WESTERN EXPERIENCE IN THE AREA OF PRIORITY OF HIGH-QUALITY HIGHER EDUCATION Stanislavs Keiss1, Arkadijs Grisins2 University College of Economics and Culture, Lomonosova st. 1, LV-1019 Riga, Latvia E-mails: 1s.keiss@eka.edu.lv; 2arc.doc@inbox.lv (corresponding author) Received 18 November 2010; accepted 15 January 2011 Abstract. The paper contains research results of contemporary foreign experience of the most developed countries on providing a strategic priority of high-quality higher education, including the growth of the role of continuity and creativity elements in it. The paper deals with the nowadays tendencies that are favourable to the increase of high-quality training of higher qualification specialists. These tendencies are based on a close integration of areas of higher education and science, and include the development of regional mechanisms of scientific and educational clusters, inherent to the majority of the most developed countries. There are also formulated some recommendations favouring the development of scientific and educational potential of Latvian higher education, finding itself in a situation of a deep crisis. Keywords: higher education, quality, continuity of education, creativity, integra- tion, scientific and educational cluster. Reference to this paper should be made as follows: Keiss, S.; Grisins, A. 2011. Western experience in the area of priority of high-quality higher education, Business, Management and Education 9(1): 19–33. doi:10.3846/bme.2011.02 JEL classification: A11; A12; A22; A23. 1. Introduction Experience of many leading post-industrial countries demonstrates that as a decisive factor of strategic competitiveness of the country, of development of high-tech and in- novative production in it, there emerges the enlarged reproduction of knowledge, impos- sible without a constant improvement of higher education. In the contemporary world economy, the higher education is regarded as the most important area in accumulation of the human and intellectual capital, in dissemination of the knowledge that, indisputably, determines consequently the essential priority of it in a successful and effective devel- opment of the country’s economy and in the increase of export proportion of high-tech production (Гришин, Цауркубуле 2010: 105–107, 113; Daugeliene, Marcinkeviciene 2009: 49–57; Melnikas 2008: 170–192). Copyright © 2011 Vilniaus Gediminas Technical University (VGTU) Press Technika www.bme.vgtu.lt B u s i n e s s, Ma n ag eM e n t a n d e d u c at i o n ISSN 2029-7491 print / ISSN 2029-6169 online 2011, 9(1): 19–33 doi:10.3846/bme.2011.02 20 S. Keiss, A. Grisins. Western experience in the area of priority of high-quality higher education It is worthwhile, perhaps, to take the results of this research into consideration as an option in the context of a vitally necessary further elaboration of the strategy for devel- opment of our country’s economy, the topicality of which has largely increased in the context of the global economic crisis, especially regarding the majority of the Eastern European member states of the EU, including the Baltic States. It is significant that the authoritative journal “The Economist” pays an increasingly greater special attention to this topic (Baltic... 2009: 38; Feeling... 2009: 36). Besides, attention has to be paid to the current serious quality problems of Latvian higher education, and the fact that a group of the representatives of science and higher education spheres together with two former Presidents of Latvia (Vaira Vīķe-Freiberga and Guntis Ulmanis) have addressed the present Prime-Minster with a request to commence with structural reforms of higher education immediately, can serve as an evidence to this fact. The achievements of sci- entific researches performed at Latvian higher education institutions are not convincing. The number of internationally reviewed publications and registered patents is the lowest among the Baltic States (Коляко 2009). The need for enhancement of the quality of higher education services, that are vi- tally essential for the national economy of Latvia, becomes even more acute with con- siderable reduction of budget allocations in the context of deep economic crisis. The government of Latvia, following the recommendations of international creditors, has reduced the financing for higher education institutions by 48% in 2009, and yet another 18% in 2010. It should be mentioned that such dramatic reductions in the given branch have not taken place in any other EU country (Коляко 2010). The Eurostat data of 2009 are also illustrative – Latvia is the EU country that has spent the least amount per student – 2840 euros. For the sake of comparison, it should be mentioned that on aver- age, there are 7898 euros spent per student in the EU. Therefore, it is no surprise that among the 600 top universities of the world, according to Times 2009 ranking, there are Vilnius University and Tartu University, but none from Latvia. According to the raking of Webometrics, there is only one Latvian higher education institution – the University of Latvia – listed among the top hundred universities of Eastern and Central Europe while there are three from Lithuania and three from Estonia (Александрова 2009). The aim of this research, based on the generalization of contemporary foreign ex- perience of developed countries, is to reflect the growing role of the high-quality, in- creasingly creative education within the framework of a close relationship with the development of scientific and educational complexes or clusters, as well as to formulate, in the form of a statement, some practical recommendations, important in the strategic development of the analysed area in Latvia. Methods and methodology of the research: monograph, synthesis and analysis, crea- tive combination of systemic and situation approaches, logical-constructive method, analysis of statistical data and informative Internet resource. 