1. COORDINATION OF INNOVATION STRATEGIES/SCHEMES IN METROPOLITAN AREAS. THE ROLE OF PUBLIC POLICIES. WHY OUR INNOVATION MANAGEMENT SCHEMES ARE APPOPRIATE FOR OUR AREA? MART REPNAU BUSINESS DEVELOPMENT MANAGER Tallinn, June 07.-08, 2002

2. TALLINN – ECONOMIC ENGINE OF ESTONIA ESTONIA: 15 COUNTIES, 247 LOCAL MUNICIPALITIES, incl. 42 cities & towns. STATUS OF TALLINN?? 1/3 OF THE POPULATION, ½ COMPANIES & EMPLOYMENT, ½ OF GDP, 2/3 OF CORPORATE PROFITS IN TALLINN 80% OF FOREIGN INVESTMENTS ARE MADE IN TALLINN AND IN TALLINN`S HINTERLAND EXPORTS OF TALLINN MAKE CA 60% OF THE TOTAL EXPORTS OF ESTONIA AND 70% OF THE TOTAL VOLUME OF IMPORTS

3. ECONOMIC SITUATION (1) Active entrepreneurs by legal form (National Tax Office – June 2001) Estonia Tallinn COMPANIES48 213 (408 404 empl.)25 363 (193 369) Micro I13 597 (0) 8 136 (0) Micro II21 832 (74 825)11 054 (36 489) Small 6 193 (122 677) 2 735 (53 352) Medium 1 148 (110 060) 479 (46 852) Large 155 (100 842) 75 (56 666) Companies per 1000 ca 35ca 64 + SOLE TRADERS (FIE) 27 096 7 479

4. ECONOMIC SITUATION (2) Gross Domestic Product 60.3% of GDP produced in Northern Estonia (Harju County +Tallinn), 1998 GDP per capita: ca 90,000 EEK in Tallinn, ca 60,000 EEK in Estonia. Service & trade make up 57% of Regional gross value added in North Estonia. GDP by economic activity, 2000: manufacturing 16.6%; wholesale & retail 16.1%; transport, storage & communication 14.9%; real estate & business services 11.9%. Major sectors in Tallinn: transport, transit & logistics services; tourism; traditional industries (metal&machinery, food, textile, furniture); innovative industries (ICT, engineering, automation).

5. STRENGTHS OF TALLINN FAST-GROWING ECONOMY WIDE RANGE OF INVESTMENT OPPORTUNITIES LOW RISKS, LOW COSTS, LOW TAXES A HIGHLY SKILLED WORKFORCE FIRST-CLASS COMMUNICATIONS A PLEASANT ENVIRONMENT TO LIVE AND WORK IN ONE OF THE MOST LIBERAL ECONOMIES IN THE WORLD

6. ECONOMIC POLICY CORNERSTONES OF ESTONIA’S ECONOMIC POLICY since 1992  LIBERALISM & ECONOMIC FREEDOM  STABILE & BALANCED FISCAL POLICY THAT MEANS  FREE MOVEMENT OF CAPITAL AND GOODS  BALANCED BUDGET AND CURRENCY BOARD SYSTEM  MINIMUM INVOLVEMENT OF THE PUBLIC SECTOR BUT IT ALSO MEANS  BALANCING TRADE DEFICIT WITH RELATIVELY BIG FDI  REDUCED PUBLIC SECTOR ROLE IN DIRECT BUSINESS SUPPORT

7. PUBLIC ORGANISATIONS ENTERPRISE ESTONIA  ESTONIAN REGIONAL DEVELOPMENT AGENCY  ESTONIAN EXPORT PROMOTION AGENCY  ESTONIAN TECHNOLOGY AGENCY  ESTONIAN TOURISM BOARD  ESTONIAN INVESTMENT AGENCY  EE REGIONAL AGENCIES (IDA-VIRU & SOUTH-ESTONIA) CREDIT AND EXPORT GUARANTEE FUND (KredEx)

8. OTHERS REGIONAL BUSINESS DEVELOPMENT CENTRES TARTU SCIENCE PARK TALLINN TECHNICAL UNIVERSITY INNOVATION CENTRE CENTRES OF EXCELLENCE (recently established) TALLINN TECHNOLOGY PARK (planned) INDUSTRY BRANCH UNIONS AND ASSOCIATIONS

9. FIELDS OF STATE SUPPORT National SME Policy HUMAN RESOURCES  SUPPORT FOR TRAINING AND CONSULTANCY FINANCES  START-UP AID AND LOANS (VENTURE CAPITAL)  CREDIT GUARANTEE  SUPPORT FOR INFRASTRUCTURE BUSINESS SUPPORT INFRASTRUCTURE  BUSINESS DEVELOPMENT CENTERS  INCUBATION AND TECHNOLOGY PARKS BUSINESS INFORMATION  BUSINESS PORTAL www.aktiva.ee  EUROINFO CENTERS

10. FIELDS OF INNOVATION SUPPORT National RD&I Policy (1) FIRST DOCUMENT TO DEFINE PRIORITY INDUSTRIES  information technologies and information society  biomedicine  materials’ technologies DEFINES THE ROLE OF THE NATIONAL GOVERNMENT  the main investor in creating the pool of knowledge, ensuring reproduction of new knowledge and skills  the catalyst of innovation process, accelerating the reproduction of new knowledge and skills and encouraging enterprises to develop and implement new technologies  the regulator that creates a favourable environment for the development of RD&I

11. FIELDS OF INNOVATION SUPPORT National RD&I Policy (2) DEFINES SEVERAL SPECIFIC ACTIONS. The main ones are:  setting strategic targets in order to acquire and apply new knowledge  integrating activity plans (economy, education, RD&I)  creating favourable policies and legislation for the private sector  financing fundamental and applied research, and necessary infrastructure  develop integrated mechanisms between R&D and the business sector  launching national programs to implement priorities STATE FINANCING OF R&D:  TARGETED FINANCING  R&D GRANTS  SUPPORT PROGRAMMES FOR INNOVATION (enterprises)  MAINTENANCE OF INFRASTRUCTURE  NATIONAL R&D PROGRAMMES FOR INNOVATION (general)

12. SOME ISSUES FOR CONSIDERATION HISTORICAL : broken tradition of innovation SOCIAL-CULTURAL : Scandinavian influence and mentality INSTITUTIONAL : limited capacity and financing BUSINESS RELATED : orientation, awareness and authority NATIONAL vs REGIONAL

13. ACTIVITIES IN LOCAL LEVEL RITTS ?? EVALUATION & ANALYSIS INCUBATION NETWORKING ?? AREA CLUSTERS INFORMATION AWARENESS RAISING CAPITAL GRANTS

14. CONCLUSIONS There exists Research & Development Policy in Estonia There exists Regional Development Policy in Estonia (Tallinn??) There are govenmental measures for R&D activities in Estonia There are governmental measures for entrepreneurial development in Estonia (Tallinn??) There is no established Industrial and Research & Development Policy in Tallinn There are local measures for entrepreneurial development, some plans for innovation infrastructure development There is support for technology transfer between university and enterprises