TALLINN - Estonia had its Year of Innovation in 2009. The project was launched by the Estonian Ministry of Economic Affairs and Communication on the basis of the Innovation Awareness program, developed by Enterprise Estonia (EE). The biggest goal behind the effort was to create a new level in the ways we think and act.
This year, and over the next couple of years, approximately 1.3 billion kroons (83.3 million euros) from the European Regional Development Fund, EE, and Estonian companies will be invested into eight competence centers, with results expected in new innovative products and services and an increase in the capabilities of researchers and universities.
“The program of competence centers, which has been funded from the European Regional Development Fund, is an EE program which could best be described as one of the most ambitious, and one which is aimed at enterprises and researchers, offering them huge future potential,” says Ilmar Pralla, director for the Innovation Division of EE. Competence Centers (or CCs) have a great role to play in influencing the competitiveness of Estonian enterprises. Research that is required by Estonian enterprises for product development purposes is the main function of research institutions, which have been established as a result of co-operation between enterprises and institutions of higher education.
Eight competence centers, which are to be allocated more than 900 million kroons from the assets of the European Regional Development Fund, were short-listed at the beginning of May, from a total of fourteen applicants. The maximum amount to be allocated to each development center is 120 million kroons. Enterprises which team up with the development centers will invest an additional 400 million kroons into these research institutions.
The main fields of activity will be IT and electronics, bio-technology (food products and medicine), and materials. Estonia already has strong companies and research bases in these fields.
Two types of enterprises have mainly been responsible for joining the competence centers: large-scale production firms or providers of services which are capable of selling products or services, which themselves emerged as the result of research work, and smaller enterprises which offer them development work. “Such combinations work very well; several smaller development companies have also concentrated around Nokia, which brought success to Finland with this synergetic model,” Pralla explains.
The eight founders, and partners of the CCs, are well-known enterprises which include the North Estonia Medical Center, Leibur, Valio, Voru Cheese Factory, Estiko Plastar, Andrese Klaas, Evikon MCI, Webmedia, Regio, Skype, Swedbank, Delfi, East Tallinn Medical Center, dairy co-operative E-Piim, the Animal Breeders Association of Estonia, and others.
Five of the competence centers have been operating since 2004 and the first results have already been achieved. For example, Lactobacillus plantarum TENSIA™, a bacteria which affects blood pressure, was discovered and developed as the result of a co-operation agreement between the researchers of the Bio-Competence Center of Healthy Dairy Products and the University of Tartu; the bacteria was used by a dairy co-operative called E-Piim to produce a healthy cheese brand called Sudamejuust (heart-friendly cheese).
According to the representative from the Bio-Competence Center of Healthy Dairy Products, Ene Tammsaar, this is also the very first consortium to offer milk production and processing companies innovative and practical advice and tips in order to quickly solve everyday problems (workshops, tips on feeding and hygiene, etc). Producers of foodstuffs are being given advice and recommendations concerning food, food ingredients and nutrition for each stage of the food production value chain.
“One of the objectives of a CC is to promote co-operation between research institutions and enterprises,” Pralla said. Recent studies show that only 2 percent of Estonian enterprises are co-operating with universities, which is a very poor result when compared to Western European countries and, above all, to Finland. These eight competence centers bring together companies who are developing traditions of co-operation with universities. According to Pralla, the number of enterprises which are joining the CC exceeded all expectations. More than a hundred other companies have expressed their intentions to co-operate with the research institutions and invest into development activities.
“This is a good indicator of the enterprises’ good will and growing co-operation,” Pralla stated. “The CC also stands for a group of enterprises working together in order to achieve objectives which would otherwise remain unachievable if they were alone, and will help to implement more ambitious projects and ideas.”
It’s the easiest thing in the world to measure the benefits which have been gained by investing into CCs, with new products and services which can soon be sold by Estonian enterprises. “If our enterprises are about to use the research results of our scientists for product development purposes, thereby becoming providers of products and services which offer more profitability and added value, the competitiveness of both Estonian companies and the national economy will improve,” Pralla added.
Tammsaar gives an example of a dairy company which mostly exports products with a low added value, so-called bulk products such as milk powder and butter. According to him, the sales success for bulk products has also been attributable to the implementation of measures which have been provided by the EU’s Common Agricultural Policy (CAP) for the organization of the dairy market. This includes, for example, intervention purchases, private storage subsidies and usage subsidies on skimmed milk powder and butter, but also export subsidies, including cheese.
Today, the EU has launched CAP reforms, and the liberalization of the agricultural market is the general trend. Therefore, Estonian experts say that the dairy sector in both the European Union and Estonia is facing a new situation in which it is necessary to focus on the production and sales of products with a higher added value. Experts consider that the key elements of this flexible strategy are food and health, food quality and processing. This also assumes bigger investments being made into research, and product development activities by enterprises.
Training people is one of the major benefits of CCs. Contemporary laboratories in competence centers represent an attractive learning environment for students, thereby encouraging them to seek further development in these fields. More and more masters and doctorate degree theses are being developed at the request of companies which have joined CCs, and the individuals who have prepared their theses in this fashion will be employed by the same companies or will continue to investigate their chosen subject in development centers.
For example, during the first three years, ten doctorate degree theses and thirteen master’s degree theses were drawn up on subjects that were related to the research fields being pursued by the Bio-Competence Center of Healthy Dairy Products. According to the estimates supplied by Tammsaar, between fifteen to twenty masters degree theses and eleven to fourteen doctorate degree theses will be added to this list over the next few years.
Pralla says that this will help to inform students about the needs of Estonian enterprises, as well as the problems facing them, while changing the product development policies of enterprises in the long run. “Changing the behavioral model of enterprises and universities is probably the biggest benefit which has been contributed by the project concerned. Entrepreneurs and research specialists who have joined the CC will change their attitude towards establishing ties of co-operation and involving themselves in product development,” said Pralla.
The interest in the establishment of competence centers has grown since 2004, when the first centers were established at universities. The largest number of CCs has been established at the Tallinn University of Technology, closely followed by different departments of the University of Tartu and the Estonian University of Life Sciences. In 2007, four of Estonia’s biggest universities sold their services and entered into more than 1,000 contracts with a total value of 370 million kroons. According to Pralla, the ties of co-operation with CCs will change the syllabus at universities while also adapting research fields to meet the needs of Estonian enterprises.
Tammsaar adds that the synergy that has been born of the levels of co-operation between researchers and enterprises will help to create innovative products which will contribute to better health levels and will diminish the risks of disease. In the long run, when adding up all the expenditure which is related to human life care, this would mean a delivery of considerable savings. “The enterprises can’t do it alone; both research institutions and the state must contribute to this purpose,” said Tammsaar.