Globalization of R&D and economic development: policy lessons from Estonia

Proceedings of the Expert Meeting, Geneva, 24-26 January 2005

Globalization provides ample opportunities for a more efficient international division of labour, thus contributing to a rise in living standards. The benefits of opening up markets depends on the policy measures implemented in individual countries in response to the strong pressures created by globalization to change existing specializations. There is a role for the State to play in creating positive externalities that would allow domestic enterprises move gradually to more knowledgeintensive, higher value-added activities. Labour, education and innovation policies, focused on some key technologies and supported by industrial policies, can potentially allow for structural changes in the economy, increase innovative capacities of the industry and, finally raise living standards