Impulse 2/2011 by Otavamedia OMA

VTT

2. 2011

A MAGAZINE ON SCIENCE, TECHNOLOGY AND BUSINESS

TACKLING THE REASONS BEHIND LIFESTYLE DISEASES P. 20

MORE OUT OF WOOD P. 42

AUTOMATION COMES TO THE AID OF HANDICRAFT P. 72

The road to success SCIENCE

VTT turns science into profitable business. This section of VTT Impulse shows how multidisciplinary research leads to innovations (pp. 20–38).

EDITORIAL

Petri Kalliokoski Executive Vice President, Strategy and Business Development VTT

Finland should create its own business model The global economy has lately been wading in a deep mire of uncertainty, and a heavy fog still lies ahead. This is evident in the plans and investments of businesses. Regardless of this, and fortunately, many companies and industries consider the renewing of business to be important. Change is an opportunity. The clever ones invest in development during challenging times, as new products and services should preferably be ready when growth begins once more. The global economy lives and develops in cycles. One significant trend in the global operating environment is the blurring of borders between traditional industries. New industries are being born, sprouting from in between traditional industries. These industries and businesses are a mixture of new markets, customer and consumer requirements, and new technologies. The development of new, radical technologies is also often a central driving force in a new, innovative way. Promotion of sustainable development is an important background factor for renewal. This is a simple fact, as Earth’s tolerance has its limits. Examples of the development described above include renewable forms of energy, the development of materials technology and its integration into new products, the transformation of ICT’s role into a technology enabling new applications in traditional industries, various industrial biotech and electronics applications, and the utilisation of virtual reality. This results in a lot of upheaval at the boundaries between different industries. Many economies are facing change, and the current industrial fields of business will be transformed. The sometimes painful structural changes in traditional industrial structures are, on the one hand, a requirement but, on the other hand, also an opportunity for creating something new. Know-how does not disappear anywhere; it can be applied in new areas. In Finland, the new, innovative companies based on ICT expertise are an example of this change, engendered by the upheaval in VTT IMPULSE

Nokia’s business, among other things – quite a number of them, actually, considering the challenging economy. The development of new businesses and industries gives Finland an interesting opportunity. The markets are often still developing, and the value networks and the roles of the players have not yet fully developed. Our national expertise can, therefore, be actively involved in the creation of rules for the new industries and the establishment of industrial structures and companies. Finnish research and innovation expertise, combined with a world-class education, lays an excellent foundation for building the businesses of tomorrow. This is made possible by our straightforward, networked and practical ways of working, and the cooperation between the public and private sectors that is advanced even on the global scale. It is also interesting to notice that a strong culture of entrepreneurship is developing in Finland – thanks to the next generation of young students. Could one even consider the possibility that, in the future, Finland will be a place with the special expertise for creating new business and commercialising it together with international partners? Everybody could benefit from a business research, innovation and commercialisation laboratory. This could be the new business model that Finland Ltd now needs. VTT has accepted the challenge of being a major player, the scriptwriter of sequels to the Finnish success story. VTT’s strategy and operating model have been finely tuned to enable the creation of new business, founded on strong scientific and research know-how. A wide technological competence base combined with business savvy, international research and innovation networks and expert staff lays the foundation for successful business, be it the creation of new business together with existing companies or starting up entirely new companies based on expertise. As they say, the best way to predict the future is to create it! 2

VTT Impulse now

2 Meet and greet: Jyri Häkämies 6 In short 9 Column 10 Focal point 12 Research and business hand in hand “Applied research is justified only when it results in applications that can be turned into commercial products.”

Industrial property rights are becoming valuable merchandise. p. 12

SCIENCE

20 Biomarkers aid the early detection of diseases Every year, millions of adults are diagnosed as overweight. Many of them have a heightened risk of cardiovascular diseases and type 2 diabetes. Research Professor, PhD Matej Orešič, VTT

27 Smart Grid – new possibilities from two-way power delivery Power grids need to become smarter to meet the needs of tomorrow’s energy consumption. Telecom technology and user engagement are paving the way to ubiquitous distributed power.

Tapio Rauma, Dr. Tech., Customer Manager, VTT

33 Service and security aspects in security guarding encounters In guarding services, customer experience grows from encounters that involve both security and service aspects. Mervi Murtonen, M.Sc. (Tech.), Senior Scientist, VTT

VTT IMPULSE

T EC H N O LO GY

40 Turn your mobile into a microscope A smart new device by KeepLoop transforms your mobile phone into a microscope.

42 More out of wood Processing multiplies the value of raw wood.

40 The strongest assets of Finnish slow-grown timber are its strength and stability as well as reasonable price.

42 48 EIT ICT Labs â&#x20AC;&#x201C; more innovation through entrepreneurship EIT was founded to promote the continentâ&#x20AC;&#x2122;s sustainable economic growth and competitiveness.

50 Northern winters challenge wind power Ice build-up on the rotors reduces the amount of electricity generated by a wind power plant. Fortunately, this can be prevented automatically.

VTT IMPULSE

BUSINESS

56 Rye becomes a healthy snack Ruisvoima chose the high-fibre rye grain as its main raw material.

58 Boats with soul The sole criteria for buying a boat is no longer utility and filling a purpose.

64 Deinococci – real survivors In 1956 a new strain of bacteria was discovered in a radiated can of meat.

66 Laser precision Veslatec is known as the first importer of a groundbreaking Nd:YAG laser to Finland. Now the search is on for new machining applications.

72 The art of automation in traditional handicraft

Traditional goldsmithing still plays a significant role in the manufacture of jewellery.

VTT on Facebook

VTT Technical Research Centre of Finland is the biggest multitechnological applied research organisation in Northern Europe. VTT provides high-end technol ogy solutions and innovation services. From its w ide knowledge base, VTT combines different technologies, creates new innovations and a substantial range of world class technologies and applied research services thus improving its clients’ competitiveness and competence. Through its international scientific and technology network, VTT can ensure the efficient transfer and utilisation of information and technology.

VTT’s key technology fields Applied materials Bio and chemical processes Energy Information and communication technologies Industrial systems management Microtechnologies and electronics Services and the built environment Business research

VTT Impulse is VTT’s publication on science, technology and business. Published twice a year in Finnish and in English. Publisher: VTT, Vuorimiehentie 5, Espoo, Finland, P.O. Box 1000, FI-02044 VTT. Telephone +358 20 722 111. Editor-in-chief: Olli Ernvall, tel. +358 20 722 6747. Editorial Board: Erkki KM Leppävuori, Jouko Suokas, Anne-Christine Ritschkoff, Kari Larjava, Petri Kalliokoski and Paula Bergqvist. Production: Cocomms Ltd. Layout: MCI Press Oy. Printing house: Edita, Helsinki 2011. Subscriptions and changes in address: paula.bergqvist@vtt.fi. The opinions expressed in this publication are those of the interviewees and do not necessarily reflect the views of VTT. ISSN 1798-0178

VTT IMPULSE

MEET AND GREET | JYRI HÄKÄMIES

Finland – innovation-driven economy Text Paula Bergqvist Photos Kimmo Mäntylä/Lehtikuva

ccording to Jyri Häkämies,

Finnish Minister of Economic Affairs, after tackling the acute debt crisis of the European Union, all attention must be turned to ensuring the competitiveness of Europe. Old tricks will no longer cut it – a whole bunch of new ones must be developed. Growth is one of the three cornerstones of the present government’s programme. “Everything depends on how well we can manage to boost the growth of companies. The creation of new innovations and development of competence is very much emphasised,” says Jyri Häkämies. The Ministry’s toolbox for supporting the growth and development of business includes tools such as the Finnish Funding Agency for Technology and Innovation Tekes and VTT. 2

The minister believes that Finland, as a strong expert in digital technology, will develop intelligent solutions, for example for healthcare systems. “Improving productivity requires a major change in our ways of working. ICT technology has a lot to give in this respect.” Goal: leading country in clean technology

Finland aims to be among the leading countries in clean technologies. The global growth of environmental business will be strong in the near future – especially in the fields of energy efficiency, water supply and sewerage, and electricity production. Häkämies predicts that Finland has a ringside seat and an opportunity of being at the forefront of growth areas: clean technology business can help tackle the world’s great challenges. “Finland has strong expertise and global networks. The question is how can we refine VTT IMPULSE

”Everything depends on how well we can boost the growth of companies,” says Jyri Häkämies.

Jyri Häkämies Jyri Häkämies is the Minister of Economic Affairs in Jyrki Katainen’s cabinet. He has previously held the posts of Minister of Defence and has been chair and deputy chair of the National Coalition Party’s parliamentary group. He was first elected a Member of the Parliament in 1999.

VTT IMPULSE

our know-how into products, creating business, products, services and competitiveness? Our goal must be to become a globally leading country in clean technologies, no more and no less,” says Jyri Häkämies. The challenges of growing market areas that are important to Finland, such as Brazil, China, India and Russia, are related to environmental issues and sustainable development. “The markets are huge, and these countries could use Finnish environmental technology and the ability to efficiently utilise raw mate rials and to design smarter and more highly refined products.” These countries also provide an opportunity, under a partnership principle, to develop new applications locally that could be taken to similar markets elsewhere in the world. Innovation from wood?

Jyri Häkämies has faith in the growth potential of timber construction. “Instead of reorganising the forestry industry, we could look for success by making something much more than just planks out of wood. However, the growth 4

of timber construction requires willingness and cooperation from many parties – researchers, designers, builders and decision-makers. In addition to new openings by the forest industry such as the use of forests for bioenergy, printed intelligence, and packaging and nanocellulose technologies, traditional mechanical forest industry also has a lot to give.” According to Häkämies, marketing Finnish timber construction now requires good ‘calling cards’, and he wonders whether such will be seen in time on the Otaniemi campus, where VTT and the Aalto University operate. Häkämies is satisfied with VTT’s new innovations and technology policies, separately mentioning the entrepreneurship of the students at the Aalto University: “There is a radical student movement there that does not go on marches but founds companies.” “In the future, minerals will play a more crucial role, making the mining industry increasingly important for Finland.” Häkämies hopes to see music become a new future growth business. He advises imitating Sweden. “Music is an important industry for VTT IMPULSE

Our goal must be to become a globally leading country in clean technologies.

the national economy, also creating other business on the side. Nor must we forget Finland’s rising games industry as a calling card.” Are business angels required?

