23 September 2009

Hot Finnish innovators

How Oulu walked from rubber boots to high-techElvi Usmanova, especially for STRF.ru
Northern Finland.

On my trip to Oulu, which is 200 kilometers from the Arctic Circle, it was quite warm. The leaves of the birches had already turned completely yellow – it was September in the yard. I looked with envy at the "walruses" who were cheerfully swimming in the river. If I had a swimsuit with me, I would have jumped after them. However, I didn't come to Oulu to swim, but to see how Finns develop innovations.

Few people in the world heard about Oulu, a small Finnish town on the shore of the Gulf of Bothnia, a few decades ago. He was known only for the fact that resin and rubber boots were produced here. Over the past two decades, this northern town has turned into a major scientific and technical center, which is called the Finnish "silicon Valley". Now it is the sixth largest city in Finland. For several years now, Oulu has been one of the fastest growing centers in Finland. The average age of Oulu residents is 36 years. People come here to study and work, and the birth rate in this region is traditionally high.

The situation in Oulu, where about 25-30 thousand inhabitants lived after the war, was the same as in many towns at this latitude. Young people left to study and work in Helsinki and then did not return to their native places. And the first thing that was done for the development of the city was the creation of a university. It was opened 50 years ago, the first university in the north of Finland. It has become a forge of personnel for innovative firms – students already in their early courses take an active part in their work.

Woodworking and paper production began to develop in Oulu, metalworking and the steel rolling industry began to develop in neighboring cities. "But in order for these industries to develop actively, new technologies were needed," says the mayor of Oulu, Matti Pennanen.  "And in the early 80s, the Oulu City Council decided to take a course for innovative development of the city." Then the city began to actively invest in the creation of new innovative firms.

Currently, about 7 million euros a year is spent from the city budget to support innovations (the total budget of the city is 700 million euros). Also, money from enterprises and from the state goes to support innovations. In general, more is invested in the innovative development of Oulu per person than in Tampere or Helsinki. Moreover, the city invests money mainly in developments at the R&D stage.

"This is the most vulnerable place, it is difficult for scientists to find investors at the stage of scientific research. As for the introduction of innovations in production, there are many funds in Finland that are engaged in this," says Matti Pennanen.

Eight hundred companies currently operating in Oulu are the result of the policy of the city authorities aimed at innovative development. Many of them were established with the participation of the city. Somewhere the share of the city is several percent, somewhere 100 percent. Now there are many well-known companies in Finland and abroad among them, standing firmly on their feet.

"The support of the city is very important for all enterprises, especially for local research and innovation centers. We understand that today we need close cooperation between business, scientific institutions, and the university," says Matti Pennanen. "They can't exist alone. At our city hall, we know all the heads of enterprises personally, we have close cooperation with representatives of these three spheres of activity. Such cooperation is very important for the city, because we are developing technologies of the future."

In total, about 17.5 thousand jobs have been created in innovative companies that exist in the city, that is, more than 10 percent of the city's population are employed in high-tech. That's quite a lot. Although the companies themselves, as a rule, are not very large – on average, each employs 16 people, but together they give very good results. The income of the high–tech sector in Oulu and its environs is approximately 5 billion euros per year.

"In Finland, the income tax is 18 percent. And we receive this money directly to the city budget, and we also receive more money from the state (10 percent of the budget). Of all the expenses of the city, half is covered by taxes. We have to earn the second part ourselves," the mayor says.

Nokia employs about 4,700 people – it is the third largest employer after the city and the hospital. "But we cannot grow only at the expense of Nokia, we must develop new directions, new jobs for the region. In particular, now we are actively developing healthcare technologies," says Matti Pennanen. – This is the future of the city! We already have a significant number of companies developing new technologies in the field of healthcare. In 1990, Medipolis was created, which led the direction of medicine and biotechnology. This firm is wholly owned by the city. It is an alliance of several dozen enterprises that are engaged in the development of the pharmaceutical industry, medical equipment, software for healthcare, etc., as well as city administration. His task is to develop healthcare in the city."

Stora Enso pulp and paper mill is also located in Oulu, which is one of the largest in the world for the production of magazine paper. I will note that in windy weather, he smells in the city like overexposed sauerkraut. This is a minus for permanent residence. But it is compensated by the beautiful northern nature. But, alas, autumn, although quite warm, is very short. Already at the end of September, snow may fall here.

"Yes, this is a northern city, but we love it like this and are glad that the city is growing," the mayor is pleased. If in 1940 25 thousand people lived here, then in 2009 – 137 thousand. A significant part of the population has grown, according to the mayor, precisely due to the development of higher education and the innovative component.

"People go to places where there is a job and an opportunity to study. We must have our own zest, then people will reach out to us," the mayor is sure.

The city begins with a technoparkTechnopolis, now one of the largest science and technology parks in Europe, also originates from Oulu.

It was created more than 25 years ago, when high technologies were not yet strongly developed in Finland. Now this technopark is one of the largest in Europe. Technopolis technoparks operate in eight cities of Finland – Oulu, Helsinki, Vantaa, Espoo, Lappeenranta, Tampere, Juvaskyla, Kuopio, as well as St. Petersburg. About 16 thousand people work in 1200 companies renting premises in 15 Technopolis technoparks. The annual turnover of the company is 31.7 million euros.

