Materials Technology Report
In terms of resource enhancement in the field of materials technology, the focus is on two different aspects of development:
materials technology in the manufacturing industry;
enhancement of oil shale as a natural resource.
Materials technology and, more generally, the growth areas connected with it (ICT, biotechnology) are one of the main driving forces in shaping industry and different sectors of economy. The increasingly rapid and more extensive integration of these technologies into industrial processes (industry 4.0, automation, additive manufacturing, sensorics, power industry, etc.) helps achieve more general long-term targets that are related to more effective use of energy and resources, including limiting the consumption of fossil fuels (energy production, transport, etc.), wider use of renewable resources (in energy production, construction, transport and other areas), overall energy efficiency and autonomy, the use of raw materials, and environmental safety, etc.
Acknowledging general global trends, and taking into account the possible application areas of materials technology, it may be said that this sector offers development potential in all branches of industry that are important for Estonia. From the point of view of the R&D trends of the materials technology research and business environment in Estonia, greater impact on the growth of added value may be expected in the processing industry. The processing industry in Estonia is mainly directed at export (70% of production) and is closely connected with the traditionally strong markets (EU, Scandinavia). These markets have a great demand for products with high materials technology content; therefore, success is directly connected with consistent development and innovating of products/services. Universities and technology development centres of Estonia form the basis for competitive competence for the application of different surface coating technologies and nanotechnology materials. Although the fields of application of these technologies are very extensive, Estonia has the potential to use the existing R&D for the development of new narrower niche products/services, or renewal of the existing products both inside the sector and beyond it (ICT, biotechnology). In certain cases it may be possible to cover the whole value chain, or the major part of it inside Estonia (e.g. R&D of nanomaterials/-coatings → rare earth metals → permanent magnets/magnetic materials → electric engines → global markets).
Today, the biggest obstacle is the lack of common interests and consistency in product development of the RDI activities of Estonian companies and universities. On one hand, it is connected with the profile of the enterprises in Estonia (mostly SMEs – no capital for development activities, larger enterprises do not have any interest or need), and on the other hand, with the capability of technology transfer (scalability of technologies, lab → industry) in RDI institutions. In order to intensify co-operation and achieve greater economic impact, it is necessary to considerably increase the extent of development activities of companies and give them a closer connection with the research activities conducted in R&D institutions. The state has an important role and opportunity to direct the R&D activities with a more detailed coordination of financing. For a more successful launching of technology transfer, proportionally more state measures should be directed from fundamental science to product development activities, as development activities consume more time and capital. Besides the already existing enterprises, the emergence of new innovative companies (start-up, spin-offtype) should be supported. Taking into account the capital intensive nature of this sector and the rapid change of markets due to globalisation, it is vital to involve the investments of both existing and new enterprises in product development or increasing of production volumes. At national level, it is important to create a relevant support system and implement it.
Besides insufficient R&D and investment capability in the business sector, the spread of new materials technologies is directly connected to the lack of specialists with the necessary experience and/or little know-how of Estonian enterprises. Thus, it is necessary to develop competence centres that would help companies stay in touch with global development trends in their specialised activities in research and development. Creating similar synergy in the education sector is equally important in order to ensure and retain competent and diverse specialists for the companies. Keeping in mind the present situation, it is necessary to increase and stimulate the involvement of high-level R&D workers in business, and to support participation in global specialised forums (fairs, seminars, conferences) and organise training, information days, seminars, etc. that would facilitate a quicker and more efficient way of using these new technologies.
One of the sub-sectors of enhancement of resources is the using of oils shale as one of the main natural resources of the state. In the context of smart specialisation, we should keep in mind the support of improved technologies in manufacturing products of higher added value (shale oil, products of chemical industry, construction materials, etc.) and in the maximum use of the value chain of oil shale and the R&D closely related to it. The oil shale sector is of national importance, and therefore it has to be viewed separately from the materials technology (nano- and surface coating technologies). Bringing about greater changes in this sector and the decisions necessary for development activities are not so much restricted by smart specialisation measures but actually linked to the strategic decisions of the state.
Oil shale as an alternative resource to oil and gas is in focus everywhere in the world, and Estonia’s potential is first of all in its extensive experience and competence in the use of various technologies that can be exported to new markets today (e.g. to Jordan). At the same time the development of this sector is connected to the progress of competing technologies, and the climate policies and environment requirements of the EU that, bearing in mind their future strategies, favour the renewable technologies. Here the state has the possibility to balance the sustainability of a necessary branch of industry by creating a favourable and stable environment for investments and further development activities.