In the Global Competitiveness Report of the World Economic Forum, Finland rose to the fourth place from last year’s seventh place. This is, among other things, due to the efficiency of the labour market. Our position was also top grade in education and innovations. Jyri Häkämies assures that the government will develop business angel or R&D incentives, if the wage trend remains within its framework. “Our capital is limited; we need more foreign capital. However, it is worthwhile investing in Finland,” says Häkämies. Finland has fared well in company environment measurements: the economy of our country is predictable, and its government has not become corrupted. “Finns are honest and fair. We invest in developing competencies. We are known for keeping to what we have agreed.” One’s success does not detract from others

Jyri Häkämies does, however, call for a more encouraging atmosphere for the Finnish organisational culture. He cites the philosopher Pekka Himanen, who has said that success does not detract anything from others; instead it means more for everyone. “In the same vein, neither is the success of a company taking anything away from others. We must develop an operating environment in which success breeds more success. We must therefore support entrepreneurial activities,” Häkämies reminds us. n VTT IMPULSE

Technology to help healthcare IN ADDITION TO the competiveness of companies, Minister of Economic Affairs Jyri Häkämies considers the aging population to be a challenge. “We not only need nursing staff but also new wellbeing technology. One of the key issues of future success is how to support elderly people living in their own homes. We will be in deep trouble if we have to find a place at institutions for everyone,” he says. The care structure and needs of the future must be anticipated. This means that there is demand for services produced by research organisations developing effective but humane care solutions, such as VTT, that is constantly developing, for example, applications and new solutions related to geriatric care. Häkämies is also concerned about the healthcare of the citizens, and its costs. “The estimates on the proliferation of, for example, adult-onset diabetes, are hair-raising. We are aware of all of the prognoses, but we still haven’t really got our act together. How can we lengthen working careers, if today’s fifteen-year-olds cannot cope in working life past the age of 55?”

IN SHORT

MEDICINE

LISÄTIETOJA: YANG YUNFENG, YUNFENG.YANG@VTT.FI

Vaccination for pollen allergy desensitisation FURTHER INFORMATION: HANS SÖDERLUND, HANS.SODERLUND@VTT.FI

THE FINNISH COMPANY Desentum is further refining a technology developed at VTT, enabling the production of next-generation allergy vaccines. The technology is based on using genetic engineering to modify the structure of the allergen, a protein causing an allergic reaction, so that it causes fewer symptoms than the original allergen but acts as desensitisation. In this way, the system can develop immunity to the allergen, reducing the symptoms. The final goal is to produce a suckable tablet. 6

A scientific breakthrough jointly achieved by VTT, Helsinki University Central Hospital’s Skin and Allergy Hospital and the University of Eastern Finland three years ago concerns the background to this research. The researchers then determined how the allergen and the IgE-class antibody bond together. They were the first to show an accurate 3D structure of the bond, which proved to be different from what had been assumed.

VTT IMPULSE

MEDICINE

Siemens and VTT to improve industrial information security FURTHER INFORMATION: MATTI MANTERE, MATTI.MANTERE@VTT.FI

SIEMENS AND VTT are beginning joint development of the information security of Finnish industry. In the future, Siemens can offer VTT’s information security analysis as part of its industrial services. In its analysis, VTT will utilise the systems know-how of Siemens experts when necessary. The analysis comprises an extensive study of the level of information security at a production facility, for example, user management, backup copying and network security.

Earlier Alzheimer’s diagnosis

MEDICINE FURTHER INFORMATION: JYRKI LÖTJÖNEN, JYRKI.LOTJONEN@VTT.FI

Finnish twin study sheds light on the causes of obesity FURTHER INFORMATION: MATEJ OREŠIČ, MATEJ.ORESIC@VTT.FI

A STUDY LED by VTT’s Research Professor, Matej Orešič, shows that the adaptation of the cell membranes of the body’s fat cells to obesity is pivotal in the development of inflammatory disorders. Many obese people suffer from a disorder called metabolic syndrome. They also have an elevated risk of contracting cardiovascular diseases and type 2 diabetes. Higher concentrations of phospholipids containing certain polyunsaturated fatty acids were found in the fatty tissue of obese people than in those of their normal-weight twins. These surprising changes in the fatty tissue counterbalanced each other, so that the mobility of the cell membrane remained unchanged. This may be the system’s way of adapting the functioning of the cell membranes in response to the strong growth of fat cells. However, with the morbidly obese, this mechanism no longer functions. When the effect of the Elovl6 gene, coding the length of a fatty acid chain, was suppressed, the cells could no longer adapt their lipid composition to the same extent. VTT IMPULSE

MAJOR STEPS HAVE been taken in Europe in the research into an earlier diagnosis of Alzheimer’s disease. Researchers have developed new methods for identifying the disease and new kind of computer software for combining the data. The software enables an objective determination of the patient’s condition. An early diagnosis combined with new treatments will reduce suffering in the future and lower the costs to society. In the EU-funded PredictAD project, objective and effective solutions are developed for earlier diagnosis of Alzheimer’s disease. The diagnosis requires a holistic study of the patient’s status, combining data from, for example, clinical tests, brain images and blood samples.

TECHNOLOGY

VTT tests mass production of printed memory FURTHER INFORMATION: ARI ALASTALO, ARI.ALASTALO@VTT.FI

VTT HAS TESTED the mass production of printed memory technology by manufacturing one thousand voting cards using the roll-to-roll printing method. The cards were used at the Printed Electronics Europe 2011 conference in the selection of the trade show’s best entries. The card was implemented in cooperation with Stora Enso, Enfucell and ANP. The test is part of the PriMeBits-EU research project, which has the key idea of utilising printing technology in products, where printed electronics would be a more competitive alternative than traditional methods.

IN SHORT

CONSTRUCTION

TECHNOLOGY

New residential areas can be made practically emission-free FURTHER INFORMATION: JYRI NIEMINEN, JYRI.NIEMINEN@VTT.FI

ACCORDING TO A study by VTT, building regulations and area-level energy solutions have a high impact on a residential area’s greenhouse gas emissions. These emissions can be reduced by as much as 80 per cent compared to those of a regular suburb. However, a solution covering the entire area is required for this. If a nearly zero-energy area is built in accordance with the EU directive, and if the costs of the rest of the infrastructure remain unchanged, the costs compared to a regular residential area will be around one tenth higher. Building regulations aiming at minimising emissions will change Finland’s current construction practices by the year 2020. MEDICINE

Researchers are searching for new cancer medicines among marine fungi FURTHER INFORMATION: MARILYN G. WIEBE, MARILYN.WIEBE@VTT.FI

THE EU’S MARINE Fungi research project is investigating the possibilities of utilising compounds produced by marine fungi as cancer medicines. The project is assessing whether certain known compounds produced by strains of fungi and currently little known tropical coral reef fungi, Pacific macroalgae and Mediterranean bath sponges, could be utilised as cancer medicines. One goal is to develop sustainable and wide-scale production of natural marine products in a laboratory. This would avoid the environmental issues caused by the harvesting of these compounds from nature. VTT’s task in the project is to develop the cultivation technology of the fungi. 8

VTT part of Silicon Valley top biotech research FURTHER INFORMATION: ANNE-CHRISTINE RITSCHKOFF, ANNE-CHRISTINE.RITSCHKOFF@VTT.FI

VTT AND THE top US research centre MSI Molecular Sciences Institute have combined their specialist know-how in biotech and founded a research institute in Berkeley, California, to promote health and wellbeing and to facilitate the creation of new business. VTT/MSI Molecular Sciences Institute creates the basic know-how for the understanding of individual microbe cells and the groundwork for the efficient production of bio-based chemicals, fuels and proteins using industrial microbes. Additionally, the research institute is developing sensitive analysis methods, for example for detecting chemicals or biomarkers heralding illnesses. The research institute was inaugurated at the end of October at the Berkeley Art Museum. The event’s main speaker was Professor Sydney Brenner, winner of the Nobel Prize in Medicine. MEDICINE

New mechanism inhibiting the spread and growth of cancer found in motile cells FURTHER INFORMATION: JOHANNA IVASKA, JOHANNA.IVASKA@VTT.FI

RESEARCHERS AT VTT and the University of Turku have disproved an earlier notion according to which cells regulate their movement and growth by means of different mechanisms. Anja Mai and Stefan Veltel, who researched the spread of breast cancer on Professor Johanna Ivaska’s research team, showed that a single cell protein (p120RasGAP) acts as an important inhibitor of both the cells’ movement and growth. Uncontrolled growth and the ability to metastasise are typical of cancer cells. The new findings now show that the regulation of these two deadly traits in cells is interconnected in a new way, which may be an important piece of information in the future development of medicines. VTT IMPULSE

COLUMN

Olli Ernvall Editor-in-chief VTT Impulse

In an innovation economy, uncertainty creates opportunities Risk-taking is more challenging when the economy is going down the drain and recession is knocking at the door. When the economy is on the up and the outlook of the global market is steady, decisions are easy to make. During an economic downturn, many companies cut their costs and reduce their financial risks, forgetting that it is precisely when the times are unstable that the opportunities of profiting from innovations are at their highest. The innovation economy involves risk-taking, where uncertain outlooks create growth potential for new methodologies, products and services. Companies that are able to see the future and have a risk-taking capability can multiply the profitability of their business or the market value of their product. A strong balance sheet combined with the desire to develop business results in weaker competitors ending up in an even tighter position or possibly exiting the market. Anticipating the economy, consumers and market development, adopting new technologies, new services and methodologies, and so-

VTT IMPULSE

called foresight knowledge are the key to success in an innovation economy. Finland, like all national economies of the EU, has to solve the problems relating to sufficiency of capital. The increasing debt in the Mediterranean countries threatens to dismantle the economy built around a previously strong Euro. It is understandable that strong national economies built on expertise and technology export, such as Germanyâ&#x20AC;&#x2122;s and Finlandâ&#x20AC;&#x2122;s, will suffer from the unstable economic development of the Euro and the increasing debt of the Mediterranean countries. Prudence impedes growth. Before the problem with the increasing debts of the Euro countries is solved, it will be reflected in the economies of all OECD countries. After all, the question is ultimately about both political and economic trust. Were one to possess a solution to the economic problem, it would be worthwhile divulging it. This would build stability and trust. As we all well know, prediction is very difficult, especially about the future.

FOCAL POINT | ANDREAS HAFNER

New direction for the chemical industry Text Antti J. Lagus Photos VTT and BASF AG

he new member of VTT’s

Scientific Advisory Board, Doctor of Chemistry and Senior R&D Manager for Science and Innovation at BASF Switzerland, Andreas Hafner, has been working closely with VTT for eight years. “We began cooperation in 2003 in the field of printed electronics. At that time, we focused on inks and processes. VTT is a globally well-known competence centre in roll-to-roll printing. In addition to pure, organic electronics, hybrid technologies are important to us. That is why we also cooperate with partners excelling in silicon-based production techniques,” says Hafner.

