VENTSPILS CITY COUNCIL VENTSPILS ICT SECTOR DEVELOPMENT STRATEGY & ACTION PLAN

Transcription

1 VENTSPILS CITY COUNCIL VENTSPILS ICT SECTOR DEVELOPMENT STRATEGY & ACTION PLAN Ventspils,

2 CONTENT ABBREVIATIONS 3 WELCOME NOTE 4 WHY ICT? ICT AS AN INDUSTRY 5 WHY LATVIA? COUNTRY PROFILE 6 WHY VENTSPILS? CITY PROFILE 7 STRATEGY: STRATEGIC DEVELOPMENT MAP 8 STRATEGY: VISION, OVERARCHING OBJECTIVE, KPIS, PRECONDITIONS 9 ICT ENTREPRENEURSHIP FUNDING AND SUPPORT HUMAN RESOURCES AND EDUCATION RESEARCH AND DEVELOPMENT ICT INFRASTRUCTURE AND ENVIRONMENT HIGH LEVEL TASKS: ACTIVITY OWNERS 20 STAKEHOLDERS: CONTACT DETAILS 21 2

3 ABBREVIATIONS CEIRD CSB ERP EU FDI FPVA FTE ISCED GDP HEI ICT KPI LGA M2M N/A NATO PhD R&D SMEs STEM TTCK VDC VET VIRAC WTO Ventspils University College structural unit Centre for Entrepreneurship, Innovation and Regional Development Central Statistical Bureau Enterprise Resource Planning European Union Foreign direct investment Free Port of Ventspils Authority Full time equivalents International Standard Classification of Education Gross domestic product Higher education institution Information and communications technology Key performance indicator Latvian Guarantee Agency Machine to machine communication Not applicable North Atlantic Treaty Organisation Doctor of Philosophy, postgraduate academic degree Research and development Small and medium enterprises Science, technology, engineering and math Ventspils University College structural unit Technology Transfer Centre of Kurzeme Ventspils Digital Centre Vocational Education and Training Ventspils University College Engineering Research institute Ventspils International Radio Astronomy Centre World Trade Organisation 3

4 WELCOME NOTE You are welcome to Ventspils! The city which has been recognised not only for its ambitions and persistence in enhancing the overall entrepreneurial environment and welfare of its residents, but also for the determined goal-setting and their achievement. During the past 7 years Ventspils has experienced a considerable ICT sector growth. Moreover, global trends demonstrate not only an increasing demand for ICT goods and services but also prescribe the need to consolidate ICT sector stakeholders efforts resulting in better partnerships, capabilities and knowledge all targeted at boosting innovation, creativity and competitiveness. Capitalizing on the achievements to date and aiming to develop Ventspils into a European level hub for smart technologies, on 29 May 2013 the leaders of 18 organisations representing Ventspils City Council, municipal institutions, entrepreneurs and higher education institutions signed the Memorandum of Understanding regarding the Development of Information and Communication Technologies Sector in Ventspils (MoU). Ventspils municipality and stakeholders, having undertaken to develop ICT sector as a high potential and value-added industry and having taken part in the Strategy development, have laid grounds for the sector prosperity enabling the creation of new jobs, enhanced wellbeing, and international recognition of Ventspils city. In the meantime, we do acknowledge that the subsequent success of the Strategy will depend on actual engagement of all stakeholders, their belief in the sector development, involvement and fruitful mutual cooperation. Referring to the above, we sincerely welcome any interested businesses to seize the entrepreneurial opportunities in ICT that our city has on offer. It would be our greatest pleasure to provide any assistance and guidance that you might require for setting up your business in Ventspils. We look forward to working with you! CHOOSE VENTSPILS FOR YOUR ENTREPRENEURIAL ENDEAVOURS IN ICT! YOUR OPPORTUNITIES: Become the signatory of the MoU; Become a member of Ventspils ICT Cluster; Establish new partnerships and collaboration networks; Partner with the regional university in line with your needs for human resources and R&D; Exploit the available funding and support tools; Take advantage of premises suitable for ICT companies for competitive prices, as well as the Internet speed and power supply capacities; Leverage the privileges of the Special Economic Zone; Negotiate with municipality investment needs for your business; AND MOST IMPORTANTLY: By participating in the development of Ventspils into a European level hub for smart technologies, maximise your investments and gain unique experience. Ventspils Digital Centre Ventspils municipal institution "All eras have certain fashions. Currently, it is trendy to use the term smart, including with respect to cities. It doesn t take much to declare that one or another city is a smart city. What is of decisive importance however, is whether such a statement is justified. To ensure that Ventspils can truly designate itself as a smart city, we have created our ICT Sector Development Strategy that addresses the needs of all residents starting from preschoolers and ending with the elderly. We are confident that the ICT Sector Development Strategy will provide substantial input to a targeted and organised approach to truly developing Ventspils as a smart city. I wish all stakeholders the best of success in achieving the desired outcomes! Aivars Lembergs Chairman of Ventspils City Council 4