21 Business, Management and Education, 2011, 9(1): 19–33 2. Necessity of development of continuity and creativity in the education The widely recognised increase of the role of knowledge in the modern market econ- omy, especially in the post-industrial, information economy, can be mentioned among the dramatic changes in higher education that have taken place since the end of the 21st century. It happens in line with the vital enhancement of the competitiveness of countries with the help of transformation of information into knowledge (Вифлеемский 2002: 115–117; Соловов 2009: 106). At present, the advantage in the competition does not depend so much on the size of a country, its natural resources or financial capital. It is common knowledge that the level of education and scope of accumulated knowledge by the society has an increasingly significant role (Фомишин 2006: 511). Besides, it is undeniable that, under the present circumstances of scientific and tech- nical progress, the elaboration and use of rapidly changing engineering and technologies requires, constantly, the newest level of education of specialists (Фомишин 2006: 512). It is significant that one of the authoritative patriarchs of the American management science, P. F. Drucker, indicated wisely that the nowadays rapid technological progress makes both the mental and the physical skills outdated in a pair of years that threatens the old professions and seasoned knowledge (Друкер 2008: 223). Therefore, a special attention should be paid to the problem that, under the circumstances of globalisation of the world’s economy, the knowledge, obtained in the system of higher education, grows out-of-date very rapidly. According to some estimates, one half of the knowledge of an engineer grows out-of-date in five years, of a physician – in seven years (Афанасьев, Мясников 2005: 16–17). At the same time, it is well known that earlier, when radical technological changes in public production took place approximately in 35–40 years, the knowledge obtained in higher schools was practically enough for the entire work- ing age of a specialist. Nowadays, the average period of updating of technologies and engineering is narrowed to 4–5 years, but in the mostly developed areas – even up to 2–3 years (Фомишин 2006: 329–330). In the light of such tendencies of rapid outdating of knowledge obtained in the sys- tem of higher education, there becomes more and more urgent the idea of continuous education as one of the cornerstone principles in teaching of specialists, having emerged already in the 70s–80s of the 20th century. Especially on the basis of the concept offi- cially approved by the UNESCO, many developed countries try to create a more elastic and less expensive effective socially oriented model of education, corresponding mostly to nowadays requirements of the post-industrial society (Кольчугина 2005: 59). It is important that the leaders of the EU consider the implementation of the idea of the con- tinuous education as a strategic element of the policy of the alliance members in the area of development of human resources. Especially, it should be mentioned that one of the most effective instruments, recognized in relation to the implementation of continuous education, is the electronic distance education. Besides, in the context of the Bologna process related to creation of a common European educational area in the EU, there takes places the intention to achieve a situation that the continuous educational system 22 S. Keiss, A. Grisins. Western experience in the area of priority of high-quality higher education would be able to facilitate the possibilities to obtain of qualification in framework of degrees, diplomas and other certificates of education, appropriate not only in present, but also in the future (Санникова, Балтере 2008: 26–27). The essence of continuous education at a changing paradigm of training of specialists is not to be sought in a traditional accumulation and appropriation of a fixed amount of knowledge and information, but in shaping the mindset of students to continue learning skills during the entire lifetime, constantly updating and seeking for necessary informa- tion, always prepared to self-educate. This is the exact reason why the modular educa- tion and different learning programmes become implemented, opening up opportunities of greater free choice to students that seek for specific learning programmes. There also takes place a principal change of the role of the lecturer: from an accustomed nowadays “translator” of knowledge he/she turns into a kind of consultant, researcher, tutor and leader of training and research projects (Кольчугина 2009: 68–69). Accordingly, P. F. Drucker had truly underlined that in an innovative organisation, there must prevail the atmosphere of learning; in such company the learning is a con- tinuous process and nobody is allowed to think that he/she is fully “educated” (Друкер 2008: 963). He also stressed that it is especially a mental worker that must be learning on a constant basis (Друкер 2001: 191). However, according to P. F. Drucker, the con- tinuous education does not replace the starting education of a specialist. For example, an engineer who starts his/her career with a good store of knowledge, necessary for good quality work, has a profession that is ageless. , there A constant improvement of the earlier obtained knowledge, skills