VTT IMPULSE

The Finnish innovation system shares a lot of similarities with the Swiss system, with which Hafner is closely familiar. According to Hafner, this has made cooperation with VTT easier. “Personal cooperation between research scientists can counterbalance and speed up the inertia of, for example, major EU projects, and this has enabled us to operate effectively in small teams. It’s also given us a good feel for what’s worthwhile pressing forward with in terms of research.” Hafner has worked with industrial innovations for a quarter of a century, and now acts as a scientific expert on VTT’s Scientific Advisory Board. Among other things, the board looks into what megatrends exist around the world and how VTT’s technology and innovations could help solve problems arising from them. For instance, the ever-growing world population, climate problems and developing markets all have a certain impact on the technological tools required. Hafner reminds us that without modern fertilisers, modern agriculture and feeding the world’s population would not be possible. The growing role of energy technology

Only a decade ago, public opinion considered the chemical industry as a source of problems rather than a provider of solutions. Now, opinions have changed. Hafner uses his own company, BASF, as an example. The company’s production facilities are located close to central Basel, where environmentally friendly and sustainable operations are the only choice. According to Hafner, this is evident in the case of the Rhine, which originates in Switzerland, becoming cleaner. “The chemical industry has put a lot of effort into cleaning its wastewaters, refining its processes and saving energy. This has not only been good for the environment, but for business as well.” According to Hafner, energy technology will become increasingly important for the chemical industry, too. For example, in order for the environmentally friendly electric car to become commonplace, new methods of storing energy are needed. OLED displays and self-illuminating screens and lightboards are examples of the chemical industry’s contribution to the development of energy-saving OLED systems.

VTT IMPULSE

Andreas Hafner

Focus on sustainability

• Doctor of Philosophy, University of Zurich, 1986 • Winner of the Werner Prize of the Swiss Chemical Society, 1994 • “Technology Entrepreneur Diploma”, Executive School of Management, University of St. Gallen, 2010 • Ciba Specialty Chemicals, Research Director, 2002–2008 • BASF Schweiz AG, Senior R&D Manager, Science and Innovation, Switzerland, 2009–

BASF dedicates over one third of its entire research budget to energy efficiency, climate protection, resource conservation and renewable raw materials. In 2009, BASF acquired Ciba Specialty Chemicals, where Hafner acted as Research Director of a strategic research unit in charge of keeping track of emerging innovations. A major focus was on printed organic electronics, which Hafner considers a technology with considerable impact potential. At BASF, Hafner is responsible for assessing the potential of emerging technologies for the chemical industry. When Hafner first began working with VTT, getting organic electronics on the market seemed to many to be a distant dream. Now, OLED displays have found their way into mobile devices, and the first organic solar cells are poised for the market. Specialty electronics solutions are familiar to BASF from many products. Hafner believes that in the future, they will have a large impact, for example in lighting development. His view is that in organic electronics it is important to be able to offer solutions instead of individual components. Mere components do not necessarily work, and investments made in them are difficult to recoup. Effective cooperation is required, which, for Hafner, means the entire value chain from research to end use. n

VTT IMPULSE

Research and business hand in hand A business plan is becoming commonplace as a pivotal part of the research plan. Text Marianna Salin Photos iStockphoto, VTT

hen Nortel

and Motorola patents moved to new owners this summer, hardly anyone was expecting any dramatic new products as a result. The IT giants wanted to be protected by patents and free to operate in a highly patented market. When everyone has a big portfolio, licences and breaches are just pawns in the game. The news was that reaching this equilibrium cost billions.

VTT IMPULSE

â&#x20AC;&#x153;Intellectual property rights are becoming valuable merchandise, and investing in them is a growing trend. Patents will be a significant form of property in the future,â&#x20AC;? explains Executive Vice President, Strategy & Business Development Petri Kalliokoski from VTT. There are now companies that primarily do business in patents and licences and the funds that invest in these. Showcasing the best ideas

For VTT, intellectual property rights are clearly products. VTT transfers them to clients who com-

mission research projects, but it also has 1200 patents of its own. Nearly a hundred new patents are applied for and received every year. But what kind of patents? “Applied research is justified only if it results in applications that can be seen to be of benefit and that can be turned into commercial products,” says Kalliokoski. Kalliokoski makes their patent portfolio sound like a bustling marketplace, but this was not always the case. In recent years, the organisation has been revamped so that the people who commercialise patents have a more direct link to where the idea originated. “Linear research processes will soon be a thing of the past. We want to be the pioneer in combining basic research, applied research and commercialisation. When we devise a research plan, we also make a business plan,” explains Kalliokoski. 14

Experts in new business try to make sure that the most commercially interesting ideas are picked up early and refined into inventions. This is why they maintain close connections with research projects and encourage researchers to share their observations.

VTT IMPULSE

When we devise a research plan, we also make a business plan.

Ready to spin off IN THE FIELD of touch screen development the first wave of initial excitement has levelled off, and manufacturers in the rapidly growing market are now attracting customers with low prices. VTT researchers have been inspired by this price war. They not only improved the old manufacturing process but combined two technologies known to them from other applications: plastic injection moulding and printed electronics. Components can be printed on a flexible plastic film which is then embedded in plastic, e.g. the plastic casing of a product. “We can make long-lasting parts and rounded shapes cheaply,” says Juha Salo, the CEO of TactoTek. He expects that this VTT patented technology will have a 10% market share in five years. “We are talking about a turnover of hundreds of millions of euros,” he points out. Hot market fascinates The roots of TactoTek lie in a customer project at VTT four years ago. The project was about developing optical features for touch screens. Antti Keränen, Senior Research Scientist at VTT, and his colleagues took a sidestep and became interested in the manufacturing processes. They got a slice of VTT’s own project and a chance to try their own ideas in practice. Commercial opportunities were already being investigated in 2008. ”My background is in theoretical physics and I have never been involved in industry. I’m more of a philosopher than a businessman,” Keränen laughs. As it turned out, this philosopher became enthusiastic about the same things that entrepreneurs tend to be: ”The market is hot, large and very competitive.” Salo started in VTT’s Entrepreneur in Residence programme last February and began to acquaint himself with the commercial opportunities of the idea. He

VTT IMPULSE

brought with him his experience as a researcher, product developer and business developer at Nokia. Licensing or manufacturing In May Juha Salo, Antti Keränen and Mikko Heikkinen, Research Scientist at VTT, founded TactoTek and received investments from the spin-off business development company VTT Ventures. A prototype is now being produced to convince future investors. After the first production line is operational, there will be several possible future directions. TactoTek can manufacture screens at their own plants near customers and even at the customer’s premises, or alternatively build and license production lines to be operated by the customer. ”We get all parts of the production line from a ‘line shop’. We just tailor and scale,” states Keränen. An essential condition for TactoTek’s success is that the company has exclusive rights to the invention. The most important patents have already been acquired. All in all they are after a package of five patents. However, Keränen is still pondering how the patents can be broken and what competitors might patent, if TactoTek does not do it. This is one aspect that separates an innovator from an ordinary inventor.

TactoTek has set its sights on the touch screen market which is currently valued at USD 8 billion. TactoTek uses manufacturing methods for printed electronics in order to develop and manufacture touch panels based on FTIR technology with lower costs than at present. The market is expected to extend from mobile phones and tablets to other consumer electronics and industrial applications.

The cutting edge of innovations

Significant business opportunities may be brewing up amongst research commissioned by clients, or, equally, amongst VTT’s own research on which it spends nearly EUR 200 million per year. The product range includes patents, licences and even newly founded businesses. Intellectual property rights are often commercialised through the customers themselves. “Our main target is to turn technology into business and get the best yield from an invention. The way we achieve this is unimportant,” says Howard Rupprecht, who has led the new business development and intellectual property rights team at VTT since last spring. Before this, he focused on sales, marketing and business development of electronics companies in Silicon Valley. According to Rupprecht, it is likely that in future most companies will not only produce their own innovations, but will also use technologies created in other companies, universities or research institutions. Collaboration with

technology leaders will become increasingly important and will ultimately raise VTT’s profile on the international stage. Rupprecht admits that location matters and consequently it is important that customers have a very good reason to engage in research in Finland. “And technology leadership provides that reason. We need to focus on key areas that we are truly world class in.” Some of VTT’s key areas are biomaterials, printed electronics, and environmental technologies related to water and waste management. Choosing tomorrow’s winners

Five years ago, VTT started to pick out ideas that could work best independently as the starting point for a new company, and VTT Ventures was created to develop spin-off companies. Now its portfolio consists of 20 businesses in areas such as electronics, IT and biotechnology.

VTT IMPULSE

Patents will be a significant form of property in the future.

“The aim is to create 3–5 new companies every year,” explains VTT Ventures CEO Antti Sinisalo. Ideas usually travel through VTT’s internal development projects to the point where an external entrepreneur takes a few months’ stint at VTT. This person will research the market and compile a business plan. If the idea is watertight and they are willing to take the risk, the entrepreneur and the inventor found a company. After this, VTT provides the seed funding. “The technology risk can be managed VTT IMPULSE

if it seems that we can enter the market in two or three years with reasonable further development.” Circulating experts and patents

VTT Ventures supports newly founded companies in their search for investors. Both private and public capital investment funds and angel investors have invested in its companies. Two companies have already moved beyond VTT Ventures. As inventions move on, so do the inventors, but Sinisalo sees this as part of a natural process. He wouldn’t be surprised to see some passionate inventor one day return to VTT after giving a good start to his or her own innovation. “At that point that person will bring in their invaluable experience.” n 17

Israel – a model country for commercialisation ISRAEL DOES NOT really have natural resources or a domestic market for technology, and a state of war is a rule, not an exception. Yet Israel is known as a nation where start-up companies appear almost as frequently as in Silicon Valley; even more frequently according to some estimates. NASDAQ lists over a hundred Israeli companies. Tami Kfir, a consultant for technology companies, has taken part in the innovation boom in Israel since the beginning of the 1990s. She offers culture as one explanation for the success. ”We don’t settle for the status quo, but always try to come up with ways to do something differently and more creatively. We don’t study by repeating things, but by asking and studying the answers of the previous generation and creating our own.” Solid base An industry specialised in security technology completes the formula for success. It is a field many get to know during national service. When the military reduced their staff in the early 1990s, medical and IT experts moved to corporate life. At the same time the country experienced an influx of Russians who brought with them expertise in natural sciences and technology. ”Furthermore, the government also started handing out substantial grants and a public incubator programme was founded. These programmes are still functioning and they are largely privatised,” states Kfir. According to her, universities have also managed to see the transfer of technology as true business, and indeed substantial revenues are generated by Universities from their new technologies. She was able to take part in this herself in the early years of the millennium when she held the position of VP at Yissum, the technology transfer company of the Hebrew University of Jerusalem. ”A researcher might come on their own initiative and talk about intellectual property rights. If, however, the researcher wasn’t very focused, we would work together to find the focus.” Learning from high-flyers Innovators with a strong base awoke the attention of international sponsors. More venture capital flowed into the country than elsewhere, and international IT companies, such as Intel and Microsoft, founded their own research centres in the country. ”The high-flyers became more successful and they became mentors and serial entrepreneurs.” However,

Tamir Kfir • specialises in licensing along with fund raising and developing the business operations of technology companies • is the founder and CEO of BP&C Consulting Group that advises technology companies with regard to life sciences • manages Israel at Landes Bioscience Investments, an investment company specialising in life sciences • is a Venture Partner at Infinity Group, an investment group specialising in commercialising Israeli technologies in China • is a member of the board of several public and private companies

according to Tami Kfir there has also been a shortage of venture capitalists in Israel in recent years. ”It is the turn of angel investors,” she states without complaining. The government is on top of things again: A tax relief for business angels has been passed this year along with the creation of biotechnology funds for which the government guarantees to contribute a share, if private parties do the same. Creativity in finance Kfir emphasises that creativity is needed at every stage of innovation, including commercialisation. ”For example, I’m naturally inspired by technology, but most of all by finance. I’m an entrepreneur myself and ready to jump onboard depending on the situation.” It is no wonder that Kfir is again where the action is, in China, creating an incubator for Israeli technology. Although Kfir has extensive experience in licensing, she doesn’t offer rules of thumb. ”Things are always dependent on the market and products, but also on the ego. Some want to see themselves in a big company, others don’t.”