5 WHY ICT? ICT AS AN INDUSTRY ICT industry, and ICT goods and services as general purpose technologies are important drivers of productivity and economic performance across all sectors, emphasising their fundamental role in national economies. Globally, ICT sector continues rapid growth and serves as the key enabler for the competitiveness of knowledge intensive industries and businesses. According to Gartner's Worldwide ICT Spending Forecast, it has been estimated that by 2014 the global ICT spending will reach 2.7 trillion, whereas spending on mobile devices is set to increase by 6.5% in 2014 to 543 billion, compared to 510 billion in WORLDWIDE ICT SPENDING FORECAST (BILLIONS) ICT GOODS AND SERVICES SPENDING, 2013 GROWTH, 2013 SPENDING, 2014 ICT INDUSTRY: Serves as a trigger for overall economic growth and quality of life; Encourages the attraction of FDIs; Is a labour-intensive and skill-intensive industry enhancing employment; Contributes to the efficiency and productivity of other industries through spill-over effects; Drives product and process innovation and modernisation of public services; Enhances the branding of the region. 2 GROWTH, 2014 DEVICES % % DATA CENTRE SYSTEMS % % ENTERPRISE SOFTWARE % % ICT SERVICES % % TELECOM SERVICES 1, % 1, % OVERALL ICT 2, % 2, % Source: Gartner's Worldwide ICT Spending Forecast, MAJOR DEVELOPMENT TRENDS IN ICT INDUSTRY GLOBALLY IN FOCUS: Data security and privacy; Smart City concepts and solutions in local governments; Machine to Machine Communication; Internet of Things; Introduction of Cognitive Computing (Neural Networks based computing, Quantum Computing). 1 Gartner's Worldwide ICT Spending Forecast, IT Sector Promotion in Developing and Emerging Countries. Federal Ministry for Economic Cooperation and Development, November

6 WHY LATVIA? COUNTRY PROFILE ICT sector plays a key role in Latvia. It has been recognised as an important success factor among industries in the national economy of Latvia for enhancing competition, overall efficiency and for meeting the demands of the society and economy. Due to its geographic location and also the low costs of doing business, Latvia is an attractive destination for locating software development resource pools, remote IT services centres, data centres and hosted services. Most importantly, ICT has been identified as one of the country s top priorities in terms of export-oriented service sectors. KEY FIGURES: LATVIA Total area: 64,589 km 2 Population: 1.99 million (May 2014) Capital: Riga Major cities: Ventspils, Daugavpils, Liepāja, Jelgava, Jūrmala Currency EUR Membership: EU, NATO, WTO COMPETITIVE ADVANTAGES OF LATVIA: Geographic location as a hub and corridor for transport, logistics and distribution; Skilled, nevertheless relatively less expensive ICT labour force; Internet speed; Strong scientific base and manufacturing traditions. KEY FIGURES: ICT INDUSTRY (2012) ICT sector turnover billion ICT sector companies, number 6,741 ICT sector employees, number 24,119 Profit 185,7 million Average revenue per company thousand Average revenue per employee thousand Average number of employees per company 3.6 Export 590 million ICT sector added value share in GDP 3.7% Sources: Lursoft, LICTA. GLOBAL RANKINGS According to the Akamai State of the Internet Report, as of 1 st Q 2014, globally Latvia has been ranked: No.5 by 4K Ready (>15 Mbps) Connectivity; No.6 by Average Connection Speed; No.6 by High Broadband (>10 Mbps) Connectivity; No.8 by Average Peak Connection Speed. MAJOR ICT COMPANIES IN LATVIA (BY TURNOVER) KEY FACTS IN ICT SECTOR: In 2010 through 2012 ICT sector experienced the average annual growth in revenues of 17%; Approx. 21.8% of all ICT services volumes are being exported; Latvia has one of the highest new business density indexes in the world; Major ICT segments by the number of employees: ICT services (83.9%), ICT wholesale (13.2%), and ICT production (2.8%); Total revenues per employee: ICT wholesale: 478 thousand, ICT production: thousand, and ICT services: 67.4 thousand; Software development segment employs the largest number of individuals, followed by telecommunications, wholesale, data processing, and production; Numerous ICT players are engaged in egovernment projects and serve the local customers, providing traditional horizontal solutions; Presence of the Latvian IT Cluster - a platform for further development of IT innovative solutions and products in Latvia and all around the globe. WHOLESALE TELECOM SOFTWARE ELECTRONICS 1. ELKO 1. LMT 2. LATETELECOM 3. TELE2 4. BITE 5. XOTEL 6. BALTCOM 1. TIETO LATVIA 2. ACCENTURE, LATVIAN BRANCH 3. LATTELECOM 4. TECHNOLOGY 5. EXIGEN SERVICES LATVIA 6. DPA 1. MIKROTĪKLS 2. LEXEL FABRIKA 3. AXON CABLE 4. SAF TEHNIKA 5. Z-LIGHT 6. REGULA BALTIJA 7. HANZAS ELEKTRONIKA Source: Dienas Business/Lursoft Top500,

7 WHY VENTSPILS? CITY PROFILE It has been acknowledged nationally that given the presence of logistics and multimodal transportation services, the education opportunities, as well as the R&D potential, Ventspils has outstanding prospects of becoming the hub for innovations, high value-added and engineering industries, especially electronics and ICT, as well as the logistics and transit development in the Baltic Sea region. This potential is moreover reinforced by certain facts, i.e. the involvement and support by Ventspils City Council, the presence of relevant stakeholders and benefits that the potential investors may enjoy while setting up their businesses. VENTSPILS CITY COUNCIL Aiming to enhance entrepreneurship in the city, Ventspils City Council has always been proactive in keeping a dialogue with businesses, having succeeded in setting high performance standards, passing informed decisions and acting professionally and with due care. STAKEHOLDERS Ventspils is characterised by the presence of all major ICT sector stakeholders, i.e. Ventspils Digital Centre, Ventspils High Technology Park and its structural units (Pre-Incubator, Business Incubator and Technology Park), Free Port of Ventspils Authority, Ventspils Vocational School, Ventspils University College and its structural unit Ventspils International Radio Astronomy Centre, life-long learning and extra-curricular learning providers and others. COMPETITIVE ADVANTAGES OF VENTSPILS: Rapidly growing ICT sector since last 7 years; Backbone Fibre Optics infrastructure to Riga, Stockholm (10 Gbps and more); Internet speed and connectivity; Support provided by the- Free Port of Ventspils Authority; Lower costs of doing business (taxes, labour force, rent payments etc.); Ventspils City Council which has prioritised the development of ICT sector, so that in a long run the ICT sector attains up to 10% of the overall economy of the city. SPECIAL ECONOMIC ZONE The Free Port of Ventspils is one of the major transportation hubs both in Latvia and the Baltic Sea region, occupying 2, ha or 44.3% of the overall territory of Ventspils. Moreover, the Free Port of Ventspils hosts one of the EU s special economic zones offering companies an 80% rebate on real estate tax, 66% rebate on corporate income tax, as well as remarkable reductions on value added tax, excise tax and custom duties. Ventspils special economic zone has ensured its status until year 2035 and it is determined to proceed with its further development. EUROPEAN AND GLOBAL RANKINGS In the FDI European Cities and Regions of the Future Report 2014/2015 Ventspils has been ranked in the group of micro cities as 3rd the best in the category FDI Strategy, and 4th the best in the category Cost Effectiveness. In the FDI Global Free Zones of the Future Report 2012/2013 Ventspils special economic zone has been ranked as the 7th the best globally. 7