and abilities must become an inseparable part of his/her work (Друкер 2008: 338). In reality, under conditions of the current globalisation, there is to be seen the objec- tive necessity of a pre-emptive prior development of education and operative prepara- tion of the new generation of specialists, who must be competitive in the labour market, well prepared to active life in the rapidly changing world, possessing adaptive mobility, stimulating the carriers of working capacity to self-development and self-training, and to creative self-realisation. In addition, the fight for talented and creative individuals is growing more fierce, potential creators of new techniques and modern technologies ex- pect a different quality from the generation of specialists of the 21st century. Under such conditions, scientific and educational and intellectual capital becomes the key asset of every successful high-tech company and competitive innovative economy. Accordingly, the future belongs to creative personalities able to a creative realisation that is in the context with the said by A. Einstein that imagination is more important than knowledge (Кольчугина 2008: 90–91; 2009: 64). In the beginning of the 21st century, the necessity to elaborate mass technologies of creation, or, more precisely, the technologies of searching and resolution of problems – a new style of innovative thinking – emerged. In Japan and especially the USA, a continu- ous search for talents among the young people, starting with the school age is taking place. For example, in the framework of the “Edison Project”, there was a plan to find 23 Business, Management and Education, 2011, 9(1): 19–33 2 million talented children in American schools until 2010. It is well-known that since the beginning of the 20th century, many Western corporations were involved in an active competitive war for talents (Афанасьев, Мясников 2005: 17). In developed countries, the talent is regarded as a national treasure; which is con- stantly sought for. The Western European countries employ well-elaborated university selection systems that support talented students. A vast work in this area is carried out by the International Association of Talented Children (Кольчугина 2009: 62–63). According to the experts of the authoritative Harvard Business Review, presently under the conditions of globalisations and the following global competition, a real worldwide “head hunt” is taking place. “Talented young scientists, designers and entrepreneurs are sought everywhere” (Као 2009: 100). It is well-known that the creative potential or creativity reflects the aspect of intel- lect, characterised by innovation, by new approaches in thinking, when solving the emerging problems. The creative ability of an individual suggests also divergent think- ing, requiring usually the possibly of a big number of answers to a simple situation (Джерри, Джерри 1999: 317; Дафт 2000: 376). However, in spite of importance of the creativity, it does not per se lead to a success of an innovation, because three quarters of successful achievements in this area were related, usually, to ability of concrete per- sons to carry out their innovations practically (Хасси 2001: 234). In reality, a creative personality is distinguished, usually, by a high comprehensive intellectual and educa- tional level, vastness of viewpoints, abstract thinking, originality of ideas, independence of judgements, thirst for knowledge, alertness, ability to listen, strong motivation and professional attitude to work, as well as by diligence, ability to focus on a problem, demonstration of love to difficulties and ability to combine the incompatible (Дафт 2000: 376; Пирсон, Томас 2008: 74). Actually, it is also known that the scientific and faculty activity of scientific and edu- cational institutions require a special type of creative abilities, possessed only by a small percent in every age bracket (Марцинкевич 2008: 27). Although in the West, the statis- tics of creativity are not yet accumulated, however, it is possible to evaluate, approxi- mately, the general tendencies. So, during the period of development of the scientific and technical revolution, from the 1950 to 1999, the proportion of Americans, related to creativity on one or other level, increased from 16.6% to 30.1%. However, a special role here is played by increase of the super-active core in creativity of Americans, making from 4.4% to 11.7%, accordingly (Ясин 2007: 9–10). Especially, the deep fundamental preparation, characteristic to creative education, provides the synergic effect and is favourable, together with the rest, to continuous education that allows prognosticating and estimating, more adequately, the tendencies of development. Accordingly, the creative higher education broadens the perception of problems and variances of their solution and stimulates the creative approach to their resolution. And, in different countries, especially the post-industrial ones, the specif- ics of creative education manifests itself through purposefulness to development of 24 S. Keiss, A. Grisins. Western experience in the area of priority of high-quality higher education constant necessity of creation, seeking for the new, to accumulation of the intellectual potential and using it in practice. In this context, there are some interesting programmes of MBA (Master of Business Administration), focused not so largely on highly special- ized knowledge than on acquisition of management skills. The teaching on the basis of case studies that favours the teaching of creative thinking and acquiring of the sets of single-handed instruments, having gained a vast dissemination in the western business schools corresponds to the aims of creative education (Кольчугина 2008: 91). 