The crucial factor to succeed in the global knowledge economy is the country’s ability to develop intellectual capital. Only those who understand the importance of innovations for growth will thrive and prosper in the coming decades. Unfortunately, CEE region lags badly behind the leaders in terms of its current and future ability to generate innovation. One of indicators measuring current ability to innovate is the number of researchers. In the mid-1990s CEE-4 (the Czech Republic, Hungary, Poland and Slovakia) and Asian NIEs had similar number of researchers per million people, while two years ago NIEs had almost twice as many persons employed in R&D per million people in comparison with CEE-4. Future knowledge potential of particular country or region can be measured by tertiary enrolment ratio. Tertiary enrolment ratio in the CEE-4 countries improved to 50 percent in 2004, but still remains well below 62 percent in the EU-15 and 82 percent in the United States.. Because of a relatively small population and a number of structural deficiencies it is very unlikely, that increase in the number of students in CEE-4 that have occurred in recent decade will translate into higher innovation potential in the coming years, unless a dramatic change in policies in CEE-4 is made. This is also confirmed by a dramatically low number of patents registered in the CEE countries and extremely low number of scientific publications.
It would be beneficial to have more discussion of, and attention paid to, the question of how to stimulate competition. In this particular case a beneficial change appears to have strongly stimulated competition. If we are to achieve increased competition in other areas, too, it is necessary to constantly emphasise consumer interests so that allocation of resources becomes as efficient as possible and protected sectors are not allowed to operate inefficiently to the detriment of potential growth. 2  Statistics Sweden calculates households’ consumption of pharmaceuticals to be approximately SEK 10 billion a year. BIS Review 37/2003  5  What can we learn from 150 years of history? To summarise, there have been many changes in the Swedish economy in recent times. The external framework is currently characterised by considerable fiscal policy and monetary policy stability, which facilitates planning and decision-making for both households and companies. Both our own history and that of other countries shows clearly that a stable external framework is an important basis for economic growth. We have also gone back to being open towards the outside world. During the war we were not, for obvious reasons. After that we were open for a long period according to the rhetoric, but less so in practice. Today we have regained a freedom for ideas, products, services and production factors that is reminiscent of the late 19th century and early 20th century. In both of these aspects we appear to have done our homework.