For almost a decade, Salvis Roga has been chairman of the board at Kurzeme Business Incubator (KBI) and member of the board at Ventspils High Technology Park (VHTP). Both provide support for businessmen and those who have just started a business in Kurzeme province. We are visiting Ventspils to meet with Roga and talk about business development in Kurzeme and the main success factors.
What is Ventspils High Technology Park?
It was established 11 years ago with the objective to provide support for companies in Ventspils and the region that develop and make products with high added value. Originally the priority industries for the development of Ventspils included mechanical engineering, electronics, metalworking, IT, industrial design, and space technology, but by now high technology is used in practically all industries. Several dozen companies in said industries have been founded here since, which went on to successfully develop their business. VHTP offers support for high technology companies, gradually evolving into a hub of smart technologies.
What kind of cooperation do you offer, and how does it all work?
First, the infrastructure, or the place for doing business, is of great importance. There are two such venues in Ventspils – VHTP, which offers land and buildings with offices, and Ventspils University College, where premises of 500 square meters in area are currently available. The latter is best suited for those companies that wish to develop cooperation with students.
One more thing offered by VHTP is personnel selection. Quite often new entrepreneurs don’t know where to look for employees. We know the region’s specifics and help these companies find the employees they need.
Next, we offer support in securing financing. There are different opportunities: support is available from Ventspils City Council, which finances a program of ICT pilot projects. On the national scale, financing is available for the development of new projects, purchasing equipment, and construction of production facilities. And we are the window through which companies can effectively receive grants or financial support.
And finally, we offer help in finding export partners. Every month, we organize our companies’ meetings with foreign partners. Export is the most important to us, as companies’ success also is our success as a business support organization.
For a long time, we worked in partnership with the Investment and Development Agency of Latvia (LIAA) as a startup incubator. Various programs have been implemented since 2007, and we were LIAA’s representation in the region. However, our agreement came to a close in 2015 when LIAA decided that it would itself provide nationwide incubator support, financed by the state and EU funds. That is why right now we offer physical and effective support for startups and lifestyle businesses in partnership with LIAA.
This past spring, companies were invited to apply for admission to KBI. Was that no longer your initiative?
KBI is an independent company. It operates parallel to LIAA incubators in Liepāja, Kuldīga and Saldus. Our initiative was the spring investment project – we were involved by providing financial support and advice to business projects we had selected. Response was overwhelming, we received almost 30 applications. We have started cooperation with a company set up by two young people from the Riga Technical University (RTU), who have developed a charger for mobile devices that is attached to a bicycle, and your mobile phone is charging as you ride the bike. There are three more companies that have advanced to the next negotiations round where the development of their business models is specified. There could have been more projects, but our capacity is not limitless. We wish to not only provide financing, but also share our knowledge, contacts, and marketing skills.
What is your opinion about applicants’ interest and will to implement their ideas?
They do want to, but they lack motivation. Measures have to be taken to encourage more people to apply and pursue their ideas. What they lack is the initial push – the money they could burn while not being certain that their project will be successful. In Kurzeme, there are at least ten new initiatives each month. There are a lot of different business ideas: typical startup projects, plans for the recreation industry, business and high-potential ideas. We’re hoping for the ALTUM acceleration program, which would be very much needed in the regions.
Can the same activity be observed in other Kurzeme cities too?
Certainly! We’re doing active work in not only Liepāja and Ventspils, but also in Kuldīga and Saldus. In each of these cities and towns, we have an office and our representatives. Each given environment dictates the direction of local businesses, for instance, wood processing, metalworking and food companies prevail in Kuldīga. Wood processing and metalworking are also popular in Saldus. High technology products are rare in these towns, so we do not focus on ICT projects alone. The smaller a town, the harder it is to find fresh ideas. High school graduates move to cities. Furthermore, if there are no educational institutions in a town, young people are not motivated to stay.
Educational institutions – are they one of the main resources fostering the city’s development?
They are indeed. They bring together smart and talented people. In every city or town, we cooperate very actively with local educational institutions. We are involved in project weeks, organize marketing schools. People can and want to create new products, but they don’t know what to do next.
What companies currently occupy VHTP?
At the moment, we house a couple dozen companies. The largest of these is Hansa Matrix. International management consulting and professional services company Accenture also has a branch here. Aspired makes interactive museum exhibits and children’s workshops. Company ORAM Mobile develops innovative solutions based on latest technology. For example, it is currently working on singing litter bins for Ventspils as part of the ICT support program. I also have to mention the flexible packaging producer Immer Digital and a branch of software management company Squalio.
Any other success stories?
We have two kinds of enterprises. The first includes companies that are new for Ventspils, but they are not new in the world. We gladly incubate such companies to create new jobs. At one time it was Hansa Matrix, which ten years ago commenced operations in Ventspils. We also have a welding facility and plant that employs 200 people. These companies all fall into one category as they are not the primary business of their founders.
The other kind of companies are those that that started everything from scratch under our supervision. For instance, Parkit that provides turning and milling services and produces machinery parts. Right now there are 30 people working at the company’s production facility. We helped the Parkit team to find investors, and we are happy to see their success. IT company TestDevLab is another such success story. They first approached us as graduates of Ventspils University College with an office at the college. It all started with support from the Business Incubator, while now they have a staff of 30 in Ventspils and another 30 in Riga. Of course, not all businesses develop as planned, but it is important that we have such success stories. And it is truly a pleasure to work with these people. I am really happy about all of them, and it feels fantastic that we can help each other!
What are the key success factors?
Devotion and the will to implement the project are very important as in many cases, the project is something done in addition to one’s main job, and it takes a lot of time. Second, the circumstances have to be right. Third, there must be skills and the ability to include the “right” people in the team. Financing is not a problem if one is proactive and ambitious.