An important problem of the oil shale sector is the ageing of the engineering and technical staff and the insufficient number of young specialists, which will result in the shortage of labour in the near future. In addition to that, the Oil Shale Competence Centre is an example that it prefers to concentrate on servicing the existing enterprises than on the R&D of new products/technologies.
1.1 General data on the sector
Global trends of materials technology are characterised and influenced by the demands and general tendencies of different (industrial) sectors, that are forced to look for new solutions in the form of high-technology solutions.7 As materials technology is by its nature an inter-disciplinary sector, global development inside this sector means integration with the tendencies of other sectors (e.g. ICT, biotechnologies, medicine) sooner than independent progress. One of the most important corner stones of the next industrial revolution will be an even greater blurring of boundaries between different sectors and faster innovation, commercialisation and production due to the global markets.
Larger implementation of the “bottom-up” manufacturing concept in nanotechnology, surface coating technologies and also in the industry more widely, will be the greatest challenge in the materials technology sector generally. Sustainable use of raw materials and energy, and the environmental requirements that are constantly becoming stricter are some of the main motivators for making use of high technology materials and materials technologies in the whole industrial sector. Additionally, manufacturing technology together with the mutual flexible management of industrial fixtures and communication and the decision-making ability of systems (industry 4.08) will begin to reshape the whole industrial sector. As well as changes in the principles of production, the raw materials sector also has to react because new technologies require different solutions (Figure 19).
The European Commission has called materials technology, including nanotechnology, one of the key technologies of the future, and the development of this sector is characterised by increasing production volumes and faster commercialisation of new (nano)materials/-technologies. It is predicted that the global marketing volume of nanotechnology products will be nearly 3 trillion USD by 2020.10 Increasing marketing volumes and rising growth trends in regard to new technologies and types of materials can be noted in the whole sector, including the sub-sectors of the S3 nanotechnology materials domains: nanocomposites – 18% annual growth rate according to research11; nanofibres – annual growth rate of products based on nanofibres is 30%12. Carbon nanotubes (CNT) – very wide use (plastics, composites, electronics, energy, etc.), predicted market volume 1.49 billion dollars by 2018. The significant increase in volume is connected with the growth of demand from the electronics sector.13 Nanotechnologies in power industry – the market potential of nanotechnology applications connected with the sphere of energy is 15 billion USD (11.4% a/a).14 In power industry generally, the use of different technologies in symbiosis (e.g. wind turbines + fuel elements to compensate due to fluctuations caused by the energy production of the wind turbine) is becoming increasingly important.
Surface coating technologies and especially thin laminates have a great potential in micro and nanoelectronics, fields of sensorics and multi-functional surface applications (see Annex). Based on present trends he predicted market value may reach to15 billion dollars by 2016.15
The greatest challenge to the global metal industry and allied industries is to reduce the degradation of the quality of materials and product characteristics caused by corrosion. According to estimates, corrosion has an impact on 3–3.5% of the GDP of developed countries. Corrosion prevention measures will bring an annual saving of 20–25%.16 In this sector there is a need and demand for high technology surface coating materials, which will create an excellent opportunity for co-operation between R&D and metal industry enterprises.
Oil shale as an alternative resource to oil and gas is studied all over the world. Oil shale resources are very large and their energy potential is comparable to the oil resources that are in use today. At the global level, many countries (USA, Brazil, Germany, China, Australia, Jordan, etc.) are interested in the use of oil shale. Bearing in mind the possible opportunities in these markets, Estonia has a good potential for the export of existing R&D and technological competences and international co-operation.
1.1.1 Overview of the Estonian sector
Although today new materials are used in different sectors, from food industry to ICT, the main and most important field of application of materials technology is the processing industry. Nearly 115,000 persons that form nearly 19% of the overall employment, work in the enterprises connected to the processing industry of Estonia. On the basis of added value, the role of industry sector in the economy is similar to the EU average (approx. 15%). At the same time, the percentage of persons employed in it in Estonia is one of the highest among the countries of the EU (about one fifth), which indicates that other countries are able to create more added value with the same number of workers.17
The processing industry sector mostly consists of small and medium size enterprises, and their focus is to mainly subcontract their activities. The production of traditional natural and a few artificial materials (timber, components of construction materials, agricultural products, metal products, plastic materials) with relatively small added value and innovation dominates in the production of materials. There is almost no high-tech and innovative materials manufacturing industry (e.g. carbon nanotubes, nano and carbon structures, synthesis of extra pure component materials for electronics industry, etc.) in the sector. The activities of the sector can generally be characterised by relatively low added value and the achieving of a price ceiling.
