LIAA Director General Kaspars Rožkalns: a new platform for ICT is required

In an interview to "Latvijas Bizness" the new LIAA Director General Kaspars Rožkalns has shared his plans for Agency’s future. Below are some of his thoughts.

What role does the state play in attracting investment?

Even though Latvia has been part of EU for 15 years and has joined Eurozone, it is still fairly unknown to Western Europe. Even in Germany there are still many people who don’t know where Latvia is and the fact that it is in EU.

Of course, German business advisors are perfectly aware of the situation in Latvia, and there is little new we can tell them. I believe that, when seeking investment, we must shift our focus to SMEs, e.g. on a small and middle-sized a German business with a turnover of 50 million euros. Such companies don’t know much about Latvia, our scientists and opportunities. This is where the investment in production can came from. Latvia is a good place when it comes to competitiveness and location of research centers.

It means that the tax policy and property tax exemptions are of no use outside Riga?

Zero rate on reinvested earnings is a good motivation and tax policy can be improved but being among TOP20 countries in the ease of doing business is much more important. This means that our existing taxation policy can bring better results if we proactively reach out to investors.

When it comes to middle-sized companies state support is much more important than a 1% lower tax rate.  10 million investment that is tiny for Germany is significant for us. In Latvia such investments get publicity and are highly regarded. With the existing taxation policy we are in a good place to reach out to investors.

What should LIAA aim for when facilitating export?

In the last two years we were focusing on national stands at fairs where entrepreneurs cover their participation costs. This is a good export tool but the companies should come there prepared. There is little use of international fairs if the entrepreneur just sits there and complains that nobody approaches him/her. They should be well aware who are the people they want to meet and how much their product will cost in a retail chain. Their partners also appreciate meeting experienced, well-prepared companies. Only then it makes sense to organize such trade missions.

Is it effective to participate in Expo in the digital era?

We are still tinkering with the idea about Expo. There will be no pavilion but the negotiations regarding a stand are still ongoing.

Expo is where we show Latvia to the world. We must consider how well prepared we are and what do we aim for. Yes, this is a show. But when presenting Latvia as a deep tech country and showing a 5G drone we can attract investors for our start-ups. This is, however, true only if during the 100 days of Expo and afterwards we keep working with the potential investors.

The state will provide more support for digitalization, according to our Minister for Economics. Will this impact LIAA too?

No doubt, we will continue supporting “classical” or niche export companies. We will proactively focus on ICT, as well as bioeconomics, smart energy and smart cities. We plan to bring together scientists with entrepreneurs and investors to help commercialize scientist ideas.

The timing for this is very good as EU projects provide funding for technology, especially for deep tech. Latvia can become a leader among Baltic states in specific niches. I believe a new platform to introduce deep technologies by connecting scientists to investors is necessary. It would serve as a meeting point for the involved parties – universities and start-ups; our technology scouts would seek technologies, Investment Project Department would attract risk capitalists, after that – strategic investors.