R&D craves business involvement

  • 2005-04-20
  • By Aleksei Gunter
TALLINN - Captain Yuri Feldman and Chief Engineer Yuri Bogomolov were with the merchant fleet several years ago when, inspired by the idea of riding Baltic waves with more speed, they developed the idea of a revolutionary power unit.

But the novice inventors faced serious problems when trying to convince potential partners that their theoretic engine required 30 's 35 grams of fuel 's five to six times less than the common internal combustion engine 's to obtain one kilowatt of power.

"The first question usually was 'Do you use any kind of a super-fuel?' and we replied 'no.' And then people usually began to cite the third law of thermodynamics and say we were crazy," recalls Feldman, 52.

But the two persevered, and today they hold a patent for their method of operating a pneumatic piston engine in Estonia and nine countries of the Eurasian Patent Organization. In addition, they have patents pending in Japan, South Korea, China and the United States.

Recently they received news about Canadian authorities' decision to issue a patent.

An inspiring story

But the case of Feldman and Bogomolov, unfortunately, is akin to a fairytale compared with the overall situation in Estonia's research and development sector. While the country's scientific research potential is satisfactory, bureaucratic barriers and the state's insufficient support system have slowed down research and development.

In Soviet times Estonia had several knowledge-based enterprises. One was Tarkon, producer of the so-called "black boxes" used in military and civil aviation.

When independence was restored in 1991, such companies' livelihood was brought to a grinding halt. The state was unable to support them and, in the best case, some, such as Tarkon, were taken over by foreign capital.

"[Companies like Tarkon] mostly do subcontracting without their own R&D work, even though they have the potential for it," says Erik Puura, deputy director of Taru University's Institute of Technology. He says that the main burden of R&D work in Estonia lies on the major universities.

But companies with Estonian capital have very limited capabilities for ordering R&D work from local universities or for developing their own research centers. Puura says the support program initiated by the Ministry of Economic Affairs and Communications and supervised by Enterprise Estonia is fairly fresh and has not brought any major results.

If it is any comfort, Estonia is not the last EU country when it comes to the R&D expenditure in terms of GDP (see fact box). The Baltic state is ahead of all new member states save Slovenia, the Czech Republic and Hungary. It is even ahead of one old member state 's Greece.

But in Puura's opinion, one must also look at the absolute numbers, not only the percentage.

"Compared to Finland, the gap is enormous. In Finland businesses alone spend 3.37 billion euros on R&D every year, in addition to the money from the state and from universities," he says, citing an October 2004 report of the Finnish government.

Even though Tartu University provides 50 's 70 percent of Estonia's total research and new doctoral degrees, it still suffers less funds per worker than any Finnish university.

"We are important in Estonia and in the region. A Finnish university's scale is global. They look for cooperation with major British, German, Japanese universities and consider Estonia a small neighbor who often needs support," he says.

Tartu University's current research priorities 's and major success stories 's lie in the fields of physics and biotechnology, thanks to a heightened emphasis on these areas in the 1980s.

The university has given birth to about 20 spin-off enterprises whose employees and technologies are closely tied with the alma mater. Apart from the relatively well-publicized HIV vaccine being developed by university scientist Mart Ustav, in cooperation with a Finnish company, the spin-off achievements include a probiotic lactic bacterium for a domestic dairy producer and a portable muscle-tone measuring device. The latter, developed by Tartu University spin-off Myoton and used in research, sports and medicine, mostly targets foreign markets.

In Puura's opinion, it is the bureaucracy surrounding the distribution of EU structural funds that creates the bottleneck for innovation in Estonia.

At the same time, the universities have begun to think more economically, trying to promote only those projects that have high potential for being finished and earning future profits. That sounds reasonable, given that maintaining a valid patent in several countries may cost up to a six-digit sum.

The lack of venture capital, private or state-provided, is another curse of the Estonian R&D sector. The government has recently discussed creating a state-venture capital fund, although it abandoned the idea. Such funds exist in many countries.

"The absence of that [state-venture capital fund] makes it difficult for universities to advance in [the process of getting] new patents. If a university sees no guaranteed support from the state, it once again is doomed for a desperate and effort-consuming search for money," says Puura.

The state often cannot see the potential that local inventions carry. For this reason the X-ray luminophore, invented by Tallinn University of Technology senior research fellow Vello Valdna in the late 1990s, eventually received industrial implementation in the United States.

Bruker, a leading medical equipment producer, has developed this luminophore to make X-rays faster, more sensitive and safer for patients.

Puura says the annual turnover of all Estonian biotech companies stands at about 60 million kroons (3.8 million euros) while, for example, the wooden-house market has a volume of some 1 billion kroons.

"One can see from this comparison where the country's priorities currently are," Puura notices bitterly, adding that the wealthier Estonia becomes, the more people will think about their knowledge-based economy.

