LATVIA’S BREAKTHROUGH TO A   HIGH-INCOME ECONOMY: THE ROLE   OF PLATFORM TECHNOLOGIESFotonika.lv kolokvijs   June 7, 2012
Topics•   What science and which innovative technology matters•   History lessons – challenges for Latvia and Europe•   Ke...
What science and whichinnovative technologymatter•   NAP2020 Goal – achieve economic breakthrough to a high income country...
R&D investment must result    in new products that sell.4    SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012
History lessons•   1990 - Latvia had over 30,000 researchers, R&D >2% of GDP.          ̶   Much of the research was aimed ...
Current status• Latvia has about 4,000 researchers, R&D =  .46% of GDP• Most research is now supported through EU  funding...
Challenges for Latvia•   For R&D to have a multiplier effect enterprises must be    found, developed or created that innov...
Given that Latvia wins sufficient R&Dfunding, does Latvia have critical mass of R&Dentrepreneurs to drive economicbreakth...
Challenges for Europe• The EU is now facing growing and overwhelming global  competition from both developed and emerging ...
STRATEGIC IMPORTANCE OF KEYENABLING TECHNOLOGIES FOREUROPEHorizon 2020 strategy: Europe’s•   Industrial competitiveness f...
European Commission’s topR&D priorityThe HLG recommended that an integrated KETs policy  should be implemented --• KETs sh...
A THREE PILLAR BRIDGE TOCROSS THE "VALLEY OF DEATH" The HLG has identified the major difficulties Europe  has in translat...
Addressing grand socialchallenges    SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012   13
 Some may feel that addressing societal  challenges may distract ETPs from their focus  on industrial competitiveness. I...
Key Enabling Technologies(KETs)    SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012   15
Should KETS be the priorityfor Latvia?•   The HLG is a committee of experts making educated guesses    about the future.  ...
Nanotechnology drives theother KETS                                      Electronics                                      ...
Topic areas to address withnanotechnologycommercialization     - Safety Research     - Industrial Safety Strategy     -...
KETs and R&D priorities for Latvia• KETS should be a priority area for Latvian R&D because EU  funds appear to be directed...
Innovation cycle:Money             Knowledge                                               Money                          ...
How to build researchintensive firms in Latvia• Doing contract research for others will add capabilities and good  salarie...
History can be important• Latvia was a center of innovation for Russia prior to 1918• Latvia emerged as a major center for...
Repeating the NacoTechnologies success Formula for success:         Researcher with commercializeable idea       + Entrep...
LATVIA’S RESPONSIBILITY:• Become one of the best places in the world to start a  business• Create and nurture the innovati...
Funding vehicles for 3pillar strategy for Latvia• Must be market focused but cannot be purely commercially  driven• Use EU...
Attract and keep R&D talent Scientists are needed, but absolutely essential are innovators    and entrepreneurs.• Good wa...
Marketing Latvia toresearchers in labs acrossthe FSU• ICST - International Center for Science and  Technology is set up to...
Naco Technologies in brief•   Headquartered in Riga, Latvia, a major city of the European Union•   Naco HIPMS technology i...
KETs and Latvian R&D      potentialKET                          Latvian R&D               Logic                           ...
Need a KETs roadmap forLatvia    SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012   30
Roadmaps link applicationsto technical challenges    SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012   31
HIPMS potential with NMPFP7 call   NMP-3 2013.2.2 - Wide band gap semiconductor materials and structures for power electr...
HIPMS can multiply FP7 impact                          FP7 Project -NMP.2013.4.1-1                   Latvian R&D          ...
Steps to develop clustersin Latvia based on HIPMS Secure HIPMS equipment for R&D use Identify high potential FP7 project...
Recommendations1. Develop a platform technology roadmap for Latvia. A. The roadmap process builds market awareness for R&D...
Recommendationscontinued...4. Innovation culture / systems A.   Very strong industry-university cooperation – RIDEON Model...
Vidvuds Beldavs                                      Director – “Kaija Consulting” SIA                                    ...