VTT IMPULSE

SCIENCE

Pages

20–38 VTT IMPULSE – SCIENCE

EE NCE S CS I ECNI C

Text: Matej Orešič

Biomarkers aid the early detection of diseases Obesity is a known health risk, but the mechanisms by which it leads to its metabolic comorbidities are poorly understood. There is a great clinical need for finding early molecular markers for pathophysiological mechanisms leading to e.g. diabetes mellitus.

ach year, millions of adults worldwide are diagnosed as obese. Obesity is characterised by excess body fat, which is stored predominantly in the adipose tissue. Many obese people suffer from a disorder known as metabolic syndrome, which includes symptoms such as hypertension and elevated blood cholesterol. They are also at risk of developing additional diseases, such as heart disease and diabetes mellitus. Mechanisms poorly understood Obesity may, in fact, be a major cause of all these problems, but there is generally little understanding of the mechanisms by which obesity leads to its metabolic comorbidities. These include such specific mechanisms as insulin resistance and diabetes mellitus. Recent research points to adipose tissue as a key target in preventing and treating obesityrelated complications. One attractive hypothesis, supported by the growing evidence from 20

clinical as well as experimental model studies, is “adipose tissue expandability”. Adipose tissue capacity is key This hypothesis states that obesity-associated metabolic complications are caused by the limited capacity of adipose tissue to expand and therefore store energy. If this limit of expansion is reached, the overflow of lipids leads to their deposition ectopically, resulting in potentially toxic effects in peripheral tissues via the excessive accumulation of lipotoxic or pro-inflammatory lipid species such as ceramides. The capacity of an individual’s adipose tissue may depend on genetic and environmental factors. While epidemiological studies suggest that there is a near linear relationship between body weight and the risk of diabetes mellitus, as measured e.g. by a degree of insulin resistance, such an association may in fact be due to the “averaging effect” across a large population. VTT IMPULSE – SCIENCE

In search of early disease biomarkers A biomarker, or biological marker, is in general a substance used as an indicator of a biological state. It is a characteristic that is objectively measured and evaluated as an indicator of normal biological processes, pathogenic processes, or pharmacologic responses to a therapeutic intervention. In a traditional epidemiological setting, molecular biomarkers are associated with specific clinical end-points. Such markers may perform well statistically in a large population setting, but may hold little value when applied to individuals. At the individual level the adipose tissue expandability hypothesis would suggest that there is a threshold for body weight, dependent on the individual’s adipose tissue capacity. Reaching of the threshold would then be accompanied by a notable decrease of insulin sensitivity.

When averaging over a population, increase of body weight would associate linearly with lower insulin sensitivity. Information about the individual threshold is, however, lost in a population-wide analysis. This has important implications when considering early risk biomarkers of obesity -associated metabolic complications. While body weight is a well-established risk factor for diabetes, at an individual level it has very little predictive diagnostic value. Biomarkers should instead be sensitive to the pathophysiological mechanisms leading to obesity-related complications. For example, a marker sensitive to the status of adipose tissue may be able to detect an individual’s proximity to his capacity for storing lipids, and thus his exposure to a higher risk of developing metabolic complications.

Figure 1. A systems approach is needed to detect biomarkers in the personalised setting. In the traditional epidemiological setting (A), molecular biomarkers may perform well statistically, but hold little value for individuals. A systems approach (B) seeks biomarkers for specific pathophysiological processes to help detect early processes leading to the disease in an individual.

VTT IMPULSE – SCIENCE

SCIENCE

Adipose tissue is key to preventing obesity-related complications.

File: Matej Orešič

Looking for liver fat markers Liver is another key organ associated with diabetes risk. According to a recent study by The European Association for the Study of the Liver, based on current trends of incidence non-alcoholic fatty liver disease (NAFLD) may affect 50% of all US adults by 2030. NAFLD, characterised by deposits of fat in the liver, mainly in the form of triglycerides, is a major risk factor leading to chronic liver disease and liver failure. In addition, liver fat is a major determinant of metabolic syndrome. There is currently no non-invasive test applicable to the health care setting for determining a patient’s liver fat. Liver fat is usually determined by histology or estimated by magnetic resonance spectroscopy. The former, requiring a liver biopsy, is highly invasive and only applied in the case of chronic liver conditions. The latter may be too expensive for health care screening purposes. There is therefore a great clinical need for the establishment of molecular markers sensitive to the amount of liver fat. Such markers could be applied for screening of patients, as well as in clinical trials aimed at treating obesity-related complications. Need for systems approach There is a need for a paradigm shift away from the search for early disease biomarkers in the epidemiological setting. Using a systems approach, the search should focus on finding molecular biomarkers of “intermediate phenotypes” reflecting the pathophysiological mechanisms behind the processes leading from obesity towards its complications, such as diabetes mellitus. 22

This will not only establish more powerful markers practicable in the personalised health care setting, but also provide powerful tools for detecting persons at risk much earlier than is currently possible. In the studies of adipose tissue, significant advances have recently been made by VTT researchers in collaboration with the Finnish Twin Cohort, Tampere University of Technology and the University of Cambridge. The team used mass spectrometry based lipidomics, a comprehensive strategy for profiling molecular lipids, to study the fat tissue biopsies among several sets of monozygotic twins. In each twin pair, one twin was obese but metabolically compensated (i.e. “healthy obese”), while the other twin exhibited normal weight. Because monozygotic twins share the same DNA and early upbringing, the impact of these factors on adult body mass phenotypes is accounted for, leaving other factors such as adult diet and lifestyle choices as the major variables. New insights from twin study When dietary intake was compared within twin sets, the obese twins were found to have lower amounts of polyunsaturated fatty acids in their diets than did their non-obese counterparts. Unexpectedly, the obese people had higher amounts of membrane lipids containing polyunsaturated fatty acids in their adipose tissues than did their non-obese twins. This finding is important because cell membranes are primarily composed of lipids, and different lipids can alter a membrane’s physical properties, such as fluidity and thickness.

Professor Matej Orešič holds a PhD in biophysics from Cornell University. Since 2003 he has led the research in the domains of quantitative biology and bioinformatics at VTT, where he is a Research Professor in Systems Biology and Bioinformatics. Orešič is the director of the newly established Finnish Centre of Excellence in Molecular Systems Immunology and Physiology Research (2012–2017). He is also a co-founder and board member of Zora Biosciences Oy and current board member of the Metabolomics Society. Prior to joining VTT, Orešič was the head of computational biology and modelling at Boston-based Beyond Genomics, Inc. and bioinformatician at LION Bioscience Research in Cambridge, MA.

VTT IMPULSE – SCIENCE

Figure 2. Model of physiological regulation of lipid membrane composition in obesity. Reproduced under the terms of the Creative Commons Attribution Licence from PietilĂ¤inen et al., PLoS Biol. (2011).

A new approach was then introduced to model lipidomics data from membrane lipids by comprehensive molecular dynamics simulations. The computer modelling of lipid membranes indicated that the new lipids observed in the cells of the obese twins balanced each other in such a way that overall membrane fluidity was unaffected. The results therefore suggest that lipidcontent changes in obese individuals might actually be an adaptation that serves to preserve membrane function as the cells expand. Additional analyses suggested that this adaptation can only go so far, and breaks down in the morbidly obese. Membrane lipids a possible marker of diabetes risk Furthermore, elucidation of the adaptive mechanism for maintaining membrane function in growing adipocytes also provides a clue to the potential new targets for preventing or treating obesity-related complications.

In the same twin study, statistical network analysis was applied to attempt to identify the regulatory mechanisms underpinning the adaptive changes. The analysis found that the gene encoding the fatty acid elongase Elovl6 might be involved in fatty acid remodelling in obese people. This finding was further validated in vitro. When Elovl6 was silenced in an adipocyte cell line, the cells could no longer maintain the right level of the adaptive lipids observed in obese twins. In summary, the study described above revealed how lipid membranes of adipocytes remodel to maintain normal membrane function in metabolically compensated individuals, and how this adaptation breaks down in individuals characterised by metabolic complications of obesity. Adipocyte membranes may hold answers to the early pathophysiological processes leading to diabetes. Consequently, measurement of adipose tissue membrane lipids or their Âcorrelates from serum could provide powerful

The adaptation that serves to preserve membrane function can only go so far.

