Development of Lithuanian Bioeconomy by Promoting Bilateral Relations of Lithuanian and Norwegian Business
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1 Closing Conference of the Green Industry Innovation Programme Development of Lithuanian Bioeconomy by Promoting Bilateral Relations of Lithuanian and Norwegian Business Presentation of the Lithuanian Bioeconomy Development Feasibility Study Vilnius 11 October 2017
2 Lithuanian Bioeconomy Development Feasibility Study (1/2) Contractor The Ministry of Economy of the Republic of Lithuania Funding source The Green Industry Innovation Programme Aim of the study Following assessment of the status quo and the potential of Lithuanian bioeconomy, as well as review of the best practices of the EU member states and Norway, to provide conclusions and recommendations on the development of Lithuanianbioeconomyand to propose measures to stimulate innovations in this sector In addition, to identify areas of bioeconomy in which business cooperation between Lithuania and Norway has the greatest potential, as well as to propose measures to promote bilateral cooperation Researchmethods Statistical analysis of data, econometric analysis of time series, general equilibrium modeling, questionnaire survey, interview, case study, document analysis 2
3 Lithuanian Bioeconomy Development Feasibility Study (2/2) Project team (authors) Leaded by prof. dr. V. Vitunskienė team of researchers from Aleksandras Stulginskis University(prof. dr. V. Aleknevičienė, prof. dr. A. Miceikienė, prof. dr. J. Čaplikas, doc. dr. D. Makutėnienė, N. Ramanauskė, V. Kargytė, D. Jazepčikas, E. Serva, A. Markelytė) in cooperation with Lithuanian Energy Institute(prof. habil. dr. V. Miškinis, dr. V. Lekavičius), Lithuanian Institute of Agrarian Economics (dr. V. Dabkienė), Norwegian Institute of Bioeconomy Research (K. Øistad) and Latvia University of Agriculture (prof. dr. I. Pilvere) Consultants Experts from Innovation Norway (Ø. Halvorsen, R. Bogužaitė) and business enterprises Plastiksė (dr. I. Vitkauskienė) and Euromediena (M. Šilininkas) Supervision panel Representatives of the Ministry of Economy, the Ministry of Health, the Ministry of Education and Science, the Ministry of Social Security and Labour, the Ministry of Agriculture, the Ministry of Environment, the Ministry of Energy, Office of the Government, Lithuanian Biotechnology Association, Association of Lithuanian municipalities 3
4 1. EU Perspective on Bioeconomy Development 4
5 According to the EU strategy Innovating for Sustainable Growth: A Bioeconomy for Europe (EC, 2012): Bioeconomy encompasses the production of renewable biological resources and the conversion of these resources and waste streams into value added products, such as food, feed, bio-based products and bioenergy 5
6 EU goals of bioeconomy development Source: EC, the Directorate-General for Research & Innovation 6
7 Challenges (Opportunities) Developing biomass deployment strategies and advancing circularity in bio-based production* Competitiveness of bio-based products and consumer awareness** value Pharmaceuticals & fine chemicals Food & feed Chemicals & materials amount The product... is innovative... reduces the use of fossil resources... is environmentally friendly... is energy-saving Transportation fuels... is cost-efficient Power & heat * The European Committee of the Regions. (2013). Opinion on Innovating for Sustainable Growth: A Bioeconomy for Europe ** EC, the Directorate-General for Research & Innovation. (2015). Bioeconomy in everyday life (catalogue) 7
8 2. Lithuanian Bioeconomy Profile 8
9 Status quo and potential of Lithuanian bioeconomy In 2014, Lithuanian bioeconomy generated GVA of nearly EUR 4.7 billion, while its contribution to the country s GDP accounted for 12.8% (since 2005 decreased by 0.3 percentage point) In 2015, thousand people were employed in Lithuanian bioeconomy which accounted for 17.6% of total employment in the country (since 2005 decreased by 7.2 percentage points) In 2016, exports of biomass and its products totaled to almost EUR 9.9 billion which accounted for 43.7% of the total value of exported Lithuanian goods (since 2005 increased by 4 percentage points) Lithuania is among the leading EU countries in terms of bioeconomy growth in all subsectors of biomass production and fully bio-based manufacturing between 2010 and 2014 Three different forecasting methods project the growth of Lithuanian bioeconomy in the long-term: GVA may reach EUR billion in 2030 compared to EUR 4.7 billion in
10 Structure of Lithuanian bioeconomy Biomass production sectors Structure of GVA (2014) Employment structure (2015) Structure of export (2016) Annual growth of GVA during Rank by GVA growth (EU-28) Agriculture 21.8% 44.9% 14.8% 17.6% 5th Forestry and logging 4.3% 5.8% 1.4% 34.8% 5th Fishing and aquaculture 0.6% 0.8% 0.1% 33.8% 3rd Fully bio-based transformation sectors Manufacture of food, beverages and tobacco 31.6% 18.4% 34.9% 16.1% 4th Manufacture of wood products 9.7% 9.2% 10.6% 28.2% 3rd Manufacture of papers 3.8% 2.0% 3.7% 52.8% 1st Partly bio-based transformation sectors Manufacture of textiles, apparel and leather 7.9% 9.0% 11.6% Manufacture of chemicals 1.1% 0.3% 2.5% Manufacture of pharmaceuticals 2.9% 0.1% 8.3% Manufacture of furniture and other manufacturing 16.2% 9.5% 12.1% 10