3. Western integration of science and education In all Western countries under conditions of globalisation of the 21st century, the im- portance of the creative function of universities as the result of their advantageous principle of unity of education and scientific researches, integration of science and edu- cation is not questioned. Today, the intellectual level of a nation, its scientific knowl- edge, the possession of which requires university teaching, increasingly determines the international prestige and the real power of every developed country (Кольчугина 2005: 62). The alliance of education and science in the quality of an obligatory condition of building an innovative economy embodies the principle of V. G. Humboldt, an outstand- ing representative of German Humanism (the end of 18th century, the beginning of the 19th century), expressed through a simple formula that teaching on the basis of science has become especially urgent under nowadays conditions of globalisation, when the permanent, accelerated process of training of highly qualified employees is possible only by close relationship between the higher education, the progressive research, and the fundamental science (Кольчугина 2008: 84). In the modern Western economy, the university has not only to generate new knowledge, to provide adequate educational services and disseminate culture values, but to be also the leader in support of eco- nomic growth and regional development (Барабашин et al. 2010: 46). High-quality training provided to specialists of the highest qualification based on cooperation with scientific activities is currently becoming a priority political direction in all developed countries as it is a necessary component of institutional structure of innovative economy (Кольчугина 2008: 84). And, practically, the idea of necessity to increase the quality of higher education services, to bring nearer the teaching process and direct studying to scientific research- ers, the carriers of the nowadays scientific information, implementing technologies of their gaining has become generally recognized. Such approach allows more operatively implement necessary changes into educational process. It is typical that, in the USA and Great Britain, the research departments of universities involve largely, independent or controlled of external organisations, doctoral students and even master students in carrying out their thesis papers (Бонюшко 2009: 389). It is important to mention that, although the Western professorship actually spends less time on lectures and seminars, 25 Business, Management and Education, 2011, 9(1): 19–33 dedicating the majority of their time to scientific researches, nevertheless, together with every of the professors there, as a rule, works a group of students, carrying out a certain task in the projects of their scientific supervisor. Sometimes, the course papers, pres- entations and diplomas become prepared by the students in relationship with research projects under direct supervision of a professor or his/her employees, assistants and so on (Ясин 2007: 17). And, as to the integration degree of higher education and science, the leader is still the USA, where the scientific researches in universities differ on the basis of scale, purposefulness, vast diversity of directions of organisational forms, sources of financ- ing, as well as a vast spectrum of successful researchers (Кольчугина 2008: 85). And, it is considered that in the USA, not only the basic bulk of fundamental researches in the sector of higher education are presently carried out, but also a great deal of practi- cal researches (Марцинкевич 2008: 21). In our opinion, in the context of indisputably growing competition, especially among the developed post-industrial countries in the complex of sectors, which include higher education and innovative development, a corresponding policy of the USA deserves a special attention. Besides, the course to activation of scientific and innovative policy, together with the priority of the area of education, including the higher education, is proclaimed by American Administration of the President B. Obama, having declared repeatedly in favour of the growth of ex- penditure to science up to 3% of GDP and defined clearly the government priorities, among which there take place investments into fundamental and practical researches, improvement of mathematical and natural education, creation of new stimulus for in- novative business (Иванова, Данилин 2010: 32). It is practically recognized that the development of scientific, technical and edu- cational resources has a hearth character. The concentration of scientific and research discoveries and design projects in progressive, developed countries has led to that many other countries are left in the periphery of this area and of the scientific and technical progress as a whole. This situation is changed not even by the growing internation- alisation and globalisation of scientific researches (Мировая экономика... 2009: 198; Майбуров 2005: 10–17). It is also generally known that there exists a high level of scientific researches and teaching in a rather small number of foreign countries, in which outstanding scientists are working. According to estimates of experts, more than two thirds of the most prestigious scientific and research universities of the world are concentrated in English-speaking countries. Besides, the world’s super-league in- cludes the majority of American universities with doctoral programmes (Harvard, Yale, Chicago, California, Princeton and others) and other prestigious universities of Great Britain. These universities have a high concentration of foreign scientists and lectur- ers. For example, of all foreign scientists, working in Great Britain, approximately 15% are concentrated in Oxford and Cambridge (Цапенко 2007: 13; Барбашин et al. 2010: 48–49). 