VTT IMPULSE â&#x20AC;&#x201C; SCIENCE

SCIENCE

early markers of diabetes risk, applicable in the personalised health care setting. The study may also help to explain why obese people are at risk of developing inflammatory disorders such as diabetes mellitus: the kinds of lipids that accumulate in the adipocytes of obese people are precursors for compounds that are known to aggravate the immune system. Furthermore, the study suggests that the lipid network controlling lipid membrane remodelling is amenable to genetic or therapeutic modulation. If small molecules can modulate this network to control both membrane functional maintenance as well as vulnerability to inflammation, new opportunities may arise for the prevention or treatment of obesity-related metabolic complications. Beyond metabolic complications In epidemiological studies, obesity has been associated with higher risk of many major diseases other than diabetes mellitus. Several cancers, Alzheimer’s disease and specific psychiatric disorders are among those on the list. Such studies do not demonstrate a causal link between obesity and other major diseases, but instead indicate that metabolic disturbances associated with obesity may, in fact, play a pathogenic role in these diseases. Identification of such metabolic disturbances may therefore help in disease prediction as well as point to novel therapeutic avenues. VTT researchers have studied, for example, the lipidomic profiles in breast cancer tissue. Specific phospholipids related to cellular fatty acid synthesis, representing the same pathways

Metabolic dysfunctions may cause cancer and certain psychiatric disorders.

as observed in obese twins, were associated with cancer progression and patient survival. Follow-up in vitro studies, including gene silencing, identified several lipid metabolism genes behind the observed lipid changes in tumours. The findings imply that phospholipids may have diagnostic potential, and that modulation of their metabolism may provide new therapeutic opportunities in breast cancer treatment. Association of obesity with psychotic disorders is another domain of increased research interest, both for its therapeutic and diagnostic opportunities. Schizophrenia and other psychotic disorders are a major public health challenge because of their severity and prevalence. Schizophrenia and other psychotic disorders are associated with medical comorbidity – two to four-fold risk of premature death from medical diseases – particularly from cardiovascular diseases. Unhealthy lifestyle, medication side effects, and poor quality of medical treatment are major causes of excess morbidity and mortality. However, some changes, such as abnormal glucose tolerance and hyperinsulinemia, are found already in first-episode, drug-naive patients, suggesting that the increased medical morbidity may partly be caused by the disease process itself. A recent study performed by VTT researchers in collaboration with the Finnish National Institute for Health and Welfare revealed metabolic abnormalities that are associated specifically with schizophrenia, as opposed to other psychotic disorders. The team used metabolomics, a highthroughput method for detecting small metabolites, to produce profiles of the serum metabolites associated with schizophrenia, other nonaffective psychosis (ONAP) or affective psychosis. Their analysis indicates that schizophrenia is associated with elevated serum levels of specific triglycerides, indicative of hyperinsulinemia, and also upregulation of the serum amino acid proline. Researchers then combined these metabolic profiles to create a diagnostic model with the potential to discriminate schizophrenia from other psychoses. This exciting study demonstrates how metabolomics can be a powerful tool for disVTT IMPULSE – SCIENCE

Figure 3. Dependency network in schizophrenia and related psychoses, revealing which metabolic variables are directly associated with schizophrenia. The network was constructed from diagnostic, clinical, and antipsychotic medication use, and from metabolite cluster data. Node shapes represent different types of variables and platforms, node colour corresponds to significance and direction of regulation (schizophrenia vs. controls), and line width is proportional to strength of dependency. The two obesity-associated metabolic variables directly linked with schizophrenia and two other metabolic network hubs are highlighted with green squares. Reprinted according to conditions stipulated in the Creative Commons Attribution License from: Genome Med. (2011) by Orešič et al.

VTT IMPULSE – SCIENCE

SCIENCE

secting disease-related metabolic pathways and for identifying candidate diagnostic and prognostic markers in psychiatric research. Conclusions There is a great clinical need for establishment of early molecular markers sensitive to pathophysiological mechanisms leading to obesity-related comorbidities such as diabetes mellitus. While epidemiological studies may be of help in the search for specific risk factors associated with the disease, more studies are needed which focus on identification of diseaseassociated intermediate phenotypes and their

markers. The latter may hold a better chance of becoming applicable in the personalised health care setting because they detect the presence of a specific pathophysiological process in each individual, which is indicative of disease progression. Furthermore, as discussed in this article, such intermediate phenotypes and their markers may also hold clues about novel therapeutic and diagnostic avenues, not only in metabolic complications of obesity such as diabetes mellitus, but also in other obesity-associated co-morbidities such as cancer, Alzheimer’s disease and psychiatric disorders.

References Fernandez-Egea, E., Bernardo, M., Donner, T., Conget, I., Parellada, E., Justicia, A., Esmatjes, E., Garcia-Rizo, C., Kirkpatrick, B. 2009. Metabolic profile of antipsychotic-naive individuals with non-affective psychosis. British Journal of Psychiatry, Vol. 194 (5), pp. 434–438.

Osborn, DPJ., Levy, G., Nazareth, I., Petersen, I., Islam, A., King, MB. 2007. Relative risk of cardiovascular and cancer mortality in people with severe mental illness from the United Kingdom’s General Practice Research Database. Archives of General Psychiatry, Vol. 64 (2), pp. 242–249.

Guest, PC., Schwarz, E., Krishnamurthy, D., Harris, LW., Leweke, FM., Rothermundt, M., van Beveren, NJ., Spain, M., Barnes, A., Steiner, J., Rahmoune, H., Bahn, S. 2011. Altered levels of circulating insulin and other neuroendocrine hormones associated with the onset of schizophrenia. Psychoneuroendocrinology, Vol. 36 (7), pp. 1092-1096.

Perälä, J., Suvisaari, J., Saarni, SI., Kuoppasalmi, K., Isometsä, E., Pirkola, S., Partonen, T., Tuulio-Henriksson, A., Hintikka, J., Kieseppä, T., Härkänen, T., Koskinen, S., Lönnqvist, J. 2007. Lifetime prevalence of psychotic and bipolar I disorders in a general population. Archives of General Psychiatry, Vol. 64 (1), pp. 19–28.

Hilvo, M., Denkert, C., Lehtinen, L., Muller, B., Brockmöller, S., Seppänen-Laakso, T., Budczies, J., Bucher, E., Yetukuri, L., Castillo, S., Berg, E., Nygren, H., Sysi-Aho, M., Griffin, JL., Fiehn, O., Loibl, S., Richter-Ehrenstein, C., Radke, C., Hyötyläinen, T., Kallioniemi, O., Iljin, K., Orešič, M. 2011. Novel theranostic opportunities offered by characterization of altered membrane lipid metabolism in breast cancer progression. Cancer Research, Vol. 71 (9), pp. 3236–3245.

Pietiläinen, KH., Róg, T., Seppänen-Laakso, T., Virtue, S., Gopalacharyulu, P., Tang, J., Rodriguez-Cuenca, S., Maciejewski, A., Naukkarinen, J., Ruskeepää, A-L., Niemelä, PS., Yetukuri, L., Tan, CY., Velagapudi, V., Castillo, S., Nygren, H., Hyötyläinen, T., Rissanen, A., Kaprio, J., Yki-Järvinen, H., Vattulainen, I., Vidal-Puig, A., Orešič, M. 2011. Association of lipidome remodeling in the adipocyte membrane with acquired obesity in humans. PLoS Biology, Vol. 9 (6):e1000623.

Orešič, M., Hänninen, VA., Vidal-Puig, A. 2008. Lipidomics: a new window to biomedical frontiers. Trends in Biotechnology, Vol. 26 (12), pp. 647–652.

Ryan, MCM., Thakore, JH. 2002. Physical consequences of schizophrenia and its treatment: The metabolic syndrome. Life Sciences, Vol. 71 (3), pp. 239–257.

Orešič, M., Tang, J., Seppänen-Laakso, T., Mattila, I., Saarni, SE., Saarni, SI., Lönnqvist, J., Sysi-Aho, M., Hyötyläinen, T., Perälä, J., Suvisaari, J. 2011. Metabolome in schizophrenia and other psychotic disorders: a general population-based study. Genome Medicine, 3:e19.

Sørensen, TIA., Virtue, S., Vidal-Puig, A. 2010. Obesity as a clinical and public health problem: Is there a need for a new definition based on lipotoxicity effects? Biochimica et Biophysica Acta, Vol. 1801 (3), pp. 400–404.

Orešič, M., Vidal-Puig, A., Hänninen, V.: Metabolomic approaches to phenotype characterization and applications to complex diseases. 2006. Expert Review of Molecular Diagnostics, Vol. 6 (4), pp. 575–585.

Virtue, S. Vidal-Puig, A. 2008. It’s not how fat you are, it’s what you do with it that counts. PLoS Biology, Vol. 6 (9):e237.

VTT IMPULSE – SCIENCE

Text: Tapio Rauma

Smart Grid – new possibilities from two-way power delivery Power grids need to become smarter to meet the needs of tomorrow’s energy consumption. Telecom technology and user engagement are paving the way to ubiquitous distributed power.

mart grid uses information and communications to make electric power delivery systems more efficient, flexible, and dynamic, while at the same time helping end users cut their energy costs and accommodate intermittent renewable sources of energy. There are many wordy visions of smart grid electricity production and usage in practice. What they have in common is a more flexible energy market with varying energy prices. The variation stems from the utilisation of inter mittent renewable energy sources in energy production. Smart grid also makes it possible for endusers to control their energy usage and even sell energy back to the grid. Making the power delivery system more efficient and flexible becomes necessary as energy consumption grows. We are, for example, witnessing a revolution in the use of vehicles powered with electricity. VTT IMPULSE – SCIENCE

This upgrade of the power delivery system requires extended use of information and communication technology, new capabilities for energy storing, and new sensors and other measurement devices that enable automation in edge areas of energy grids. Fundamentally, power delivery systems are still the same as they were a hundred years ago. Now we are beginning to apply information and communication technology to the grid in much the same way as it was employed 30 years ago in telecommunication infrastructure.

Telecom technology in power delivery Emerging smart grid technology has often been compared to existing telecommunication networks. However, there is a real difference in mindset between the grid and Internet technologies. In a nutshell, the smart grid represents the convergence of technologies that control the flow of electricity on the one hand and bits on 27

SCIENCE

When compared to pieces of information, electricity is much less tolerant of impairments and manipulation.

the other. When compared to pieces of information, i.e. bits, electricity or a flow of electrons is much less tolerant of impairments and manipulation, such as delays, latency, compression, coding, etc. In telecommunications, there has been a trade-off in recent decades of reliability for functionality. Because there is so much redundancy and so many enticing new features, we are willing to put up with impairments that would have been intolerable when the five nines philoso-

phy ruled (99.999 per cent reliability). Telecommunications engineers are now entering power system control, where the five nines still prevail. The demands to be met in power delivery and telecommunications are different; it is difficult to imagine people accepting variations in voltages, for example, or unpredictable (albeit short) power cuts. There are cultural and subcultural barriers to overcome. Power engineering, communications, computing, and IT all have their separate vocabularies, their special ways of talking.

The Smart Grid Conceptual Model

Figure 1. NISTâ&#x20AC;&#x2122;s conceptual model for Smart Grid.

VTT IMPULSE â&#x20AC;&#x201C; SCIENCE

File: Tapio Rauma Tapio Rauma, Dr. Tech., has been a VTT customer manager since 2006 and head of the Intelligent Energy Systems innovation programme from the start of 2011. His background is in industrial applications of fuzzy logic, a subject he explored in his dissertation of 1999. Rauma also has six years’ experience working in companies: tasks at Solid Information Technology Oy related to standardisation of mobile services, while at Capricode Oy he was employed as CTO.