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R&d economic breakthrough 2012 06-07

  1. 1. LATVIA’S BREAKTHROUGH TO A HIGH-INCOME ECONOMY: THE ROLE OF PLATFORM TECHNOLOGIESFotonika.lv kolokvijs June 7, 2012
  2. 2. Topics• What science and which innovative technology matters• History lessons – challenges for Latvia and Europe• Key enabling technologies (KETS)• Nanotechnology as the key enabling technology for all KETS• KETS and EU 2014-2020 R&D priorities• KETS and R&D priorities in Latvia• Platform technologies and clusters• HIPMS as a platform technology• HIPMS potential with NMP FP7 call• Steps to develop clusters in Latvia based on HIPMS Platform• Recommendations SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 2
  3. 3. What science and whichinnovative technologymatter• NAP2020 Goal – achieve economic breakthrough to a high income country by 2020.• Strategies: ̶ increase R&D investment to at least 1.5% of GDP by 2020, 3% by 2030 ̶ significantly expand science and engineering education ̶ Catalyze more innovation• Given that Latvia spent even 3% of GDP on R&D it may not have desired results. ̶ R&D by itself is not highly profitable. ̶ To make money and generate economic development R&D investment must result in new products that sell. ̶ To benefit from R&D production must occur in Latvia or be done in 3d countries with profits returning to Latvia. SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 3
  4. 4. R&D investment must result in new products that sell.4 SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012
  5. 5. History lessons• 1990 - Latvia had over 30,000 researchers, R&D >2% of GDP. ̶ Much of the research was aimed at USSR military needs ̶ A significant share of R&D was related to specific production issues. Innovation was tied to production.• Latvian R&D was rated world class in several key fields – wood chemistry, organic synthesis, magnetohydrodynamics, solid state physics, electronics, biomechanics, and others.• Collapse of Soviet Union led to loss of customers for Latvian R&D. ̶ VEF, Alfa, Ellar, Radiotehnika, other industries that used R&D collapsed ̶ Without paying customers R&D became a drag on the Latvian economy ̶ The Latvian government saw no role for the large R&D capability ̶ Scientists attempted to survive in the emerging private economy. Large numbers of specialists emigrated to the West and to Russia SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 5
  6. 6. Current status• Latvia has about 4,000 researchers, R&D = .46% of GDP• Most research is now supported through EU funding mechanisms.• Very little research has a customer• Of the research that has a customer an even smaller share is oriented towards new product development. SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 6
  7. 7. Challenges for Latvia• For R&D to have a multiplier effect enterprises must be found, developed or created that innovate and transform R&D results into value in Latvia.• Securing R&D contracts with major foreign firms will not have a multiplier effect. Even creating a major R&D center in Latvia for a foreign firm would have little multiplier effect on the Latvian economy.• No established R&D based business is likely to move its headquarters to Latvia.• Latvia must create R&D based enterprises that innovate in Latvia• Latvia will be largely dependent on EU funding of R&D SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 7
  8. 8. Given that Latvia wins sufficient R&Dfunding, does Latvia have critical mass of R&Dentrepreneurs to drive economicbreakthrough?Does Latvia have the time to develop anindigenous pool of R&D entrepreneurs in viewof global challenges?Can Latvia import R&D entrepreurs? SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 8
  9. 9. Challenges for Europe• The EU is now facing growing and overwhelming global competition from both developed and emerging economies in particular in North America and East Asia. ̶ Emerging economies such as China, India and others are rapidly mastering traditional European strengths• For Europe to remain a “high income region” it must innovate with products and services that will out-compete other regions in the future.• There is no guarantee of success. • Volvo was bought by a Chinese firm. • China is emerging a leader in genome sequencing, other technologies• Major change is on the way... SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 9
  10. 10. STRATEGIC IMPORTANCE OF KEYENABLING TECHNOLOGIES FOREUROPEHorizon 2020 strategy: Europe’s• Industrial competitiveness for growth and jobs as well as for Europe’s ability to address grand societal challenges in the coming years.• The European Commission High-Level Group of Experts (HLG) identified Key Enabling Technologies (KETs) as central to strengthening Europe’s capacity for industrial innovation and the development of new products and services needed to deliver smart, sustainable and inclusive European growth. SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 10