Development of applications on the basis of the use of new and innovative materials (nanostructures, renewable energy materials, nano- and micro-fibres, etc.) is dominant in the R&D activities related to the application of materials. Less attention is paid to traditional materials (developing wood and the raw materials of construction materials, etc.), although there are exceptions (e.g. attempts to make use of the waste from oil shale production, research on using bio-mass in power industry, etc.). The activities characterised as exceptions are targeted at innovative companies (Skeleton Technologies OÜ, AS Elcogen, Crystalsol OÜ, etc.).
There are a few examples of rapidly developing sectors with high potential, for example in the application of composite materials (renewable energy equipment, water crafts, drone technologies, tools), but relevant activities are characterised by a weak connection with the R&D activities, and therefore the volume and effectiveness of development activities does not correspond to the potential of the sector. The main obstacle to the application of the above-mentioned innovative materials, is the scaling from lab level to the level of prototypes and production, the financing of which the enterprises often cannot afford.
Enterprises operating in Estonia
In 2013, there were nearly 6,000 enterprises in the whole processing industry. 200 of them had at least 100 employees, and half of the employees of the industrial sector were employed by these companies. In 2013, the total sales revenue of processing industry enterprises remained at the level of nearly 10 billion euros. In the branches of the processing industry, that are important for materials technology, there are a few enterprises (see Annex 1) that are able to produce high added value. The added value created by very many successful SMEs or large companies is between 20,000 and 30,000 euros per worker, although there are also product and technology development enterprises that are capable of producing added value of more than 50,000 to 70,000 euros per worker. On the basis of the implementation of materials technology, the enterprises can be grouped as follows:
Enterprises developing materials technology whose products or services are based on the technology they are developing. Generally these enterprises have the knowledge and competence within the company, and they fully co-operate in R&D, both domestically and abroad. They are mainly dealing with the commercialisation of R&D and exclusively focused on the global market. The most important enterprises here are Skeleton Technologies OÜ – super-condensators; AS Elcogen – fuel elements; Crystalsol OÜ – PV solar panels; Visitret Displays – energy efficient screen technology; Clifton AS – GaAs power electronics; specialised spin-offs.
Enterprises in the processing industry using materials technology. They are already using the existing technologies/materials for product innovation or the production of materially changed product. R&D is mainly targeted at optimisation of main activity/products (productivity, effectiveness of use, energy use, new properties, etc.).18
The importance to export in the processing industry as a whole is increasing, and since 2009 the volume of export has constantly grown, reaching to nearly 7 billion euros in 2013. The Estonian processing industry is exporting about 70% of its products, therefore, knowledge of foreign markets and reacting to the changes of markets is very important in that sector. From the point of view of materials technology, the biggest exporters are the equipment, wood, chemical, metal, and rubber and plastics industries, forming nearly 60% of the total export volume.
Considering the size of the sector, the variety of the export countries of different branches of industry is rather large, but the neighbouring countries Finland and Sweden still form an important part of it. Most (60%) of the foreign investments made to the processing industry of Estonia also come from these countries.
Considering global technology trends, the technological and product development capability of processing industry enterprises is rather modest. However, the global growth trends are quite similar to the growth predictions of the Estonian companies in the relevant sectors. Figure 3 shows the predictions of the partner companies of the Estonian Nanotechnology Competence Centre for 2013 on the sales potential of the products and services related to the development activities conducted within the framework of the ENCC.
The four largest companies in the oil shale sector are: Eesti Energia AS (EE), Viru Keemia Grupp (VKG), Kiviõli Keemiatööstuse OÜ (KKT) and ja AS Kunda Nordic Tsement (KNT). Each company has branches in mining (extraction limits respectively 75%, 14%, 10%, 1%; altogether 20 million tons per year19), power and heat production, and the first three have also branches in shale oil production (Eesti Energia Õlitööstus AS, VKG Oil AS, Kiviõli Keemiatööstuse OÜ20). In recent years, the sector has shifted towards greater processing of oil shale (more complex value chains are used, see Annex) and the capacity for shale oil production has been increased (EE Enefit 280; VKG 2 Petroter retorts, the third will be completed in 2015). At the moment VKG is the largest oil shale processing company in Estonia (fuel oils added to ship fuel, bitumen for road construction, coke for electrodes, fine chemistry for pharmacies and cosmetics industry, admixtures for polymers, etc.). The greatest part (85%) of the shale oil production of the whole sector is exported to Belgium (40%), Netherlands (20%) and Sweden (18%).21
1.2 The role of education and rdi in the sector
It can be said, as a generalisation, that the USA, Germany and Japan are leaders in the sphere of materials technology in implementing innovations and by the range of R&D. In recent years, South Korea and China have also developed very rapidly. In these countries the whole support structure is well established, from academic capability, ambitious enterprises that use technology, highly qualified work force and an efficient risk capital market that enables to successfully implement research intensive R&D and business technology transfers (see Annex).