There is thus a social aspect to getting people with diverse skills and backgrounds to work together meaningfully. The Institute of Electrical and Electronics Engineers (IEEE), the world’s largest professional association dedicated to advancing technological innovation, states in their standards that Smart Grid is a complex system of systems. The National Institute of Standards and Technology’s (NIST) Smart Grid Conceptual Model (Figure 1) shows clearly that there are plenty of interactions among the subsystems within the grid system, adding to the complexity of the whole. To remain stable, the grid must be controlled constantly in real time. As the power system is upgraded to include more flexibility, integrated communications, and advanced controls, it will enable extensive integration and interoperability of a large diversity of technologies from different industries. The Smart Grid of the future is evolving towards a highly automated system that uses advanced technologies to manage power availability and quality, predict load demands, and monitor the status of supporting infrastructure. It is clear that the whole system must be designed carefully to avoid problems in electricity availability and delivery. A lot of attention is already paid on Smart Grid to • architecture, • interoperability, • privacy, trust, and security, • risk assessment, • identity management, • reliability, and • contingency planning. This integration will mean more monitoring and control activities, enabling two-way flow of both electricity and information for the production, transport, and consumption of electric energy. It seems obvious that the implementation of Smart Grid adds intelligence to all areas of the power system infrastructure that will interoperate with end-use applications and loads.

Opportune time to renew the grid Smart grid technologies are being introduced at a time when power systems are in urgent need of renewal and expansion. VTT IMPULSE – SCIENCE

The average age of transformers and substations in the advanced industrial countries is somewhere around 40 years. In some rapidly industrialising countries, such as India and Brazil, electric infrastructure is inadequate and unreliable, while in some of the world’s poorest countries there are areas with no infrastructure at all. According to the United Nations Statistics Division, about a billion and a half people have no access to electricity. In the next 20 years, as systems are incrementally improved or built up, techniques will be borrowed from control system theory and ICT to improve performance and flexibility in energy transmission and distribution, which will tend to converge to a certain extent. Intelligence will be embedded in the grid, supported by numerous sensors, so that the system can self-correct and navigate its way around changing requirements, and even problems. This is not trivial: using a totally new kind of intelligence as the basis for modifying the system’s behaviour is an extremely demanding challenge. It will take time to demonstrate that we actually know how to control the whole system reliably.

Activating the end users Engaging the consumer is a key challenge in the operation of the smart grid. In order for it to benefit the customer and society as a whole, consumers must have visibility in their energy use and have the tools to manage it. Smart, remotely readable meters are already being installed around the world. Huge amounts of data are collected from smart meters, and special attention must be paid to the performance of data collection systems.

Engaging the consumer is a key challenge in the operation of the smart grid.

SCIENCE

One vision is that every home will have a solar array, windmill or fuel cell.

Smart meters, however, are just the first step in the revolution of measuring electricity consumption. In the future we expect more automated household appliances forming an automation system inside houses, helping to optimise energy consumption and allowing for rapidly changing energy prices in their operation. Though a lot of innovation will take place at the granular level as smart grid technologies are introduced, the general features of the grid will not change radically in the coming decades. We will not see the kind of architectural sea change we have witnessed in telecommunications over the last thirty years. If there is a sea change in electric power, it will be the transformation from centrally generated power to ubiquitous distributed power.

One vision is that every home will have a solar array, windmill, or fuel cell, and each of these systems will be able to feed energy into the grid at times in addition to drawing power from it. The grid as a whole will be an enormously dynamic federation of micro grids, in which supply and demand are constantly being rebalanced in response to price signals and physical constraints. The role of local, residential energy systems will clearly be worth considering. Here in Finland we have a unique situation in building technology. In general, our houses are built using high quality standards, and tendency is clearly towards zero energy, or even plus energy houses. This means that in the summer our houses will turn into small power plants. The potential for finding technological spearheads is obvious.

Figure 2. A possible roadmap of development phases. (Source: SGEM project)

VTT IMPULSE â&#x20AC;&#x201C; SCIENCE

Figure 3. Evolution of Smart Grid Interoperability.

Cars as a power supply There are some key technology areas that may accelerate the evolution of the smart grid. One of the most important components would be cost-effective storage. Electric vehicle development programmes drive R&D in batteries; some manufacturers are considering offering grid-scale arrays, drawing on new technology developed for cars. The theoretical potential is huge. On average, about half the power gridâ&#x20AC;&#x2122;s generating capacity built to handle peak loads is unused, and cars are parked for 90 per cent of the time. So if car batteries could store energy for the grid and feed it back as needed, it would be a real revolution in power. On the other hand, the vision for this phenomenon is based on end-user profit and is highly dependent on two factors: variation in energy prices should be high, and the batteries need to be much more efficient than they are at the moment.

VTT IMPULSE â&#x20AC;&#x201C; SCIENCE

All in all, storing energy and selling it back to the grid may create a totally new business branch, if this vision comes true. Battery technology is perhaps not the one and only way to store energy; discussion goes on about other methods, such as thermal energy or pumped hydro. When integrating existing technology with another technology where reliability is paramount, it takes time and money to turn all innovations into working product. This is the main constraint on the smart grid.

Storing energy and selling it back to the grid may create entirely new business.

SCIENCE

Policy as a stimulus? All signs point to energy prices rising dramatically in the future. Politicians cannot simply let it happen without encouraging the whole energy sector to make changes in their business ecosystem. Public funders are, in fact, awake, as they should be. The utilities industry may not be eager to jump at new technology without being sure its use is economically feasible. The authorities may need to use regulation to force the ecosystem to change. Change is bound to happen, but its timetable depends heavily on the development of the required technologies, ecological pressures, and energy price trends One view on Smart Grid evolution was given by the Finnish Smart Grids and Energy Markets project (SGEM) – see Figure 2. It seems that steps can be defined, but their exact timing is more problematic to estimate.

The SRA has since been put into practice in EC frame programmes. In the SRA, the EC specified that Europe’s electricity networks must be flexible, accessible, reliable, and economic. Key actions called for in the vision include • creating a toolbox of proven solutions that can be deployed rapidly and cost-effectively • harmonising regulatory and commercial networks in Europe to facilitate cross-border trading of both power and grid services • establishing shared technical standards and protocols that will ensure open access, enabling the deployment of equipment from any manufacturer • developing information, computing and telecommunication systems that enable businesses to utilise innovative service arrangements • ensuring successful interfacing of new and old designs of grid equipment to ensure interoperability between new and old subsystems.

Standardisation has begun

Conclusions

As this change to more intelligent electricity grids seems to be happening all around the world, there is an urgent need for standards. Key players in the markets have been active for several years. In the USA, there have been many working groups on standardisation, e.g. in the preparation of the U.S. Energy Independence and Security Act (EISA, 2007), and at the U.S. National Institute of Standards and Technology (NIST). The International Electrotechnical Commission (IEC) also has an interest in standardising future electricity generation and delivery systems. Different initiatives have started to focus their work to avoid overlapping. For example, IEEE (IEEE P2030) focuses on interoperability components of Smart Grid communication, power systems, and information technology platforms (see Figure 3). Some years ago, the European Commission published the Strategic Research Agenda (SRA) for Europe’s Electricity Networks of the Future. The EC also positioned their SRA against other national or international research programmes. As a result of worldwide interest many intercontinental cooperation forums were identified.

Future power delivery systems will be much smarter and more flexible than today. Technological improvements are on a good path towards enabling integration of ICT, telecommunications, and energy delivery technology and creating an intelligent power delivery network. Energy production will focus more on utilising renewable technologies, which makes it necessary to control energy consumption. To unleash the full potential, there is a great need to activate end-users and affect the way they use energy. A green world arises from smart energy production, smart energy delivery, and smart energy users.

References Energy Statistics Yearbook, United Nations Statistics Division. http://unstats.un.org/UNSD/energy/yearbook/default.htm European Technology Platform SmartGrids: Strategic Research Agenda for Europe’s Electricity Networks of the Future. http://www.smartgrids.eu/documents/sra/sra_finalversion.pdf George W. Arnold and Wanda K. Reder: Why Building the Smart Grid Will be a Long-Term Project. IEEE Smart Grid Newsletter, toukokuu 2011. IEEE P2030/D5.0 Draft Guide for Smart Grid Interoperability of Energy Technology and Information Technology Operation with the Electric Power System (EPS), and End-Use Applications and Loads

VTT IMPULSE – SCIENCE

Text: Mervi Murtonen

Service and security aspects in security guarding encounters In guarding services, customer experience grows from encounters involving both security and service aspects. Traditional service definitions fail to provide the richest possible view of value creation in B2B security services.

n service business, customer relationships are built and destroyed one encounter at a time. Service encounters refer to the moment of person-to-person interaction between a customer and a firm, or single exchanges of products and services. Table 1 shows other viewpoints on service encounters taken in recent literature. Previous studies have acknowledged that service encounters are one of the critical determinants of customer satisfaction and loyalty in service business.

Taking security guarding as a research context, this paper approaches value in business-to-business (B2B) services through customer narratives of security service encounters. The results of this study provide answers to the following research question: “How are general service aspects and security aspects present in security guarding encounters?” With a practice-based approach, this paper makes explicit that security guarding is an extraordinary form of B2B services, and the need for context-specific analysis of these

Dyadic viewpoints on service encounters

Source

Customer’s roles

–

Provider’s roles

Solomon et al.,1985

Short-term incidents, episodes

–

Long-term relationships, partnership

Holmlund, 2004

Emotional and personal aspects

–

Economic and professional aspects

Czepiel,1990; Van Dolen et al., 2001

Job satisfaction

–

Customer satisfaction

Gil et al., 2008.

Efficiency

–

Personalisation

Surprenant & Solomon, 1987

Visibility, front office

–

Non-visibility, back office

Johnston & Clark, 2008

Dyadinen vuorovaikutus

–

Polyadic interactions

Solomon et al., 1985

Face-toface interactions

–

Technology-enabled interactions

Bitner et al., 2000

Expected behaviour and outcomes

–

Perceived behaviour and outcomes

Solomon et al. ,1985; Coye, 2004

Table 1. Summary of the viewpoints on service encounters in recent literature.

VTT IMPULSE – SCIENCE

E mpirical

T heoretical

SCIENCE

3. T heory matc hing Linkages between theory and empirical findings

1. P rior theoretic al k nowledge Value creation in services Security products & services Service encounters

2. T hematic interviews (raw data) 12 interviews in 7 customer companies Observations of service encounters

5. T heoretic al s ugges tions Contribution to security and service research

4. Narratives of s ervic e 6. Managerial c onclus ions enc ounters (main data) Contributions to security service What happens when development service providers and customers meet and interact?

