The most ambitious innovation project in Estonia

Approximately 1.3 billion Estonian kroons from the European Regional Development Fund, EE (Enterprise Estonia), and Estonian enterprises will be invested into eight competence centres this year and over the next couple of years, resulting in new innovative products and services and an increase in the capabilities of researchers, stems and universities.

“The programme of competence centres which has been funded from the European Regional Development Fund is a EE programme which could best be described as one of the most ambitious, and one which is aimed at enterprises and researchers, offering them a huge future potential,” relates Mr Ilmar Pralla, the director for the Innovation Division of EE. Competence centres (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 the result of co-operation between enterprises and institutions of higher education.
Eight competence centres which are to be allocated more than 900 million Estonian 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 centre is 120 million Estonian kroons. Enterprises which team up with the development centres will invest an additional 400 million Estonian kroons into these research institutions.
The main fields of three-field, four-field, and one-field short-listed enterprises are IT and electronics, bio-technology (food products and medicine), and materials, respectively. Estonia has strong enterprise and research bases in these fields.
Two types of enterprise have mainly been responsible for joining the competence centres, these being large-scale production enterprises or providers of services which are capable of selling products or services which themselves emerge 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, having brought success to Finland with this synergetic model,” Mr Pralla explains.
Eight of founders and partners of CCs are well-known enterprises which include the North Estonia Medical Centre, Leibur, Valio, Võru Cheese Factory, Estiko Plastar, Andrese Klaas, Evikon MCI, Webmedia, Regio, Skype, Swedbank, Delfi, East Tallinn Medical Centre, Dairy Co-operative E-Piim, the Animal Breeders Association of Estonia, etc.

First results
Five of the competence centres 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 Centre 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 Südamejuust (Heart-Friendly Cheese).
According to the representative from the Bio-Competence Centre of Healthy Dairy Products, Ms Ene Tammsaar, they are 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.
According to Mr Pralla, the eight competence centres all operate in the spheres that are seen as the most promising for Estonia. “Regrettably, we don’t have an energy and environmental technology CC, but there wouldn’t be space enough in Estonia for more. The further objective is to involve even more companies around the existing CCs,” he says.
“One of the objectives of a CC is to promote co-operation between research institutions and enterprises,” Mr Pralla explains. Recent studies show that only two per cent 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 centres bring together the cr?me de la cr?me of companies who are developing traditions of co-operation with the universities. According to Mr Pralla, the number of enterprises which are joining the CC exceeded all expectations. More than hundred other companies have expressed their intent to co-operate with the research institutions and invest into development activities.
“This is a good indicator of enterprises’ good will and growing co-operation,” Mr Pralla continues. “CC also stands for a group of enterprises working together in order to achieve objectives which would otherwise remain unachievable of they were alone, and will help to implement more ambitious projects and ideas.”

Benefits
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,” Mr Pralla says.
Ms 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. 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 organisation of the dairy market. This includes, for example, intervention purchase, 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 liberalisation of the agricultural market is the general trend. Therefore, 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. 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 centres 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 centres.
For example, during the first three years, ten doctorate degree theses and thirteen masters degree theses were drawn up on subjects which were related to the research fields being pursued by the Bio-Competence Centre of Healthy Dairy Products. According to the estimates supplied by Ms 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.
According to Mr Pralla, 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 behavioural 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,” Mr Pralla predicts.
The interest in the establishment of competence centres has grown since 2004, when the first centres 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. The fact that in 2007, four of Estonia’s biggest universities sold their services and entered into more than one thousand contracts with a total value of 370 million Estonian kroons, speaks volumes. According to Mr 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.
Ms 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 cares, 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.”



Competence centres programme
** EE launched the competence centres programme in January 2003. The measure is used to support long-term co-operation ties between enterprises and research institutions for the purpose of implementing market-orientated research and development activities.
** The budget for the competence centres programme which is funded from the European Regional Development Fund is set at one billion Estonian kroons until 2013, with the maximum amount available for each individual development centre being 120 million Estonian kroons.
** By October last year, all competence centres were supposed to submit their intent for the participation in the programme to the EE. In total, 29 applications were submitted by research institutions which have been established by enterprises and universities. EE brought similar groups together and fourteen applications made it to the next round.
** Eight CCs which required funding were short-listed from among the fourteen applications for the establishment of competence centres. Apart from that of the European Regional Development Fund, co-financing will be available for approximately one hundred partnering enterprises.
** A committee which consisted of fifty experts assessed the applications, those experts including general experts and internationally recognised specialists and experts in their respective fields. The greatest amount of attention was given to the research capacity of the centres that had been established, something that is required by enterprises in order that they might be able to launch new, innovative products and services.
** Since 2004, the EE has contributed approximately 200 million Estonian kroons to the activities of five competence centres. These are the Competence Centre of Food and Fermentation Technology, the Bio-Competence Centre of Healthy Dairy Products, the Competence Centre in Electronics, Info- and Communication Technologies ELIKO, the Competence Centre for Cancer Research, and the Estonian Nanotechnology Competence Centre.



