Business support in Latvia

Support measures to accelerate innovation development

Dr.Phys.Māris Ēlerts, Deputy Director 13.06.2012

Contents

• Encouragement, awareness, start-ups

• Business incubation

• Venture Capital instruments

• Technology Transfer

– Performance of TT Liaison offices

– Setting up a TT System

• Raising competitiveness of companies

– Development of New Products and Technologies

• Cooperation to increase private investment into R&D

– Cluster development

– Development of Competence Centres

Investment

Agency

Trade

Promotion

Agency

Innovation

Agency

Structural

Funds

Administrator

LIAA FUNCTIONS - ACTIVITIES

National Innovation System of Latvia 2007-2013

Awareness and Start-up

Encouragement of youth Visits to companies

Trainings

Business camps

Promotion towards

interest in natural

sciences Innovation Bus

Technical creativity events

Disseminating information on innovation and on the program through mass

media Publicity, Internet source, Training/ information/ marketing brochures

TV competition, Innovation award etc

Venture Cup

Businessman in 5 Days

Business model validation

Business development consultations

Technology comercialisation -Training of scientists

-Training of business developers

Mentoring

Society in General Authors of Business ideas Start-ups

Matchmaking/ Pitch events

Results 2007 2008 2009 2010 2011

Students selected

160 160 115 114 110

Students trained 149 130 99 114 110

Real Business ideas

50% 35% 44% 40% 70%

Involved HEI 5 (LU, LLU,

LBK, RA, VeA)

5 (LU, BSA, RA,

VeA, REA)

5 (BA, Liep U, RSEBAA D-pils,

LU Valka)

4 ( VeA, BA,

RsEBAA D-pils,

BA “Turība”Cēsis, D-

pils

4 (RSEBAA D-pils,

“Turība”, RSEBAA, Liepājas universit

āte)

Established companies

11 6 3 N/A N/A

Businessman in 5 Days

“Idea Cup” (Venture cup) statistics

Quantitative indicators 2008 2009* 2010 2011

Submitted business Ideas 376 545 677 485

Intensity of Technology based ideas

25% 14% 29% 19%

Participants (Total) 450 ~599 1400 1250

Ideas selected for the 2nd round

104 (28%) 204 (36%) 148 (22,2%) 187 (38,5%)

Training seminars 4 4 6 4

Participants in training seminars

280 - 437 732

Presentations of Success Stories

4 4 6 5

Mentored ideas 100 - 72 78

Involved mentors 70 49 44

Business plans submitted for the finals

49 12 12 15

Established companies 10* 1 - 4

Technology Transfer LiOs

• Technology Transfer Liaison Offices

– 8 TT Liaison offices integrated in Latvian PROs

– Database on research capacities;

– Collaboration projects between PROs and Companies

2009 2010 2011 (IIQ)

Contracts (for research, licencing etc)

11 51 5

International Patent applications 5 5 1

National Patent applications 44 36 5

Other IP applications 48 4 1

Commercialization proposals 51 67 5

Income (k.LVL) 13.54 29.86 10,89

Jauni produkti/ tehnoloģijas esošiem uzņēmumiem

Knowledge Transfer Platform

Sources of knowledge (PROs and others)

Technologies with

commercial potential

Technologies with

commercial potential

Technologies with

commercial potential

Technology search/ Scouting/ pre-feasibility

Reactor Business Developers

Pirmsinkubācija

Inkubācija

Jauni produkti/ tehnoloģijas esošiem uzņēmumiem Jauni produkti/ tehnoloģijas

esošiem uzņēmumiem New technologies in existing companies

New Ventures

Technology Transfer

Preseed

INCUBATION

Commercialization Reactor

November, 2009

May, 2010 November, 2010

May, 2011

CIS Technology Presentation

9 10 13 9

LV Technology Presentation

0 1 2 3

Registered business developers

90 170 150 150

Individual Meetings 46 60 50 30

Letters of intent 3 7 9 6

New companies established

2 2 3+1 n/a

Objective: To promote establishment of new internationaly competitive start-ups

in Latvia, by comercializing technologies developed in CIS countries.

Incubator Network (QII, 2011)

Tenants

Virtual

Pipelined

(waiting list)

Left New products

developed Jobs

512 80 40 146 194 1 052

Lessons learned:

• involvement of local municipalities (regional authorities) necessary;

• Readiness of local governments to finance incubators;

• Problems with state aid rules

National Innovation System vs Regional Innovation System

• NIS offers wide spectra of support instruments

• RIS is able to offer specialized instruments, tailored to the local needs

• Most important task and challenge of RIS – people who could use opportunities offered by NIS in a most efficient way for the local region, municipality, county

• Most important element of RIS – a Person – coordinator, advisor, facilitator. Irrespective of where is his official job – municipality, university college, entrepreneur, local development institution. E.g. – cluster facilitation; technology transfer etc.

