Estonian Innovation Policy Activity against the Background of the EU Member States

Innovation policy is essential to guarantee a country’s development and the continuous enhancement of its innovation performance. The aim of this paper is to empirically analyse the position of Estonia in different innovation policy areas compared to other European countries. Seventeen different variables that characterise the activities of the public sector in promoting innovation are used in a principal component analysis to reveal the structure of public sector activities in promoting innovation. The principal component analysis reveals that the activities of the public sector in promoting innovation can be characterised using six components. Analysis of Estonia’s position in these policy areas shows that in comparison with other European countries, the extent to which the public sector in Estonia enhances the overall framework for innovation is above the European average and R&D in the higher education sector is also above average. But R&D in the government sector in Estonia is in a weak state; only a small proportion of innovative enterprises in Estonia receive financial support for innovation from the public sector (including support from the EU), and universities and public sector agencies in Estonia only cooperate with firms in innovation activities to a small degree.