Pertti Huuskonen, President and CEO of Technopolis Group of Companies, says that the technopark was created as a joint venture of the Oulu City Administration (50 percent) and several individuals and companies (50 percent). "This ownership structure was important at the initial stage – at that time, this industry required the support of the city. With the development of the technopark, the share of the city gradually decreased. Now 5.3 percent belongs to the city of Oulu. But there are 40 other cities that also own shares," Mr. Huuskonen said.

The main difference between technoparks and a conventional business center is in a wider range of services that are provided "from one window". So, in the income structure of Technopolis, 75 percent comes from renting real estate, and the remaining 25 percent are various services: consulting, conferences, secretarial, etc.

The concept of Technopolis's infrastructure development activities consists of three stages. At the first stage, the company is provided with premises, then various services and related services – from telecommunications to secretarial. At the same time, each company chooses from the existing service package only the services it needs. At the final stage, the company is provided with business development support. Technopolis also helps in attracting external financing and preparing business plans. Thus, a kind of innovative ecosystem is being created.

In Russia, this is not always the case, and the heads of innovative enterprises often say that they do not see any difference at all between business centers and technoparks.

Pertti Huuskonen says that the electrical wiring and ceilings in Technopolis are made so that the redevelopment of the building can be done within a few days, and the rearrangement of workplaces can be done within a few hours. "This is convenient for a high-tech business, in which it is difficult to guess how many people will work even in a year."

Now there are about 300 tenant companies in five technoparks in Oulu. These are companies working in the field of IT, healthcare, ecology, etc. The average number of employees of the company renting space in the technopark is 13 people. Many companies occupy small premises measuring 10-20 square meters, but there are "anchor" companies, such as Nokia, which rents about 40 thousand square meters. A separate building has been built for her.

New buildings in the technopark are built when the existing ones are filled and there is a volume of preliminary applications from new customers for 50 percent of the new areas. All the real estate of the technopark is rented out. Investments of innovative companies in the acquisition of real estate ownership are considered economically inefficient in Finland. It is believed that real estate investments "bind" capital, and investments in innovation are more effective.

Another direction in Technopolis is business incubators. This is, in fact, a training and consulting support program for aspiring entrepreneurs. "We grow about 40-50 new firms in the business incubator every year. Having grown stronger, many of them become tenants of our premises," says Pertti Huuskonen.

Startups in the business incubator are helped to choose project ideas, evaluate the possibilities of their commercialization, search for venture capital, financing and further development. At the same time, a personal assistant is assigned to each firm, who is both a consultant and an adviser. The institute of mentoring is practiced – retired managers help novice managers. In addition, technopark specialists know the needs of large companies and help to bring them together with startups within the technopark. For a small company to find a large buyer is simply vital for survival and stable operation.

One of the technoparks in Oulu is located next to the university. (Technopolis has three main options for placing technoparks: near the university, in the city center or near the airport). Technopolis actively cooperates with the university: experts consider developments made by students and teachers, which are most often in the initial stage. In total, more than 4 thousand experts in various industries cooperate with the technopark. They evaluate the commercial prospects of the projects and, if the idea is recognized as realistic, then the "cultivation" of the business begins. At the same time, a personal consultant is assigned to each firm.

According to statistics, 86 percent of beginners survive in Technopolis technoparks. Of course, not all of the survivors become new Nokia, but most of them are successfully developing.

Waiting for the KulibinsI am meeting with the heads of one of the small companies that is "grown" in Technopolis.

Experts drew attention to this project when it was literally in its infancy – scientists were conducting research on how physical activity affects the development of osteoporosis. Based on these studies, university staff have created a device that helps in the prevention of this disease. The problem is very relevant for many countries. For example, in Russia, osteoporosis (a progressive decrease in bone density, which increases the likelihood of fractures) affects every third woman after the age of 50.

"The device that we have developed allows us to monitor whether enough load is received during the day," says Marco Ala–Ketola, managing director of Newtest Oy.

A small round device is attached to the side of a person and captures the movements that help strengthen the bones. This is, for example, walking (the norm is 13 kilometers per day), walking up stairs, jumping, etc. Exercises that are not associated with such a load, such as swimming, do not affect bone density and are not counted.  So every day you can see whether the daily norm is met or whether it is worth moving more and longer.

Hundreds of devices have already been sold. In Finland, there is a boom in everything related to health, disease prevention, so the inventors got into the stream.

So far, there are practically no innovative firms in Oulu created with the participation of Russian capital. However, the city authorities say they will welcome the creation of such firms. Especially if they work in the field of healthcare technology, biotechnology – this area is considered very promising here and is strongly supported.

55 percent of the budget of Oulu goes to the social sector, noticeably 20 percent to education. These are the largest items of expenditure in the city budget, the rest of the money goes to infrastructure, culture, etc. There is also one of the largest multi-specialty hospitals in Finland, which employs 3,700 people.

Minus the city – there is no direct connection with Russia. It is impossible to fly to Oulu without a transfer from either St. Petersburg or Moscow. First you need to get to Helsinki, from there to Oulu either about 1 hour by plane, or about 6 hours by train or car. Planes from Helsinki fly every hour. But we must be prepared that with a small number of passengers who have bought a ticket, they will have to wait for the next flight.

Portal "Eternal youth" http://vechnayamolodost.ru
23.09.2009

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