8 STRATEGY STRATEGIC DEVELOPMENT MAP 8

9 STRATEGY VISION, OVERARCHING OBJECTIVE, KPIS, PRECONDITIONS VISION VENTSPILS the smart choice for living, education, science and entrepreneurship in ICT OVERARCHING OBJECTIVE VENTSPILS a European level hub for smart technologies A succeeding industry results in enhanced prosperity, visibility and recognition of the city, consequently attracting more people willing to settle down for LIVING and work. EDUCATION empowers individuals to become active participants in the transformation of economy and society and ensures the supply of skilled workforce, whereas ICT sector prescribes what particular competences are needed. SCIENCE produces cutting-edge knowledge and innovations, whereas businesses take innovations to markets and identify areas to be researched. A flourishing ENTREPRENEURSHIP generates jobs, maximises revenues to the municipal budget, resulting in prosperity and well-being of its residents. The overarching objective implies the ambition of Ventspils city to achieve the key performance indicators of selected leading European ICT clusters (regions) per resident and consequently to become a significant and internationally recognised player in the field. To qualify for a European level, the performance indicators of four North European clusters were analysed and the relevant thresholds to be reached by year 2020 were identified in such areas as the number of employed in ICT sector, number of students in higher education institutions, incl. ICT students, number of PhD students and R&D staff. KEY PERFORMANCE INDICATORS Employed in ICT, incl. subsidiaries, number ,150 Students (Ventspils University College, other HEIs), number: ~1,440 1,700 2,150 - incl. ICT students PhD students in Ventspils University College, number R&D staff in Ventspils University College, number PRECONDITIONS FOR ICT SECTOR DEVELOPMENT IN VENTSPILS ICT SERVICES SEGMENT DEVELOPMENT: Availability of skilled workforce: software and applications developers, systems analysts and architects, graphic and multimedia designers and others; Network of cooperation partners: presence of ICT companies, suppliers, service providers, support organisations and multinationals in Ventspils; Availability of support tools and programmes: Business Incubator, venture capital, Accelerator, export promotion, municipality ICT support programmes; Internationalisation of local university: high-level foreign lecturers, talented students and cooperation with local ICT industry. ICT PRODUCTION SEGMENT DEVELOPMENT: Availability of skilled workforce: electronics engineers, supervisors of technological processes, IT and electronics mechanics and assemblers; Arranged infrastructure: premises for ICT production for competitive prices provided with the required capacities and redundancy. PRECONDITIONS FOR THE ATTRACTION OF HUMAN RESOURCES TO VENTSPILS Utmost attention should be paid to two groups of people most open to mobility, i.e. pupils of general education institutions in the age group for their studies and youth aged for their studies and career development; Provision of high quality jobs; Provision of affordable housing options; Provision of advice and support for people who have moved; Provision of advice and support for people who are thinking of moving or returning; Involving both long-term residents and in-migrants from all age and life-stage groups in local decision making; Developing initiatives to encourage return migration. 9

10 ❶ ICT ENTREPRENEURSHIP STATUS QUO During the last seven years Ventspils has experienced a rapid ICT sector growth testified both by the increase in the number of local companies and the employed and the establishment of new companies involving the capital of Sweden, Denmark, USA and others. In 2012 there were 88 ICT companies and affiliates operating in Ventspils, employing 217 persons and attaining the total turnover of 8.0 million. From these 88 companies and affiliates 67 have been active during the last three years, i.e. had turnover, employees or profit/loss. On average, Ventspils generates 3.2% of the national GDP, and the city s GDP per capita is the second highest in the country exceeding the national average 1.7 times. KEY FIGURES IN ICT SECTOR IN VENTSPILS (2012) ICT sector companies, number 88 Active ICT sector companies, number 67 ICT companies with 10+ employees, number 4 ICT sector employees, number 217 ICT sector turnover 8.0 million ICT sector profit thousand Average turnover per company 91,545 Average turnover per employee 37,124 Employees per company, average number 2.5 Source: Lursoft. NUMBER OF EMPLOYEES IN VENTSPILS ICT COMPANIES KEY FACTS: ICT represents approximately 1% of the overall entrepreneurship turnover; Involves 1.13% of the total number of employed; Represents approx. 7% of the total number of active businesses; 90% of companies operate in ICT services segment, providing 67% of the total Ventspils ICT sector turnover and employing 72% of the total number of employees; 3% of companies represent ICT production segment, providing 14% of the total Ventspils ICT sector turnover and employing 23% of the total workforce; 7% of companies operate in ICT wholesale, providing 19% of the total Ventspils ICT sector turnover and employing 5% of the total workforce. ICT SECTOR TURNOVER (EUR) NUMBER OF ICT COMPANIES IN VENTSPILS We considered various alternative locations for the development of manufacturing facilities of liquid-crystal displays. The competitive advantage of Ventspils, was the availability of the Industrial Park with sufficient power capacities, the undertaking by the Free Port of Ventspils Authority to construct and rent out the manufacturing building, as well as the presence of the higher education institution. Ilmārs Osmanis Member of the Board, Ltd. Ventspils Elektronikas fabrika and Ltd. EuroLCDs 10

