Fresh perspective from the ambitious New Director of the Latvian Investment and Development Agency (LIAA), Ieva Jāgere, for attracting investment, businesses in Latvia and the startup ecosystem support.
Following is an excerpt from the interview
“I have definitely come in with fresh energy, my own business-oriented approach, and the firm belief that the agency has solid foundations and groundwork on the basis of which we can create great, entrepreneur-friendly support programs.
We are planning to develop a grant program to specifically support costs incurred in R&D. Similar programs existed in Latvia in 2014, at which time tax incentives encouraged businesses to invest in R&D. This ended in 2018 when changes were introduced, ensuring that no corporate tax was required on reinvested profits. However, we see that the 2014 tool worked excellently, and businesses were motivated to invest more in R&D. As a result, innovation progressed more rapidly. It’s important for us to see these costs clearly, because this enables us to understand how much is being invested in innovations that will drive economic growth in the future.
Therefore, through various state support program initiatives, we will try to ensure that businesses are required to separately account for these R&D expenses.
We see this as a potential “carrot” for foreign investors, because many large projects considering investment in Latvia and significant R&D expenditures are interested in how the state can support them.
Focusing on R&D, there are two challenges: on paper, Latvian businesses invest very little in R&D, and at the same time, may be companies simply don’t record these expenditures.
When we introduce specific support programs that fund these costs, businesses will undoubtedly be more motivated to include these expenses in their reports, because if they don’t, they won’t qualify for funding. As a state, we will also benefit because we will be able to objectively assess our businesses’ ability to invest in innovation and draw conclusions based on this data.
I come from the business sector, and it’s crucial to me that we keep up with the times rather than follow the old processes as we did before.
For example, it’s not just about organizing X number of meetings and moving on, but evaluating a set of actions to assess concrete or anticipated outcomes—how many contracts were signed, how much exports to a specific country increased, etc.
The criteria will not be the same for all nations—for one country, the focus might be on strengthening Latvia’s image, while another may have significant export potential that we need to capitalize on more effectively. In yet another country, there could be a strong network of investors that we can better access through our representative office there.
It has been coordinated with the Latvian Chamber of Commerce and Industry (LTRK) and exporters—all initiatives stemmed from entrepreneurs, whose input we have listened to and understood as demonstrating the need for these representative offices. Of course, we will monitor the contribution of each representative office in terms of results, but for now, we are not planning to make any changes.
Yes, we have heard interest from entrepreneurs about having a representative office there, which would also serve as a Gateway to other Asian markets.
Recently, when I was still working at Altum, I attended a major venture capital conference in Amsterdam, where all the large funds emphasized that if we think long-term, we must focus on investments in science-intensive technologies.
I understand that not all funds are eager to invest in these technologies, as the lifecycle of funds is often too short to take on such investments. However, I would like to believe that venture capital funds will still find room in their investment portfolios for science-intensive technologies.
It is clear that we cannot impose an obligation on any one fund to exclusively invest in science-intensive projects since all current funds have a comprehensive investment strategy.
I certainly don’t want a scenario where the ministry drafts a program and LIAA approves it, only for it to turn out that the program is impractical and its criteria unattainable.
While we cannot sell a company’s products or ideas on their behalf, we can ensure that our programs and support help them achieve their goals faster and more successfully—whether in product development or revenue growth.
After many years in the private sector, where I gained extensive experience in finance and investment consulting, as well as at Altum, I realized it was time to take the next step and contribute to my country, Latvia, in a role where I can make the most impact.”
– Ieva Jāgere
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