ESTONIAN TECHNOLOGY AGENCYMr. Tanel Köösel

Estonian Technology Agency

ENTERPRISE ESTONIA

Estonian TechnologyAgency Estonian Trade

Promotion AgencyEstonian

Investment Agency

Estonian RegionalDevelopment Agency

Estonian TouristBoard

ENTERPRISE

ESTONIA

EAS South EstonianAgency

EAS Ida-ViruAgency

ACTIVITIES AND BUDGET OF ESTAG IN 2002

New products and technologies

Access to new knowledge

Surveys, support for technology

transfer

Increasing ofawareness

Development of competence

Estonian Technology Agency

ROLE OF ESTAG, ITS ACTIVITES AND IMPACT

ESTAGprovides funding and

consultationinitiatorco-ordinator

projects and programmesinternational co-operation

competitivenessprofitability

growth

new businessesnew enterprises

Research institutesand universities

Enterprises

Growth in exports, stronger industrial base, creation of new jobs, higher welfare

DATABASE

HIGH TECHNOLOGY ESTONIA

www.hightechestonia.com

HIGH TECHNOLOGY ESTONIA www.hightechestonia.com

GOAL

To introduce innovative Estonian

products, services and

technologies to potencial foreign

R&D partnerts and investors.

FINANCING AND DEVELOPMENT OF TECHNOLOGY-INTENSIVE COMPANIES

MONEY

TIME

Benefits from publicsector investments

Cash flow of a company

Financing for development of business and internationalisation (private investors, banks, KREDEX, ETPA, EIA)

Fundamental research (Estonian Science Fund, Science Competence Council)

R&D funding (grants, loans; ESTAG)

Funds for improvement of knowledge in business and finance (grants; ESTAG, ERDA)

Venture capital financing (seed, start-up; currently not provided by the state)

Venture capital financing (private)

Applied research (ESTAG)

Search and identification of new ideas for start-ups (ESTAG)

RESULTS OF R&D

Data on changes in turnover and export as well as employment is gathered on

all ESTAG projects at the initiation, launch and end.

VISION OF TECHNOLOGY DEVELOPMENT – MAPPING FUTURE TECHNOLOGY NEEDS

Related technologies

Break-throughtechnologies

Key technologies

1Y 3YRS 5YRS 7YRS

COMPANY´S GOALS

TEHNOLOGICALCAPABILITIES

MARKETNEEDS

Research3 - 10 years

10% of resources

Research3 - 10 years

10% of resources

Fundamental research1 - 20 years- Universities- Scientific institutions

Fundamental research1 - 20 years- Universities- Scientific institutions

Technology programmesTechnology transferApprox. 1 - 5 years- ESTAG - EU- Industry- Universities

Technology programmesTechnology transferApprox. 1 - 5 years- ESTAG - EU- Industry- Universities

Applied research andproduct developmentApprox. 1 - 2 years- Industry- ESTAG

Applied research andproduct developmentApprox. 1 - 2 years- Industry- ESTAG

RESOURCES

RISKS

Strategic choices2 - 5 years

30% of resources

Strategic choices2 - 5 years

30% of resources

Product development1 - 2 years

60 - 70% of resources

Product development1 - 2 years

60 - 70% of resources

RISKS

RESOURCES

INDUSTRY MODEL ACADEMIAMODEL

Time and sources of financing.Time and allocation of resources.

problems andresearch objects

co-operation

STRATEGIC BASIS FOR INDUSTRY – CO-OPERATION WITH ACADEMIA

ESTAG – DEVELOPER OF AND PROVIDEROF FINANCING FOR JOINT R&D PROJECTS

Foreign companies Estonian companies

Estonian universitiesR&D institutions

Foreign universitiesR&D institutions

R&D FINANCING COMPETENCE

JOINT PROJECTS FOR INTEGRATION OF“NEW” AND “OLD” ECONOMY

EXCHANGE INTEGRATION

oldeconomy

neweconomy

oldeconomy

neweconomy

Creation of high-tech companies, emergence of new markets and sectors,

growth.

Modernisation, development of existing markets and

present competitive advantages.

+

STRATEGIC ACTIVITIES OF ESTAG

Ensuring access to capital

Increasing of awareness

Co-ordination

and financing

of international

co-operation

programmes

Increasing of innovation capability

Development of competence

Development of infrastructure

R&D PROJECT FINANCING AT

ESTAG

R&D EXPENDITURE 1995-2006E, % OF GDP

0,00%

0,20%

0,40%

0,60%

0,80%

1,00%

1,20%

1,40%

1,60%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: Estonian R&D Strategy 2002-2006

GOAL OF FINANCING

The ultimate goal of the projects financed by ESTAG is the

development of innovative technologies and application of

those in business.

0%

20%

40%

60%

80%

100%

1992 1993 1994 1995 1996 1997 2000

Fundamental research Applied research Experimental development

As a result,

efficiency and

performance of

the Estonian

business sector

will increase.

?

FINANCING OF R&D IN ESTAG

Feasibility

studies Development and

applied research

Product/process development and

preparation of production

R&D STRATEGY

Planning

Max Min

TECHNOLOGY RISK

% OF SUPPORT

Application

LOAN – 75%

75% GRANT 25%

GRANT – 75%

Production, marketing

FINANCING PRODUCTS OF ESTAG

THE FINANCING PRODUCTS OF ESTAG ARE INTENDED FOR:

– Execution of product development projects

– Execution of applied research

– Execution of feasibility studies

FINANCING PRODUCTS OF ESTAG INCLUDE:

– Loan for enterprises (product development - 75% of total cost of project)

– Grant for enterprises (product development - 25%)

– Grant for R&D institutions (applied research - 50%)

– Grant for feasibility studies (75%)

ESTAG FEASIBILITY STUDY GRANT

• The feasibility study grant is intended for use in the process of preparation for product development and applied research projects.