• Main issue – how to finance activites of such facilitator (financial limitations, procurement rules etc.)

Tenants of Incubators, Valmiera Business and Innovation Incubator

SIA Taste CAPS! www.tastecaps.com

SIA VLBB

SIA GRAUC Investments www.gmtbeauty.com

Tenants of Incubators (Riga Region)

SIA „Eksotim”

SIA GREEN PARK

Tenants of Incubators (Ventspils, Talsi)

KIRO Cosmetics

SIA "Aquarium projects"

SIA “Latvisoft”

Tenants of Incubators (Zemgale)

SIA

„UAVFACTORY”

“Green” industry Technology incubator Program in design phase

• In cooperation with Innovation Norway and SIVA

• Available funding: 8,0 MEUR

• Intended Structure:

– Operation costs for TI (Science park of Riga Technical University and University of Latvia)

– Pre-Seed for SMEs, 5.0 kEUR, intensity 90%

– Seed for SMEs, 200.0 kEUR, intensity 70%

• Timing:

– April 2012, programme proposal accepted by the donor representatives;

18

Venture capital instruments 2007 - 2013

Seed Funds

Ave. deal size €50K €1m €3m

VC Funds

Pre-Seed Funds

Business Angel Co-investment Funds

7 Pre-Seed projects (MolPort, Naco Technologies, BuzzPodium, E-Tag, Blue Bridge Technologies)

5 Investments (Primekss, EUROLCD, Oobelisk)

Other Financial Instruments

- Loan Guaranties & Export Guaranties (Latvian Guaranty Agency)

- Start-up Credits, supported with grants (LHZB)

Partner Logo

Project JOSEFIN (Joint SME Finance for

Innovation)

The project is based on 2 main pillars:

1. Individual coaching of SMEs to develop innovation or

internationalization projects and prepare for finance.

• Implemented by Investment and Development Agency of Latvia;

• Coaching is provided by qualified coaches selcted by LIAA;

• SMEs received coaching in the following fields:

- Business plan development and market research;

- Planning of finance and funding opportunities;

- Intellectual property rights and other legal issues;

- Marketing.

• 15 SMEs went through the coaching process in 2010-2011.

2. Financial instrument to finance the innovation projects of SMEs: Loan +

EIF/CIP guarantee.

• Implemented by Land and Mortgage Bank of Latvia.

New Financial instruments

• Mezzanine loan program, provided by Latvian Guarantee Agency.

– Funding for the initiative: 17,74 MLVL (25,2 MEUR)

– Long term loan with increased risk and reduced colateral

– Minimum loan for company – 100 kLVL (~142 kEUR); maximum – 700 KLVL (~1,0 MEUR), that may not exceed 40% of total project costs.

Development of New Products and Technologies

• Objective: to provide support for development of new and/or significantly improved existing products, services, or technologic processes, as well as to promote enterprises to invest in research and development (R&D)

• Program covers almost all new product development phases including the introduction of the on stream production of the product

• New program coming in 2012 – max 10.000 Ls to SME’s for cooperation with research institutions or for patenting.

Total Amount

(MLVL)

Max

Support in

MLVL

Submitted

Projects

(amount.,

MLVL)

Approved

Projects

(amount.

MLVL)

Development of New Products

and Technologies

8,3 0,350 291 (30.6) 120 (8)

Introduction of New Products

and Technologies

38,0

34,0

0.350

1.0

91 (20.2)

183 (58.1)

56 (11.8)

113 (35.7)

Protection of Intellectual

Property

0,17 0.020 32 (0.42) 17 (0.24)

Few Samples

“Smart Coatings” to increase and decrease penetrability of radiance in different areas of spectrum

Introduction of car Park management system Skybrake supplemented with GPS and GSM technologies

Elaboration of Prototype for real-time online hyper spectral chemical imaging

Forest monitoring systems

Cooperation...

• Support to Industrial Clusters (2009 – 0,3 MEUR, 2010 – 0,3 MEUR, 2011 – 0,35 MEUR, Under MoE; 2012 – 2014: 2.0 MEUR ERDF)

– To promote cooperation between enterprises and related institutions (education, development institutions) from related industries by supporting implementation of common projects.

• Competence Centres (60.8 MEUR)

– to raise the competitiveness of enterprises by promoting collaboration of research and industrial sectors to implement industrial research, development projects of new products and technologies

– 6 Competence centres established (Machinery and Transportation; Biotechnologies and Environment; Chemistry and Pharmacy; Forestry; Electronics; and IT) .

Cross border initiatives

Thank you! Rīga, LV-1442 Tālrunis: +371 67039410 Fakss: +371 67039401 E-pasts: maris.elerts@liaa.gov.lv www.liaa.gov.lv