The role of R&D in the development and implementation of materials technology
In 2011, the total RDI expenses of Estonia amounted to 2.37% of GDP. The average of the euro area countries (17) was 2.12%, and present indications show that the countries that make the largest investments to R&D were the following: Germany 2.89%, Denmark 2.98%, Austria 2.77%22.
In Estonia, the R&D activities of materials technology are mainly conducted at the University of Tartu, Tallinn University of Technology and, to a certain extent, also at the National Institute of Chemical Physics and Biophysics. The research groups at the University of Tartu specialise in nanotechnology and research into surface coating. Tallinn University of Technology specialise mainly in research activities related to energy, surface coatings, mechanics, mechatronics and oil shale chemistry. Part of the activities of the National Institute of Chemical Physics and Biophysics are also targeted at the research and development of new energy materials. The above-mentioned institutions have close connections with both Estonian and international companies and R&D (see Annex). Their main international partners are in the EU and the neighbouring countries (Finland, Sweden) and the co-operation between different research institutions has become well established over the years. Besides co-operation projects, there are also connections with both international (Science Link,23 Technet_nano24) and domestic co-operation networks (NAMUR25) to unify and increase the capability of the regional R&D competences and infrastructure.
Taking a broader view of the processing industry shows that two technology development centres have been established with the help of the EU resources in order to improve the co-operation of enterprises and researchers in the sphere of materials technology:
Estonian Nanotechnology Competence Centre (ENCC, founded in 2004; 13 partners);
Innovative Manufacturing Engineering Systems Competence Centre (IMECC, founded in 2009; 18 partners).
ENCC deals directly with the RDI activities of nanotechnologies and surface coating materials, but IMECC is focused more on engineering and automation of industry. Due to the activities of IMECC, they have close co-operation with the ICT sector. On the materials science side, the greatest common ground is in the development and implementation of additive manufacturing or 3D printing technology. During the period from 2007 to 2013, ENCC and IMECC accounted for nearly 20% of the total financing of the technology development centres measures of Enterprise Estonia (8 technology development centres were financed).
Besides technology development centres, there is one inter disciplinary centre of excellence, “High-Technology Materials for Sustainable Development” (the period from 01.01.2011 to 31.12.2015, budget 6% of the total financing of the centres of excellence amounting to 46.5 million euros) that deals with the computer design, synthesis, characterisation and implementation of new materials in order to solve the problems of sustainable high-performance power industry. The centre of excellence has four research groups: energy generation and storage devices (University of Tartu), super-acids and –bases (University of Tartu), coatings and sensors (University of Tartu), solar cells (Tallinn University of Technology).26 In comparison, biotechnology has five and ICT has two centres of excellence, and the distribution of the budget is respectively 49% and 19% of the total financing of centres of excellence. 27
Additionally, the infrastructure and equipment of research institutions has been improved in recent years in order to be an even more competitive partner to business and international co-operation projects. The following is an overview of more important financings (2007–2013):
Renewal of the infrastructure of the University of Tartu and Tallinn University of Technology to the amount of 49.4 million euros;
Supporting of research infrastructure of national importance (national co-operation network NAMUR with the participation of the University of Tartu and Tallinn University of Technology) 4.9 million euros;
Research internationalisation programme to the amount of 4.7 million euros;
Supporting the acquisition of science equipment for R&D institutions to the amount of 7 million euros.
