two thirds would actually have to come out of the private sector. "Estonia's problem is that we have a weak private sector that isn't able to invest," Mr Soomere pointed out.
He added that the actual aim has to be 3% of GDP with 2% funded by the private sector. "Those 2% are the real pain point," he said.
Still, there is reason for optimism. Though reaching this goal may take time, it is within reach, Mr Soomere said. For now, the most likely source of private-sector investment into R&D lies abroad, with already more than a third of 2017's total sum of €133.4 million going back to foreign companies.
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Editor: Dario Cavegn