  11. 11. European Commission’s topR&D priorityThe HLG recommended that an integrated KETs policy should be implemented --• KETs should be visibly prioritized in EU policies and financial instruments• The European Investment Bank group should pro- actively support KETs initiatives in Europe . “A European integrated initiative to pass the KETs ‘Valley of Death’, High-Level Expert Group on Key Enabling Technologies, Final Report”, European Commission, June 2011 SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 11
  12. 12. A THREE PILLAR BRIDGE TOCROSS THE "VALLEY OF DEATH" The HLG has identified the major difficulties Europe has in translating its ideas into marketable products – in crossing the internationally recognized "valley of death". To cross this valley, it recommends a strategy comprising three pillars: ̶ A pillar focused on technological research ̶ A product demonstration pillar focused on product development ̶ A production pillar focused on world-class, advanced manufacturing Source: Executive Summary; “A European integrated initiative to pass the KETs ‘Valley of Death’, High-Level Expert Group on Key Enabling Technologies, Final Report”, European Commission, June 2011 SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 12
  13. 13. Addressing grand socialchallenges SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 13
  14. 14.  Some may feel that addressing societal challenges may distract ETPs from their focus on industrial competitiveness. In reality, societal challenges provide the largest growth markets for businesses. SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 14
  15. 15. Key Enabling Technologies(KETs) SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 15
  16. 16. Should KETS be the priorityfor Latvia?• The HLG is a committee of experts making educated guesses about the future. ̶ Experts can be wrong... ̶ Success with KETs may not lead to products that dominate global trade. ̶ In fact – some market leaders do not have superior technology.• Some R&D frontiers that fall outside of KETS may have greater economic development potential for Europe than KETS. ̶ Stem cells, genome sequencing, space industrialization , quantum computing, robotics• Nanotechnology appears to be driving change in the other KETs SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 16
  17. 17. Nanotechnology drives theother KETS Electronics Photonics nano Materials Manufacturing Electronics SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 17
  18. 18. Topic areas to address withnanotechnologycommercialization  - Safety Research  - Industrial Safety Strategy  - Standardization  - Technology Transfer & Innovation Financing  - Regulation  - Industrialization & nano-Manufacturing  - Skills and Education  - Networking  - Communication  - Research & Technology SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 18
  19. 19. KETs and R&D priorities for Latvia• KETS should be a priority area for Latvian R&D because EU funds appear to be directed towards KETS, • but all opportunities need to be approached with an open mind. The next globally significant product may have nothing to do with KETS.• Regardless the topic of research, R&D must have a customer to lead to innovation and to generate value.• Latvia now has few research-intensive firms that can be customers for university R&D• IMPLICATION – THE PRIMARY GOAL MUST BE TO BUILD RESEARCH-INTENSIVE NEW BUSINESSES IN LATVIA SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 19
  20. 20. Innovation cycle:Money Knowledge Money R&D Profits & New investment Technology Marketing New & sales Products SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 20
  21. 21. How to build researchintensive firms in Latvia• Doing contract research for others will add capabilities and good salaries for a few but will do little to achieve economic breakthrough.• In most fields Latvian research is too weak to support new major developments• Latvia’s strengths include geostrategic position and history: ̶ Latvia is part of the EU with its increasingly favorable climate for innovation and technology commercialization. ̶ Most Latvian researchers are fluent in Russian and many still have ties to scientists at research centers in the former Soviet Union. ̶ Russia, Ukraine, Belarus and other FSU republics have poor environments for innovation and technology commercialization. ̶ Latvia can offer a entrepreneurial haven for Russian and other FSU scientists to commercialize breakthrough technology. “Naco Technologies” SIA is one example of what is possible SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 21