Figure 1. Research process in this study

types of services is indicated. General service aspects are insufficient in themselves to provide the richest possible view of value creation in B2B services, and fail to illustrate the value creation for business customers. Materials and methods The customer perceptions of security guarding were collected in the form of oral narratives (Figure 1). A narrative is an oral or written account of personal experiences or experiences of others told to other people; “account” refers to story-like constructions containing description, interpretation, emotion, expectations and related material. In this study, the narratives of guarding service encounters emerged over the course of interviews with seven organisations, all of which had had a relationship with a guarding service provider for more than two years. The interviewed organisations represented public and private offices, light industry, retail and hotel businesses. In total, 12 people were interviewed. The interviewees were actively involved in defining, negotiating and monitoring the guarding services, i.e. they were the ones who knew the most about the security services in their organisations. In the interviews, narratives were obtained by asking a critical incident question: “Can you recall any specific situation where you were exceptionally satisfied or disappointed with the 34

current guarding services?” Each informant told 1–3 stories, and each story described one incident. The full interview transcriptions were used in data analysis to fully understand the background for the narratives. In total, 25 narratives describing guarding service encounters were reconstructed. The narratives describe service encounters that occurred on customer premises, and they include both satisfactory encounters and unsatisfactory customer experiences. Service encounters in security guarding services Private security consists of three main entities: the security customer, the security company and the security officer, with each having different interests in steering the provision of security services. Security companies have a multilevel relationship with their customers (Figure 2.). On the contractual level, the security customer specifies the nature and functions of the security service together with the security company. The end users are not necessarily involved in the contractual level at all. On the operational level, the end-users and security officers interact in service encounters. These also occur on the external level between security officers and the customer’s customers, other visitors and even with outsiders, who may try to enter the customer premises invited or non-invited and may become a threat to the customer or to the visitors. VTT IMPULSE – SCIENCE

In this study, the security service encounters both on the operational level (between guards and end-users) and on the external level (between guards and welcomed visitors especially) consisted of similar actions and behaviours. The more distinguishing feature in service encounters was whether a security threat was involved in the situation or not. Two types of service encounters emerged: situations where the security guard was needed to guarantee the safety and security of the customer in a threatening situation, and situations where there was no security threat but the guards were asked to help the customer in some other way. A representative narrative of each was selected. In the first sample narrative, a female narrator, who is a security customer’s representative and an end-user of security services, describes a surprising and threatening situation that she had faced in her office with a customer: One of our officers was ill, and one customer’s appointment had to be cancelled. We had tried to reach the customer, but could not provide him with the information that the officer was ill. When the customer came, he was pretty badly drunk, and not satisfied with the fact that he couldn’t meet the officer. The guard calmly explained the situation to him and told that he would be given a new appointment time, when preferably he would be sober.

The customer got really angry about the situation, and started directing the aggression towards the guard, intentionally irritating him and shouting “Call the police! Call the police!” The guard repeatedly asked him to leave. But all the customer did was continue shouting and provoking the guard. Then the guard grabbed him and held him still. Finally, the guard was sitting astride him and had hold of his arms. And then the guard told me to call the police, which I did. The police came really fast, it was probably five minutes. The situation could have escalated into a serious fight, so I don’t think the guard had a lot of options at that point. The guard was very calm; he behaved calmly, and explained the facts to the customer, trying to clarify the situation verbally. But when that didn’t succeed, it ended like this. All in all, I think what he did was the right thing to do. In this sample, the narrator is satisfied with the solution the guard provides for her. The guard is present at the scene from the first minute, and supports her in dealing with a difficult customer. The guard takes a leading role in solving the situation. In the narrator’s opinion, the guard draws the right conclusion about the situation and calms the aggressive customer in a controlled but assertive manner. In the second sample narrative, another female narrator describes an incident that had

”All in all, I think what he did was the right thing to do.”

Security Company

Security Customer

C ontractual level

Security Officers

End-users

O perational level

Outsiders

Visitors

E xternal level

Figure 2. Interactions in security services

VTT IMPULSE – SCIENCE

SCIENCE

Customers are not seeking high-class security at any cost.

occurred in her office. In this case, the guard is present in the office, and the narrator asks him for help in a non-threatening situation, but is refused: We had a young guy here (as a guard). I asked if he could help us move a table. He replied that it was not part of his job description. And when I asked what was, he said he would rather be doing this job sitting on the couch at home. He sat there all day long looking like he was just waiting for the shift to end. Some people totally lack motivation. If his job was just to sit there, what would he do if some trouble occurred? I don’t know how he would react to it. He was a young and educated guy, but he still showed a complete lack of flexibility. We have a lot of women in this house, and when two of us with sore backs try to move a table and ask a young guy ”Could you grab a corner?”, the answer is ”It’s not in my job description.” [laughs] In the second sample, the narrator asks a security guard to assist her in moving a table. The guard declines to help her. The refused customer becomes irritated and frustrated, since, at least in her opinion, a young male guard would have a lot of time and enough physical strength to help a woman move a table. In this sample, the customer is dissatisfied with the resolution, since it does not answer her immediate needs. Next, I take a closer look at the security and service aspects in guarding based on these two samples and other narratives. Security aspect in encounters Security competence is by far the most important value driver in guarding services – a must-have that needs to be in place. Security competence refers to security know-how, knowledge of the rules and legislation concerning guarding, and effective security operations. The main goal of guarding is to guarantee the security of the customer’s personnel, information and property, and guards are expected to possess security skills and knowledge that customers do not have, as illustrated in the first sample narrative. Security competence in service encounters is demonstrated by the actions and behaviours

of the guards. The guard’s actions affect how well and at which point the security threat is identified, what proactive measures are taken, whether the threatening situation is escalated or soothed, and how it resolves. It is thus not only a question of security as a feeling, but also security as an actual physical threat. For security services it is typical that service encounters occur under distractive, stressful and even dangerous circumstances. Distractions are typically caused by exceptional situations and unwanted visitors or intruders, who may be drunk or intoxicated and behave aggressively or impertinently. Typically, the situation is resolved when the guard is asked to guide the unwanted people out of the customer’s premises. The narrators appreciate not only the short response time but also to the guard’s willingness and ability to help and guard’s close presence on the customer’s premises. Physical closeness and daily informal connections strengthen interpersonal relationships and the feeling of belonging in the same team, which is an important asset in resolving critical incidents. Service aspect in encounters Customers are not seeking high-class security at any cost; security cannot be over-emphasised or it becomes a value destroyer for the customer. Customers also expect a high-class service, but it seems to be somewhat unclear what the high-class service means in security services. For instance, providing high-value security services for the security customer may require that some incoming visitors are forbidden to enter or asked to leave, which is not good service from their point of view. Friendliness towards incoming visitors, therefore, generally considered as a value attribute in all services, does not necessarily deliver value for the security customer and may even jeopardise security. The guarding service is an exceptional form of B2B service, given that the service provider spends long periods of time with the customer, on the customer’s premises, and has continuous and frequent interactions with various people in customer’s organisation. Following the house rules of the customer organisation is thus particularly important. VTT IMPULSE – SCIENCE

File: Mervi Murtonen Mervi Murtonen, M.Sc. (Tech.), works as a senior scientist at VTT. She has 15 years of experience in risk management research. Currently, she is working as a project manager of a three year research project with ten leading security companies in Finland. Also, she is writing her PhD thesis under the topic of value creation in B2B security services.

VTT IMPULSE – SCIENCE

A penetrating theme in all narratives is that guards are expected to act and behave according to both the service description and the specific house rules of each customer. Predefined service concepts are expected to adapt to each customer’s own habits and traditions. In the narratives, service flexibility appears to be a critical aspect, with potential to either increase or decrease customer value. This is illustrated in the second sample narrative, where the guard refuses to help the customer in a task that falls outside his job description. It is easy to understand the customer’s request for help, when we look at guards through the eyes of the customer: The customer value delivered in passive monitoring is difficult to perceive, although continuous monitoring and pass controlling is crucial for maintaining security. This puts guards in a difficult position: they can either accept customers’ requests and perform tasks beyond the service contract and job description; or stick to the contract and refuse requests that are outside the service description. Security is jeopardised with the former, and customer satisfaction with the latter. Discussion Customers do not want either high-value security or high-value service to be at the expense of the other. Customers expect guarding services to include both, without fully understanding what that means and how to achieve both. Formal service encounters represent only a part of the time customers and guards spend together. Thus, the customer receives not only a snapshot of the guarding service provider’s offerings in service encounters, but also observes and interacts continuously with the guards in the meanwhile. What is interesting is what happens between the formal service encounters, because all the points of consumer-company interaction are critical for creating value. Three distinctive points of interaction in supplier-customer relationship in security services can be identified: 1. Situations related to anticipating, preventing, dealing with and recovering from security threats (illustrated in the first sample narrative)

Following the house rules of the customer organisation is thus particularly important.

2. Situations where no threat occurs but other extra services are requested or delivered (illustrated in the second sample narrative) 3. Moments in between the two above-mentioned service encounters, when no service is delivered and no threat is involved In the situations related to security threats, the security aspects turn out to be the primary sources of customer value. Nevertheless, customer value is not only created in forms of service outcomes (what is delivered), but also in forms of service experiences (how it is delivered). The service aspects also need to be taken into account, therefore, in developing the security procedures and security encounters. This is a difficult task, because guarding services is a strictly regulated professional service, where many service aspects are invalidated and overruled by security aspects, and vice versa. For example, security aspects such as proactivity and availability require that a guard is able to concentrate fully on monitoring and maintaining security at the scene. Any additional service tasks may disrupt these critical tasks. In the situations where there is no threat involved but customer is requesting for additional services, the status of guards and their security-related duties are put aside and the guard takes the role of serviceman, conducting various tasks on behalf of the customer. Customers ask for this type of additional service to fill the spare time between securityrelated tasks, “as the guards are present anyway”. The service aspects become the primary sources of value, but guard status is not necessary for performing these services. However, guard’s security competences, trustworthiness and reliability may help in conducting some tasks and add extra value for the customer, although no threat is involved. 37

SCIENCE

Between actual service encounters, invisible as well as informal and individualistic features of both security and services surface. During these intervals no formal securityrelated or service-related interactions occur between guards and customers. The guards continue to conduct back-office tasks and carry on monitoring the security situation and surroundings while the customer continues his/her own tasks and activities. Thus, both service and security aspects are present, but only on a nonvisual level and beyond the interaction level. These intervals deviate from the scripted service behaviour, potentially leading to both positive and negative consequences. At best there is a building of mutual trust and commitment, which are important assets under threatening circumstances. Conclusions Keeping in mind that a dynamic and multifaceted concept of value is defined and perceived by customers; considering service encounters as origins of perceived customer value; and comprehending that business customers’ perceptions of service encounters are increasingly important, the need for profession-specific analysis of service encounters in B2B services is indicated. Traditional and uniformly defined service aspects are insufficient in themselves to illustrate the creation of value for the business customer in different settings, and fail to provide the richest possible view of value creation in various B2B services. Different aspects become the key sources of value in different service encounters and in the intervals between them, and more studies are needed on the contingent nature of value creation in B2B services. The present study has a number of managerial implications. It is evident that understanding supplier-customer interactions and the customer’s perspective on value creation are crucial in analysing value in service economics. Similar to many other services, security guarding in its most visible form on operational level and visible only to those representatives of customers who have daily contacts with a service provider. As both security and service are intangible concepts, the results of this study will advance our understanding of how the security aspects and service aspects add value for the customer. 38