11 3. Opportunities of Lithuanian and Norwegian Business Cooperation and its Support Measures 11
12 Norwegian business operating in Lithuanian bioeconomy In the beginning of 2015, one-eighth of all Norwegian companies in Lithuania operated in bioeconomy sectors, i.e. 30 business enterprises not including 4 producers of rubber and plastics Since 2005 annual FDI from Norway into Lithuanian bioeconomy increased by nearly 4.5 times and reached EUR 84.6 million in million EUR 3.3 0, Annual FDI from Norway into Lithuanian bioeconomy 3.4 0,0 0, , ,6 3,6 3,9 4,4 4, , , , Rubber and plastic products* Food products and beverages Agriculture, forestry and fishing Furniture* Textiles, wearing apparel and leather* Wood and wood products 12
13 Some examples of successful Norwegian and Lithuanian business joint ventures Manufacture of wood and wood products Manufacture of textiles and wearing apparel Manufacture of food Bauwerk Boen Massive Wood Construction Viking Industrier Baldeka Hjellegjerde Baltija Devold Scandye Mittet Team Kameleon Baltic Nokvėja 13
14 Lithuanian business perspective on cooperation with Norwegian companies Business enterprises (N=103) and Associations (N=14) survey results: Importance level from 1 (low importance) to 5 (high importance) Fields of cooperation with Norwegian companies (in descending order based on average importance level) Food sector Forest biomassbased sector Bio-based chemicals and pharmaceuticals Bio-based textiles, apparel and leather Biowaste treatment B A B A B A B A B A Implementation of green innovation projects Biomass waste treatment technologies Management of solid biodegradable waste Biorefinery of other plant biomass: bioenergy Recycling of combined packaging waste Biological wastewater treatment Processing animal by-products ,7 Biorefinery of wood biomass: bioenergy Biorefinery of biomass of aquatic organisms Pharmaceutical biotechnology Biosynthesis: research, industrial application Production of bioplastic and biodegradable bioplastic Biocatalysis: research, industrial application
15 Norwegian good practice relevant for Lithuanian bioeconomy development Know-how in particular fields of bioeconomy: Biomass waste treatment technologies Biomass waste and biodegradable solid waste management Municipal and household waste collection and recycling into biogas Wood, other plant biomass and biological waste recycling for production of bio-energy, especially biogas Aquaculture development in closed systems Green innovation project implementation in all bioeconomy sectors Experience in bioeconomy business development: Bilateral business or business and science projects Integration of bioeconomy sectors allowing to use all waste, reduce costs, optimize the knowledge sector and create innovative products and technologies (clusters, industrial symbiosis) Creating favorable conditions for bioeconomy start-ups and consulting companies via acceleration programmes 15
16 Summarizing opportunities for cooperation Potential areas of cooperation: R&D and innovations Transfer of biotechnologies (especially of Norwegian know-how) Development of business competencies (professional advisory, training, business development assistance) Improving investment climate Investment Dissemination of good practice (business missions, contact fairs, information, contact networks) Cross-sectorial relationships and interactions (between the biomassproducing sector and the sector transforming it into value-added products) Support platforms that can be used for stimulating cooperation: The Norwegian Financial Mechanism The European Economic Area (EAA) Financial Mechanism EU Programme for Research and Innovation HORIZON 2020 The European Structural and Investment Funds 16
17 Initiatives to promote cooperation (1/6) R&D and innovations Subsidies for business feasibility studies on the development of bilateral businesses and project implementation Support for commercialization phase of new products by indirect instruments of financial engineering Subsidies for bilateral projects aimed at the development and implementation of bioeconomy innovations 17
18 Initiatives to promote cooperation (2/6) Transfer of biotechnologies Support of investment projects Support for implementation of Norwegian knowhow in Lithuanian companies 18
19 Initiatives to promote cooperation (3/6) Holding business contact fairs Organization Organization of campaigns for attracting investors 19
20 Initiatives to promote cooperation (4/6) Information Support for creation of information cooperation networks Support for good practice dissemination, news, etc. 20
21 Initiatives to promote cooperation (5/6) Development of business competences Acceleration programmes professional services of highly-skilled experts: advisory, training, assistance in project development, meetings with experienced entrepreneurs and/or companies Support of measures for bringing closer the business culture 21
22 Initiatives to promote cooperation (6/6) Improving investment climate Support for creating and retaining jobs in Lithuanian regions Adaptation of study, vocational training and qualification development programmesto the labourmarket needs 22
23 Thank you for your attention Virginija Kargytė Aleksandras Stulginskis University Chair of Coordination Committee at Baltic Forestry, Veterinary and Agricultural University Network M: +370 (656) E: W:
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