During the same period, Enterprise Estonia has financed the fundamental projects of materials technology R&D aimed at enterprises (12 projects to the amount of 4.6 million euros), preliminary research (25 projects to the amount of 416,377 euros) and research and development centres (to the amount of 11 million euros). The materials technology programme (financed by Archimedes Foundation through ERDF) gave an immense impetus to the development of materials science and technology in R&D institutions as well as to the development of the co-operation of enterprises and R&D. 19 materials technology projects were financed by this programme, to the amount of 9.3 million euros. Altogether 40 companies participated in the projects. 28
In Estonia, materials science and technology are taught at the University of Tartu and Tallinn University of Technology. They both have materials science and technology study programmes at all levels . Furthermore, a joint international study programme “Materials and Processes of Sustainable Energetics” has been created in co-operation with the University of Tartu and Tallinn University of Technology. In conjunction with other things, the programme is targeted at the involvement of foreign students. In order to improve studies, a joint graduate school of the University of Tartu and Tallinn University of Technology “Functional Materials and Technologies” has been founded. A, masters' degree programme of Tallinn University of Technology „Materials Technology” has been developed, and nanotechnology modules for the University of Tartu masters' degree programme in physics have been created. In co-operation with the ENCC, PhD degrees in materials technology have been secured at the University of Tartu since 2011. 11 theses have been defended by today. At the same time the theses of several graduates of doctoral studies in physics and chemistry have been closely connected with materials science and/or technology.
Despite these positive results the interest in the materials science programme has dropped in recent years. For example, in 2012 there were 20 students and 16 places in the materials science programme of the University of Tartu (i.e., there was competition), but eight students were admitted to 20 places in 2014. Considering the high drop-out rate (about 40% during the first year), the strengthening of technology intensive enterprises by a work force with a doctor’s degree is extremely problematic.
The role of R&D in the enrichment of oil shale
One of the tasks of R&D is to develop products with added value for the enrichment of oil shale. Much attention has been paid to studying the possibilities of motor fuel production by refinement. Another important issue has been, and is, the enrichment of the by-products of shale oil production, the use of ashes and semi-coking gas29. The R&D and training related to oil shale are, at the moment, concentrated at Virumaa College, Departments of Thermal Engineering and Mining of Tallinn University of Technology, and the Oil Shale Competence Centre (OSCC). At Virumaa College, one professional higher education study programme and one master level programme are directly connected with oil shale chemistry. At the Department of Mining of Tallinn University of Technology, nine doctor’s theses on oil shale have been defended since 1996 (the last in 2011), and the Department participates in various researches and projects.30 Main fields of research are the analysis of the natural resource and preparing development programmes for its optimal use; development of the technology of sustainable mining and planning of possible solutions; the use of mined areas and assessment of economic, environmental and social impacts; use of mines that have filled with water and the processing of mining residues and waste.31
OSCC is essentially the research and development centre of the sector (budget 16% of the whole funding of competence centres of Enterprise Estonia), and provides lab and IP services and, among other things, also business incubator services, which at the moment are used by one company (Hydrogenatio R&D OÜ).32
1.3 Strengths, weaknesses, competition advantages
This chapter describes the SWOT analysis of the materials technology sector and gives an overview of the main factors.33
The most important strengths of Estonia are the RDI infrastructure that serves as a pre-condition for supporting innovation, and the acceptance of new solutions by enterprises. Depending on the field, it has the necessary R&D specialists, research and development potential and experience for using and introducing new solutions. Besides the research and development potential, Estonia also has the capability of large and medium-sized enterprises for and the interest of public sector in investments in innovation.
The most important weaknesses and obstacles concern the labour force and the R&D potential of enterprises. To a certain extent, this is caused by being unaware of new technologies and little readiness for co-operation inside the sector and/or with other sectors. The small capacity and interest of R&D institutions in making the applied research necessary for enterprises and insufficient funding for product development continue to be problems. Due to the profile of enterprises (SME), it is hard to attract additional capital in innovation and development activities, and the situation is made worse by the financial sector’s disinterest in supporting the development of new production technologies. Therefore, the development activities of enterprises and R&D in some production sectors are short-termed and episodic.
The opportunities for Estonia are related to the implementation of sector-specific R&D through new (materials) technologies/solutions or the export of existing R&D results/experience. The processing industry is mainly concerned with exports and very closely connected with traditionally strong markets (EU, Scandinavia). These export markets need products with innovative materials technology, thus the wider and more diversified implementation of materials technology helps increase the general competitiveness of enterprises in export market. By implementing new technologies, it is possible to move in the value chain towards the production of products with higher added value, and to make the maximisation of value chain considerably more effective in the country. Assessing the need for labour resources in the sector, there is causative possibility to develop natural sciences, materials technology and technological education.
The main threat is preserving the comfort zone of enterprises and R&D institutions, i.e. the enterprises continue to concentrate on short-term problems and long-term readiness for innovation decreases; the R&D institutions deal only with the research topics that are of interest to them and the focus shifts to fundamental studies, even more reducing co-operation possibilities and the demand of enterprises for R&D. From the point of view of the processing industry and other sectors of industry, the threat is in the exhausting of existing export markets and the inability to reposition or find alternative markets for new innovative products/technologies, i.e. the export markets that exist today do not necessarily have to do that in the future. Another great threat is the diminishing of the increase in highly qualified workforce, because the motivation system for young specialists and students does not support adequately the university studies and learning engineering-technological specialities, graduating successfully and acquiring higher level qualification (Master’s or Doctoral level degree). As a result of that, the volume and quality of research in R&D institutions decreases because competition is gradually weakening and there are not enough motivated researchers.
