Baltic Rim Economies Quarterly Review ISSUE NO. 5, 21 DECEMBER 2011 EXPERT ARTICLES: Jose Manuel Barroso: Bringing EU-Russian relations to a new level Page 1 Jyrki Katainen: The great potential of the Baltic Sea cooperation Page 2 Mart Laar: The new threats to Northern-Europe Page 3 Diana Wallis: The stalemate in Spitsbergen could be used to Norway's advantage Page 4 Olavi Ala-Nissilä: Challanges for the EU from the perspective of external audit and accountability Page 5 Petteri Orpo: Our common bond – ties that bind us Page 6 Matthew Lodge: A shared vision for promoting sustainable growth Page 7 Aleksi Randell: The Turku process – promoting concrete cooperation with Russian partners Page 8 Henry Lindelöf: The City of Kotka looks to the East Page 10 Veli-Jukka Pennala: Maritime situational awareness across borders Page 11 Detlef Müller: “Friction generates heat” – tourism, cooperation and the Baltic Sea identification factor Page 12 Jorma Korhonen: The Baltic Sea and the Arctic will increase their importance in the energy security for the European Union Page 13 Suvi Innilä: Positioning Turku on the world map – the city’s year as the European Capital of Culture Page 14 Arne Grove: Role and achievements of the Nordic Council of Ministers (NCM) on environment and energy in North-West (NW) Russia, as a part of the Baltic Sea Region Page 15 Bo Österlund: Piracy is a menace to international sea traffic Page 16 Nina Vaskunlahti: Russia and the European Union – a multilayered relationship Page 18 Sergey Dubinin: Russian finance system on the waves of global finance crisis Page 19 Mika Kaukonen: Finland needs a strategy for immigration Page 20 Irinja Paakkanen: Current trends of internationalisation within the University of Turku Page 21 Mathias Bergman: Not why?, not when? – but how! – innovative solutions for the Baltic Sea Page 22 EXPERT ARTICLES CONTINUED ON NEXT PAGE To receive a free copy, print or register at www.tse.fi/pei Baltic Rim Economies Quarterly Review ISSUE NO. 5, 21 DECEMBER 2011 EXPERT ARTICLES CONTINUED: Vicente Carabias, Karel Haegeman, Alexander Sokolov, Manfred Spiesberger, Klaus Schuch, and Irina R. Kuklina: Foresight for EU-Russia S&T and innovation cooperation Page 24 Marina Bouianov: Some observations on today’s European and Russian innovation process Page 26 Charles Wessner: R&D procurement and the role of the SBIR program Page 28 Ivan Bortnik: Innovative entrepreneurships in Russia Page 29 Nikolai Puntikov and Stanislav Tkachenko: Does the Russian economic system support technological entrepreneurship? Page 30 Fredrik Westerlund: Russian intelligence services can help domestic nanotechnology – by keeping at arm’s length Page 31 Andrei G. Zabrodskii: Ioffe Institute and its contribution in the development of nanotechnology in Russia Page 32 Ruslan Shafiev: On innovation activity in Russia Page 33 Kalman Kalotay: Internationalization of high-tech industries – lessons for the Russian government Page 34 Adugna Lemi: Internationalization of R&D – implications for Russia Page 36 Kari Liuhto: Some policy proposals based on the Finnish-Russian innovation collaboration Page 37 Irina Sarno: Learning economy in the Baltic Sea region – an experience of the Finnish-Russian cooperation Page 38 Sergey Tsybukov: The "Triple Helix" of the Polymer Cluster Page 39 Alasdair Reid: Integrating national innovation strategies to leverage the potential of the Baltic Sea region Page 40 Eero Vuorio: Biocenter Finland – a novel way to restructure national research infrastructures Page 41 Pekka Ihalmo: Culminatum works to develop an attractive innovation environment for biotechnology in the BSR Page 42 EXPERT ARTICLES CONTINUED ON NEXT PAGE To receive a free copy, print or register at www.tse.fi/pei Baltic Rim Economies Quarterly Review ISSUE NO. 5, 21 DECEMBER 2011 EXPERT ARTICLES CONTINUED: Sergey Shishkin: Modernization of public health care system in Russia Page 43 Simo Mannila: Future perspectives of Finnish-Russian cooperation in neighbouring areas in the field of social affairs and health Page 44 Maarit Valo: Technologically-mediated communication in working life – a rich area for both basic and applied research Page 45 Jorma Nieminen: The emergence in the 1970s of the Nordic mobile phone services and industry – learnings for today Page 46 Anna Wziątek-Kubiak: Heterogeneity of innovation strategies of Poland’s firms Page 48 Marjukka Mäyry: Friendship between Finland and Poland Page 49 Hans Langh: Maritime transport in winter is necessary for Baltic Sea states Page 51 Elisa Holma: Strong recovery in maritime transport volumes stalled with economic uncertainty Page 52 Vladimir Miklashevsky: Real investment in Northwest Russia – Ground Zero for reindustrialization? Page 54 Kim Wikström and Elena Ganskau: Adaptation of business models to local conditions in Russia – five Nordic companies' experience Page 56 Esa Rautalinko: Implementing a luxury strategy in Russia Page 58 Pekka Kuusniemi: Sanitary ware market differences in the Baltic Sea region Page 59 Nodari Simoniya: Russia – facing new challenges on the world gas markets Page 60 Viesturs Ozolins: Russia towards energy saving and renewable energy Page 61 Svetlana Avdasheva and Guzel Yusupova: Antitrust cases against Russian oil companies – battle for cheap petrol is under way Page 62 Stanislav Tkachenko and Dmitry Tkachenko: Special Economic Zones in Russia – new trends Page 64 Lena Jonson: Six more years with Vladimir Putin Page 66 Kirill Rodionov: The outline of political reforms in future Russia Page 67 EXPERT ARTICLES CONTINUED ON NEXT PAGE To receive a free copy, print or register at www.tse.fi/pei Baltic Rim Economies Quarterly Review ISSUE NO. 5, 21 DECEMBER 2011 EXPERT ARTICLES CONTINUED: Anaïs Marin: Belarus – no economic miracle for free Page 68 Barbro Widing: Economic cooperation around the Baltic Sea – in search of efficiency and good governance Page 69 Dmitri Lanko: Russia’s 2012/2013 CBSS Presidency Page 70 Ismo Söderling: Finland, and migration in the Baltic Sea Region Page 71 Malla Paajanen and Riitta Kosonen: Joint promotion of the Baltic Sea Region – triple helix cooperation in practice Page 73 Liisa Rohweder: Words cannot save the Baltic Sea Page 74 Mikko Nikinmaa: Dioxin in Baltic salmon and herring – is it a toxicological problem? Page 76 Kim Jordas: The challenges of professional fishery in the Baltic Sea – a Finnish point of view Page 77 Irina Sennikova: Intellectual entrepreneurship as a way to innovation economy Page 79 Erik Terk and Jüri Sakkeus: Future of North-South connections – about transportation, but not only transportation Page 80 Esa Sallinen: How to select international distribution channels for business software products? Page 82 To receive a free copy, print or register at www.tse.fi/pei Expert article 853 Baltic Rim Economies, 21.12.2011 Quarterly Review 5ƒ2011 Bringing EU-Russian relations to a new level By Jose Manuel Barroso Relations between Russia and the European Union have been the creation in March 2011 of an independent EU-Russia civil growing in importance and their dialogue has been improving society forum. in quality. Indeed, in this new rapidly changing and globalised This is also a joint effort on the EU side and complements world, the EU and Russia are increasingly interdependent. We the partnerships being developed by Member States at have a common cultural heritage forged throughout the long national level. More importantly, the partnership has already course of Europe's history. European and Russian culture from started to deliver practical results -cooperation in the space music, to arts and literature have been influencing each other sector was demonstrated by the successful launch of a Soyuz to the point of being one and the same. Europe and Russia from an EU space port, as part of the Galileo programme last also share the same continent and have a strong interest in October; technical regulations are being aligned in several stability and harmonious development from the European sectors; and discussions on a visa-free short-term travel peninsula to Asia. Economically, our industries are set to regime are in progress - all of which reflect a common vision of benefit significantly from a greater integration of trade, the future. investment and technology exchange. In the field of energy, The fact that the EBRD and the EIB are also associated to we also have a lot to gain from an increased security of supply the finance of modernisation initiatives means that concrete and transit, a diversified set of suppliers and clients and financial support will be given to projects in both the private improved efficiency. and public sector. This is a significant achievement. In the past two decades this relationship has been Russia's accession to the WTO which the EU and in considerably strengthened, as illustrated by increased dialogue particular the Commission, has been very actively supporting on strategic issues, growing cooperation on security and is another building block of the modernization agenda that both defence e.g., within the EUFOR Chad FCA and greater the EU and Russian authorities are working on. It is clearly in bilateral trade flows. Russia was the EU's third-largest supplier the interest of the EU, Russia and the rest of the world to see and fourth-largest client in 2010. The EU is Russia's most this last major world player joining the multilateral trading important trading partner by far, accounting for 50% of its system. Following the agreement between Georgia and overall trade in 2010. It is also the biggest investor in Russia Russia, the EU looks forward to seeing Russia's accession and 75% of Russian FDI stocks come from EU Member finalised at the WTO ministerial meeting mid-December. States. The key question, therefore, is not whether the EU and Russian accession would strengthen world trade and hopefully Russia are interdependent on a wide range of political and contribute towards consolidating EU-Russian relations and economical issues, but rather how that interdependence will be closer bilateral economic ties.