VTT AS THE INNOVATION PARTNER

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1 VTT AS THE INNOVATION PARTNER Jouko Suokas, Executive Vice President Santiago, 3rd November, 2009 The content of the presentation 1. Chilean challenges and opportunities 2. Finnish innovation environment 3. VTT in brief 4. Examples of innovation partnership 5. VTT internationally, VTT way of doing

2 Chilean challenges and opportunities CHILE FINLAND Finland Chile Population 5.3 million 16.4 million Area km² km² Economic structure: Industry 32.3% 50% Agriculture 2.6% 5% Services GDP share of R&D expenditure 65.1% 3.45% 45% 0.7% Source: Finpro 5/2008

3 Chilean challenges Highly dependent on mining sector. Majority of mining export is ore concentrates and cathode copper. GDP growth depending on fluctuating metals prices Energy, cost and future supply assurance: national energy efficiency program exists, but a national energy strategy is lacking Water resources Forest industry: important pulp production, only some higher value production Low investment in R&D and innovations, and lack of public private partnership culture in innovations Energy: overcoming the crisis and heading towards long term solution Copper mining represents around 11% of total energy consumption in Chile. The mining sector as a whole accounts for 32% of the total electricity consumption in the country. For 2015, is expect mining consumption to increase by 24.2% over 2007 level. 67% of Chilean copper is produced in the area served by the Northern Interconnected System (SING) where close to 60% of generating capacity was gas-fired in Faced with almost total cuts in the supply of Argentine natural gas, power plants have been forced to switch to diesel, with the resulting increase in costs and logistics difficulties. New projects (LNG and coal generation plants) are in construction to ensure electricity stability as from Source: CIMM

4 Limited water availability The limited supply of water that can be sustainably extracted from the existing aquifers of northern Chile means not only uncertainty for the mining industry, but also conflicts between the different sectors that compete for the use of this resource. Mining is responsible for only 5.2% of total water consumption in the North of Chile (mining regions). Mining needs to be part of the solution by increasing efficiency, innovation, desalinization and new high technology solutions. Arica-Parinacota & Tarapacá : Collahuasi Cerro Colorado Quebrada Blanca Atacama: Candelaria Salvador Ojos del Salado Project Caserones (ex-regalito) Project Franke Valparaiso Andina El Soldado VI region: El Teniente Antofagasta: Escondida Spence Chuquicamata Radomiro Tomic El Abra Mantos Blancos Lomas Bayas Michilla El Tesoro Zaldívar Project Esperanza Project Gaby Coquimbo: Los Pelambres Projecto Andacollo Sulfuros Metropolitan Region: Los Bronces Source: CIMM Chilean opportunities Current situation in global market is challenging After the recession the most growing economies will the most probably be in Latin America and Asia instead of the USA or Europe Latin America s importance in the world economy is growing the fastest In order to establish a business to another continent you need a good bridgehead position Chile offers a stable society, a solid legal basis and a good infrastructure with possible incentives for a new business Chile has a clear orientation towards a knowledge based economy and society Long tradition in bilateral relationships Finland- Chile

5 Finnish innovation environment GDP share of R&D expenditure in Finland % Source: Statistics Finland

6 R&D expenditure in Finland Private sector Public sector VTT Billion Source: Statistics Finland, VTT Innovative enterprises participating in public-private co-operation As a percentage of total innovative enterprises (aggregated manufacturing and services sectors), 1996 (NL: ) Co-operation with higher education institutes IT LU NL PT UK IE ES DE AT FR BE DK SE FI Co-operation with research institutes LU IT IE AT PT NL DE BE FR ES SE UK DK FI 29 Source: Science, Technology and Innovation in the Netherlands, Ministry of Education and Ministry of Economic Affairs

7 VTT in brief VTT s status as performer of R&D work Basic research Applied research UNIVERSITIES INDUSTRY VTT Development

8 VTT in brief 2009 Customer sectors Biotechnology, pharmaceutical and food industries Electronics Energy ICT Real estate and construction Machines and vehicles Services and logistics Forest industry Process industry and environment Personnel 2700 Turnover 245 M Focus areas of research Applied materials Bio- and chemical processes Energy Information and communication technologies Industrial systems management Microtechnologies and electronics Technology in the community Business research VTT s operations Research and Development Strategic Research Business Solutions Ventures Expert Services Corporate Services Innovation processes, technology and service business New materials biomass based products industrial biomaterials functional materials reinventing paper Specialty electronics high-performance microelectronics printed intelligence optical instruments Green ICT Sustainable energy quantum leap solutions to climate change efficient use and saving of energy renewable energy sources Technologies for wellbeing health promoting food solutions drug development Sustainable development Example: VTT s research vision and diagnostics ICT for health Ecoefficient built environment ecoefficient traffic and community infrastructure ICT applications Intelligent products and production digital product process global distributed production intelligent machines and materials Digital world Ambient intelligence digital services networked devices and environments human - technology interaction ICT technologies cognitive communication systems next generation internet information security