2 Objectives and indicators of the sector
2.1 Development and implementation of high technology materials technologies
The processing industry is an important sector of the Estonian economy and it has a great potential. Its different sectors have the capability to develop materials technologies in co-operation with R&D enterprises. The main objectives in the use of new materials and technologies are the significant increase in the effectiveness and added value of industry, more effective and sustainable use of resources and the reduction of its impact on the environment.
Indicator No. 1 – Increase of the competitiveness of processing industry
The added value of the processing industry per worker is at present close to the Estonian average (23,000 euros). The objective is to increase the added value to 41,500 euros per worker per year which corresponds to the objective set by the paper “Estonian Entrepreneurship Growth Strategy 2014–2020” to reach the level of 80% of European average by 2020.34
Sub-objectives supporting the main objective:
Indicator No. 2 – process and product innovation of processing industry enterprises
The result of intensive implementation of new materials technologies in the processing industry is the increase in the share of new or materially changed products in sales revenues. The objective is to increase the share of new or materially changed products in sales revenues by 10–15% in different sectors. The CIS research conducted by the Eurostat does not reflect the statistics of enterprises with less than 10 employees. Therefore, it is necessary to conduct a new research of enterprises to determine the starting level of the indicator, and the research has to be repeated every two years for monitoring.
Indicator No. 3 – increase in the number of enterprises participating in materials technology R&D
In order to increase the competitiveness of the industrial sector, it is important to increase the number of enterprises dealing with R&D and to encourage the emergence of new innovative enterprises. Research of enterprises has to be conducted to determine the starting level, so that there would be a reference value of adequate exactness. The relevant projects of Enterprise Estonia and Archimedes can be taken into account as the first reference.35
Indicator No. 4 – percentage of the R&D expenses of processing industry
New and complicated materials technologies require close co-operation with R&D institutions, the activeness of which in the processing industry is minimal. The objective is to double the R&D expensed of processing industry by 2020 in comparison to the level of 2014.
2.2 Wider use of oil shale in the chemical industry
The indicator of the effectiveness of the development activities of smart specialisation in the enrichment of oil shale is the effective use and mining of oil shale.
Indicator No. 5 – effectiveness of the mining of oil shale
Since 2010, most of the oil shale has been obtained by underground mining (approx. 60% in 2013), in which, depending on conditions, the mining loss may be up to 35%.36 The loss is caused by the pillars left to prevent subsidence, and one of the main preconditions for making oil shale mining more effective is reducing the loss created by underground mining. The objective is to decrease by 2020 the losses incurred in underground mining by 30%.
Indicator No. 6 – increasing the importance of oil shale chemistry research
Increasing the share of applied research in all areas of oil shale research will develop the technologies of more effective and environment friendly use of oil shale, and improve the co-operation between the private sector, government agencies and universities. The objective is to raise the applied research expenses to 50% by 2020.
Explanation of the selection of growth area and domains
The trans-sector principles of the selection of domains have been indicated in the general part of the reports.
As a result of the analyses, the following fields were selected to be the domains of the enhancement of resources growth area of smart specialisation:
Oil shale in chemical industry;
Implementation of nanotechnologies in new materials;
Implementation of surface coating technologies.
The domains were selected for the following reasons.
Use of oil shale
Oil shale is globally a natural resource with great energy potential, and Estonia has long traditions of producing electricity, oil and gas from oil shale. Thanks to the development of technologies, there are many more opportunities for a larger enrichment of oil shale. VKG has developed the production of phenols, resins and methylresorcins, and (fine) oil shale chemistry has a great potential. Products with greater added value can be produced from the oil and by products (coking gas, ashes) produced from oil shale. The use of mine wastage has yet to be finalised.
There are several technologies for producing shale oil from oil shale, but depending on the difference of the rock in each deposit, these technologies cannot be used in the same way everywhere. Estonia, with its partners from Russia and Germany, has been constantly improving the pyrolysis (semi-coking) technologies. At the same time it is also possible to use hydrogenation technologies for producing oil from oil shale. The aim of versatile expertise and experience is to export the know-how as it has been successfully carried out in Jordan where a power station working on the basis of oil shale will be constructed.