  22. 22. History can be important• Latvia was a center of innovation for Russia prior to 1918• Latvia emerged as a major center for electronics, machine tools, pharmaceuticals, biomechanics and other fields during the Soviet period.• The Soviet Union developed strong R&D capabilities relating to several KETs, especially advanced materials. These capabilities have been weakened but Russia, Ukraine, Belarus and other FSU republics continue to be strong in key disciplines.• Despite having large resources for investment, the climate for technology commercialization in Russia and other FSU republics is poor.• Russian scientists and specialists from other former Soviet republics are familiar with Latvia• Welcome to Latvia! Добро пожаловать в Латвию! SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 22
  23. 23. Repeating the NacoTechnologies success Formula for success: Researcher with commercializeable idea + Entrepreneur and management team + Investment + Innovation environment Successful R&D-based enterprise SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 23
  24. 24. LATVIA’S RESPONSIBILITY:• Become one of the best places in the world to start a business• Create and nurture the innovation environment  Openness to creativity and change  Locations such as TechnoHub where new stuff can be attempted at modest cost  Multiple sources of investment  Availability of mentors  Mobility of people• Attract and keep R&D talent capable of developing commercializeable technology SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 24
  25. 25. Funding vehicles for 3pillar strategy for Latvia• Must be market focused but cannot be purely commercially driven• Use EU funding to develop R&D infrastructure, educational capabilities• Focus funding on high potential areas with global potential• Key to achieve breakthrough - Fund R&D based startups and growth of R&D based companies in Latvia ̶ Properly fund Eurostars program. Latvian projects should be funded like projects in other EU countries – 1.5 million Euro.• Develop alternative funding sources to accelerate development beyond what is possible with EU funding which will be focused on KETs. ̶ Latvia’s Future bonds sold to the public with long term maturity (pensions, education costs for children) to fund startups. Risk managed through portfolio diversity. SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 25
  26. 26. Attract and keep R&D talent Scientists are needed, but absolutely essential are innovators and entrepreneurs.• Good wages and good living conditions are essential to attract R&D talent whether of Latvians who have left the country or of highly qualified foreigners looking for opportunity.• Entrepreneurial opportunity – the chance to own a stake in a high potential business is key to attract potential entrepreneurs• Given that Latvia has developed a package to offer then the package needs to be marketed.• Programs such as Eurostars are essential to allow creative talent to develop equity in high potential businesses SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 26
  27. 27. Marketing Latvia toresearchers in labs acrossthe FSU• ICST - International Center for Science and Technology is set up to help FSU researchers to commercialize their technology.• ICST works with Virtual CEO, a Latvia-based company, to organize “Commercialization Reactors” to bring together researchers, entrepreneurs and investors. ̶ Naco Technologies resulted from a “Commercialization Reactor” ̶ 5th Reactor concluded on May 16 SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 27
  28. 28. Naco Technologies in brief• Headquartered in Riga, Latvia, a major city of the European Union• Naco HIPMS technology is the culmination of 30+ years of R&D at leading Institute of Material Science (Moscow) ̶ 4+ years of production coating of aerospace, automotive, electronics and nuclear industry parts ̶ technology strategy - move faster and smarter than competition. Stay at least five years ahead• Support from ISTC and JEREMIE Programs with financing from two Latvian venture capital funds in 2011• Two businesses ̶ Production operation: coating and surface engineering services to firms in the aerospace, automotive, tools, electronics, medical device and other markets ̶ R&D equipment sales: develop and sell Naco Process HIPMS equipment to research organizations SIA “Kaija Consulting” sagatavots Pārresoru koordinācijas centram 28-05-2012 28
  29. 29. KETs and Latvian R&D potentialKET Latvian R&D Logic potentialNanotechnology HighMicro and High Process can be applied to electronicsnanoelectronics manufactureIndustrial High Organic synthesis institutebiotechnologyPhotonics High Application to improve optical quality, life, durability and reduce manufacturing costsAdvanced materials High Solid State Physics Institute, Naco processAdvanced High HIPMS process speed lends itself tomanufacturing integration with high volume manufacturingsystems SIA “Kaija Consulting” sagatavots Pārresoru koordinācijas centram 28-05-2012 29
