Changes in industrial structure and potential: the case of Lithuania

The core aim of the research paper is to analyze the changes in the structure and potential of Lithuanian manufacturing industry, affected by the long process of economic transformation experienced since 1991. The purpose of this paper is to disclose how Lithuanian industrial structure has been moving towards the level of advanced industries, to analyze which sectors have the potential to contribute to the development of the overall manufacturing industry, and to explore how the contribution of individual manufacturing industries has changed over the researched period. The study provides the analysis of several key indicators, which enable to estimate the potential of Lithuanian industrial structure in accordance with quantitative particulars and revise the alteration of the contribution of individual manufacturing industries to the overall potential of Lithuanian manufacturing industry. This paper intends to present the estimations of the changes in Lithuanian industrial structure and its potential during the period of 2000-2014 on the basis of the composite Index of the Long Run Income Potential of Industrial Structure. The empirical analysis has revealed the signifi cance of medium-high and low-tech industries and disclosed the variance of the contribution of individual manufacturing industries to the overall potential of Lithuanian manufacturing industry. The empirical study has disclosed that Lithuanian industrial structure shows a very modest potential of growth and development, and the potential of Lithuanian industrial structure remains a controversial issue. The evident shift into high-value added manufacturing industries, where knowledge and technology intensive sectors play the central role, has not been confi rmed