Oil shale is used in Estonia for the following purposes: production of electricity and heat – 11.08 million tons of trade oil shale; production of shale oil – 5.9 million tons of trade oil shale. Besides that, Auvere Thermal Power Station, which will consume 2.44 million tons of oil shale per year, and one Petroter retort consuming 1.0 million tons of trade oil shale per year are being constructed, and Enefit 280 retort consuming 1.9 million tons of oil shale per year is being modified. In total, 22.32 million tons of trade oil shale will be needed to fulfil maximum capacities in the coming years.
Oil shale was selected as a growth area domain because of the low added value of oil shale which accompanies the technologies presently used. At the same time oil shale is the most widely used natural resource of Estonia.
Application of materials technologies (nano- and coating technologies) in new materials
In 2011, a thorough overview of the Estonian materials science and technologies and their industrial applications “Feasibility Study for an Estonian Materials Technology Programme”37 was prepared with the help of Finnish scientists and consultants. Kauhanen et al. (2011) to describe the nature and maturity of the development of the Estonian materials science (see Figure 4). The research shows that all important stages of production chain are covered in the sector, and it has been possible to move on from R&D fundamental research to near-market products, which now have been accepted or will soon be accepted in foreign markets (e.g. Skeleton Technologies OÜ, AS Elcogen, Crystalsol OÜ).
The sectors with greater potential, high and nanotechnology materials (solar elements, nanomaterials, earth metals, fuel elements), oil shale technologies, and surface coating materials and technologies are described in this part of the analysis. Materials technology is also very closely connected with other priority S3 growth areas, such as ICT and biotechnologies. Besides that, the European Commission has highlighted nano- and materials technologies as key enabling technologies.38
As there are many sectors that are connected with materials technology, and most of them have great importance or potential to the development of the Estonian economy, it is unreasonable to give preference to any of the fields (except the ones related to oil shale). The processing industry is the main sphere of implementation of materials technology that has the greatest economic potential for Estonia (see Annex 4).
Taking into account the development of technology in the world, the capability and development plans of the Estonian R&D institutions and the potential of the sectors of industry, the following focus domains have been selected for materials technology development (see Annex 4):
Implementation of nanotechnologies in new materials;
Implementation of surface coating technologies for manufacturing functional surfaces.
Considering the distribution and capabilities of Estonian materials technology R&D (see Figure 4), narrower sectors for specialisation can be brought out. The potential technologies and spheres for the implementation of high technology materials technologies that are to be developed are the following:
Implementation of nanotechnologies in new materials:
nanostructured carbon materials;
micro- and nanofibres;
rare earth metals;
energy technology materials.
Implementation of surface coating technologies for manufacturing functional surfaces:
corrosion resistant coatings;
anti-wear coating technologies;
multi functional surface coatings, including biotechnological coatings (anti-bacterial, bio-compatible, etc.).
Nano- and materials technologies give an excellent possibility for creating new start-up/spin-offtype enterprises. Presumably new SMEs are established in a wide range of sectors, which creates the possibilities for inter disciplinary co-operation with e.g. ICT and biotechnologies sector. Making use of new materials and technologies helps to gain a competitive advantage in rapidly developing growth areas with great potential, which in combination with ICT solutions will establish good pre- conditions for the emergence of economic sectors with international scope.
4 Sector-specific barriers and activities
Business and development activities in the processing industry and oil shale sector require large investments. Generally, both the workforce (requires specific competence and skills, continuous training/retraining due to the development of technologies, scientific degree) and the access to specific equipment /technologies and/or know-how are expensive. The development of new products or services takes a long time (in comparison to ICT) and development is capital intensive (certification processes, infrastructure and fixtures, development staff, IP, etc.).
Sector barriers summarise the most important barriers hindering the achievement of the objectives of the sector on the basis of the main problems of the sector. The activities (S3 measures) are meant for overcoming the barriers and/or realising the potentials of the sector. The activities (measures) can be divided into two: S3 measures39 and measures of wider scope. S3 measures are described in more detail in the general part of the reports.
4.1 Encouraging the devlopment of high technology materials, prferably in different domains
Barrier: TT and capability of product development
The lack of co-operation and common ground of RDI activities between universities and enterprises has been the main obstacle of the product development and RDI activities of Estonian enterprises. The reasons for that are the lack (and/or management) of resources of enterprises and universities (including the functional activity space of universities that contributes to co-operation), and the short-term and episodic horizon of the RDI activities of enterprises. There is no pilot production capacity for primary testing of new technologies (the so-called proof of concept) that would enable to scale technologies from laboratory level to the development of semi-industrial solutions.
