Innovation policy in the context of nowadays globalisation

Abstract

needed as the global competition weakens the profitability of the existing industries. Highlevel research and education, good infrastructure, and public research and development (R&D) support are identified as promoting mechanisms. Domestic market would support business of SME’s significantly. General innovation policy (e.g., tax reliefs for R&D) may provide good starting points for many fields but their growth is often hindered by factors that are specific to one or a few industries. It is essential to analyze variables of a theoretical Brouwer’s mathematical model for analysing the sales of new products. A higher R&D intensity results in higher sales of new products. R&D subsidies reduce the fixed costs of introduction. A major R&D policy instrument should be a general tax-credit facility to lower the labour costs of R&D personnel. One of purposes of the innovation policy must be to reduce the R&D costs of companies, in particular those of SMEs. Subsidies, including the tax-credit facility, reduce the costs of introducing new products into the market. Aim of the research is to analyse mentioned above areas of innovation policy in context of Latvia.