Eight CCs were born out of co-operation ties between enterprises and research institutions

Competence Centre of Food and Fermentation Technology (CCFFT)
Food Laboratory of the CCFFT develops new ice cream, confectionery, and bread and dairy production technologies. Extending the shelf-life of products and improving the functionality of foods are its main goals. As the result of the work that has so far been conducted, the sales performance levels and the awareness of brand marks of the companies involved will improve.
Another important sphere is the participation in co-operation projects with the Dutch, Canadian, Finnish and Estonian companies and research institutions, all of which are aimed at the development and sale of technologies and hardware and software all over the world.

Estonian Nanotechnology Competence Centre (NanoCC)
NanoTAK is mostly involved in performing common research projects in the field of nanotechnology and the development of new materials for its partners and other stakeholders.
The Estonian Nanotechnology Competence Centre has two main research fields: nano-structural gas sensors and functional nano-materials. The goal of the first research field is to considerably improve the measures in use for the detection of toxic, environmentally hazardous, explosive or just unpleasant gases. Improving the sensitivity of sensor elements and defining lower power requirements, combined with wireless technologies and increasingly stricter environmental and safety standards, will help to increase the use of gas sensors in industries, offices, households, and in the general monitoring environment. The first solutions to be suitable for final producers will be completed as the result of co-operation ties between NanoCC, Evikon MCI and other partners, and will hopefully be completed in a couple of years.
The aim of the other research field is to identify alternatives for combining various nano-structures with common everyday materials in order to improve some of their functional properties. Today, the greatest amount of attention is being given to the implementation of carbon-nanotubes. In co-operation with Estiko-Plastar, opportunities are being examined in order to diminish the importance of oil products in plastic materials; to increase the durability of certain building materials while diminishing the energy consumption requirements of production processes in co-operation with the Clay Processing Service and some other partners; solutions for increasing the durability of textile production and decreasing raw material content are being studied with Haine Ribbon Factory. In addition to the implementation of carbon-nanotubes, functional surface treatment materials such as electro-optical glass which is based on nano and micro-structures are being developed in co-operation with Andrese Klaas and Printcenter Estonia.

Software Technologies and Applications Competence Centre (STACC – Software CC)
The main fields for the STACC include software development methodologies (software systems which work faster, better and have higher levels of quality), and data extraction methods, or how to outsource interesting and important information from bulk data collections.
Such research will result in methods for analysing the e-healthcare information in order to improve public health and provide high-quality diagnostic tools, analytical methods ensuring personal privacy (such as in health care, or banking) and alternatives for developing better software, for example.
The most well-known technological partners of the CC are Webmedia, Regio, Cybernetica, Quretec, Logica and KnowIT and Skype, Swedbank, Delfi and the East Tallinn Medical Centre as the users of such technologies.

OÜ Bio-Competence Centre of Healthy Dairy Products (CC)
The research by this CC focuses on the development of innovative, research-based platforms for the development of sustainable milk production and novel healthy products.
The main research fields include biotechnology and human health.
Breeders of livestock and geneticists, feeding specialists, microbiologists, milk technologists, nutrition specialists, bio-chemists and doctors have joined together their efforts within the framework of the CC projects in order to scientifically digest and improve the milk production chain as a whole, starting from the breeding and feeding of livestock, and ending up with the production of healthy milk products. The aim is to increase the competitiveness of the dairy sector of Estonia. The objective of the centre is to use new biotechnical methods to create new solutions and new, innovative technologies for the production of health-supporting, research-based products which aim to help mitigate diseases, which are required on the domestic market and which feature a high export potential.
The participants are the dairy cooperative, E-Piim, the Animal Breeders Association of Estonia, Starter ST OÜ, the Estonian University of Life Sciences, and the University of Tartu. The partners are a collection of smaller and larger dairy companies and farms.
For example, Lactobacillus plantarum TENSIA™, a bacteria which affects blood pressure, was discovered and developed as the result of co-operation ties between the researchers of the Bio-Competence Centre at Healthy Dairy Products and the University of Tartu; the bacteria was used by the dairy co-operative, E-Piim, to produce a healthy cheese brand called Südamejuust (Heart-Friendly Cheese).

