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Openness to innovation

Lithuania is open to partnerships and innovative solutions that empower change on a national level.

Lithuania’s public sector strives to increase the effectiveness of its services by engaging with talent, business, science and society.

Digital solutions. Lithuania has already digitized 90 percent of public sector services and we have no intention to stop there. Lithuanian IT firms have built and continue to develop a whole range of innovative public sector solutions for everything from governance and agriculture to infrastructure and healthcare. Today, more than 80 percent of the country’s citizens use e-government services. For business, the figure is 97 percent. In a country of 2.8 million people, the main e-government website had been visited 16.9 million times as of 2020.

We rank 8th in the EU for digital public services for businesses.[1] Lithuania’s acceleration of e-government solutions, praised across the EU, has helped create a single platform for public information and services for business: a fast online system for tax registration and payment that lets taxpayers submit all returns electronically. The online tax administration system, i.MAS, ensures efficient and modern tax administration. That, along with more than 50 bilateral double taxation treaties, creates a business environment which is convenient and economical.

Public invitation to experiment. Society, business and academia are being encouraged not only to use digital services, but also to contribute to developing innovative solutions. The GovTech Lab was set up to engage the latest technologies, startups and innovative businesses in further improving public sector services. There a team of ambitious professionals is organising a series of challenges whose goal is not just to seek solutions to public sector problems, but also to actively foster and expand the govtech community. The solutions developed so far in this format are a major step forward in terms of breaking down barriers and stereotypes related to collaboration between startups and the public sector.

Empowering talent. Create Lithuania is the first and so far only programme for creative, proactive professionals who want to contribute to shaping the modern future of Lithuania. Participants with international experience can use the knowledge and innovative ideas they’ve gained abroad to help improve Lithuania’s public sector.

Government support for innovation. In Lithuania, trying out new approaches and hypotheses in the real world is easy and safe. There are sandbox environments for innovations. They allow innovators to test their solutions in a real-life setting with the supervision and guidance of the relevant authorities. The Bank of Lithuania opened the first sandbox in Lithuania in 2018, for fintech companies, and in 2021 a year-long trial of Workpower UAB’s “Ooniq” peer-to-peer insurance platform was completed, bringing new possibilities for the financial services market. Today in Lithuania you’ll find successful fintech sandboxes, an energy sandbox, a transport solutions sandbox, and a proptech sandbox for real estate initiatives. There are also a number of active innovation collaboration hubs, like the Blockchain Centre Vilnius.

Striving to foster an attractive, competitive and innovation-friendly environment, the Bank of Lithuania has also put forward other solutions. The LBChain, for instance, is a blockchain-based technology platform intended to help startups go from idea to product faster and at lower cost. The RegTech solution, meanwhile, makes it possible to automate financial market participants’ reporting and so reduce the administrative burden.

State institutions as an engine of innovation. Today Lithuania is known in Europe and the world as a hub for financial technologies. The authorities, by working together, managed to react quickly and seize opportunities that arose in the context of Brexit. The regulatory environment needed for this breakthrough was put in place with incredible speed thanks to co-operation between the authorities. Fintech companies have been turning their eyes to Lithuania in recent years above all because of the extremely favourable regulatory environment and the positive attitude of the regulator, the Bank of Lithuania, towards fintech startups. The flexibility and openness of the central bank has no doubt accelerated the flow of fintech companies to Lithuania, with 230 now operating in the country.

Public and business support for science. Lithuania is one of the EU countries where business invests most in public scientific institutions. Companies’ investments in research and development has almost doubled over the last decade. In 2019, the latest year for which data is available, businesses invested a total of €208 million in R&D, or 0.43 percent of GDP.[2]

Attention to the environment. Lithuania is a European leader in the recycling of plastic packaging. The country has over 3,000 collection points where people can return single-use plastic packages. Beverage packaging collected in the last 5 years in Lithuania helped save an estimated 554.6 GWh of electricity. All EU member states have committed to recycling 90 percent of plastic bottles placed on the market by 2029, and Lithuania has already met that target, as more than 90 precent of plastic bottles are now returned to collection points. Public engagement with the cause is also reflected in a poll conducted in October 2020 which showed that an overwhelming majority of respondents (98 percent) support the packaging return system as useful.

In early 2021, Vilnius University took the historic step of becoming one of the first large organisations in Lithuania to use only green electricity for its operations. Vilnius University will reduce CO2 emissions by about 7,500 tonnes every year.

Vilnius Airport is among the renewable energy leaders in the Baltic region. In recent years, it has upgraded its lighting system, installed solar panels and added hybrid vehicles to its fleet. In total, the airport plans to save at least 168.18 MWh of electricity annually, which is like providing 90 average households with electricity for a whole year.

@R. Venclova

[1] European Commission, Digital Economy and Society Index, 2020.
[2] https://strata.gov.lt/lt/naujienos/8-naujienos/834-verslo-investicijos-i-mokslinius-tyrimus-didziausios-per-10-met-verslo-investicijos-i-mokslinius-tyrimus-didziausios-per-10-met