In comparison to the base research activities of universities, the enterprises have insufficient availability of capital and capability of involvement for product development, which is especially problematic for new starting enterprises (e.g. innovative SMEs, start-ups/spin-offs, etc.). There is a great need for early and growth phase capital that could be used for financing the preparation of the global growth of an enterprise.
There is still a great shortage of qualified (know-how and high technology experience) specialists who would have the adequate expertise for implementing new technologies for enterprise.
TARGET GROUP: R&D institutions and enterprises developing materials technologies, new start-ups/spin-offs
HELPS ACHIEVE THE OBJECTIVE: development of high-tech materials/technologies
To develop semi-industrial lab base for pilot production and technology transfer activities, and to ensure access to research infrastructure for the private sector;
To create a motivation model for universities for involving more local enterprises in R&D projects; to increase the capacity of development activities conducted in private enterprises and to connect it more closely with research conducted in R&D institutions;
To support start-up-/spin-off-type of enterprises in rapidly developing sectors connecting different domains;
to increase the awareness of SMEs and spin-offs for the involvement of risk capital (SuE) and the implementation of business models/projects (EAF Founders Institute);
to increase the awareness of SMEs and spin-offs for the involvement of risk capital (SuE) and the implementation of business models/projects (EAF Founders Institute);
co-finance foundations through boosting by the state;
to adapt state supports by considering the specifics of the sector, and to encourage the involvement of foreign capital together with the state capital;
To improve study programmes:
to improve engineering-technical study programmes by adding (materials) technology subjects;
to create an international study programme based on materials technology and involve more foreign students.
* Feasibility Study for the Estonian Materials Technology Programme grant programmes for students/teams for connecting entrepreneurship and traineeship at different levels of study at an early stage.
S3 MEASURES: applied research, RDI, Start-up Estonia (SUE), university grants
MEASURES: innovation shares
4.2 Increasing the use of materials technologies in the processing industry
Development and implementation of new materials technologies in the processing industry is largely influenced by the profile of the enterprise and the general trends of subcontracting in the sector. In the case of international companies the main obstacle is not having any development units in Estonia, which is usually a strategic decision of the parent company. In the companies with an Estonian background, the lack of competent workforce (managers, specialists, etc.) and the necessary know-how and capital for more intensive use of new (materials) technologies is of greater importance. Due to a lack of technology awareness, the co-operation of enterprises with other stakeholders is limited and episodic.
TARGET GROUP: processing industry and R&D institutions
HELPS ACHIEVE the added value, R&D capacity and new products OBJECTIVES of the processing industry:
Developing competence centres that would help enterprises to be in touch with the global development trends in the research and development activities of the relevant sector and the capability of the relevant sphere in Estonia on the basis of CCTs/centres of excellence;
Improving of the materials technology advisory measures for SMEs and medium-size and large enterprises (involvement of consultants);
Involving CCTs in the organisation of technology training, information days, seminars, etc. targeted at enterprises;
Supporting the participation of the R&D staff of enterprises in the global forums of the sector (fairs, seminars, conferences) that would contribute to the rapid and effective implementation of new technologies;
Implementing the possibilities of materials technology industrial doctorate (doctorial studies in co-operation with enterprises) more widely;
Initiating training and retraining programmes that would increase the internal activeness of enterprises for introducing new technologies and innovation for the middle-level specialists, technologists and engineers working in enterprises;
Supporting of SMEs in the implementation of new and materials technologies.
S3 MEASURES: CCT, applied research, university grants, demand side policies
MEASURES: MEAC development programme, innovation shares
4.3 Increasing the effectiveness of oil shale resource consumption and mining
Barrier: limited capability for R&D and ensuring increase
For the processing of oil shale into products with higher added value and more extensive refinement of the raw material, it is necessary to diversify the research development activities of innovative products/technologies and to increase the conducting of base and applied research.
The ageing of engineering staff and the shortage in the number of young specialists constitute an important obstacle for the sector. There is a lack of higher level specialists in this sector which, in addition to hindering the increase in the number of university lecturers and research workers, also prevents highly qualified persons from going to work in enterprises to lead production development. The popularity of engineering specialities is falling and there are few graduates with engineering education in the specialities necessary for the sector.
TARGET GROUP: R&D institutions and oil shale sector enterprises
HELPS ACHIEVE THE OBJECTIVE: improvement of the resource consumption of oil shale and oil shale chemistry R&D