The structure of Latvia's exports still shows low added value in many sectors, stated in an interview with the LETA agency the chairman of the Fiscal Discipline Council (FDC), professor at the University of Latvia and dean of the Faculty of Economics and Social Sciences, Janis Priede.
"This means that in many cases, volume prevails over quality. The question of how to implement principles of higher added value remains on the agenda," said Priede.
He reminded that it should not be forgotten that Latvia is a small open economy. At the same time, according to Priede, we should not underestimate ourselves — although we are small, we are potentially very capable and can achieve a lot. The areas that he believes would be interesting to focus on and where the state should think strategically are future technologies and how Latvia as a country can act or at least participate in these processes.
The head of the Fiscal Discipline Council noted that fundamental sectors — food, woodworking, and others — will not disappear, as people will always want to eat, and wood will always find application in many areas. However, even in these sectors, according to Priede, higher added value and innovation are possible.
"Wood is not just round timber as a resource; it can be used to create innovative materials for construction. There are many companies in Latvia that have advanced so far in their innovations that they have created materials for which applications are yet to be found. This is another question — how to justify and how to sell very innovative products," said Priede.
He also expressed the opinion that Latvia should pay attention to those areas that are currently rapidly developing, such as artificial intelligence and quantum technologies. According to Priede, Latvia definitely has opportunities in these fields. In the field of quantum physics, researchers in Latvia work at leading scientific universities, and our discoveries have laid the foundation for many subsequent discoveries worldwide.
Priede emphasized that it is necessary to strategically assess which technologies will surround us in the future and which should be focused on. For example, artificial intelligence, data centers, various types of digital services, social networks, and others. Priede reminded that currently, products and services from American companies are mainly used in Europe.
"Large technology companies have already announced their intention to invest serious amounts in these technologies. In my opinion, Europe should respond with mirror steps, otherwise we risk falling behind," said Priede.
He also pointed to productivity as a reserve for Latvia. Latvia has reached about 70% of the average productivity level of the European Union (EU). This means that much of what we do is not efficient enough, emphasized Priede. That is why tools of artificial intelligence and other digital technologies, in his opinion, are actually a matter of productivity — it is an opportunity for us to earn more.
"Overall, I look optimistically: there are indeed excellent companies in Latvia that demonstrate a very high level both in innovation and productivity. And through these good examples, these flagships, we need to understand what state policy contributes to this development and how to support it in other sectors," said Priede.