26 S. Keiss, A. Grisins. Western experience in the area of priority of high-quality higher education 4. Regional Scientific and Educational Clusters As it is known, competition of the 21st century has gained a general, global character in all areas of the world economy. As a rule, the countries try to succeed in the interna- tional competition not only in single branches, but in a whole group of branches, linked horizontally and vertically (Гордеев 2008: 198–199). It should be mentioned that the well-known American economist M. Porter in his theory about competitive advantages of the countries of worldwide economy, including also on the level of companies, attrib- uted the greatest weight to the clusters, underlining especially that the clusters create the critical mass for unusual competitive success in certain areas of business. According to M. Porter, the cluster is a group of geographically neighbouring interrelated companies and related organisations, functioning in a certain area and characterized by common activities and mutually supplementing each other. And, although setting of the borders of a cluster often turns out to be a complicated task that requires a creative process on the basis of understanding of the most important interrelations of different branches in it (Портер 2000: 205–208), however, it is, simultaneously, out of the question that the development of some clusters or “bunches”, as a rule, determines the export specialisa- tion of a certain country (Международные экономические отношения... 2001: 167). Strengthening of the role of innovations in the contemporary world economy has led to increased attention paid to the problem of the innovative component of regional cluster (Damaskopoulos, Gatautis 2008: 11–21). As a result of the carried out theoretical researches and analysis of case studies in the end of 1990s, D. Odretch and I. Feldman elaborated on a theory on economic development, based on the process of formation of innovative clusters. According to this theory, the clusters are defined as a number of interrelated organisations, facilitating the implementation of innovations in a certain branch or sector of economy. In its turn, the basis of innovative clusters, according to Ch. Carlson and other authors, is formed by the flows and outer effects of knowledge, possessing the quality of geographical concentration, and by ability of the firms to ab- sorb them (Быкова 2009: 346). The innovative factor is presently a decisive one in relation to the competitiveness of economy of the most developed countries. For them, it has to become a usual activity to form innovative clusters, to possess a high level of cooperation in the area of inno- vations by universities and corporations (Иванов 2008: 5, 6; Navickas, Malakauskaite 2009: 255–259). Experience of the EU in the area of formation of clusters of innova- tive technologies, providing the formation of competitive science-capacious branches deserves a special attention (Клавдиенко 2007: 69). The topicality of it is created by the indisputable fact that, according to the level and dynamics of science-capacious and innovative development, the entire region of the EU falls behind not only the USA, but also Japan. It is interesting that in some years before the current global economic crisis, in 2005, it was clear that the ambitious plan of the EU in the light of Lisbon strategy on overrunning the USA during a ten year period (2000–2010) will not be fulfilled. Instead of growth, the competitiveness of the European economy showed an obvious decline, 27 Business, Management and Education, 2011, 9(1): 19–33 the gap in innovative area continued to deepen. Therefore, the implementation of the strategy was postponed to 2013. Nevertheless, exactly the Lisbon Strategy remains in the EU as one of the principal directions of integration activities, including the area of higher education and science. It is without a doubt that corresponding increase of investments into national programmes in the future although with corrected terms have to strengthen the innovative-educational development vector of the countries of alliance (Афанасьев, Мясников 2005: 15; Дынкин, Иванова 2008: 9). And although presently, the development of innovative clusters in the majority EU member-states is falling behind such countries like the USA, simultaneously, the es- timates of interaction between universities and business in those countries are fully comparable with the situation in America (Иванов 2008: 6). It is also known that all possible activities to increase innovations in the European industry are undertaken in the EU. The cluster policy is regarded by the EU as the key instrument for increase of competitiveness in sectors and regions of innovative potential growth and economic development in the mid- and long-term perspective. Clusters gave an important im- pulse to regional development of those countries, which implemented their principles. Accordingly, the cluster conception of development of entrepreneurship is focused on interrelations between corporative structures, investment, mediator, scientific, educa- tional and public organisations of the region. It is characteristic that three of the best seven high-tech clusters proudly named the “Silicon Valley of the 21st Century” are functioning in Germany: Munich, Hamburg and Dresden. In Italy and France, the re- gional clusters are