2026-08-04
- Lithuania fails to ensure a consistent innovation pathway from research to market – the largest share of funding goes to product development and exports (EUR 1.83 billion), while significantly less is allocated to research and prototyping (EUR 206.7 million and EUR 491 million respectively).
- Funding measures operate as a set of separate instruments, making it more difficult for businesses to move seamlessly through all stages of innovation development, from research to commercialisation.
- Even once a product has been developed, its value often remains unprotected – of the 30 projects assessed by the auditors, only one result was patented, although in 27 cases products were developed or commercialised.
- The National Audit Office recommends establishing a coherent innovation funding chain and ensuring consistent support throughout the entire patenting process.
In Lithuania, 174 funding instruments have been established to promote business innovation, but they do not form a coherent chain stretching from research to a market-ready product protected by intellectual property rights. An audit carried out by the National Audit Office, entitled “Business Innovation Promotion System”, revealed that significantly less funding is allocated to the early stages of innovation development than to product development and export, and even products that have been developed or commercialised are rarely protected by intellectual property rights.
As a result, the innovation process can be disrupted at two points – when promising ideas move from one development stage to the next, and when seeking to protect results that have already been created and turn them into a long-term competitive advantage.
“Innovation policy cannot end with the allocation of funding. The state’s objective is to create the conditions for as many ideas as possible to go the whole way from research to the market and become solutions protected by intellectual property rights. Isolated measures are not enough for this – a coherent system is needed to transform public investment into long-term benefits for the country’s economy,” says Auditor General Irena Segalovičienė.
Funding measures do not ensure a coherent innovation chain
In the first half of 2022–2025, 174 funding measures were implemented in Lithuania to promote business innovation, with a total budget of over EUR3 billion.
The largest share of funding was allocated to the development and export of products – EUR 1.83 billion. EUR 491 million was earmarked for prototype development, and EUR 206.7 million for research. This indicates that the innovation funding system is more focused on the middle and late stages of the innovation cycle, while less attention is paid to the early stages of innovation development.
The audit revealed that the funding measures operate as a set of separate instruments rather than a coherent system. Due to insufficient coordination between them, it is more difficult for businesses to progress consistently through all stages of innovation development, from research to bringing a product to market; as a result, some projects never reach the market. This is also confirmed by the audit findings – not a single project was identified that had received funding at at least two consecutive stages of the innovation development chain.
The value created is not always protected
The audit revealed that even after a product has been developed or commercialised, its intellectual property often remains unprotected. Of the 30 projects assessed, products were developed or commercialised in 27 cases, but only one was patented. This indicates that products created with state investment are not always protected by intellectual property rights.
The insufficient attention paid to intellectual property protection is also reflected in the country’s overall patenting indicators. Between 2022 and 2025, an average of 26 national patents per million inhabitants were granted in Lithuania each year. It is worth noting that the number of patent applications in Lithuania is more than three times lower than the European Union average – in 2024, 45 patent applications were filed per million inhabitants in Lithuania, while the EU average stood at 152.
This is due to systemic factors. It takes an average of 2–5 years for a patent to be granted, but measures to compensate for patenting costs are only valid for 1–24 months, meaning that companies may not have time to take advantage of them. Businesses also lack information about the options for protecting intellectual property.
From isolated measures to a coherent innovation system
The National Audit Office recommends moving from isolated funding measures to a coherent innovation promotion system that would ensure consistent project funding at all stages – from research to bringing the product to market. It is also proposed to establish consistent financial and expert support throughout the entire patenting process – from the generation of R&D results to ensuring the long-term validity of the patent.
The aim of implementing these recommendations is to increase the proportion of projects receiving funding at least at two consecutive stages of the innovation chain from 0 to 30 percent, and the proportion of R&D project results that are patented or protected by other intellectual property measures from 3 percent to 20 percent.