Competence Centre for Cancer Research AS (CCCR)
The aim of the Competence Centre for Cancer Research is to improve the quality of cancer therapy by developing and implementing new diagnostic platforms and offering the pharmaceutical industry new cancer drug candidates.
As the result of the research work undertaken by the CCCR, it will be possible to diagnose tumours at an earlier stage. The focus is on non-invasive diagnostics, meaning that individuals don’t have to be cut into pieces in order to discover whether they are suffering from cancer. Even now, it is possible to assess individual risks in terms of the occurrence of cancer when it comes to certain forms of breast and intestinal cancer.
New generation cancer drug candidates which are more effective, selective and less toxic for other parts of the body are being developed by the centre.
The vast collection of experience and knowledge in medics, bio-technologists and chemists is being pooled in order to create new drug candidates and diagnostic platforms. A majority of those Estonian organisations which are involved in cancer treatment and diagnostics are establishing members and partners in the centre.

OÜ Competence Centre in Electronics, Info- and Communication Technologies ELIKO
ELIKO’s main domains are Smart Space Technologies and Services (SSTS) and Advanced Signal Processing (AST); in other words, sensing and signal processing methods and personalised data communications services.
Sensing and signal processing methods allow information to be collected from a variety of phenomena and processes. The measuring of biological, electro-chemical and mechanical values are studied and developed for this purpose, mostly by determining their electrical impedance. The goal is to improve the reliability of sensor networks in the field of health care, above all; however, the CC also focuses on the service life of batteries and measuring their electric capacitance, and identifying defects in a variety of composite materials and their structures (for example, wind turbine blades).
Personalised data communication services are primarily intended for the users of mobile equipment. Personal museum guide software called “Smartmuseum”, which has been developed for the Research History Museum in Florence within the framework of a project that was launched under the Seventh Framework Programme, serves as a good example. The item will suggest artefacts and select multimedia content to match the wishes and pre-set preferences of a specific user. It is intended to implement similar software solutions in health care, such as in home nursing for patients, for example.
In total, sixteen enterprises are currently participating in the applied research programme.

Competence Centre for Innovative Engineering Production Systems Technology (CCIEPS)
CCIEPS focuses mostly on three research and development domains, their common denominator being the development and implementation of a concept of a plant of the future.
- the development of e-production, and the service life management models and identification of implementation requirements for products, which is based on the distribution chain network and cluster level, and on testing the models in enterprises;
- the development of company-centred automated processes which are based on robot-technical solutions;
- the development of intelligent systems for collecting and analysing the required information from the working environment using sensors, and the adoption of smart decisions which are then communicated to control centres.
The integration of information technology solutions with different industrial and production fields is characteristic of the research projects that have been planned. The outcomes of research will provide the bases for the implementation of new products, increasing productivity and the implementation of state-of-the-art technologies for production purposes. The applications are not limited to mechatronics and the engineering sector, but can be also implemented in food processing, timber and furniture industries.
At the moment, this all includes fifteen well-known enterprises which belong to the engineering and mechatronics consortium. The research partner of the CCIEPS is the Mechanics and Information Technology Department of the Tallinn University of Technology. At the international level, the plans include co-operation ties with a number of international centres. The CCIEPS development projects are linked to the European Manufacture Roadmap development concept.

Competence Centre for Reproductive Medicine and Biology Technology (Repro-CC).
The main domain of Repro-CC is the development of reproductive medicine technologies. The group mostly focuses on diagnostics in infertility and the development of methods of treatment. The results will be implemented in the form of new technologies which will be used for identifying the causes of infertility which are attributable to either males or females, and for improving the efficiency of infertility treatment. At the moment, the accuracy of methods for diagnosing infertility leaves a lot to be desired and the treatment has low efficiency rates.
Another priority domain of the Repro-CC is the development of technologies which are widely used in veterinary medicine (such as livestock breeding), and which are being aimed at improving the efficiency of the breeding of livestock.
Thirteen partners, ten of these being enterprises and three of them universities, are participating in the activities of the Repro-CC.

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