spreading as well in various areas, including innovations. Experience of some small countries of the EU (Denmark, Finland) in the area of innovations is impressive. It is Denmark that has become the generally recognized worldwide leader in use of clusters in economy. Today, 29 leading clusters are function- ing in Denmark. It should be mentioned that the approach to implementation of clusters in Denmark is in many ways identical to British, including innovative technologies. In its turn, under the impact of the theory by M. Porter, the cluster approach in relation to high-tech clusters of information and telecommunication technologies has become very popular in Finland, which presently employs 1.4 times more people than the resource oriented woodsy cluster, functioning in the maturity market. Even in the case of clus- terfor strategies of innovations, the Finns have one of the highest levels of productivity in the world (Миндлин 2009: 459–463). A distinguishing feature of a contemporary cluster, in the general model of produc- tion-cooperative and other interactions, is not only the focus according to geographical feature and its obvious innovative orientation (Усик 2009: 14), but also the obligatory existence of a system-formative central element in the form of a university institute, cre- ating obvious competitive advantages in the process of activation of innovative regional development (Вахрушева 2009: 386, 387; Strauf, Scherer 2008: 137–151). In reality of the 21st century, in the economy of developed countries, especially the post-industrial ones, the universities are the institutions that not only have to generate the new knowl- 28 S. Keiss, A. Grisins. Western experience in the area of priority of high-quality higher education edge, provide adequate educational services and hand-over the cultural values, but also be the leader in facilitating of economic growth and regional development (Барбашин et al. 2010: 46). On the one hand, it becomes more and more obvious that the transfer of the focus from innovative development to regional level is created by the condition that the re- gional environment determines the competitiveness of national economy in the world market. It is the regions that are capable to react operatively on the changes in outer and inner conjuncture, implement a rapid adaptation on account of a bigger arsenal of instru- ments of national policy (Вахрушева 2009: 386). On the other hand, the innovations focus on the points; where a high density of resources of the national development takes place, including highly qualified scientists, engineers, and technicians. Simultaneously, it is becoming more and more important that innovative firms, the closeness of universi- ties and other research institutions provide, as a result, the synergic advantages of the analysed regional clusters (Иванов 2004: 26). We agree with those presuming that in the nearest future the competitiveness of national economies will be determined by existence of effective innovative regions in the countries, concentrating dozens of firms of one or several related branches. Joint entrepreneurial activities, the state and universities must be used in capacity of a basis in development of innovative territories, but the central role in this threefold relation- ship is to be attributed to universities (Селиванова 2006: 19). In the context of the above mentioned, and taking into consideration, especially, that the foreign researchers recognise imperfections of the maturity theory and united methodological approach to innovative clusters, including their possible variances. (Быкова 2009: 346), it is fully justified that, according to the analysed clusters, the term “regional scientific and edu- cational cluster” is used. 5. Conclusions The rapid scientific and technological progress in conjunction with increasing globalisa- tion is accompanied by rapidly outdating knowledge that has been acquired within the system of higher education, and it urges the topicality of the idea of continuous education as one of the main principles for specialist training in the modern world. The essence of continuous education is not contained in the traditional way of accumulating and acquiring a set scope of knowledge and information, but in formation of student lifelong learning skills, their guiding towards continuous enhancement of and searching for the required information in the rapidly changing world, in their acquisition of adaptive mobility, devel- opment of and readiness for independent learning and creative self-expression. In the leading countries, especially in the post-industrial ones, talent is viewed as a national treasure, and the search and selection of the most talented young people takes place regularly. And in combination with fundamental education and training that is characteristic of creative education, it gives a synergetic effect, which, in its turn, among 29 Business, Management and Education, 2011, 9(1): 19–33 others, activates continuous learning. Within the circumstances of globalisation in the 21st century, the competitiveness of a country becomes increasingly dependent on the generation of innovative knowledge that cannot exist without efficient functioning and continuous enhancement of creative higher education system, the foundation of which is based on close links with science, innovative activity, and on the focus of higher educa- tion institutions on the permanent necessity to develop and search for innovations, on the accumulation of intellectual potential and its use in practice. In the developed countries namely cluster policy is considered to be the key instru- ment for enhancing the innovative-educational