11 ❶ ICT ENTREPRENEURSHIP STRATEGIC DEVELOPMENT GOAL: AN INTERNATIONALLY RECOGNISED CITY WHERE CREATIVE, INNOVATIVE AND RAPIDLY GROWING ICT BUSINESSES DEVELOP. AS A RESULT OF STRATEGY IMPLEMENTATION WE WILL: Increase the number of active ICT companies in Ventspils more than twice and quintuple the number of employed in ICT, including local start-ups, spin-offs, subsidiaries of local and foreign companies (incl. multinationals), and attain 10% of the overall economy of the city in a long run. Achieve the critical mass of ICT sector stakeholders by establishing Ventspils ICT Cluster that, among other things, will lead to national and international recognition and visibility of Ventspils as a city with developed ICT sector. KEY PERFORMANCE INDICATORS Active ICT companies, number (% of all companies in Ventspils) 67 (6%) 100 (increases) 150 (9%) ICT sector turnover (% of total turnover of all companies in Ventspils) 8,055,986 (1%) 35,000,000 (increases) 92,000,000 (10%) Employed in ICT sector, headcount (% of all employed in Ventspils) 217 (1%) 637 (increases) 1,150 (6%) OUR COMMITMENTS AND UNDERTAKINGS VENTSPILS ICT CLUSTER To achieve the critical mass of the involved stakeholders we are establishing Ventspils ICT Cluster - a geographic concentration of interconnected companies, specialised suppliers, service providers, and associated institutions enhancing the knowledge exchange between producers, users, education institutions, R&D organisations and the local authority. Not only we aim to attract new members to seize the vast growth and development opportunities both locally and internationally, but also to involve in various ICT related events, to cooperate and network all targeted at raising the awareness of Ventspils ICT Cluster brand. NATIONAL ICT SECTOR INITIATIVES As Ventspils ICT Cluster we undertake to align our research and innovation activities with the national Smart Specialisation Strategy priorities. Moreover, we develop partnerships with the Latvian IT Cluster to seize expansion opportunities and to promote exports and cooperation. RENOWNED INTERNATIONAL ICT SECTOR PLAYERS To enhance growth, we monitor co-funding opportunities offered by EU funds and develop ICT and space related projects. To strengthen our potentials we identify and establish long-term cooperation with renowned international ICT clusters. ICT SECTOR NEEDS AND SATISFACTION Aiming to respond to the needs and wants of our entrepreneurs, we inquire ICT companies in Ventspils annually to assess the demand for human resources, required competences, services, housing, urban environment and many other important aspects. Moreover, to identify industry trends, new market players, potential partnerships and opportunities for new development projects, we undertake a bi-annual market study. THE ROLE OF A CLUSTER: To ensure the critical mass of sector stakeholders and to offer a platform for networking, cooperation and exchange of experience; To produces knowledge spillovers that spur a collective productivity; To identify and develop new business opportunities through collaborative national and international projects; To facilitate the collaboration between the public and private entities; To promote and position ICT competences of companies and R&D institutions; To optimise the uptake of ICT as an enabling technology for various industries; To drive innovations through the involvement of all relevant stakeholders. 3 Strengthening Clusters and Competitiveness in Europe. The Role of Cluster Organisations. Dr Christian Ketels, Dr Göran Lindqvist, The Cluster Observatory, Dr Örjan Sölvell, October

12 ❷ FUNDING AND SUPPORT STATUS QUO Funding and support services and tools are crucial to ensure growth of any company or business throughout the whole lifecycle starting from the business idea concept and start-up phase and ending with the maturity stage. VENTSPILS HIGH TECHNOLOGY PARK Ventspils High Technology Park (VHTP) is the major stakeholder in terms of funding and support provision having been established for the purpose of enhancing the development of hi-tech companies, incl. those operating in ICT sector. PRE-INCUBATOR IDEA STUDIO Pre-Incubator provides consultancy and support in evaluating and developing business ideas, undertaking market research and analysis and identifying resources for starting the business. BUSINESS INCUBATOR Business Incubator offers premises and support services for companies in their early stage of activity. It helps new companies to create and develop new products and services, elaborate technologies and carry out marketing activities. TECHNOLOGY PARK Technology Park offers territory, premises and support services for high- tech companies, and educational and research institutions. Being located in the Technology Park is the next logical step also for technology companies after completing the process of business incubation. MAJOR SUPPORT: Support during preincubation, incubation and operation, incl. provision of high quality infrastructure and services; Support offered by Free Port of Ventspils Authority, incl. benefits available within Special Economic Zone; Venture capital funds and business angels; Other funding and support tools and events; Latvian Space Technologies and Services Cluster. KEY FIGURES (2012) ICT companies in Idea Studio, VHTP Pre-incubator, number 10 ICT companies incubated in VHTP Business Incubator, number 11 ICT companies hosted in VHTP, number 11 Premises available for ICT sector in VHTP 7,446 m 2 Premises available for ICT sector within business support programmes 2,249 m 2 Venture capital allocated to Ventspils ICT companies 3,117,500 FDI projects in ICT in Ventspils, number 9 Sources: VHTP, LGA VENTSPILS DIGITAL CENTRE Ventspils Digital Centre (VDC) is a public municipal institution responsible for promoting the involvement of Ventspils city municipality, residents and entrepreneurs in information society and e-governance, actively participating in the formation of information society and implementation of e- governance solutions on local, regional, national and international level, establishing, maintaining and developing information and communication technology infrastructure, as well as promoting the integration of education, science and manufacturing, launching of research outputs, development of knowledge based sectors, establishment of SMEs and improvement of quality management system. Based on the achievements of the last 14 years and experience accumulated both in Ventspils and elsewhere in the world, a very specific action plan has been elaborated aimed at developing Ventspils into a global level hub for smart technologies. Being aware of the extent of this task, Ventspils Digital Centre invites anybody to involve in the implementation of the present Strategy both with recommendations and proposals and, most importantly, definite activities. Egons Spalāns Director, Ventspils Digital Centre Ventspils municipal institution 12

