Seed Forum Iceland
Valgerdur Sverrisdottir Minister of Industry and Commerce
Dear Seed Forum Guests:
One of my Ministry´s ongoing projects is to improve the innovation environment of Iceland's business sector. There are of course numerous projects, and in our mind, the most important one is increasing Icelandic companies participation in research and development projects. Despite the fact that Icelanders are now spending around 3% of Gross National Income on research and development, it is clear that the majority of this spending is coming from relatively few, large companies. Investment by other companies, however, is relatively low. The Ministry of Industry and Commerce has therefore directed the Science and Technology Council to investigate ways in which companies can be encouraged to increase this important part of its operations.
We also intend to look beyond the traditional framework of science and technology, and consider innovation in sectors that are not often mentioned when discussing innovation. I am particularly thinking about what has been defined as the "creative" sectors, which is knowledge-based industry, for example design. It is also essential to evaluate how to increase innovation in the service and business sector, which form the largest parts of the Icelandic economy.
It is the view of the Ministry that substantial benefits can be expected from innovation projects in these sectors, a view that is supported by the Science and Technology Council.
An important step was taken to promote innovation in 2003 with the creation of the Technological Development Fund. The fund is now beginning its third operational year, and has already allocated 420 million kronas, and will reach 500 million next year. These funds will be allocated to strengthen research and develop business ideas that are likely to achieve results in the marketplace. The largest grants from the Technological Development Fund have been 30 million kronas for a three-year development period. The fund’s board is now considering increasing this to 50 million kronas. The purpose of this increase is to take on larger and more ambitious projects that are in the nation’s best interests.
By using the resourses of the Technological Development Fund and other instruments available enables us to attain targets that motivate companies to strengthen their research and innovation activities.
Another instrument that we can use is the Impra Innovation Centre at IceTec, the Technical Institute of Iceland, which has proved to be vital for servicing entrepreneurs, small high-tech companies and other innovation projects.
The third instrument is the Innovation Venture Capital Fund, which is owned by the government. At the beginning of this year the fund’s equity was increased by one billion krona, we plan to increase this by one and a half billion krona between 2007-2009. This will enable the fund to form cooperative funds with other investors. The condition for this is that the funds can at least double its equity with additional financing from the private sector – this will ensure that the cooperative funds will have at least three billion krona for investing in innovation.
Although the goal has been to strengthen the Technological Development Fund and create continuity through investments by the Innovation Venture Capital Fund, it has not been accomplished. It is therefore clear that a gap exists between these two investment instruments – and our goal is to bridge this gap as soon as possible. Because of this, free market initiatives to finance investment entrepreneurs, small high-tech companies and other innovation projects are extremely important.
Without any doubt, one of the primary problems facing innovation is lack of venture capital in small, high-tech companies. I am aware that the participation of small, high-tech companies in Iceland in Seed Forum has been beneficial, and most of them have been successful in finding solutions, both through the event itself, or indirectly through the preparation and training that goes hand-in-hand with the Seed Forum. Meetings such as the Seed Forum are an important contribution to presenting companies to likely investors. It is therefore appropriate to thank those who have taken the initative to make this event a reality here in Iceland. I would also like to wish those companies that are presenting themselves and their products, all the best in the future.
I declare the Seed Forum conference open.
Thank you very much.