january 13, 2005ester project meeting in tel aviv results, problems, strategy of the ester project...
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January 13, 2005ESTER project meeting in Tel
Aviv
Results, Problems, Strategy of the
ESTER project in Estonia
MTÜ CONNECT Estonia
January 13, 2005ESTER project meeting in Tel
Aviv
Presentation outline
Ester project- what are the results so far What are the problemsWhat are the challanges and what we can achieveby Ester
January 13, 2005ESTER project meeting in Tel
Aviv
Deliverables
Identification of Potential Entrepreneurs and Analysis of Business Environment in Estonia – report deliveredInterviews with potential actors in the high-tech sector in Estonia-report deliveredInterviews with potential VCs– interviews completed
January 13, 2005ESTER project meeting in Tel
Aviv
Interviews with potential actors in the high-tech sector in Estonia Key findings
January 13, 2005ESTER project meeting in Tel
Aviv
Interviews with potential actors in the high-tech sector in Estonia
General Conclusions 1. There is no lack of ideas for potential application
among researchers of R&D institutions in Estonia. There are missing skills, experiences and motivation to realize the ideas. Knowledge transfer and the process of commercializing an idea are not effective and are mainly based on initiative of a researcher.
2. R&D institutions develop technology mainly by “technology push” model. The main gap is related to knowledge of market and existing contacts with the businesses in the world market.
January 13, 2005ESTER project meeting in Tel
Aviv
January 13, 2005ESTER project meeting in Tel
Aviv
Researchers
January 13, 2005ESTER project meeting in Tel
Aviv
Companies
January 13, 2005ESTER project meeting in Tel
Aviv
Interviews with potential actors in the high-tech sector in Estonia
General Conclusions 3. R&D institutions and companies both declare the importance of
cooperation with each other. At present the real cooperation is weak, under motivated for both sides, and mainly based on personal contacts. Differences in understanding of expected results and working cultures are also factors inhibiting productive collaboration.
4. Role of public sector support is crucial for activating application of research results and developing cooperation between R&D institutions and industry. At present there are missing clear targets on governmental level (plans by fields of technology) and expectation to private sector input in first stages of technology development are very high. Limited amount of available seed funding and a few business angels limit the development of
emerging high-tech companies.
January 13, 2005ESTER project meeting in Tel
Aviv
January 13, 2005ESTER project meeting in Tel
Aviv
Interviews with potential actors in the high-tech sector in Estonia
General Conclusions
5. Today the role of science parks in the process of creating start-up companies and developing technology is weak in Estonia. They have no available funds and facilities for support of technology development.
6. There are no priorities or clear strategy in development of technology infrastructure in Estonia. Decisions depend on possibilities of lobby groups to influence the process. Due to limited resources the interest in cooperation is weak, which in turn reduces the effectiveness of using these limited resources.
January 13, 2005ESTER project meeting in Tel
Aviv
January 13, 2005ESTER project meeting in Tel
Aviv
January 13, 2005ESTER project meeting in Tel
Aviv
January 13, 2005ESTER project meeting in Tel
Aviv
Interviews with financial managerOutcomes from the interviews
Legal and tax problems Limited range of financial instruments Taxing of stock options Taxing of consolidated concerns– it is not
suitable for domicile Negative equity – forced liquidation
according to legal Portfolio company valuation and tax basis
January 13, 2005ESTER project meeting in Tel
Aviv
Interviews with financial managerOutcomes from the interviews
Business related issues Small size – limited dealflow Poor communication between researchers
and scientists
January 13, 2005ESTER project meeting in Tel
Aviv
Interviews with financial managerOutcomes from the interviews
Finacial managers’ proposals to improve the situation Tax incentives and solving current tax/legal
problems To provide additional funds to leverage
current investments Public fund or public provision of funds with
strong upside incentives Improvement of public RD grant system
January 13, 2005ESTER project meeting in Tel
Aviv
Problems- General
Enterprise Estonia– main business grant agency- struggling with EU requirements– not enough agile and without sufficient vision and business leadershipBusiness sector with limited RDUniversities with limited business interactionVery week ecosystem to support SUs
January 13, 2005ESTER project meeting in Tel
Aviv
Key Challanges in Estonia
Whether and how to define priority clusters and niche sectors for support provided that resources (both human and financial) are scarce and industry structure does not always support university best research excellence areas and vice versa?How to define pre-conditions for venture capital intervention schemes and how to increase the efficiency for technology development support system? How to lay down a framework for innovation-based entrepreneurship?How to improve linkages between universities and businesses?How to initiate industry-university co-operation and how to design incentives for that sake? How to match technology-push applied research and technology development university initiatives with market demand as local industrial clusters are limited or almost non-existent? How to design initiatives which push forward technology development and other RTD initiatives within universities?
January 13, 2005ESTER project meeting in Tel
Aviv
What we can achieve during the final phase of the Ester project
VC , Seed capital schemes To propose sensible changes to legal framework to
faciliatete private equity/VC funding in general To propose alternative pilot project for early stage
seed financing To contribute to the development of early-stage
private investor community development
Technology grant funding, incubators To propose changes to current grant provision
schemes to make public funding schemes more agile To propose incentive scheme changes to current
incubator system
January 13, 2005ESTER project meeting in Tel
Aviv
Promising sectorsICT
Dynamic private sector Well- developed and competitve local markets (telco) Weaks links between companies and research projects Companies investing marginally into risky projects & RD
Life Sciences and Medical Devices Internationally competitive research Growing pool of qualified personnel in life science Limited number of companies (ca 10 companies) No pharma companies
January 13, 2005ESTER project meeting in Tel
Aviv
Promising sectors
Material Sciences (nanotechnology) Good research, mostly not commercialy or
application –driven Very limited business knowledge Very limited business knowledge Fairly small industrial sector to co-operate with