TRAMES, 2007, 11(61/56), 3, 324–342
Technology-intensive
FDI and economic development in a small country – the case of Estonia
Marek Tiits
University of
Tartu and the Institute of Baltic Studies
Abstract. This article reviews the role of foreign direct investment in industrialisation historic of various catching-up economies and experiences aiming atdraws based on ingthon is lessons
for policy-making esesegane lause –mis
eesti keeles? in in small countries small countries.
The author states modern worldthat the introduction
of advocates
proactive
foreign investment strategy is a one of the most effective in a
small country influential possibilities means in a small country to for arapidly
increase ofthe knowledge intensity of the
economy. However, the
Estonian innovation policy, Yet, similarly to most of the EU nhas ew
mNember
sMtates, has Sstrongly undervaluedunderestimated the
power and role of such proactive strategies. The author calls for much better
focusing of the activities of foreign investment agencies and closer
co-ordination of FDI strategiesforeign investment with education, research,
employment and other policies.y
Keywords: foreign direct investment, R&D and innovation
policy, economic development strategy, small countries, Estonia
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