“I’d like 6 kilograms of
innovation, please”

Ojasaar Yrjö, representative of Solon partners Ltd., Estonia,
at this year’s Baltic Dynamics Conference.

Ojasaar Yrjö

Text: Evelina Kutkaitytė

Last month the annual Baltic Dynamics conference invited innovation supporters from around the Baltic Sea to Tallinn, Estonia.

Estonia’s president, Toomas Hendrik Ilves, opened the conference emphasising the importance of Baltic cooperation. “The Baltic States make huge impact to EU economy as well as help withstanding the business competition with the bigs like China”, said the Estonian president, who also is the initiator of EU’s Baltic Sea strategy.

According to the president, the findings of Baltic Dynamics conference should be presented to the Baltic governments. The bureaucracy level in Estonia makes it almost 3 years to get business support from the state thus the companies prefer working on their own. Similar conditions are observed in Latvia and Lithuania.

Despite all independent efforts to survive in the market, today‘s businesses show lack of knowledge and creativity. Why Apple was so successful? Because it combined technology and design. In our universities technology, design and arts are still taught separately. If we observe and compare people involved in innovation support and creative industries, we will notice their language and understanding of environment are quite different. The first ones talk about clusters and valleys, and the others – about garages and camps.

At the conference, six creative Baltic incubators were presented.
Tallinn creative incubator is one of three incubators of in Estonia, with 47% of the country’s creative enterprises as participants. Standing out for its orientation to business rather than to traditional industries, the Tallinn creative incubator was awarded as the second best creative incubator in the world last year.

Riga creative industry incubator is the only creative incubator in Latvia, established in 2010. The aim of the incubator is to be a one-stop-shop providing all creative services in one place. Riga creative industry incubator is responsible for distributing 2 million Euros for start-up companies and providing business support for at least 100 companies in 5 years.

The role of creative business incubators in the regeneration of city regions was presented with a quote of the famous sculptor Constantin Brancusi – “to see far is one thing, to go there – another”.

Liverpool stopped being sorry for itself
Basecap3TM is an award-winning business community in Liverpool (UK) supporting creative industries. It provides a modern environment where new start-ups and early stage development companies can access quality business support, engage with likeminded entrepreneurs and improve their chances of starting and maintaining a business. “The incubator made the city alive and Liverpool stopped being sorry for itself” claimed the presenter Roy Jones. “Creative industries are full of SMEs which are the key of all economies” – added R. Jones reasoning why helping creative SMEs is necessary for the economy.

2800% growth
Arabus business incubator at Aalto start-up centre (Finland) aims at promoting entrepreneurship in the field of creative sector and industries. Their success stories include companies demonstrating growth of 2800% like Footbalance and Futurice as well as Microsoft award winners GWEB and Sopima.

In the USA an average 11% of industries grow on venture capital, 25% of GDP and 80% of jobs are created by companies with venture capital investments. When Angry Birds, a video game developed by a Finish company, got so successful, many more investors came to Finland to check whether there was something more happening.

The problem is you cannot order innovation and success in advance
“I’d like 6 kilograms of innovation, please” – laughs Ojasaar Yrjö, representative of Solon partners Ltd. In Estonia. On the way to innovations there is always a valley of death – a period of time when companies and business starters need support and few are interested in investing. In many countries state comes to help at this stage of business development. Springboard in Finland offers 9 thousand Euros per investor you succeed to attract with your idea. Estonian development fund runs a virtual incubator Seedbooster, and Baltic Innovation Agency offers trainings to entrepreneurs on how to present your idea to a potential investor.

A venture garage
Aalto University (Finland) is running the Aalto Centre for Entrepreneurship WITH the aim of “creating engines” for new and existing companies. Collaborating with Stanford University (USA) and other partners they recently opened a Venture Garage – a co-working space for Baltic and Nordic entrepreneurs. With annual budget of 400 million Euros Aalto University employs 15 people to work with young entrepreneurs, 9 of which are exclusively involved in technology transfer. In 2010/11 there were fifteen companies established on the basis of Aalto originating ideas. Aalto University believes that entrepreneurs should be seen as heroes thus awareness building is one of the main tasks within entrepreneurship programs.

Business leading innovations are never concrete in the beginning. The good news is that there are milestones indicating if it’s worth investing more. Technology transfer process in Aalto University involves evaluation of ideas looking for anything “sunny” that might work rather than anything “cloudy” proving the idea will fail. The bright sides of ideas are sought either in business potential, feasibility to manufacture or intellectual property rights.

University roles
Professor Pasi Malinen (Finland) demonstrated his models for developing 3rd generation universities. He, like most of the speakers, marked the need of change in management and communication. “Nowadays universities try to become more innovative by creating special departments, leaving everybody else to do their old, regular work. But everyone should be involved,” said the professor.

The urge for collaboration was also expressed among Swedish start-ups. In one case, a student’s initiative resulted in the establishing of a business incubator which later evolved into a local science park:

“Young entrepreneurs at that time didn’t ask for an incubator – they simply wanted an environment for collaboration, and today Jönköping Science Park (Sweden) is offering a unique meeting place for entrepreneurs. The physical environment has no walls. Combining ideas is what makes them happen”, said managing director Therese Sjölundh. Differently from other similar institutions Jönköping Science Park has both pre-incubation and post-incubation programmes. Also, this science park focuses on business excellence rather than technology excellence. 14 employees are working mainly as business developers, evaluating about 300 business ideas per year, helping 100 of them to start, and hosting 15 companies in business incubator. Sjölundh noted that no linear development will ever lead companies to success. Thus the aim of business incubators and science parks is to help companies finding their own business model for growth.

Lithuania is losing to Estonia
According to the competitiveness index, Lithuania is in the middle of the three Baltic States, losing its former leading position to Estonia. KTU Regional Science Park (Lithuania) shared statistics proving financial benefits of innovation and business support for the State. In Lithuania there were nearly 60 Million EUR invested into infrastructure of incubators and science parks so far meanwhile companies that grow with their help pay over 6 Million EUR taxes each year.

The next Baltic Dynamics conference will take place in Lithuania, 13 – 15 of September, 2012. We kindly invite to you to join the next event of sharing ideas and best practices on business support in the Baltic’s.