Smart Specialisation Strategy in Lithuania has constituted an important framework to coordinate research and innovation policies and investments with a significant improvement from past experiences, creating a space for a participatory process of innovation stakeholders. The higher education institutions are actively participating in the S3 process, with a good correlation of the S3 selected priority areas and the higher education research capacities, but with no significant changes in the internal decision-making. The higher education system presents an unbalanced funding model, with most incomes devoted to education activities rather than research and innovation. 

The research and innovation system of Lithuania is highly dependent on European Structural and Investment Funds, as national funding is comparatively very small, creating specific challenges in the implementation of the Smart Specialisation concept.

There is a growing demand of the productive sector of skilled students in engineering/STEM fields. This has increased demands of discussion spaces between public authorities, business and higher education to re-balance the attraction of students from social sciences to STEM studies, as well as a stronger policy to attract international talent.

• The multiple policy shifts and lack of long-term vision investments for HEIs in the past has considerably eroded the trust and capacity for agreed coordinated responses with Government. The seven year framework provided by S3 has tried to overcome this trend, however there is still the need to develop a stable long-term “contract” between HEIs and Government.
• The balance between the three HEIs’ missions is strongly tilted towards education (of undergraduate students). This is due to the structure of public funding, which historically favoured massification of HE at the expense of research and third mission activities. As the number of students decline due to demographic trends, Lithuania faces an opportunity to rebalance the three missions of HEIs.
• One of the core challenges in developing skills for S3 relate to the declining HEIs capacities to provide ICT and engineering education. To address the complex roots of this problem, the Government in coordination with key stakeholders should develop and implement a comprehensive strategy for STEM education covering all stages of education.
• There is a growing number of knowledge intensive start-ups and the scale of research – business collaborations has increased. The scope of such activities remains limited by international standards. Hence, there is a need to develop structural capacities of HEIs to support technology transfer, manage intellectual assets, and promote entrepreneurial culture.
• Attracting and retaining talented academic staff remains challenging for Lithuanian HEIs. To maintain its competitive position Lithuania should ensure that the level of wages for academic staff is close to the EU average and careers in research are attractive to top talents.