Entrepreneurship is by far the most important force stimulating economic growth and social progress. In case of the Baltic States pro-market regulation allowed passing over the transition period in a relatively short period of time and, therefore, be sufficiently competitive as to integrate into the European Union. Thus, presently, the Baltic States came to be the most economically developed countries among the former USSR states. Consequently, the present research addresses three key questions, first, which is the role of entrepreneurship in determining the Baltic States’ economic development, second, what is the influence of R&D investments of the society in general and of business in particular in boosting economic development, and third, will the present fiscal policies in the Baltic States motivate further economic growth by stimulating entrepreneurial and innovation? The methodology involved in this paper includes both quantitative and qualitative indicators which combined will offer a deeper insight upon the matter of the present research. The results received allowed reaching the conclusion that entrepreneurship has enhanced all the Baltic States’ economic competitiveness yet the extent differ, with Estonia leading followed by Lithuania and Latvia