Estonia must learn to turn science into capital, says Tartu rector

Estonia has been long seen as eastern Europe’s poster child for performance in research and innovation, but the small Baltic country now needs to renew its efforts to turn science into economic gain and to find a more equitable balance between basic and applied research.

Toomas Asser was re-elected in April as rector of the University of Tartu with a plan to enhance the university's cooperation with industry, building on progress made by the country over the past 15 years in the digital sector.

“We are great at turning capital into science but not that good turning science into capital,” Asser told Science|Business.

Estonia has seen remarkable economic growth over the past 15 years, thanks in part to policymakers who understood the significance of investing in digitising public services. As a result, Estonia has one of the most advanced systems in the world, with a single point of access to services ranging from voting and paying taxes, to accessing healthcare and getting a driving licence.

Public investments also spurred innovation in academia and the private sector, with digital start-ups going on to become global leaders in videoconferencing, fintech and other fields. Meanwhile, the University of Tartu led the country to be a leader in genomics, setting up a sequencing database covering 20% of Estonia’s population.

But, says Asser, without commercial translation, this rapid and successful growth of research and innovation is not sustainable in the long run. “We have to change something,” he said.

Tartu has identified over 50 research projects with significant potential for commercialisation, but which researchers have not been able to carry out as yet. To speed things up, the university is planning to increase the support it gives to research teams interested in building their entrepreneurship capabilities. “My dream for the next five years is to open up the potential of existing high-level research at the university,” said Asser.

Estonia recently put forward a strategy for economic growth until 2035 that has the aim of doubling private R&D investment, from 1% to 2% of GDP over the next 17 years. Public R&D investment in Estonia reached the 1% of GDP target in 2019 but Asser says it will take some time for the private sector to double its R&D investment and for the country to reach the combined 3% target set by the EU.

The 2035 strategy also aims to boost research commercialisation, which fits with Asser’s plan for tapping into the economic potential of ongoing research projects. To drive this, the university has set up an asset management company to facilitate the transfer of innovation and technology from academia to business.

In addition, the university has a support programmes for entrepreneurship and mentorship for undergraduate, Masters and PhD students. It has also launched a proof of concept funding instrument to help researchers take their first steps towards becoming investment ready and understand how to attract private risk capital.

Asser says the university now has a standardised mechanism for converting intellectual property into equity, to ensure that researchers and founders have a stake in any future success. He hopes other universities in the country will follow the example. Asser will also try to set up a fund for investment-ready spin-outs.

Young talent

For Asser, the main challenge for Estonian universities now is coming up with incentives to attract more young people to its PhD programmes, to contribute to generating knowledge and to turn that knowledge into services and products. “Our problem is that there is a very small interest for our own talented young population to be in academia and to do PhD studies,” he said.

Estonian universities should in theory deliver about 300 PhD degrees every year, but universities are missing the mark by about 50 PhD diplomas.

Asser believes the higher education sector remains underfunded and not enough attention is being paid to basic research, despite government efforts to boost public R&D funding. At Tartu, about 80% of the public research funding is disbursed through competitive calls, while only 18% of public money can be used freely by the university on basic research.  “It will be ideal to increase the share to 25% or even 30%,” he said.