13 ❷ FUNDING AND SUPPORT STRATEGIC DEVELOPMENT GOAL: A VISIONARY CITY THAT PURPOSEFULLY SUPPORTS THE NEEDS OF THE ICT SECTOR. AS A RESULT OF STRATEGY IMPLEMENTATION WE WILL: Increase the number of annually supported ICT companies more than 3 times by ensuring the operation of the Pre-Incubator, Business Incubator, Technology Park, and the Accelerator and providing support to ICT start-ups and spin-offs. Ensure that Ventspils becomes the first city in the Baltics that launches and operates an ICT pilot project programme for entrepreneurs. KEY PERFORMANCE INDICATORS ICT start-ups in business incubators, technology parks and accelerators, accumulated number Funding by start-up support programmes (% of ICT industry turnover in Ventspils) 210,164 (2.6%) ,000 (1.4%) 500,000 (0.5%) Spin-offs from HEI and R&D institutions, accumulated number VC investments in ICT sector in Ventspils by venture capital funds and business angels, accumulated amount (% of total funds allocated in Latvia) FDI projects, accumulated number (FDI volume in the equity capital) 2,917,500 (20.3%) 6 ( 20,219) 3,500,000 (4.1%) 12 ( 40,438) 7,000,000 (8.3%) 18 ( 60,657) OUR COMMITMENTS AND UNDERTAKINGS SUPPORT FOR START-UPS AND SPIN-OFFS Based on our successful experience to date, we ensure the operation and services of the Pre-Incubator and Business Incubator. To supplement the set of support tools, we establish and operate the business acceleration programme and launch the municipality ICT pilot project programme. We also actively involve ICT business idea authors in various dedicated events, enhance commercialisation of new technologies and aid in global and export marketing activities. We support ICT community networking and organise in Ventspils international ICT events. VENTURE CAPITAL, PRIVATE INVESTORS, BUSINESS ANGELS Being aware of the importance of relevant funding, we enhance cooperation with national and international venture capital funds. We also strive to attract to Ventspils a seed or venture capital fund, ensure the expansion of the existing business angels network and organise regular pitching events. INWARD ICT INVESTMENT PROGRAMME We develop an ICT inward investment programme, detailing the goals, activities to be undertaken and the activity owners. Consequently, we identify and attract investment projects from leading global ICT companies, as well as other international and local investors. Since 2002 the Free Port of Ventspils Authority has been purposefully undertaking the industrial development of Ventspils. Nowadays it is impossible to think strategically without utilising information and communication technologies. These industries overlap and ICT companies not only supplement the range of manufacturing companies within the territory of the Free Port but also cooperate with those. The focus area of the Free Port of Ventspils Authority, is to identify challenges and search for innovative solutions for the economic development of the Port and the region, proving that today it is not only the provider of services but also assumes the role of the region s developer. For this reason we do consider it self-evident to participate in the development ICT sector and therefore we do expect and we are prepared for definite initiatives, activities and outputs. Igors Udodovs Deputy Administrator and Head of Marketing and Development Department, Free Port of Ventspils Authority 13

14 ❸ HUMAN RESOURCES, EDUCATION STATUS QUO Science, technology, engineering and math (STEM) related industries are crucial to continuing innovation, the development of knowledge-intensive economies and to European competitiveness. The future supply of STEM skills is dependent on the development of competences, interest and passion in the sciences through early years of education, science teaching having a strong long-term impact and progression to high-level STEM skills being nurtured through general and technical vocational education. One of the most important preconditions for developing ICT sector in Ventspils is the availability of highly qualified graduates and graduates with solid STEM skills in all levels of education. KEY FIGURES (2013) Pupils in general education institutions (daytime, in Ventspils), number 3,965 Students in VET, total number 713 Students in ICT-related study programmes in VET, number 52 Higher education students in Ventspils, approx. number 1,440 Sources: VCC, VVS GENERAL EDUCATION General education in Ventspils is provided by 1 primary school, 2 lower secondary, 5 secondary schools, 1 gymnasium, and 1 evening school. General education in Ventspils can be acquired both in the Latvian and Russian languages. VOCATIONAL EDUCATION Vocational education in Ventspils is provided by North Kurzeme Vocational Education Competence Centre Ventspils Vocational School (VVS) providing a range of study programmes: metal processing and mechanical engineering, motor transport, public catering, hotel management and accounting, as well as two ICT-related study programmes: electronics, and mechatronics. HIGHER EDUCATION Ventspils University College (VUC), being the leading higher education institution in Ventspils, is a self-governing state university college and scientific institution. Its key activities are aimed at carrying out scientific research and implementing academic and professional study programmes in 3 faculties: Faculty of Information Technologies (computer science and electronics), Faculty of Economics and Management, and Faculty of Translation Studies. VENTSPILS UNIVERSITY COLLEGE IT FACULTY GRADUATES EDUCATION OPPORTUNI- TIES IN VENTSPILS: 10 general education institutions; North Kurzeme Vocational Education Competence Centre Ventspils Vocational School ; Regional HEIs - Ventspils University College and subsidiaries of 4 other HEIs: Baltic International Academy, College of Law, Riga Teacher Training and Educational Management Academy, and Riga Technical University; Various extra-curricular and life-long learning service providers. Microsoft Latvia is grateful to Ventspils partners for the current cooperation and the launched initiatives on actual projects targeted at the enhancement of quality of education, and the IT knowledge and competence of companies and municipality. Ēriks Eglītis Country Manager, Microsoft Latvia 14

