MEASURING INNOVATIVE PERFORMANCE

Nowadays innovation is the main driving force to economic growth and prosperity. Europe has a long tradition of good performance in research and innovation, and each Member State has its own policies and programs on research and innovation. The support and development of innovation performance is one of the priority tasks for the government of Latvia. The targets of European Union (EU) within the Europe 2020 strategy for smart growth include combined public and private investment levels to reach 3% of EU's GDP as well as better conditions for R& D and Innovation. Latvia has made some progress towards the Europe 2020 target indicators, but there is still place for improvement in a significant number of areas as Latvian innovation rate is still below EU's average. European Commission declares a need to produce an indicator to measure Europe's progress towards a more innovative economy. The indicator will measure the progress of strategy and represent overall research and innovation performance and reasons why it differs between member states. An important aspect of the indicator is that it should allow comparability on the global level. Latvia should consider the applicability of new innovation indicator. The paper aims to discuss the innovation performance of Baltic States and to examine the usability of the new approach of calculating Europe 2020 Innovation Indicator in case of Latvia. The theoretical and methodological evidence is based on the analysis of the economic literature, scientific works published by Latvian and foreign scientists; the legal documents of European Commission; the statistics database of the Central Statistical Bureau of Latvia; Eurostat and other international statistical and methodological materials. Bibliography review, as well as methods of statistical analysis such as grouping, processing and comparative analysis has mainly been used in the paper.