This article aims to analyze overcoming labor supply shortages in the Digital ecosystem and demand structure according to the innovation performance and value proposition designed by local IT enterprises. The authors have designed a simple metric based on the value added generated by local IT firms, categorizing firms into one of three models: destructive, stagnating, and productive. The factors influencing the performance of the IT ecosystem were analyzed. This article pays special attention to the impact of digital literacy and artificial intelligence on economic development, comparing the situation in all three Baltic states. The article discusses the support for the digital ecosystem concerning domestic innovation and entrepreneurship policies and identifies the latest proven policy measures to overcome weaknesses. Reforms have been carried out, but they do not result in an increased number of “productive companies,” and over 30 years since the collapse of the USSR, brain drain and fundamental systematic issues are still critical. The change of the post-soviet mindset as a part of innovation culture is analyzed.