If we want to catch up with the innovation train speeding ahead, we must accelerate at all levels, wrote Indrek Tulp, a member of the board of Metrosert and head of the applied research center, on December 23rd in Delfi. Below is Indrek’s opinion article.

Economic downturn and people’s struggles to make ends meet have led to almost daily discussions on how to find a formula to get Estonia’s economy and societal welfare back on the growth path. One of the key components of the solution is the phrase “knowledge-intensive entrepreneurship.” This requires an answer to the question of how to attract more scientists and engineers who contribute to creating economic value – in business.

The need to better connect science and business in Estonia is more urgent than ever. Innovation leaders, such as Belgium, the Netherlands, Sweden, Finland, Denmark, and Switzerland in Europe, not to mention the U.S., which is far ahead, have long recognized this and have already taken decisive steps in this direction.

The reason is simple: in most developed countries, successful and high-revenue products can only be created with significant research and development support, which includes front-line applied research and experimental developments that bring technologies closer to the market. This is how world-leading products are born, and their commercialization creates jobs, generates tax revenues for the state, and benefits society at large.

The numbers show the backlog

We don’t need to look far for good examples. Among our neighboring countries, Sweden and Finland stand out with their high productivity and knowledge-intensive economies. Their labor productivity is $96 and $85 per hour, respectively, while in Estonia, this figure is $55 (OECD 2022). In these countries, the proportion of research and development workers in the entire working-age population is significantly higher – 2.26% in Sweden and 2.19% in Finland, compared to just 1.26% in Estonia (Eurostat 2023).

The difference is primarily seen in the private sector, with research and development employees making up 1.74% in Sweden, 1.29% in Finland, and only 0.63% in Estonia. This clearly shows that higher productivity is driven by smart people who create higher value-added products and services.

In these countries, universities, research institutions, and various technology development centers work closely with both the private and public sectors. When a conscious innovation policy and a strong education system are added to this equation, success stories begin to emerge.

Success stories in Estonia despite the lag

Despite the lag, there are success stories in Estonia born out of cooperation between businesses and scientists. Examples include Skeleton Technologies, which broke onto the world stage with supercapacitors, biotechnology company Icosagen, and Milrem Robotics, which develops robotics solutions for both defense and civil sectors. These companies share common traits: highly educated product developers, global and customer-driven thinking, and close collaboration with research and development centers.

Who will connect science and business?

Unfortunately, these examples are still exceptions in Estonia. The lack of specialists capable of combining academic knowledge and marketable production is hindering growth. Such specialists are in high demand from both businesses and their potential partners – development centers – that want to excel in both research and the business world.

The lack of research and development workers in Estonia is a significant bottleneck for innovation. According to a 2023 OSKA study, Estonia’s backlog in the proportion of R&D workers in companies has actually increased over the past decade – both in comparison with innovation leaders and the EU average.

In most European countries that excel in innovation, research and technology organizations (RTOs) have been established to bridge science and business. Estonia only managed to establish its RTO in 2023, with the applied research center launched at Metrosert, which has been operating since 1919 as the national metrology center. The tangible benefits for businesses will begin to materialize in the coming years.

Ideas Are There, but Implementation Is Stalled

We are facing the challenge of how to quickly catch up with the fast-moving innovation train. The competencies our businesses urgently need are not only related to developing innovative products as prototypes. From my daily work, I see that a major bottleneck is related to production development – how to bring a new product to industrial scale efficiently while considering regulations, especially within the EU market.

To build production considering all necessary aspects for commercialization, capable engineers are needed. Without considering every step in advance, several steps may need to be redone in the product certification process, resulting in significant costs. Not to mention cases where the product must be removed from the market, which leads to both financial costs and significant reputational damage.

Years ago, manufacturers had to recall the Volkswagen model with a technical fault and the Samsung smartphone with a faulty battery that was a fire hazard, both of which received extensive public attention. To avoid such fiascos, competent product and production development is crucial.

95% of Estonian companies are micro-enterprises, where efficiency is essential and labor resources are limited. For such companies, it is wise to engage an external team with testing infrastructure ready for research and development. In particular, Metrosert’s applied research center, which combines both scientific and business expertise, can assist in developing a promising prototype into a commercially viable product that meets regulatory standards.

While we are still in the phase of building experimental infrastructure and expanding our team, interest from both Estonian and foreign companies is already significant. Several companies and partners have already expressed specific interest in the desired service volumes and applied research cooperation projects, both domestically and internationally.

It will take time to start industrial trials, but businesses can already turn to the applied research center with their product development challenges – we offer consultation and help map future collaboration opportunities.

Competence from the classroom

I certainly don’t claim that the applied research center will solve the entire problem of increasing Estonia’s economic productivity. Offering testing infrastructure and partnerships with businesses is extremely necessary, but even more critical is solving the problem of competent people.

To ensure that we have educated product developers and engineers in the future labor market, we must start fostering children’s and young people’s interest in natural and exact sciences, as well as technology fields, from the very first stages of education and extracurricular activities. At the elementary school level, this is already very good, with examples such as robotics clubs and Taavi Kotka’s initiative for girls’ technology clubs. However, problems arise at the middle school level.

If we don’t offer extracurricular education in exact sciences at the middle and high school levels, young people’s attention will inevitably shift to so-called “softer” fields. This is why, according to the statistics office, the number of graduates in natural sciences and mathematics bachelor programs has not increased over the past seven years, the number of master’s graduates in these fields has decreased, and the number of PhD graduates remains consistently lower than needed for our business development.

Of course, we can’t only point the finger at the education system. A significant potential lies in cooperation between research institutions, businesses, and the applied research center. Companies can enhance their research and development competencies through continuing education. If hiring a separate research team is not affordable, it is possible to grow the competence of existing staff. Companies can also collaborate with universities by offering internships or thesis topics – all to ensure that graduates are ready to apply their knowledge in the economy.

Making success stories visible

It also helps when companies demonstrate more to the public the significance and value of product developers’ and engineers’ work, thus increasing the attractiveness of these professions among young people. It is also important to share success stories that emerge from the cooperation between science and business. Valuable are hackathons organized in cooperation between universities and businesses, which help young people tackle real challenges under the guidance of experienced mentors.

The applied research center also contributes to developing the competencies that link science and business. We can serve as a springboard for industry development workers. When transitioning from university directly to an industrial company as an engineer or developer, the gap between the two worlds is often too large. We offer an ideal intermediary stage for emerging top talents. Working for a few years between the academic and industrial worlds provides excellent preparation for the next step – joining a company’s development team.

Seeing how the cooperation between universities, industrial companies, and the newly established Metrosert Applied Research Center is gradually deepening, we can say that Estonia’s situation is optimistic. However, if we want to catch up with the innovation train speeding ahead, we must accelerate decisively at all levels.

Source: Delfi