The University of Tartu (UT), the oldest university in Estonia, has an impressive number of spin-offs – 55 at the moment with an annual turnover of 39 million euros in 2018. In the last decade, 33 new companies have been added, creating high-tech jobs in the region. According to Erik Puura, Development Vice Rector at UT, it is one of the roles of the university to put knowledge into economic use, whilst the role of companies is to make profit out of it. Aivar Pere, Business Advisor at the Enterprise and Innovation Centre of the university, adds that spin-offs can also promote local research by bringing the commercial contracts to solve complex questions back into the university. “We know what is happening in the field of spin-offs, having analysed it for the last decade, and we see growth; a change in volume and new jobs,” says Pere.
The figures speak for themselves: whereas in 2006 the total number of jobs at UT spin-offs was 200, by last year it had increased to 460. The success story is also visible when we consider export. Whereas in 2012, the export volume of spin-offs was 5.4 million euros, by 2018 it had increased to 17 million. A positive impetus comes from the fact that entrepreneurship is a compulsory subject in all fields of study at the University of Tartu, and about 200 research-heavy companies are active around the university.
Biotechnology as the engine
Another trump card is that a significant number of spin-offs – 14 in total – are in the field of biotechnology. Pere explains that there are certain buzzing areas at the university which create new entrepreneurial opportunities and one of those is gene technology: “I predict that we will see new business growth around the data and services of the Estonian Genome Project in the near future.” The university is also preparing to launch the Science to Business Programme in collaboration with the Tartu Science Park.
At the same time, the University of Tartu and some entrepreneurs are initiating the Delta Centre in collaboration with the City of Tartu: entrepreneurship will play an important role there. Erik Puura says that people in Tartu tend to fear that all the best ideas go to Tallinn, from there to Helsinki and on to London, finally landing in Silicon Valley. “The solution is in a growing number of IT companies who establish their base in Tartu. It is a town with a clean and academic environment that attracts many smart people from Estonia and abroad,” says Puura.
Whereas the Estonian University of Life Sciences and the University of Tallinn do not have any companies that can be defined as spin-offs and the Estonian Academy of Arts only has one, Tallinn University of Technology (TalTech) has 11. This is due to how the university defines this form of entrepreneurship. Kaja Kuivjõgi, Technology Transfer Manager at TalTech Mektory, believes that the promotion of spin-offs is not widely popular in Estonia and more efforts should be made in this field: “We have not foreseen that, at a certain point, researchers or doctoral students may feel that they do not want to spend the rest of their lives in academia. That they may wish to enter the private sector or put their knowledge into use as entrepreneurs. We have not created a structured path for that.” Kuivjõgi adds that if startups can take advantage of the right ecosystem, financing bodies and accelerators, this potential should also be used for spin-offs.
At the time when more and more new Estonian startups are conquering world markets and attracting media headlines, spin-offs have taken a calmer approach. Producing a real consumer product in a research-heavy company is not comparable to creating a website or an app. Pere explains that spin-offs are typically following a very different timeline: “Our stories develop slowly, because it is our wish that researchers also stay at the university developing their field.” A perfect example is the academic Mart Ustav, who in the 1990s started his spin-off Quattromed, which grew into two companies, Icosagen and SYNLAB, which are now part of the biggest lab chain in Europe.
Scientific solutions serving society
Bercman Technologies, which collaborates with the University of Tartu, is dedicated to saving human lives. This autumn, the company opened the first smart pedestrian crosswalk in Tallinn, which makes crossing the street safer mostly for pedestrians, but also for cyclists. This globally unique Smart Pedestrian Crosswalk (on the photo) is a smart traffic sign that can be used everywhere, notifying drivers and pedestrians of danger. The smart crosswalk uses artificial intelligence, interaction with self-driving vehicles and sensors, and it combines more than 30 different functions in order to adapt to various traffic situations and weather conditions.
The young men behind the company Crystalspace started out during their masters’ studies in the student satellite team of ESTCube and brought the experiences they gained into the world of business. Today they are working in the European Space Agency (ESA) Tartu Incubator which has invested a development funding of 50,000 euros in them. They are one of the leading creators of a camera that works in the vacuum of space.
Although the topic of mobile positioning never used to be a subject of research at the University of Tartu, it came into focus thanks to professor Rein Ahas, the founder of Positium, whose initiative attracted both attention to the field and contracts to the university. The company creates statistics on the basis of location-based big data, however extracting useful information from the data requires sound methodology. Developing the latter is what the company focuses on. “This is where our links to the university are helpful, because methods which are published and thereby validated by the academic world, are acknowledged by the customers of Positium. This is what largely differentiates us from competitors, who do not really publish their methods to the same extent,” explains Executive Director of the company, Erki Saluveer.
For example, the Indonesian Ministry of Tourism uses mobile positioning data from Positium’s product to calculate official tourist numbers for those who do not provide immigration information. The country has over 17,000 islands and, before using the mobile positioning application, many tourists were left out of their local statistics due to lack of adequate tracking solutions.
Relocated plants and protected borders
The mission of another UT spin-off, Nordic Botanical, is to restore biodiversity and create nature-friendly landscapes and cities. The company started research and development in cooperation with Alexela Oil, in the framework of which scientists from several universities were brought together to develop the methodology for the relocation of protected orchid species from one area to another. This thorough study provided the base material for the research works of many University of Tartu students, also laying the foundation of good practices for future collaborations. The spin-off continues to take advantage of the experiences gained by the ecologists of the university by working together with private companies and local government bodies to develop nature-based solutions for the design of cities and landscapes, as well as offering alternatives to the standard lawn-based landscaping.
The company ReLaDe aims to give the world a reusable washing detergent that can be collected from the washing machine after use. Scientifically speaking, the company has its Proof of Concept, in other words the conceptual preparedness, and now only needs to attract funding for technological development work. As the company will have to integrate its system into existing washing machines, they are in the process of negotiating with international producers.
Another notable TalTech spin-off is Defendec. Founded in 2007, this company develops wireless sensor network technology. The primary goal of the company was to create IoT based products. The first sensor created for border surveillance came onto the market in 2009. Under the name Smartdec, it is the main product of the company, used to secure the outer borders of NATO and the European Union. The appliance helps to curb international trafficking, illegal trade and -border crossing, and it is a necessary technological means of assistance for defence forces and the border guard. Defendec solutions are used in 30 countries all over the world today.
In addition, the list of TalTech spin-offs includes Crystalsol, which in collaboration with the researchers of the university is developing a totally new type of flexible and semi-transparent photovoltaic or solar panel. This will enable different kinds of surfaces to be covered with solar panels; widely available elements such as copper, zinc, sulphur and selenium will be used as raw materials.
In summary, the Estonian spin-off landscape is characterised by diversity and the emphasis on solving serious problems, the large volume of knowhow and a relatively calm pace of development. Various exciting developments are on the horizon as, according to Puura, the first companies in the field of IT and genomics are being created and joining them is likely to produce profit.