1. (U) Summary: Embassy Tallinn proposes one FY08
project for the Business Facilitation Incentive Fund
(BFIF) to facilitate the participation of three leading
U.S. science and technology parks in the international
innovation conference 'Baltic Dynamics 2008.' This
conference will take place in Tartu, Estonia September
3-5, 2008. It will bring together government, academic
and corporate experts on high-tech research and
development. Post is requesting a total of USD 9,999 in
BFIF funds. End Summary.

A) Justification:

This proposal will support the Department's goals of
investing in people, and promoting economic prosperity.
It will raise the profile of U.S. research and
development institutions at a prominent annual Baltic
event which, for the last eleven years, has attracted
hi-tech researchers predominantly from European
countries. It will assist Estonia's economic goal of
maintaining growth through innovation in key technology
sectors. Lastly, it will further personal networks among
leaders in a variety of hi-tech fields, with the aim of
facilitating bilateral cooperation and investment in
these fields.

Estonia Strives to Innovate -- the U.S. Can Help


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After several years of ten percent or more annual GDP
growth, Estonia's economic growth is slowing. GDP
growth fell to 7 percent in 2007 and is projected lower
in 2008. Government of Estonia (GOE) policy makers
continue to discuss ways to increase Estonian
productivity and sustain growth, including through the
use of innovative and high-tech products. (Reftel B)
The GOE established the Estonian Development Fund in
April 2007, which is helping to fund innovative
companies. It also recently opened an office of
Estonia's trade promotion agency (Enterprise Estonia) in
Silicon Valley.

Although Estonia has an investor-friendly market and is
well-known for its advanced high-tech sector, it is
still very difficult for small Estonian companies to
attract attention in the United States. This is due in
large part to the relatively small size of Estonia's
market, fierce competition, and the need to develop good
personal relationships in order to break into certain
high-tech sectors in Estonia. Bringing key players from
the U.S. high-tech sector to Estonia will go a long way
to facilitate development of these key relationships.

The Baltic Dynamics conference has been held annually
since 1996 to promote the sharing of best practices
among technology parks in Estonia, Latvia and Lithuania.
The host of the conference rotates every year, and 2008
will be Estonia's turn as host. The 2007 conference was
held in Riga, Latvia, and attracted participants from 33
countries, mostly from Europe. A key goal of this
proposal would be to raise the profile of the U.S. at
this event.

Research Triangle Park in North Carolina, the Silicon
Valley U.S. Market Access Center, and the San Jose Bio-
tech Center have confirmed their preliminary interest in
participating in the Tartu innovation conference 'Baltic
Dynamics 2008' from September 3-5, 2008. The host of
this year's conference, Tallinn Technology Park
'Tehnopol', is a relatively new organization, and does
not have the funds to offer to cover travel costs to
attract participants. Therefore, Post is applying for a
BFIF grant of 9,999 USD to fund travel and lodging for
three U.S. participants to the conference. Tehnopol, in
turn, will dedicate a portion of the conference program
to the U.S. representatives for their presentations. In
addition, for the first time in this annual conference,
Tehnopol will arrange for corporate meetings in Tallinn
and Tartu to introduce the U.S. technology parks to a
variety of high-tech business leaders in Estonia.

The GOE, the City of Tallinn, and the Tallinn University
of Technology established Tehnopol in 2003 to support
knowledge-based innovative entrepreneurship and foster
closer cooperation among higher education, the private
sector, and research and development organizations.
Tehnopol has approximately 51,000 square meters of
rental space, 115 mature tenant companies (including
Skype, the internet telephony leader owned by EBay), and
17 start-up companies. The expertise and shared mission
of North Carolina's Research Triangle Park and the
technology parks in San Jose would provide a valuable
model for Estonia's efforts to forge a greater
partnership between industry, government and academia.
The Baltic Dynamics conference would also provide our
U.S. participants with opportunities to identify
promising Estonian start-ups that could work in the
future with U.S. companies.

U.S. participants would arrive in Tallinn on September
1, and would have a full-day program at Tehnopol,
including company meetings, on September 2. They would
leave for Tartu September 2 to attend the conference
September 3-5 and return to Tallinn September 5 in the
evening.

The cost breakdown is as follows:

Airfare approximately 8,400 USD (2,800 USD per person
U.S. government fare -- for three people)

Lodging 1,599 USD (533 USD per person for 2 nights
lodging in Tallinn and 3 nights in Tartu -- for three
people)

B) Planning Milestones:

March 2008: BFIF money is awarded.
April 2008: The names of the participants are
determined; Post coordinates hotel and other logistic
details.
September 2-5, 2008: conference

C) Performance Metrics: Success of the trip will be
based on the level of U.S. participation, the number of
company meetings held, and any partnerships or
collaborative efforts between companies of the Estonian
and U.S. science parks originating from the conference.

D) Estimated Costs: Transportation: USD 8,400, Hotel:
USD 1,599
Total Requested: USD 9,999.

E) Point of Contact: Political/Economic Officer Robert
Hollister, phone: +372-668-8107, fax: 372-668-8259,
email: hollisterrm@state.gov.

F) Leveraging of Funding? Yes, Tehnopol will pay the
costs related to the meetings on September 2, the cost
of local transportation in Tallinn and to Tartu and
back. Tehnopol will also pay all other expenses related
to the conference in Tartu.

G) Outcome/Success Criteria? Yes, see paragraph C
above.

H) Follow-up Strategy: Economic/Commercial/EU FSN will
follow-up with the management of Tehnopol and the
Enterprise Estonia office in Silicon Valley regularly to
facilitate and track success stories. This proposal
will also further Post's Mission Strategic Plan goal of
fostering U.S.-Estonian partnerships in innovation-based
industries (see also Ref B).



2. (U) Post thanks EEB/CBA for consideration of this
proposal.

PHILLIPS