  30. 30. Need a KETs roadmap forLatvia SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 30
  31. 31. Roadmaps link applicationsto technical challenges SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 31
  32. 32. HIPMS potential with NMPFP7 call NMP-3 2013.2.2 - Wide band gap semiconductor materials and structures for power electronics in energy technologies NMP. 2013.1.1-1 - Exploration, optimization and control of nano-catalytic processes for energy applications NMP-2 2013.1.1. - Self-assembly of naturally re-occurring nanosystems NMP 2013.1.2-1. - Nanotechnology-based sensors for environmental monitoring NMP 2013.2.1-1. - Developing new next, fictionalizations and processing routes for carbon fibers NMP 2013.2.2-4. - Materials solutions for durable energy collectors FoF NMP 2013-2. - Innovative re-use of modular equipment based on integrated factory design FoF.NMP 2013-5. - Innovative design of personalized product-services and of their production processes based on collaborative controls FoF.NMP 2013-6. - Mini-factories for customized products using local flexible production FoF.NMP 2013-7. - New hybrid production systems in advanced factory controls based on new human-robot cooperation interactive FoF.NMP 2013-10. - Manufacturing processes for products made of composites or composite metallic materials FoF.NMP 2013-11. - Manufacturing of highly miniaturized components NMP 2013.4.0-1. - CNRS production technologies manufacturing graphene NMP.2013.4.1-1 Development of new materials with a reduced critical metal content – coordinated call with Japan GC.NMP.2013-1 Improved materials for innovative ageing resistant batteries SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 32
  33. 33. HIPMS can multiply FP7 impact FP7 Project -NMP.2013.4.1-1 Latvian R&D JapaneseMoreR&D IP for alternative materials Replace lithium?? Substitute rare earth metals Commercialization Companies in Latvia Companies in Japan SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 33
  34. 34. Steps to develop clustersin Latvia based on HIPMS Secure HIPMS equipment for R&D use Identify high potential FP7 projects Prepare winning FP7 proposals for 2013 Develop 2014-2020 technology roadmap leading to multiple clusters by 2020 Implement Platform Technology Strategy Footer 34
  35. 35. Recommendations1. Develop a platform technology roadmap for Latvia. A. The roadmap process builds market awareness for R&D and for marketing / production awareness of the potential benefit of R&D. B. The roadmap provides policymakers an overview of the market potential of R&D that is being undertaken.2. Import technologists with great ideas A. Facilitate the return of Latvian researchers to Latvia interested in launching research-based businesses in Latvia. B. Attract Russian, Ukrainian, Belarusian, Kazakh and other scientists to join with Latvian entrepreneurs to develop research-based EU and global market oriented businesses in Latvia. Consider India, China other emerging markets.3. Infrastructure A. Use EU funding for KETs to develop infrastructure and R&D capabilities to support Latvian KETs with entrepreneurial development driving further R&D SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 35
  36. 36. Recommendationscontinued...4. Innovation culture / systems A. Very strong industry-university cooperation – RIDEON Model B. Constant circulation of people between industry and university C. Innovation education starting from preschool through university D. Support for new business formation by Commercialization Reactor, Techno- Hub, incubators, technology parks, seed capital network5. Platform Technology focus A. Public / private partnership process  Role for public investment to lead to IP  Private investment to commercialize IP B. Priority – nanotechnology as the driver of KETS  Biomechanics / biomaterials cluster based on historical capabilities, technology and market conditions. Latvia can be a center for advanced joint implants and related technologies – 25+ billion USD market  Advanced materials cluster – Naco Technologies, Sidrabe, GroGlass, others  Wood chemistry , forest products cluster  Synthetic biology cluster  Herbal medicine cluster? SIA “Kaija Consulting” // FOTONIKA-LV XIII kolokvijs 07-06-2012 36
  37. 37. Vidvuds Beldavs Director – “Kaija Consulting” SIA Phones: US - +1-812 -320-3161 / Latvia - +371-27862021 vidbeldavs@gmail.com Skype - vidbeldavs© 2012 “Kaija Consulting” SIA

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