9 Examples of innovation partnership VTT services

10 VTT visions, road maps and foresights Synthesis gas from biomass From R&D to industrial success (Road map made in VTT s UCG project in 2006) Peat ammonia plant Oulu/Finland Biorefineries at pulp and paper mills and at large CHP plants - diesel production: tons/plant - by-product heat for process steam or district heating - high overall efficiency First synfuel production plant MW feed capacity tons/a diesel fuel - 3 % Finnish transport fuel - start-up in Biomass/waste gasification for power (Lahti, Corenso, Värnamo, Kokemäki) Industrial demonstration: 15 MW - replacement of oil/gas - start-up in 2009 New applications - fuel cells, 2nd gen. IGCC - hydrogen or methane - renewable chemicals Synthesis gas R&D in Europe and USA in 1980 s R & D on hot filtration and catalytic gas cleaning VTT-UCG Optimised syngas R&D & PDU-scale development Further R&D - process optimisation - waste gasification - hydrogen technologies

11 Stora Enso / Neste Oil Joint Venture for F-T BTL Diesel Fuel 50/50 Joint Venture NSE Biofuels Oy to first develop technology and later produce next generation renewable diesel crude from wood / forest residues Currently building a 12MW demonstration plant in Stora Enso s Varkaus mill, to be in use spring 2009 Investment decision for a commercial scale plant when the parties have enough experience from the demonstration plant Strong development consortium Joint Venture partners: Testing & research partner: Gasification supplier: From Neste Oil and Stora Enso

12 Sandvik AutoMine Driving in mine tunnels made autonomous When supervised remotely from e.g. above ground, both production efficiency and safety can be improved Fiber based products and materials Novel wood-based products Converting and high-value products Biomaterial chemistry

13 UPM Raflatac: Freshness indicators for consumer packages Benefits Consumers can see at a glance whether the meat is fresh Unerringly shows at a glance whether the meat is spoilt UPM Raflatac has increased its business volume through commercialisation of innovations Contacts: Eero Hurme, Customer Manager Tel VTT internationally, VTT way of doing

14 VTT on map Saint Petersburg, Russia Silicon Valley, USA Finland Oulu Raahe Kajaani Brussels, Belgium Seoul, South Korea Shanghai, China Tokyo, Japan Santiago de Chile Jyväskylä Kuopio Tampere Turku Espoo Lappeenranta Rajamäki VTT has decided to establish a legal entity in Chile Ministry of Employment and the Economy. VTT... VTT International Ltd. VTT Chile VTT Korea VTT Representative Offices: SPG, Silicon Valley,Shanghai, Tokyo, Brussels

15 Services and industries Mining Food industry Aquaculture Forest VTT Chile Ltd. is your innovation partner in mining, food industry, aquaculture and forest industry providing multiple technology and business solutions ENERGY ENVIRONMENT ICT AND AUTOMATION BIOTECHNOLOGY INNOVATION MANAGEMENT Levels of research partnership Doing business together INCREASING NEED TO DEVELOP PEOPLE TOGETHER Developing & carrying out research programmes together Developing & carrying out research projects together Researchers visiting for limited periods of time Exchanging information and visitors occasionally INCREASING NEED TO DEVELOP PROCESSES TOGETHER

16 Stimulating new business We do not only help you predict technological breakthroughs and discover future business potential. We also offer you turnkey solutions to benefit from them. VTT offers a straight connection from R&D into innovations and new business development, acting as a partner in technology transfer and commercialization. We help our customers to assess new technology and business concepts before larger investments are made. Several spin-off companies based on VTT's technology are established every year Customer is our partner Our goal is to build long-lasting, intimate relationships with our customers We will understand our customer s business and their needs which will help us to be proactive. Customer relationships are our collective responsibility

17 Innovation is like football Football seems an easy game to play for beginners, but in reality it is dizzyingly complex, so does innovation Good coaches know the keys to winning consistently in ever changing circumstances Game plan that positions them for success is needed. No strategies that worked in the past. Many fail in innovation because they don t have a plan how to play and where to play VTT creates business from technology

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