Baltics are Sitting on a Gold Mine, yet Losing Investment Opportunities 

EBM NEWSDESK ANALYSIS

The new assessment of Latvia’s current investment climate by foreign investors indicates an  increasingly polarised outlook. Latvia and the Baltics, in general, have genuinely significant  innovation-driven investment opportunities and a good innovation ecosystem foundation. However, the Baltics suffer from long-standing structural challenges and a shocking lack of  coordination and communication, as the two worlds – the world of researchers and the world  of private sector actors/foreign investors – are largely living apart. This results in a waste of  public funding, loss of investment and innovation opportunities, slowing down economic  growth and competitiveness. 

These findings are presented in the latest edition of the Foreign Investors’ Council in Latvia  (FICIL) research – Sentiment Index, conducted in collaboration with RTU Riga Business  School. The research drawing on the views of foreign investors in Latvia and researchers  across all three Baltic States.  

An increasingly polarised outlook on Latvia’s investment climate 

The assessment of Latvia’s current investment climate by the foreign investors indicates a  moderately positive, but increasingly polarised outlook, combining recognition of progress  with growing frustration over unresolved structural challenges. Human capital has emerged as  the most urgent domestic concern. Investors are calling on policymakers — particularly ahead  of Latvia’s autumn 2026 parliamentary elections — to treat education, labour availability and  demographic policy as strategic national priorities. 

The current governmental crisis in Latvia raises concerns of the foreign investors over the  politicymakers’ ability to solve critical problems, to work together as a team, and to coordinate  the work of public institutions. 

Innovation and competitiveness held back by structural barriers 

Latvia and the Baltics, generally, have a credible foundation for innovation leadership in  specific areas. Yet the two communities — research institutions and the private sector — remain largely disconnected. The barriers go far beyond funding! In view of these barriers, it  is unimaginable how many opportunities, which could have boosted innovation, economic  growth and competitiveness, have been wasted and continues to be wasted. Moreover, given  that public funding is a key financing source for research institutions, the question becomes  even bigger – how much taxpayers’ money have been wasted?

Time to move beyond resilience 

In view of FICIL, it is time for Latvia and for the Baltics, generally, to step up the game: to  move beyond a model, which focuses on resilience and stability for survival towards  competitiveness through innovation, agility, local resource-utilisation and distinct strengths. 

The current research also presents findings on how to untap the investment and innovation  potential of Latvia and of the Baltics generally, discusses the potential benefits of stronger  research, development and innovation collaboration between the Baltic States, and highlights  key messages of foreign investors and of Baltic researchers to the national, Baltic and EU  policymakers. These findings will be presented and discussed on 28th May during a high-level event “Beyond Borders: Investment & Innovation in the Baltics”, organised by FICIL.  Information about the event: 

The event will gather representatives of the European Commission, ministries of economy of  Estonia, Latvia, and Lithuania, key international financial institutions, major innovation related stakeholders in Europe, foreign investors, researchers and innovators in the Baltics.  

It will feature three research presentations on investment and innovation in the Baltics,  delivered by FICIL, the European Investment Bank Group Riga Office and the German-Baltic  Chamber of Commerce.  

More information about the event is available on FICIL website:  https://www.ficil.lv/2026/04/17/save-the-date-beyond-borders-investment-innovation-in-the baltics/ 

Information about research: 

FICIL conducts the Sentiment Index research since 2015. The central aim of research is to  stimulate evidence-based policymaking to improve investment climate in Latvia. More  information about research can be found on FICIL website: https://www.ficil.lv/sentiment index/