Programme Agreement signed for the Business development, Innovation and SMEs programme in Latvia

The programme agreement for Latvia Innovation was signed on 14 July 2020.

Key information about the programme

  1. The programme is operated by: The Investment and Development Agency of Latvia (LV).

  2. The Donor Programme Partner in this programme is: Innovation Norway (IN NO).

  3. The programme objective is: Increased value creation and sustainable growth.

  4. The programme funding amounts to € 12.5 million (excluding co-financing) and is funded entirely by the Norway Grants.

Why is the programme needed?

  • the business structure of Latvia is mostly made up of micro enterprises and SMEs with limited capacity to invest in R&D, including lack of knowledge and entrepreneurial skills of companies on the role of innovation in business development and competitiveness;
  • Latvian industrial structure is mainly characterised by low-tech companies the share of both medium-high and high-tech companies is 15% of the total manufacturing sector, while the corresponding EU average is 47%;
  • insufficient cooperation and coordination between science, technological development and innovation organisations and the manufacturing sector;
  • funding gaps in access to finance, especially for SMEs, to develop new products and technologies, that enhance more green, digital and inclusive economy;
  • insufficient participation in global value chains for boosting productivity through knowledge transfer and intensive use of technologically advanced inputs;
  • insufficient industrial base for development of new products, weak uptake of technology in SMEs

What will the programme achieve and who are the beneficiaries?

The Programme will support SMEs to achieve the overall objective - increased value creation and sustainable growth. In the area of GII, the Programme will mainly focus on sustainable, green growth and circular economy. Additionally, the Programme will address welfare technology and development of innovative ICT solutions and products.

The expected long-term impacts of the Programme are Increased value creation and sustainable growth. This objective will be reached by the modalities of the Programme, that ensures availability of the Norway grants to a wide range of SMEs. Start-ups and micro enterprises will mainly be able to participate in the Tech Business Centre (TBC) and small grant schemes to develop innovative products and technologies. Medium enterprises can apply in the call for proposals (main call) to conduct research activities and start the production of new products.

The programme aims to increase the competitiveness of enterprises in Latvia and is expected to lead to the development of 39 products and technologies. This will contribute to a higher value creation and will facilitate sustainable growth.

The main target group of the Programme is SMEs, established as legal persons in Latvia. The primary target group of small grant schemes includes existing and newly created enterprises with a high potential for innovation. For them, this Programme will give access to the necessary finance and be a chance to develop new products and introduce them to the market.

The target group of the main call will be enterprises with an already existing industrial base that want to develop the range of their products and implement new ones into production or companies, that want to greenify the existing production processes in order to become more competitive and environmentally friendly. Furthermore, the services of TBC will serve a broad group of beneficiaries, such as SMEs (the main target group), start-ups that want to develop their ideas, and innovative, science-based large enterprises. This will among others be done by promoting cooperation with research organisations, NGOs, clusters, mentors, acceleration funds, industry experts and professionals with experience in business development.

How will the programme strengthen bilateral relations?

One of the overall objectives of the Norwegian Financial Mechanism is to strengthen bilateral relations between Norway and Latvia. To facilitate cooperation, the Programme is implemented in partnership with Innovation Norway as the Donor programme partner. Taking into account the target to implement 35% of projects in donor partnership, Innovation Norway will fully engage in recruiting donor partners for potential project promoters through bilateral activities. Donor Programme Partner will participate in the project Selection Committee during open calls and will have an important role in the validation of project promoters. Both the Programme operator and the Donor programme partner will maintain a close dialogue with the Programme stakeholders (business organisations, relevant ministries, NGOs, etc.) in Latvia and in Norway.