• The purpose of a feasibility study is to obtain information about the feasibility of a planned applied research or product development project and about the possible application of the project’s results. Feasibility studies are generally conducted over a short period and usually involve consultation by experts.

• Within the feasibility study project, ESTAG can finance the compilation of a business plan or the formulation of a technology strategy for the planned project, market and patent research, preparation of an international project, elaboration of the project plan and other activities related to the preparation of a project.

• ESTAG will cover up to 75% of a feasibility study´s costs (up to EEK 100,000). The total cost of a feasibility study can total up to 25% of the cost of the consecutive project.

SUPPORT FOR APPLIED RESEARCH AND PRODUCT DEVELOPMENT

CONDITIONS OF APPLIED RESEARCH GRANT• ESTAG can cover up to 50% of the total costs directly related to the project.

CONDITIONS OF PRODUCT DEVELOPMENT GRANT• Financing: ESTAG can cover up to 25% of the total costs directly related to the

project.

CONDITIONS OF LOAN• Financing: ESTAG can cover up to 75% of the total costs directly related to the

project.– Interest rate: 1-5% annually calculated on the basis of the loan balance– Term: up to 8 years– Grace period for the loan principle: up to 3 years– Collateral: in general no collateral is required

APPLIED RESEARCH PROJECT GRANT FOR RESEARCH INSTITUTIONS

• The grant for applied research projects is intended for financing applied research, the results of which can be used by Estonian industries for substantial improvement of existing or the development of new products, technologies and services.

• ESTAG can finance with a grant up to 50% of the total costs related to an applied research project. ESTAG may cover up to 75% of the costs related directly to a project, if the project is compatible with EU priorities for research and development, and the project involves international cooperation between several parties.

• ESTAG may cover up to 100% of the costs directly related to the project if the results of the project are available to all enterprises and individual persons on an equal basis and the project is executed for industrial purposes and in co-operation with enterprises.

TARGET AREAS OF ESTAG SUPPORT

= Target area of ESTAG support = Strategic direction

Development oftechnology SMEs

Large companies

Research institutions,universities

Development oftechnology

Research(applied research)

Pilot projects

Product development

Market entry

INITIATION AND DEVELOPMENT OF PROJECTS

II p

has

e

Gate

Preliminary analysis Result

Detailed research

Developmentof product/service

Testing ofproduct/service

Presentation and anchoring of

product/serviceon the market

Initialresearch

III p

has

e

N-p

has

e

I ph

ase

Gate Gate Gate

DECISION-MAKING AFTER EACH PHASE

Criteria Output

Ended projects

Continuingprojects

Haltedprojects

Assessment

Aggregateevaluation

MarketingOrganisation

and management

FinancingProduct andtechnology

EVALUATION OF PRODUCT DEVELOPMENT PROJECTS IN ESTAG

5 MYTHS ABOUT APPLYING FORFINANCING

REALITY

Financing of a project is determined by its quality not by its

field.

MYTH 1

Only projects in the currently “fashionable” fields (e.g.

genetics and IT) are financed.

REALITY

Decision on financing is based on the aggregate rating of a

project. In case important aspects of a project (e.g.

financing, co-operation, management) are not elaborated,

the aggregate rating will be low.

MYTH 2

In order to get financed, it is enough to elaborate the

scientific/technological side of the project, the rest is not

important.

5 MYTHS ABOUT APPLYING FORFINANCING

REALITY

The goal of the projects financed by ESTAG is application

of the results in business.

MYTH 3

The goal of the project can be e.g. an article in a scientific

publication, practical application of results is not

important.

5 MYTHS ABOUT APPLYING FORFINANCING

MYTH 4

Applied research means that the area of research is

determined. What will be the result and whether there will

be a result at all will be seen sometime later.

REALITY

The exact definition of results which the applied research will

be pursuing is a precondition for receiving ESTAG

financing.

It may be reasonable to change the aims in the course of the applied research

project! Changes in the project plan are done in co-operation with the Agency.

5 MYTHS ABOUT APPLYING FORFINANCING

REALITY

A financing application flooded with specific terms will not

enhance the likelihood of receiving financing.

MYTH 5

Financing application and project plan can be submitted in

any form.

5 MYTHS ABOUT APPLYING FORFINANCING

EUREKA

EUREKA IS A PAN-EUROPEAN CO-OPERATION NETWORK:

• For promotion of market-oriented, industrial R&D

• For development of international co-operation

• For development of co-operation between the industry and R&D institutions

EUREKA:

• Co-finances international R&D projects in all European states (also in Israel, Turkey and Russia)

• Co-ordinates cluster projects, which help to foster co-operation in R&D between SMEs and large companies

• Co-ordinates R&D co-operation networks which function in a similar way to technology programmes

ESTIRC

• Enables to find technological solutions suitable to the needs of companies and scientific institutions.

• Mediates technological solutions developed in companies and scientific institutions to foreign markets.

• Assists in all questions related to development of technology.

• Helps to increase awareness among companies and scientific institutions about EU technology and development programmes and encourages to participate in those.

Estonian Technology Agency

TO BRING YOUR IDEAS TO LIFE!

• Consultation– Evaluation and development of ideas

• Co-financing– Co-financing of projects

• Partners– Estonian enterprises

– Foreign enterprises

– Scientific organisations

– International programmes (EUREKA, IRC etc.)

THANK YOU!

Estonian Technology Agency11 Roosikrantsi Str, Tallinn 10119Tel. +372 627 9700Fax +372 627 9427e-mail: estag@eas.ee

Estonian Technology Agency

http://www.estag.ee