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Estonia is leading the way in smart city solutions

Thirteen years ago, the surrounding area of the national airport in Estonia was nothing but a garbage dump next to some dilapidated housing. Today, the area boasts one of the most exciting and innovative business campuses in Europe. More than 10 000 people work in this increasingly smart part of town, today known as Ülemiste City, and it is a base for more than 400 companies. Smart and green city solutions are also being developed elsewhere in Estonia.

Ülemiste City area, which today can be considered an unofficial part of Tallinn, was an industrial district of the Dvigatel factory during the Soviet era. Both consumer goods and military equipment were produced on the 36 hectares of land. When Mainor privatised the area, the initial plan was to renovate the industrial complex. But times changed. The founding father of the campus was the late Ülo Pärnits.

‘Ülo was 70 years old when he proposed that we build a smart city here. In a general sense his idea still underpins it all. He wanted young talents not to leave Estonia and stay to follow their dreams,’ says Margus Nõlvak, Chairman of Mainor Ülemiste. The discussion was never about an office landscape, but about the city of the future.

The campus is being developed by Mainor Ülemiste and Technopolis Ülemiste, which is partially listed on the Finnish Stock Exchange and partially belongs to Mainor. Technopolis was brought into the development process due to its valuable experience in developing business campuses. Back then there was a need for finances and know-how. At first, Mainor was alone and spent its energy on bringing the first companies, including the well-known IT companies Helmes and Nortal, to the campus.

‘Ülo Pärnits took an extraordinary step and created the first open private park on the campus. Our big picture includes a lot of greenery. The idea is to create the kind of environment where smart people want to be,’ says Ursel Velve, Board member of Mainor Ülemiste.

The moment everything changed

The residents of Tallinn witnessed the campus starting to develop. In addition to a growing number of local and foreign corporations, public institutions moved in. First hundreds, then thousands of employees. A breakthrough came about four to five years ago, when the first fine-dining restaurants and other services moved in, Selver opened its first supermarket and the sports club chain MyFitness was the icing on the cake.

‘People were waiting for years for the sports club. The service providers finally realised that there were enough people here needing their services on campus,’ recalls Nõlvak. It was the dream of developers to now have people spending as much time as possible on campus and not having to go out to train or find food. In addition, there is a kindergarten, a local and international school and the recently opened health clinic. At this point, the developers thought it was the right time to think about residential housing. The first project – Lurich House – has 81 rental apartments ready to be moved into soon.

Keeping the ecological footprint small

As the campus grew, so did the ecological footprint of the area. Electricity, cars, garbage and other things put a strain on the environment. An advantage of Ülemiste City is that the campus is being developed gradually and hence decisions can be taken flexibly. The developers regularly listen to the companies on campus – their customers. For example, it was recently decided that the establishments on campus should not sell food and beverages with single-use plastics. Even the large supermarket chain Selver agreed to come along with this initiative, albeit they need a transition period.

‘When we talk about a smart city, we often only think about technology. People tend to ask us what kind of smart solutions we have. But smartness is also about clever city planning and a generally great working environment. This includes the natural environment,’ says Velve.

Smart parking

Smart technological solutions are all around the campus. For example, making use of the already existing network of security cameras, a smart parking system that shows available parking spots on campus was recently created. Before, one had to drive all around campus to find a parking spot. ‘It is a great example of our way of thinking. Our aim is to solve the problems people on campus have, to save their time and to make their lives easier and more comfortable, so that they can focus on the most important thing of doing their jobs very well,’ explains Nõlvak.

The developers of Ülemiste City believe that future cities will use various solutions, including technological ones, in order to create living- and working environments where people can go about their lives as easily as possible.

‘The owners of this campus deserve a lot of praise. They enable us to work creatively. We can accomplish what we want here and we have been told that it is not the main goal to maximise profit. The supportive environment is more important,’ adds Nõlvak. A sense of mission is more important here than money.