15 ❸ HUMAN RESOURCES, EDUCATION STRATEGIC DEVELOPMENT GOAL: A SMART CITY PROVIDING HIGH QUALITY, INTERNATIONALLY-COMPETITIVE EDUCATION OPPORTUNITIES AND HUMAN CAPITAL THAT MEETS LABOUR MARKET DEMANDS. AS A RESULT OF STRATEGY IMPLEMENTATION WE WILL: Enhance the pupil interest in STEM subjects in general education institutions, incl. become the first municipality in Europe where all pupils from Grade 1 already are provided with the opportunity to master programming skills in general education establishments. Almost double the overall number of students in Ventspils and almost triple the number of ICT students and enhance the internationalisation and international recognition of higher education in Ventspils. Introduce new ICT study programmes in Ventspils Vocational School and Ventspils University College to meet the demand of ICT companies for qualified workforce. KEY PERFORMANCE INDICATORS Specialised ICT skills of general education pupils, accumulated amount (% from total target audience in a given year) N/A 540 (10%) Students in ICT-related study programmes in VET, number ICT graduates in VET, headcount in the last 2 school years (% of graduates in VET) ICT students in HEIs, headcount per annum ICT graduates in HEIs, headcount per annum (% of graduates in HEIs) Academic staff in ICT study programmes in VUC, headcount International degree-seeking students in ICT study programmes in HEIs in Ventspils, % OUR COMMITMENTS AND UNDERTAKINGS 0 (0%) 57 (28%) 20 (11%) 82 (35%) 2,700 (23%) 77 (39%) 144 (45%) 0% 9% 13% KNOWLEDGE AND INTEREST IN STEM AND ICT As involvement in STEM subjects is crucial in early stages of life, we develop a study programme on programming and algorithmic thinking skills for ISCED 1-3 level and ensure the professional development of teachers. To enhance interest in STEM and ICT we organise and launch various events and competitions both on local and international scale. We also attract and reward the most talented teachers and undertake a feasibility study about the school of the future specialised in foreign languages and technologies. VOCATIONAL EDUCATION AND TRAINING Supply of professionally trained human resources is one of the major preconditions for ICT sector development, therefore we drive partnerships with ICT companies to identify the most demanded qualifications. To meet the ICT sector growth needs, we develop additional vocational training programmes in ICT, enhance the existing ICT-related study programmes and organise events aimed at involving more students in the vocational education and training. We also attract new and talented teachers and provide professional training to the existing faculty members. HIGHER EDUCATION As we are eager to raise the new generation of ICT sector professionals, we attract high-achievers in STEM subjects from all around the country. We also work on motivating the high-potential VET graduates to pursue academic development in our university, as well as cooperate with ICT industry in ensuring internship programmes and developing and improving ICT study programmes. To enhance the academic capacities, we attract talented local and international staff members, involve succeeding guest lecturers from the industry. We focus our attention on aligning IT education curricula with professional associations and drive professional certification during studies. We recognise the importance of professional practice opportunities and field practice. In the meantime, we acknowledge the potential input of our alumni by supporting networking and mentoring. We strive to internationalise our university, therefore we aim to attract top level international staff members and to develop a joint degree programme in ICT with an internationally recognised HEI. Moreover, we work on attracting international students, as well as organise various international level events. HUMAN CAPITAL We are aware of the need for human resources in ICT, therefore we develop a relevant strategy. We aim to attract to ICT sector software and applications developers, systems analysts and architects, graphic and multimedia designers, electronics engineers and electronics engineering technicians, computer network and systems technicians, electronics mechanics and servicers, electrical and electronic equipment assemblers. To enhance the mobility to Ventspils, we develop a website and operate a helpline for servicing the interested individuals. We also diversify the forms of academic studies, proceed with extra-curricular education and career development activities and establish a dedicated ICT entrepreneurship-training programme with international coaches and mentors. 15

16 ❹ RESEARCH & DEVELOPMENT STATUS QUO Regionally, research and development (R&D) is one of the driving forces for Kurzeme region, the main reasons being the heritage of the unique space equipment (32 m and 16 m satellite telescopes) in Irbene owned by Ventspils University College and also the broadband internet connection from Scandinavia. RESEARCH INSTITUTIONS The major research institutions in Ventspils are the structural units of Ventspils University College - the Centre for Entrepreneurship, Innovation and Regional Development and Ventspils International Radio Astronomy Centre. CENTRE FOR ENTREPRENEURSHIP, INNOVATION AND REGIONAL DEVELOPMENT (CEIRD) The primary objective of CEIRD is the involvement of qualified, internationally recognised human resources to enhance the inclusion of Latvian scientists in international research and to develop research to be marketed to the private sector. VENTSPILS INTERNATIONAL RADIO ASTRONOMY CENTRE (VIRAC) The key areas of operation of VIRAC are basic research in astronomy and astrophysics, applied research in space technologies, high performance computing and research on applied engineering electronics. COMMERCIALISATION OF R&D OUTPUTS The main institutions that are generally related to commercialisation of R&D in ICT sector in Ventspils are the structural units of Ventspils High Technology Park - the Preincubator Idea Studio, the Business Incubator and the structural unit of Ventspils University College the Technology Transfer Centre of Kurzeme (TTCK). KEY FACTS: The research outputs of VIRAC have increased from 10 ICT related publications in 2010 to 45 in 2012; In 2010 VIRAC implemented 60 research projects, in , whereas in ; Since the foundation in 2011, Pre- Incubator Idea Studio has supported development of 42 ideas, 10 of which represent ICT sector; With support of TTCK, in contracts have been concluded for the total value of 120,944 involving miscellaneous services and researches for the needs of both Latvian and foreign companies. KEY FIGURES ( ) Employees in research institutions in FTE (VIRAC), number 41 Persons with PhD degree in Ventspils, number 38 Projects in VIRAC, number 45 Turnover of VIRAC 1,462,85 Commercialisation offers in TTCK, number 15 Sources: VIRAC, CSB, TTCK. RECOGNITION: As a result of international assessment of the Latvian research institutes undertaken by the Ministry of Education and Science in co -operation with the Nordic Council of Ministers it was concluded that there are 15 capable research institutes of international importance in Latvia, including Ventspils International Radio Astronomy Centre. Ventspils municipality and entrepreneurs are already undertaking joint projects with Ventspils University College, keeping in mind the necessity to attract human resources to the region, involve highly qualified and promising professionals. We highly appreciate the sustainability of this tripartite cooperation, municipality s support to entrepreneurs and research development. Sandis Kolomenskis Chairman of the Board, DPA High Technology Centre "SQUALIO" 16

