The future of High – Tech industries in Baltic Vilnius, Alvydas Vitkauskas MicroLink group Country Manager, Lithuania

Why Baltic states need High–Tech? Current low productivity of the economy Insufficient availability of labor resources and rising labor costs Competitive science potential and traditions Relatively good quality of education

State of Baltic IT industries A lot of IT companies 7 or 8 digit turnover numbers of major IT companies Market increases at a rate of 10-15% annually

Size of Baltic IT companies

…same at different perspective

The problem

Challenges for Baltic IT sector Dependence on local demand Small size, fragmentation, low specialization and weak capital base Low value-add efficiency compared to CEE or Nordic peers

Cure: consolidation and innovation Emergence of real pan-Baltic IT companies Emergence of export oriented high - tech companies Increased spending on R&D

What’s more? Facilitation of entrepreneurship Financial support for new companies Venture and equity capital

How to create new Nokias? Finnish funds invested 391 m EUR in 256 companies Danish funds invested 283 m EUR 50% of capital goes to High-Tech companies

It means there are more than 200 new potential Nokias in Finland and Denmark alone

EU funds for: Low cost infrastructure for High-Tech enterprises Substantial improvements in education system Investments in R&D and applied science Information and communication technologies for state and municipalities

Case study: SAF Tehnika A 18 m EUR Baltic company Succesfully competes on global telecom equipment market The only really successful Baltic technology company

SAF’s sales geography

What to do next? Facilitate R&D, use EU funding to do it Facilitate entrepreneurship and provide infrastructure for new companies Consolidate Baltic IT market to form capable IT enterprises

Thank you!