The brains behind Kaunas’s rise

February 28, 2017

Kaunas has established a reputation as a medical technology and R&D hub for the Baltic region. Its next step, as Natasha Turak discovers, is to ensure that its technological prowess is acknowledged on a global scale.

A dedicated proficiency in management, IT and life sciences has put Lithuania on the map for a growing number of medical technology companies. The city of Kaunas, with its cluster of R&D facilities and universities, is actively working towards becoming the regional destination for companies seeking fast growth and global reach.

“Being a small country, we should be flexible to adapt ourselves to global challenges,” says professor Rytis Krusinkas, head of the finance department at Kaunas University of Technology (KTU) and university senate chairman. “Historically, Kaunas was an engineering city. The engineering focus from the time of the Soviet Union has now expanded to electronics, mechatronics, informatics and so on.”

A meeting of minds

Mr Krusinkas believes technology, health and business have an ideal confluence in Kaunas. “We are in very good situation here – we have the National Innovation and Entrepreneurship Centre [NIEC], full of young companies and university spin-offs, which Kaunas is famous for.”

A joint venture signed in 2014 by KTU, the Lithuanian University of Health Sciences and the Lithuanian Energy Institute created the NIEC, which develops intellectual property management, entrepreneurship, science and business consultation. It also specialises in ‘young business incubation’ through the KTU Startup Space – Lithuania’s largest academic start-up centre, which has spawned more than 36 successful start-up companies since it was established in 2012.

“Along with a technological background, we are trying to give our students an interdisciplinary approach,” says Mr Krusinkas. “We are involving different business cases in the studies and familiarising them with the international environment.” Students can combine programmes from the fields of technology, humanities, systems engineering, social sciences, finance, biomedicine and more.

KTU’s science and technology park – the largest in the Baltics – features Santaka Valley Laboratories, a 9000-square-metre integrated study, research and business valley that offers open-access lab space for students, researchers and businesses. With more than €25m invested by the university, Santaka Valley’s materials science, ultrasound science and synthetic chemistry institutes are among the best equipped in Europe. The university’s numerous partners include Samsung and NASA, the latter of whom sought KTU out for collaboration on technologies for brain monitoring in microgravity.

Vittamed’s niche

Among the university’s medtech start-ups is Vittamed, a Kaunas-born company producing non-invasive devices for brain diagnostics. “Our product will be the first of its kind; currently there are no approved devices to be used for non-invasive inter-cranial pressure monitoring,” says Vittamed founder Edvardas Satkauskas. “It’s a niche market opportunity, and we are aiming to launch it commercially at the end of this year.”

The company was significantly helped by $10m in venture capital funding from the US, the UK and Malaysia and has worked with partners in Switzerland and other European countries for its clinical trials. It has a US presence through its office in Boston and its partnership with Baylor College of Medicine in Houston, Texas.

“Lithuania is a small country, which has many benefits. In a small country you can talk to the minister of economy or the prime minister if needed,” says Mr Satkauskas. “We have excellent support from our investment agency, Invest Lithuania. Kaunas Free Economic Zone [FEZ] has excellent tax benefits and we plan to build a factory there.”

Arunas Lukosevicuis, scientific supervisor at KTU’s biomedical engineering institute, says: “Our approach is to develop products that are affordable, smart, small, wearable, unobtrusive and very effective. There are many niches here and we are working on that. So I have the vision that our environment will be famous for these kinds of decisions, and I see that innovation culture is very much increasing.”

A majority of employees in the city’s hi-tech businesses are graduates of the local universities. Kaunas-based Ortho Baltic produces custom-made orthopaedic products and patient-specific prosthetic bone implants for surgeries, using 3D printing to create the moulds. Nearly all of its 120-strong staff was educated in Kaunas, and it works closely with the Lithuanian University of Health Sciences and others. The company exports 99% of its product and sells to hospitals and suppliers all over Europe as well as in Australia, Canada, and the United Arab Emirates.

A satisfied customer

One of Lithuania’s most prominent foreign investors in the medtech field is US-based Intermedix, which delivers technology-enabled professional services to healthcare providers, government agencies and corporations.

“We’re very closely collaborating with industry partners,” says Agnius Liutkevicius, professor of KTU’s computer science department. “We’ve signed an agreement with Intermedix, one of the largest health informatics companies in the world, and with it we’ve established the Creativity Laboratory, where KTU students and researchers can make joint projects.”

The company chose Lithuania for its first European site in 2013, employing 700 people in its Kaunas office who provide Intermedix clients with IT applications, data management, customer operations and medical coding.

Local hero

Locally born companies showcase the innovation coming out of Kaunas’s technology ecosystem. A prime example is Elinta, founded in 1991 and based in Kaunas FEZ, which produces hi-tech disruptive electronics and automated systems. The company, winner of the Baltic Innovation Prize in 2014 and 2015, produces core technologies ranging from industry automation and computer vision systems to 3D scanners and electric mobility. Elinta’s products are sold in 32 countries, including the US, Canada and Australia.

Elinta has developed 400 fully electric cars for Lithuania, and works with more than 40 partners, including Siemens and US automation developer Emerson. Company founder Vladas Lasas, winner of the Oslo Business for Peace Award, believes the country could attract US automaker and energy innovating giant Tesla.

“We need global brands that are doing the best things for the world, and we see huge opportunities to scale up and add experience from the best universities in Lithuania and abroad, merging our capabilities and our people,” he says. “I think Lithuania could be one of the best places for Tesla to develop its European business.”

Striving for greater international exposure is not without its challenges, however. “We’re working in close co-operation with our ministries of economy and health, but we’re in transition,” says Mr Lukosevicuis. “Moving from a very centralised economy to a capitalistic economy, some traditions remain and people are making a lot of mistakes.”

And Vaidotas Marozas, director of KTU’s biomedical engineering institute, says: “We have a constant need for financial support to keep our young brains here, and not let them go to the UK.”

Mr Lasas believes the Kaunas region has been “kept a secret”, adding: “We need to share more of the success stories happening here, and build upon these good developments. So we need a catalyst for the Lithuanian economy such as investment to help develop our start-ups and our technology. We will do our best.”

Source: fDi Intelligence

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