"The main problem is the lack of interest toward new technologies among the businesses. Also, Estonia's most significant enterprises belong to foreign capital and the owners prefer to carry out the necessary R&D work in the labs of the holding company set outside Estonia," says Rein Kaarli, advisor in the science department of the Ministry of Education and Science.

Several experts have pointed out that implementing a new technology is an extremely costly process, which scares off businesspeople.

Puura suggests that the science sector's infrastructure, i.e. lab equipment, should be the first target for improvement. Apparently, Puura and his colleagues' prayers have been heard. Two weeks ago the government pledged to give 230 million kroons toward R&D infrastructure over the next two years.


So far, business-university cooperation has mostly included major companies 's industry flagships that can afford spending a little extra on quality R&D.

In early March, Tallinn University of Technology prolonged for five years a cooperation agreement signed in 2001 with the Tallinn-based BLRT Group, one of the largest ship-building and industrial companies in the region. The university provided innovative practical solutions for the company to test and implement. In return, BLRT Group offered internships to the university's students. About 160 graduates of Tallinn University of Technology currently work for BLRT Group, which makes up almost half the company's management and engineering staff.

The school has also successfully improved the power units to a number of Tallinn trams.

Volta, Estonia's oldest electrical motor company, is about to launch production of wind-powered generators for private consumers. Developed in cooperation with the university, the generators are said to be capable of working at wind speeds as low as three to four meters per second.


Estonia also has its fair share of self-proclaimed inventors, and Mati Salm is currently one of the most notable.

Salm, who earlier broke into the retail sector with his textile sauna besom, recently designed a round table containing a barbecue grill. A uniquely designed air-circulation system prevents the grill's coal from burning the wooden table. The patented invention received warm welcome from both French and U.S. markets.

Another example is Tartu engineer Heiki Juris' innovative ventilation and heating system for residential and industrial buildings. By using the earth's natural heat, several pipes and a fan, the system could cut up to 60 percent of a building's heating bill. In the summer, the system functions as an air-conditioner.

Meanwhile, more dubious inventions have received publicity in the local press. Several months ago, a Tallinn Airport technical support team member claimed he invented an adaptive lighting system, which various car manufacturers have used for years.

According to Puura, every now and then people come to the university to advertise their inventions.

"We try to be polite and listen to everyone, but when we see we're dealing with obvious nonsense, we send those people away," he says.


Yet Feldman and Bogomolov's combustion engine remains one of Estonia's most inspirational invention stories. The idea was initially spurred by Bogomolov's concerned over the unreliable nature of an internal combustion engine. Turning to Feldman, his former professor and current colleague, the two were able to successfully improve this power unit.

In a nutshell, the innovation's genius lies in its pulse-like method of delivering compressed air to the cylinder's working chamber. The unit would consist of an air compressor that could, for example, be powered by electricity and a pneumatic piston engine. The machine is clean, quiet and highly efficient.

The inventors claim their product can be used across all fields currently dependent on internal combustion engines, including the car industry. Yet Feldman's claim that the air compressor-powered engine could produce six kilowatts of output, enough for a small household, does raise doubt.

But Estonian and international patent experts seem to have faith in the invention, having already acknowledged the engine.

And then comes the money issue.

According to Feldman, it would take about 200,000 euros to build a working model and measure its results. "All the research companies we have contacted ask for a working model and documented test results. They do not want to risk their money on building a model," he says, adding that he and Bogomolov have already invested a hefty sum on patents and so can't afford building costs.

The two have also waved their ideas in front of high-profile state officials, going so far as to ambush then Prime Minister Juhan Parts in a corridor after a reception. Parts shook the inventors' hands, asked them to submit everything in writing and recommended that they address Enterprise Estonia, a governmental business development agency.

The agency is now trying to find money for the project.

"If the prime minister would use our invention to create a positive and innovative image of Estonia at the international level, I am sure both the country and we could benefit from it," stresses Feldman. He adds he is sure that companies set to increase fuel consumption would do anything to block the invention.

The lack of state money allocated for R&D and Estonia's poor industrial level prevent new technologies and inventions from becoming a reality, says Feldman.

Yet on a more optimistic note, in just four years the scientists' inventions have earned patents in several countries and developed a decent level of state cooperation. In the business of science, this is quite an admirable accomplishment.

"Well, yes, [development] has been going quite fast, but we'd like it to go even faster. After all, a patent lasts for 20 years and then it's all in public domain," says Feldman.

Estonia's R&D fact sheet:

Main R&D centers: Tartu University, Tallinn University of Technology, Estonian Agriculture University, Tallinn Pedagogical University.

Total number of researchers (2003, incl. academic staff): 1,970

Gross national R&D expenditure (2003): 0.83% of GDP, or 66.8 mln EUR (49% coming from the govt, 33% from private sector, 15% from EU funds, 3% other sources).

R&D expenditure to GDP ratio in other countries: Israel 4.81% (world leader), Sweden 4.27%, Finland 3.46%, Iceland 3.11%, Japan 3.06%, USA 2.8%, EU average 1.93%.

Source: Ministry of Education and Science