17 ❹ RESEARCH & DEVELOPMENT STRATEGIC DEVELOPMENT GOAL: A CITY OPEN TO INNOVATION TO ENHANCE NEW KNOWLEDGE CREATION AND ACTIVE PAR- TICIPATION IN GLOBAL R&D. AS A RESULT OF STRATEGY IMPLEMENTATION WE WILL: Almost double the number of R&D staff and R&D students, consequently increasing the research publication outputs, the number of patents and patent applications and commercialisation of inventions. KEY PERFORMANCE INDICATORS Research publication output, accumulated number in the latest 5 years Patents and patent applications, accumulated number in the latest 5 years Commercialisation offers, number 15 increases 45 R&D staff, FTE number R&D students, headcount OUR COMMITMENTS AND UNDERTAKINGS INNOVATIONS AND NEW KNOWLEDGE CREATION To enhance R&D potential in Ventspils we aim to attract larger state and EU funding and develop proposals on potential commercial services. Moreover, we develop a plan for self-sustainable public-private partnerships and innovations leading to synergies between HEIs and businesses. INTERNATIONALISATION OF RESEARCH AND DEVELOPMENT Given the heritage of the unique space equipment in Irbene and the achievements of VIRAC to date, we drive Latvia's participation in the European Space Research Programme. We also maximise the value of the newly-established M2M laboratory. We work on increasing the number of research publications, on attracting international R&D staff and maximising participation in international level science conferences. To enhance the R&D potential in terms of talented human resources, we develop a joint PhD level study programme in ICT. To enhance the publicity and visibility we organise bi-annual international high level ICT sector specific conference for European universities and ICT industry. "Ventspils ICT Sector Development Strategy is a successful example that the major focus is on a limited number of controllable parameters. Only a few facts should form the basis of the Latvian IT Strategy: our internal IT market is non-existent, therefore goods should be exported. The major restriction with respect to the extent of IT exports is the lack of specialists. Education is one of the very few fields that the country can directly develop and not only influence. When new companies choose the location for the delivery of IT services, they do evaluate several criteria: the number of languages local residents have acquired, the extent of government support for entrepreneurship, the availability of IT workforce, infrastructure, education system, costs, and intercultural compatibility. Maksims Jegorovs Accenture Latvia Lead 17

18 ❺ICT INFRASTRUCTURE, ENVIRONMENT STATUS QUO Good quality infrastructure and environment are important ingredients for sustainable development of any industry. Moreover, developed public services, energy, communications systems, efficient transport and urban environment enhance the overall standards of living of residents. KEY FIGURES (2013) Number of international submarine backbone lines; number of national land backbone line providers 2 international lines, 3 national providers KEY FACTS: Available Backbone connection speed, speed per link Free WiFi public points, number 52 Available electrical power capacity in VHTP, redundant routes, power, number of routes Public e-services in Ventspils, number 10 Sources: VDC, VHTP, VCC. ICT INFRASTRUCTURE AND E-SERVICES 10 Gbps 6 MW 2 Ventspils has good connection to international communication infrastructure. There are two submarine backbone lines going to Sweden (Nynashamn, Stockholm) and several national backbone line connections going to Riga through independent routes operated by three different providers. There is a national level backbone connection also to Liepaja. Through these backbones Ventspils has good connection to major International backbones: through Stockholm to Moscow-St. Petersburg-Helsinki-Stockholm-Copenhagen- Frankfurt; through Riga to Moscow-Riga-Vilnius-Warsaw-Frankfurt. Frankfurt is among major world-wide Data Centre locations including (and also interconnected with) Amsterdam, London, Dublin, Paris. Advanced communication infrastructure opens opportunities in both directions: processing heavy data tasks requiring high-speed connection capacity to major hosting locations and operating Data Centre facility at Kurzeme region and the Baltic Sea region level. ENVIRONMENT Local WiFi network has 200 access points in 27 city areas. It has been increased by 25 additional free of charge WiFi access points by Lattelecom; Fast, reliable broadband Internet connections for citizens and businesses; Fast fibre-optics Internet connection possibilities for business facilities; Ventspils as a successful pilot project area for e-government and e-city solutions; Energy infrastructure project Kurzeme Ring which constitutes a part of the larger NordBalt project; Ventspils as a hub for transportation and logistics; Sports, culture, leisure and social life opportunities for families; Public bus and ferry lines. Ventspils city may be considered as one of the most successful cities in Latvia and Europe in terms of urban planning and design activities, green urban areas, spaces for pedestrians and cyclists. Major urban projects such as change of hot water mains, water handling facility projects, street renovation projects, city environment arrangement (leisure parks, blue flag beach, children amusement parks, etc.) are being undertaken permanently. Ventspils offers a wide variety of social life and leisure time activities. The city hosts numerous local and visiting cultural, entertainment and sports events for almost every taste, age and interest group. Ventspils has also several museums, parks for children, and libraries. KEY FIGURES IN VENTSPILS (2012) Population in Ventspils, number 37,336 Employed in Ventspils, number 16,160 Employed in ICT in Ventspils, number 217 Average gross wage in Ventspils Unemployment rate in Ventspils 7.6 % Housing fund per one inhabitant 26.7 m 2 3 star hotels (beds), number 15 (1,164) Public transport lines, number 23 Intercity public transport lines, number 5 Ferry lines, number 3 Sources: CSB, Lursoft, VR, VCC. The Head Office of TestDevLab Ltd. is located in Ventspils, where the majority of our employees work. From our Ventspils Office we provide software development and testing services to our customers in USA, France, UK, and other export markets. Our company plans a long-term development in Ventspils, therefore we highly appreciate the ICT sector strategy with particular emphasis on the improvement of study programmes and their quality, as well as activities aimed at motivating the graduates to develop their careers and stay in Ventspils in a long-term. Ervins Grīnfelds Member of the Board, Ltd. TestDevLab 18