potential and competitiveness of many branches and regions. For small countries like Latvia, the positive experience of region- al clusters of several smaller EU countries, including Denmark and especially Finland, should be taken into consideration. It is strongly recommended that in the 21st century the principle of joint entrepre- neurship activities of businesses, the state and universities has to be used as the foun- dation for innovative development of the priority territories of a country. Besides, the central role in such a cluster shall be given to a university or a regional higher education body of the same significance. The leading higher education institutions can and must generate not only new knowledge within the regional cluster mechanisms, but also take the leading role in fostering economic growth and regional development. In order to enhance the competitiveness and quality of the higher education institution services in Latvia, it is necessary to encourage the cooperation among higher education institutions, science and businesses. Also state-owned, not only private higher education institutions must have more rights to provide training in foreign languages (as the lan- guage of instruction), as it can offer a chance to attract talented foreign students, includ- ing students outside EU – from the countries that have been established on the base of the former post-soviet space. Funding from the European funds has to be used to the extent it is possible in such regional innovative-educational clusters in the mode of much closer cooperation and flexible integration of state and private higher education institutions. References Baltic brinkmanship. 2009. Outsiders are wrestling with Latvia’s problems. The government is one of them, The Economist October 15: 38. Damaskopoulos, T.; Gatautis, R., et al. 2008. 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Remiantis šiandieninėmis tendencijomis, palanku didinti aukštos kvalifikaci- jos specialistų kokybinius mokymus, grindžiamus glaudžia aukštojo mokslo ir edukacijos integracija, apimančia daugumai labiausiai išsivysčiusių šalių būdingą mokslo ir edukacinių klasterių regioninių mechanizmų plėtrą. Straipsnyje pateikiama keletas rekomendacijų, palaikančių gilioje krizėje esančią Latvijos aukštojo mokslo ir edukacijos potencialo plėtrą. Reikšminiai žodžiai: aukštojo mokslo kokybė, edukacijos tęstinumas, kūrybingumas, integracija, moksliniai ir edukaciniai klasteriai. Stanislavs KEISS. Dr oec., is an associated professor, Vice-Rector for Scientific Affairs, Head of the Department of Economics at Ekonomikas un kultūras augstskola (the University College of Economics and Culture). He has studied at Latvia’s Academy of Agriculture (1971–1975), and as post-graduate student – at Moscow State University (1978–1981), in the specialities of accounting and economic analysis. In 1992–1994 S. Keiss was employed in different posts of banking system. Since 1996, he has acted as the leading researcher in the Institute of Economics of Latvian Academy of Sciences and a scientific leader of several scientific projects and grants, financed by the Latvian Scientific Council. He has taken part in the research projects on regional reform, commissioned by the government of Latvia. S.Keiss makes regular conference contributions in international scientific conferences and is the author of more than 120 scientific publications. The areas of S. Keiss’s scientific research interests are: accountancy theory and accounting practice, banking, regional economy and scientific research. Presently, S. Keiss is an expert of the Commission of Experts of the Humanities and Social Sciences of the Latvian Scientific Council. In 2004, in the 32nd International Scientific Practical Conference “Tatur Readings” the International Luca Pacioli medal was awarded to S. Keiss for his contribution in the development and implementation of international accounting theory and practice. 33 Business, Management and Education, 2011, 9(1): 19–33 Arkadijs GRISINS. Dr oec., is the Deputy Vice-Rector for Scientific Affairs at the University College of Economics and Culture (Ekonomikas un kultūras augstskola). After correspondence post graduate course at the Institute of Economics of Latvian Academy of Science (1978–1982), he defended candidate of Economic Science dissertation of the theme: “The State Regulation in the Sphere of Social Services under modern Capitalism” (1984) and received candidate of Economic Science (1985). Later, he was confirmed as Dr oec. (1993). He was Deputy Director at the Latvian Institute of Free Market, (1994–1996), Head of the Economic and Management Science Department of Business Institute “Rimpak Livonia” (2000–2002). His main area of scientific research is the study of foreign economic activity in the sphere of Latvian industry and services, including problems of economic globalization and regionalization. In co-authorship he has participated in three research projects of the Latvian Council of Science: “Consumer confidence: economic analysis and measurement” (2001–2004); “The Latvian manufactures in modern conditions of globalization and regionalization the World economy: problems, decisions, prospects” (2005–2008); “Social economic centres and their role in economic development in Latvia” (2009–2012). He has published about one hundred scientific and popular scientific publications, including more than ten monographs and brochures (in co-authorship and without co-authorship). His main teaching subjects are “International economic relations”, “International marketing”, “Management”, “International business”, “World economy”. He has participated in Erasmus exchange programs.