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Finnish institute VTT adapts to funding cuts

Finland’s largest research institute aims to bolster income and attract scientists

by Alex Scott
August 27, 2018 | A version of this story appeared in Volume 96, Issue 34


Photo of a VTT researcher developing a fiber product at research facilities in Espoo, Finland.
Credit: VTT
VTT's biomaterials pilot facility in Espoo, Finland, is one of the largest of its kind in the Nordic region and is tapping into demand for research on biorefineries.

VTT Technical Research Centre of Finland, the country’s largest applied scientific research institute, with a staff of nearly 2,400, is being squeezed. Despite expertise in hot scientific fields such as biomaterials, biodegradable polymers, and batteries for electric cars, funding from the Finnish government is starting to dry up.

VTT at a glance

Location: Espoo, Finland

Owner: Finnish government

Research focus: Nuclear technology, biomaterials, agrochemicals, electronic materials, and vaccines

Staff: 2,368

Income: $180 million annually, divided about equally between the Finnish government, the EU, and private companies

Projects: More than 2,000 active at any time

Research capacity: 4 million hours of R&D per year

Status:F inland’s only large multitechnology research institute

Challenges: Public funding and recruiting

Until recently, the government was happy to hand VTT $80 million annually, but for the past couple of years, public funding has dropped to just over $60 million. In a second potential problem for VTT—and perhaps a side effect of the funding worries—the organization is struggling to find suitable staff, including senior chemists. Should either problem continue, VTT’s core scientific capability could be jeopardized.

VTT’s managers, though, remain upbeat about continued success for the 76-year-old institute. CEO Antti Vasara, a physicist by training, is pragmatic about the challenges that VTT faces. Stretching back on a low sofa in a café in central Helsinki, he appears unrattled and quickly provides assurances that solutions to these problems may already be in hand. The way VTT responds could even open up new opportunities for the organization, he says.

VTT’s reaction to its funding challenge has been rapid. It has already been able to offset much of the decline in government spending by cultivating contracts with private companies and government agencies around the world. It’s also tapping more into European Union research grants.

In fact, the institute has learned how to become one of the most successful at winning European Union funding for research projects. “We more than tripled our success rate since the year 2000. It is highly competitive, but more than 15% of the applications we make get funded,” Vasara says. VTT’s activity in the past couple of years places it among the 15 most successful applicants for EU research funding, he adds.

While the Finnish government provided close to half of VTT’s funding a few years ago, income is now split about evenly between Finnish government, EU, and private contracts. “It has been a good acid test for our skills. We can match global competition in our selected research areas,” Vasara says.

He senses—but does not know for sure—that government funding will hold steady going forward. “We hope that rock bottom has been hit,” he says.

A substantial share of VTT’s new income from the EU and the private sector is for developing sustainable technologies. Some of the most pressing global problems of the day are climate change and plastic pollution. VTT is well placed to develop solutions in both of these areas by applying knowledge it has built up over decades, Vasara says.

An example is the organization’s deep know-how about turning substances from trees and agriculture, such as cellulose and lignin, into sustainable fuels and materials. VTT is in the running to win a $1 million competition sponsored by the Ellen MacArthur Foundation to develop materials that solve the problem of microplastics in the oceans and elsewhere in the environment. It was already among five organizations to split an initial $1 million.


VTT’s entry, made from forest and agricultural by-products, is a recyclable and compostable cellulose-based film that could replace plastics in food packaging. The film combines two cellulose-based transparent layers that have complementary moisture and gas-barrier properties. Potential applications include foods such as breakfast cereal, coffee, chocolate, and cheese.

“It’s a technology we’ve been developing for 15 years,” says Jussi Manninen, VTT’s head of solutions for natural resources and the environment. “Cellulose loves water; to prevent water uptake is one of the most difficult challenges.”

VTT has also succeeded in attracting companies in food ingredients and pharmaceuticals. Contracts with private companies in the past couple of years led, for example, to the exclusive licensing of a technology to the Fazer Group, a food ingredients firm, for extracting β-glucan, protein, and oil from oats. The technology emerged from a joint study started in 2003 by VTT and Natural Resources Institute Finland to identify functional components of oats.

Science’s evolution from chemists and biologists working in isolation to cooperation among many disciplines plays to VTT’s strengths because the organization has such broad expertise, Vasara claims. An example is electronic devices for medical applications, a field in which VTT can draw on experts in biology, physiology, physical processes, and printed electronics to develop flexible sensors.

Other VTT projects in the electronics field include substrates derived from wood. A potential application of such materials is in displays integrated into bus windows.

In a bid to bring in more money from businesses—and especially from start-ups—VTT has begun offering the use of its pilot-scale facilities for testing new processes in runs of up to 1,000 kg. Projects include polymer production and chemical synthesis, Manninen says.

We don’t want basic-science types but rather those that have been doing science and seeing it applied.
Antti Vasara, CEO, VTT

VTT also plans to create more start-ups of its own. It has introduced about 30 spin-off companies since its inception in 1942.

But technology can move rapidly, especially in areas like information technology and machine learning, and it is in fields such as these that VTT now has a shortage of expert personnel. The institute is also struggling to recruit enough synthetic biologists.

The organization attributes the lack of available talent partly to the failure of universities to develop students with the right skill sets. “We challenge universities to look further ahead and educate people according to what we need 10 years ahead of now,” Vasara says.

He adds that the shortage is most acute for senior scientists. Among the postings on VTT’s website are openings for a scientist for silicon photonics processing, a research manager for smart energy and transport solutions, and a research professor for food production.

Vasara acknowledges that VTT is seeking a relatively rare type of scientist: one with experience in academia and industry who can serve both the institute’s government and private-sector clients. “We don’t want basic-science types but rather those that have been doing science and seeing it applied,” Vasara says.

Located at about the same latitude as Anchorage, Helsinki has brutal winters that might put off some would-be international scientists. This reporter had some trouble sucking in air when it was –19 °C one February in downtown Helsinki.

But Vasara is quick to make his pitch for VTT—and Finland—as a good place to work. “You don’t have to speak Finnish if you work for us,” he says.

And despite its cold winters, Finland has a growing reputation as a good place to live. Earlier this year the United Nations rated the people of Finland—and its immigrants—as the happiest in the world.

Although Finland’s growing status as a good location may help attract talent, it won’t guarantee it. And worryingly for VTT, the EU’s scientific research budget could come under pressure next year when the U.K.—which pays a net $12 billion into the EU every year—exits the region.

While VTT has had success replacing public funding with alternative income, it could find itself having to hunt down more commercial research contracts without a full scientific team at hand.


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