19 ❺ICT INFRASTRUCTURE, ENVIRONMENT STRATEGIC DEVELOPMENT GOAL: A STATE-OF-THE ART CITY WITH AN ENVIRONMENT AND E-SERVICES FOR LIVING, LEARNING, PROFESSIONAL DEVELOPMENT AND BUSINESS. AS A RESULT OF STRATEGY IMPLEMENTATION WE WILL: Expand the area of the available high quality and reasonably priced ICT infrastructure provided with power and data networks of required capacities for production, offices and data centres. KEY PERFORMANCE INDICATORS ICT sector satisfaction with housing availability ICT sector satisfaction with municipality services N/A 70% 80% Efficiency of the distribution system to deliver electric power (ASAI Index) Availability of broadband high-speed internet connections (Fibre Optics and WiFi), % of territory for business activities N/A 95% 99% N/A increases 80% ICT sector - specific commercial premises 9,400 m 2 19,100 m 2 22,825 m 2 OUR COMMITMENTS AND UNDERTAKINGS HOUSING, TRANSPORT INFRASTRUCTURE To meet the need for relevant accommodation, we build a 4-5 stars hotel, as well as arrange business apartments for long-term non-residents and new high-quality apartments for ICT sector top managers, specialists and professionals. We will also proceed with the development of Ventspils Airport. E-SERVICES To enhance the business environment, we reduce the administrative burden for businesses by utilising one-stop service agency and e-services and enhance the use of digital signature at a municipality level. ICT INFRASTRUCTURE AND INTERNET We continue work with our major suppliers on improving electricity redundancy and capacity in Ventspils, enhance Internet connectivity and ensure industrial areas with an access to data transmission services. We also develop Ventspils metropolitan area network to include major industrial areas. In support to businesses we ensure good quality commercial premises for attractive prices. "Over the last 7 years Ventspils city experienced a rapid ICT sector development. The number of ICT enterprises has increased more than 5 times. The new strategy and action plan will help to continue this development and achieve even more substantial concentration of ICT businesses in the city. According to the strategy we plan to make Ventspils more visible on the European ICT map, by finding a niche suitable for the city and the region, as well as by providing high quality education, outstanding infrastructure, and the best business environment for ICT enterprises. Ivars Eglājs Chairman of the Board, Ventspils High Technology 19

20 HIGH LEVEL TASKS ACTIVITY OWNERS To attain the defined overarching objective, i.e. VENTSPILS A EUROPEAN LEVEL HUB FOR SMART TECHNOLOGIES, based on the analysis of global ICT industry development trends, ICT sector in Latvia and Ventspils, as well as survey results of the Latvian and North European entrepreneurs, the total of 30 tasks and 104 activities to be undertaken by year 2020 have been defined, identifying the major tasks (in the priority sequence): # TASKS ACTIVITY OWNERS ❶ Increasing the number of students, especially talented youth and foreign students and offering a well-recognised study content of high quality in Ventspils higher and vocational education. Ventspils University College Ventspils Vocational School Ventspils Digital Centre ❷ ❸ ❹ ❺ Developing programming skills from Grade 1 in general education institutions. Attracting human capital in line with ICT sector needs, incl. by ensuring the availability of good quality housing, as well as more opportunities for work, field practice and studies in Ventspils city. Establishment and operation of Ventspils ICT Cluster, co-operation and networking (ensuring the critical mass of ICT companies, suppliers, service providers, support organisation in Ventspils city). Ensuring the availability of funding and support programmes (Pre- Incubator, Incubator, Accelerator, export promotion, venture capital attraction and activity of business angels). Ventspils City Council Education Department Ventspils Digital Centre Ventspils City Council Ventspils Digital Centre Ventspils Digital Centre Ventspils ICT Cluster (following its establishment) Ventspils High Technology Park ❻ Establishment and operation of municipality ICT pilot project programme. Ventspils City Council ❼ Attraction of multinational corporations. Ventspils City Council Free Port of Ventspils Authority Ventspils High Technology Park Ventspils Airport ❽ ❾ Ensuring the availability of commercial premises for ICT sector needs for competitive prices provided with the required capacities and Internet connections. Enhancing international reputation and commercialisation of research outputs. Ventspils City Council Free Port of Ventspils Authority Ventspils Digital Centre Ventspils High Technology Park Ventspils University College (VIRAC, TTCK) 20