A scientific approach

In cooperation with TalTech University, the campus has plans to create a professorship of the Future City. This position, at the Engineering Department of the university, will bring together researchers and a research development working group, as well doctoral and master students who will focus on studying the kind of work- and living environments that will attract top specialists from all around the world. ‘To date, we have taken many decisions based on gut feeling, but we would like to include a more scientific approach,’ explains Velve. The main themes are city planning, innovation in building, mobility and future business models which will be based on data from the city.

The next goal of Ülemiste City is to increase the number of people moving around campus to 20 000 by the year 2025. Less than 20% of the campus has been developed. The Future City is developing step by step whilst always taking into account what their customers want.

TalTech creates a Smart City Centre of Excellence

TalTech University, one of the largest higher education institutions in Estonia, received great news in April. The European Commission decided to support the Estonian-Finnish collaboration project “Finest Twins” with 15 million euros. The co-financing from Estonia is 17 million. This decision will bring many changes to the two countries and the cities of Helsinki and Tallinn.

There is a large team behind the project. From the Estonian side, the entire process has been led by Ralf-Martin Soe, the founding Director of the Smart City Centre of Excellence (Finest Twins) and Senior Research Fellow at the Ragnar Nurkse Department. The funded project will focus on smart city solutions and will bring the cities of Tallinn and Helsinki digitally much closer to each other than their geographical distance of 80 kilometres.

Back in 2013, Ralf-Martin Soe started working for the ICT Demo Centre (today ITL Digital Lab), a non-profit established by IT companies. Among other things, it gave birth to the current e-Estonia Briefing Centre. Soe was just starting his doctoral studies and wanted to witness the success story of e-Estonia as well as contribute to it. His task at the ICT Demo Centre was to find new projects for the e-state, which was experiencing some stagnation. They began focusing on research-heavy projects with foreign financing, hoping to see more collaborative projects between different companies and different countries. On his second day at work, Soe happened to go on a study trip to Helsinki and visited a joint company of IT enterprises called Forum Virium Helsinki. This is where it all began.

‘The entire R&D activity is very similar to startup culture. Especially in terms of new initiatives. You have an idea and know how it could be funded and then you test it. At one point, you will have a portfolio of ten ideas and you know that up to five of them will be developed in the end,’ says Soe.

An unexpected setback

Forum Virium Helsinki was already operating, focusing on smart city solutions and using data to improve services. 80% of their funds came from foreign grants. Soe invited himself to be a long-term observer and the “Finest Twins” idea happened to become part of the ICT Demo Centre portfolio. Later, the latter was replaced by TalTech. Although the project team worked very hard, the first reply from the European Commission was negative.

‘So we proceeded with other ideas and forgot about that one,’ recalls Soe. The decision back then was a big and unpleasant surprise. Soe took up part-time employment with the Ministry of Economics and Communications and continued at ITL Digital Lab, in addition to studying for a while at the UN university in Portugal. In 2018, he received his doctorate at TalTech, which was inspired by the Finest Twins project.

The successful second attempt

At one point, the European Commission started to hint that “Finest Twins” should resubmit its application. TalTech was keen to do so. This coincided with the announcement that the state of Estonia was ready to co-finance with 17 million euros. Hence, they took a new look at the application. About 90% of the application remained the same and it was clear what needed to change. The financing decision this time turned out to be positive.

‘The first negative reply we received came as a bad surprise and the second, positive decision, was just as unexpected, at least for me.
Although, naturally I hoped we would be successful,’ says Soe today.

Focus on smart city solutions

Ralf-Martin Soe thinks that the timing of the “Finest Twins” project was good. The European Commission today considers smart city solutions to be one of the priority R&D fields. This was not the case in 2015. The direction in Europe is increasingly towards digital unification in the region. As Soe says, the fragmentation of digital services is a problem in Europe. Without strong cooperation, each country is digitising, automating and robotising itself and the systems may not be connectable – and even if they are, there is not always a desire to connect them. The broader goal of “Finest Twins” is to find a solution to such discord between Estonia and Finland.

