Lithuanian Prime Minister visits GSB

Feb. 3, 2010, 12:05 a.m.

In a special guest lecture at the Graduate School of Business (GSB) yesterday morning, Prime Minister of Lithuania Andrius Kubilius provided an overview of the Northern European country and touted its commitment to innovation and higher education, as well as its investment-friendly environment for foreign companies.

Prior to the lecture, the Prime Minister met with Professor Garth Saloner, Dean of the Graduate School of Business, and Professor Condoleezza Rice, who was instrumental in helping Lithuania join the North Atlantic Treaty Organization (NATO) in 2004 as Former President Bush’s National Security Advisor.

The lecture by Prime Minister Kubilius, given in Professor Eric Bettinger’s Economics of Higher Education class, emphasized infrastructure, innovation and higher education in Lithuania and how those factors translate into economic competitiveness for the former Soviet Republic. Kubilius praised Stanford as the “best university in the world” and urged the Graduate School of Business students present to “watch the Nordic-Baltic region,” especially Lithuania, for signs of rapid development in the coming years.

“What we are looking for is targeted towards business development goals in building Lithuania’s long-term strategy for the next 10 years,” Kubilius said in an interview with The Daily after his lecture.

“I look forward to seeing how we can develop Nordic-Baltic country-specific specialization on development of a high tech service hub,” he continued. “I just met with [the executives of] Oracle, HP, Cisco. It is a very good beginning, and we shall continue. I hope those companies will see an attraction in Lithuania.”

He noted that he chose the GSB as one of his stops in his visit to the United States in part to see how deep reforms in Lithuania’s university system in making them more high tech could be modeled after Silicon Valley.

The Prime Minister noted his country’s prime location at the center of Europe and at the intersection of Eastern Europe, the Baltic region and the European Union (EU), of which it became a member in 2004. Membership in the EU has brought Lithuania “economic assistance” and the “the ability to be part of the huge European market,” Kubilius said.

Kubilius highlighted extensively the economic growth and potential of Lithuania. Before the 2008-2009 global recession, Lithuania’s economy had one of the highest growth rates in the EU, fueled by its innovation and interest in laser technology, medicine, information technology, biotechnology, nanotechnology and materials science.

Nevertheless, the recent global economic downturn has seriously affected the Lithuanian economy. Before the economic crisis, 60 percent of Lithuania’s Gross Domestic Product (GDP) was export-related, and as a result, the country suffered when other major economies and trading partners were hit by recession.

Kubilius, however, remains confident. “We are recovering,” the Prime Minister said. “When markets come up [again] . . . of course we shall recover also.”

To speed up his country’s recovery and strengthen its economy to weather another financial crisis, Kubilius emphasized an aggressive attempt to lure foreign investors to Lithuania. Central to that effort is underscoring the country’s qualities, along with its advantages as a strong hub of technology and investments.

While conceding that the country’s higher education system has “much to improve,” Kubilius stated it provides a solid foundation for the knowledge-based economy that Lithuania is striving to build. Moreover, 90 percent of Lithuanians speak at least one foreign language, usually English or Russian.

The Prime Minister went on to list a series of noteworthy statistics of Lithuania’s development of necessary infrastructure for a knowledge-based economy and leadership in the Internet and mobile communications industries. Lithuania ranks first in the world in Internet upload speed and fourth in the world in broadband quality. “I don’t know how we have 150 mobile phones for every 100 people,” he said, followed by laughs from the audience.

In terms of Lithuania’s economic relationship with rising China, the Prime Minister commented to The Daily that Lithuania and China are in good standing.

“We have good economic relationship in trade and manufacturing,” he told The Daily. “We are in good discussions at an early stage to look into possibilities to move goods from China into Europe with railroads, not shipping around Asia and Africa. We are also preparing to participate in the World Exposition in Shanghai [this summer].”

The Prime Minister joked to The Daily that Lithuania, which is known to produce many professional basketball players such as Zydrunas Ilgauskus of the Cleveland Cavaliers, among others, covers three things in their government agenda: “Economic growth, [Lithuania holding] the EU presidency in 2013 and winning basketball.”

However, another high item on their agenda is energy and low-carbon energy technology. Lithuania is currently building a new nuclear power plant and is in an ongoing internal debate about reliance on Russia for energy.

“We are restructuring our electricity system, a field where some kind of new supplies can be [from] wind, solar and biofuels,” Kubilius said. “We are also looking to all the new possible technologies on how to save energy.”

Graduate student Yukihiro Kashima was in the audience and had little previous knowledge about Lithuania.

“I thought his talk was quite impressive,” he said. “He really informed us about the Lithuanian economy’s future prospects and the government’s commitment to growth.”

In the remainder of his visit to the United States, Prime Minister Kubilius is expected to discuss trade and technological investment with high-level officials in New York and Washington, DC, including Treasury Secretary Timothy Geithner, Commerce Secretary Gary Locke and Federal Reserve Chairman Ben Bernanke. Also part of this trip’s investment-promotion efforts were meetings with the executives of IBM, Oracle, HP, Cisco and other Silicon Valley high-tech companies.

The Prime Minister expressed hope that like Silicon Valley, Sunrise Valley — in Lithuania’s capital city, Vilnius — would some day become a magnet for business, science and technology startups.

Kubilius pointed to the shift in recent years from a government-regulated system to a market-based one, the creation of a modern financial and legal framework (including intellectual property rights) and other changes in policy for science and technology. His central message: that Lithuania is now actively “hunting.”

“Before,” Kubilius said, “our government was just sitting and waiting when some companies from Silicon Valley would come.” Now, “we are running around; we have knowledge; we have everything; come, and you will see.”

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