‘Technologically speaking, approximation is possible, but this requires agreements and strong leadership of the project,’ explains Soe adding that a good example of inter-country systems is the Estonian company Bolt – it is possible to use the app in Tallinn, Lisbon and Helsinki. Yet problems come from various local government services, ranging from transport to health- and childcare.

What does “Finest Twins” bring?

“Finest Twins” will create a Smart City Centre of Excellence at TalTech, which will bring together top specialists from TalTech and Aalto University. In addition, Forum Virium Helsinki and the Estonian Ministry of Economics and Communication will contribute with their know-how. The grant has been awarded for seven years during which the Centre needs to compete successfully with other European centres of research and development for large research grants. In addition, the Centre of Excellence will be carrying out top level research and real-life pilots in five areas: mobility, energy, building-architecture, governance and data.

‘Estonia will become a stronger exporter of R&D. This means that we will have many continuing projects. It is our aim that Estonian entrepreneurs will collaborate more with Aalto University and Finnish companies with TalTech. Usually those counterparts would not find each other,’
says Soe.

From the end of 2020, at least two larger pilot projects need to be initiated annually. In total, there need to be at least ten projects. The researchers of the Centre will be involved in each one and each phase must involve cross-border cooperation.

‘The expectations are high. We need to make about ten R&D grant applications per year. This will show how strong the focus is in bringing in additional funding,’ says Soe, adding that the Centre of Excellence is not created for only seven years. It needs to be strong enough to remain in operation for decades. There are also high expectations in terms of scientific publications.

New Estonian magnet

The Estonian e-state is known and praised throughout the world. According to Soe, the same could become true for smart city solutions. The cooperation between Tallinn and Helsinki may attract people here to admire the results. Soe brings in another comparison with startups. “Finest Twins” will also run pilot projects, some of which may turn out to be success stories and some not.

‘We cannot rule out that after seven years we will become a Centre of Excellence which focuses on service provision and sales,’ says Soe. The grant received from the EU presumes that the main focus is attracting R&D grants.

Green technology “Silicon Valley” in Paldiski

PAKRI Science and Industrial Park has been active since 2007. From the outset, its focus was to bring together companies that deal with the development of products and services in the field of energy- and environmental technologies. This includes companies needing office and production space as well as companies wanting to test their technologies.

One of the authors of the idea, shareholder and CEO – Enn Laansoo Jr – says that PAKRI is much more than just an industrial park. They are developing an innovative physical environment or a “smart campus”. In addition, in cooperation with the Tallinn Science Park Tehnopol they offer various business services to clients.

‘We produce green energy for our clients and we are able to create value from energy oversupply, which in turn helps clients to make their products more environmentally friendly,’ says Laansoo Jr.

In 2007, the topic of green technology was becoming more popular in the world. There were discussions about renewable energy, smart cities, a smart electricity grid, recording energy and much more. Why not create a themed Silicon Valley in Estonia?

PAKRI encompasses 65 hectares of land in a great location with the potential to enlarge the park by 2-3 times. In 2012, the first buildings were opened. To date, there are three building complexes with the total area of 20 000 sq. m. The park currently has 18 production clients and 35 service providers.

‘We are a great environment for testing future technologies and producing current ones, whilst promoting technologies created in Estonia,’ says Laansoo Jr.

Geographically and logistically, PAKRI Science and Industrial Park is located in a great place – Paldiski – which is an hour’s drive or train ride from Tallinn. In addition, there are two ice-free ports nearby as well as the Ämari airfield. Apart from the beautiful nature and developing area, Paldiski also has a sufficient workforce.

You can read more about the opportunities Estonia provides in smart city solutions here and find out more about the country’s industrial parks here. If you need more information on business opportunities in Estonia, our unique e-Consulting service is the way to go.

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