References Bitner, M. 1995. Building service relationships: It’s all about promises. Journal of the Academy of Marketing Science, 23(4), pp. 246–251. Czepiel, J.A. 1990. Service encounters and service relationships: Implications for research. Journal of Business Research, 20, pp. 13–21. Flanagan, J.C. 1954. The critical incident technique. Psychological Bulletin, 51(4). Gil, I., Berenguer, G., & Cervera, A. 2008. The roles of service encounters, service value, and job satisfaction in achieving customer satisfaction in business relationships. Industrial Marketing Management, 37, pp. 921–939. Holmlund, M. 2004. Analyzing business relationships and distinguishing different interaction levels. Industrial Marketing Management, 33, pp 279–287. Jayawardena, C., Souchon, A.L., Farrell, A.M., & Glanville, K. 2007. Outcomes of service encounter quality in a business-to-business context. Industrial Marketing Management, 36, pp. 575–588. Lapierre, J. 2000. Customer-perceived value in industrial contexts. Journal of Business & Industrial Marketing, 15(2/3), pp. 122–140. Prahalad, C.K., & Ramaswamy, V. 2004. Co-creating unique value with customers. Strategy & Leadership, 32(3), pp. 4–9. Smith, C.P. 2000. Content analysis and narrative analysis. H.T, Reis, & C. M. Judd (Eds.), Handbook of research methods in social and personal psychology, pp. 313–335. Cambridge University Press. USA. Solomon, M.R., Surprenant, C., Czepiel, J.A., & Gutman, E.G. 1985. A role theory perspective on dyadic interactions: The service encounter. Journal of Marketing, 49, pp. 99–111. Wakefield, A. 2003. Selling Security. The private policing of public space. Willan Publishing, Portland, USA. van Steden, R., & Sarre, R. 2010. The tragic quality of contract guards: A discussion of the reach and theory of private security in world today. The Journal of Criminal Justice Research, l(1), pp. 1–19.

VTT IMPULSE – SCIENCE

T E C H N O LO GY

Pages

40–54 VTT IMPULSE – TECHNOLOGY

The matchbox-sized microscope attaches to the phone with a magnet.

KEY TERMS mobile phone, microscope KEY PERSONS Jaakko Raukola KEY MESSAGE KeepLoop and V T T are commercialising a device that turns the mobile phone into a microscope. VTT CONTACTS jaakko.raukola@keeploop.com, janne.suhonen@vtt.fi MORE INFORMATION www.vtt.fi

Turn your mobile into a microscope A smart new device by KeepLoop transforms the mobile phone into a microscope. Text Paula Bergqvist Photos Ari Ijäs

VTT IMPULSE – TECHNOLOGY

he Finnish company Keep

How does a mobile phone microscope work?

Loop and VTT are in the process of commercialising a device that adds a microscope feature to a mobile phone. “The first applications will come onto the market at the beginning of 2012,” promises Jaakko Raukola, CEO of KeepLoop. The product is based on next-generation lens technology, a compact structure as a mobile phone add-on, and customisable additional features. “The device also stands out on account of its ease of use, durability and moisture resistance,” Raukola lists. “Pictures taken at a precision of a hundredth of a millimetre can be reliably measured, which is important especially for professional use. The device can even reach a precision of a thousandth of a millimetre, although at the cost of some measurement reliability.” Professional products launched first

The first products are designed for industrial use. “More features are required of devices targeted for professional use, such as 3D and highly advanced software,” says Raukola. More affordable consumer products will be released in due course. “We want to target the products at different professions so that they meet the needs of each user group,” says Raukola. “The consumer products to be launched later will also be designed to suit different operating environments.” The technology behind the mobile phone microscope was developed at VTT and licensed out to KeepLoop Oy. Development cooperation with VTT continues, and work is currently underway to connect a LAB chromometer to a mobile phone. A multitude of uses

Mobile phone microscopes can be used to study surface formations, particularly in the printing industry as part of quality control.

Jaakko Raukola

In the security business the devices could be used, for example, for reading microcode in various logistics systems. Mobile phone microscopes can also be used for studying security markings and for authenticating products for brand protection purposes. The microscope is capable of detecting hidden symbols in products that are not visible to the naked eye. The microscope is also ideal for studying the environment. Consumers can use it when out and about for examining plants and insects, for example. Other potential applications are the examination of textile structures, strands of hair, or the fibre structure of paper. The device can also be utilised in social media and community-based hybrid media where regular media usage patterns are linked. n

The operation of the mobile phone microscope is based on images produced by the combined effect of a LED light and an optical lens. The device can be used to examine various surfaces and structures at microscopic precision. You can store sharp, high-quality photographs on your mobile and forward them as image messages. Your mobile phone is transformed into an instant microscope by simply placing a flat, magnet-attached microscope module over your phone’s camera lens. The assembled mobile phone microscope fits comfortably in your pocket, just like a normal phone. The plastic macro lens of the microscope magnifies objects effectively. The camera’s field of view is 2 x 3 millimetres. A series of LEDs embedded in the lens perimeter enable objects to be illuminated from different angles. Images illuminated from several different angles can be used to produce, for example, 3D topographic maps with your mobile phone. The 3D maps are accurate to one hundredth of a millimetre.

In the security business the devices could be used for reading microcode.

VTT IMPULSE – TECHNOLOGY

KEY TERMS wood processing industry, modelling, simulation, wood construction, wood durability, certification KEY PERSONS Ari Kevarinmäki, Antti Kivimaa, Olli Raunio, Tomi Toratti, Arto Usenius, Hannu Viitanen, Sakari Virtanen KEY MESSAGE The wood products industry needs to invest in boosting the value added to its products. VTT CONTACT antti.kivimaa@vtt.fi, arto.usenius@vtt.fi MORE INFORMATION www.vtt.fi

1.5 kilograms of carbon dioxide are bound in one kilogram of dry wood. A wooden detached house stores as much carbon as is released by a family car over ten years. Wood insulates 15 times better than concrete and 400 times better than steel, and wooden structures have no thermal bridging.

VTT IMPULSE – TECHNOLOGY

A wooden house is much lighter than one made of concrete. Wood weighs 500 kilograms per cubic metre, while concrete weighs 2,400 kilograms per cubic metre. Transporting wood is much cheaper than concrete. More prefabricated wood elements than concrete elements can be loaded onto one vehicle.

More out of wood Processing multiplies the value of raw wood. Text Antti J. Lagus Photos Voitto Niemelä, Future Imagebank, iStockphoto, Risto Raunio, Seilo Ristimäki / Iloinen Liftari Oy

T FMO Tapiola in Espoo, Finland is Europe’s tallest wooden office building.

VTT IMPULSE – TECHNOLOGY

h e Finnish forest industry is

headed towards structural change. In the future, the majority of pulp and paper will be produced in places where wood grows fast – such as South America. The manufacture of wood products in Finland will remain profitable, though, and the further these products can be processed, the better. VTT has been involved in the development of tools to enable the wood processing industry to utilise forest resources more efficiently. According to Research Professor Arto Usenius, the sheer range of development options is so broad that computer modelling is needed to assist the decision-making process. “We model the raw materials, processes and products mathematically. This allows us to simulate different alternatives. Before making an investment decision one must know, for example, what are the optimal plant configurations,” says Usenius. VTT has carried out an extensive project for a South African client to investigate the potential for establishing a new plant. As part of the study, 300 South African whole-tree stems from the company’s wood supply area were analysed in Finland. 43

Operative planning

Research

Best sawing patterns by using a simulation program

Optimal plan for raw material procurement, production and selling for a specific period by using a saw model

VTT-WoodCIM® software Profitability analysis of timber selling request

Optimisation of blank and component production

Log class limit optimisation according to demand

“We determined the complete stem geo metry, knots and all. Using a virtual stem database, we calculated what products the company should manufacture. We also calculated the profitability of these products,” explains Usenius. Similar calculations modelling processes and products have also been carried out for Finnish companies, and VTT has developed a software tool, WoodCIM, specially designed for this purpose. Usenius has been involved in developing the WoodCIM software since the 1970s. Today, WoodCIM has grown into a modular tool for evaluating the entire production process and is used for both strategic and operative planning. The software is currently used

Product-based optimisation of bucking

From order book to log order

Strategic planning

Training

mainly by Finnish clients, although there has been international interest in the product and, according to Usenius, the export potential for WoodCIM is currently being investigated. Advance stand data for precision harvesting

WoodCIM enables advance calculation of which stands will give the best sawing results before sending in the harvester. VTT is also currently working on a similar EU project to develop stand evaluation methods. Laser measurement is used to determine the stand composition. This gives much more accurate stem size measurement than visual methods. Usenius predicts that in the future sawmills and other wood processing compa-

The benefits of Finnish slow-grown timber are its strength and stability and reasonable price. 44

VTT IMPULSE – TECHNOLOGY

nies will use data collected in this way when planning their harvesting operations. By making stand data available ahead of logging, harvesters can be programmed to cut to specific dimensions. VTT is also investigating the possibility of gathering data on felled logs throughout the entire process, from harvester to final log use. Currently, information gathered at one stage, for example during felling or log sorting, is no longer available during the following stages. A huge amount of valuable information is lost in this way. According to Antti Kivimaa, Senior Advisor at VTT, the value of wood as basic sawn timber is around three to four times higher compared to pulp chips or energy wood. “The raw material should be utilised to the highest extent possible. As the traditional fibre industries begin to use less wood, the wood

Raunio Sawmill keeps its wheels rolling with WoodCIM AT THE RAUNIO Sawmill in Koski, Southwest Finland, WoodCIM is used as an everyday tool for planning the mill’s production and sawing strategy. The basic data used for planning the sawmill’s operations include log storage and stand inventory data and the dimensions and quality requirements of the sawn timber. “The entire production is simulated in WoodCIM. Only then do we go to the forest and the sawmill,” says production manager Sakari Virtanen. Raunio Sawmill’s involvement in VTT development projects goes back twenty years. The latest project, DigiPOS, was launched in the spring. Virtanen is part of the project’s steering group, and the Raunio Sawmill is due to carry out sawing trials for the project in due course. DigiPOS aims to increase the predictability of sawing, for example by means of X-ray scanning. According to Virtanen, the Raunio Sawmill has benefitted from receiving the latest research data from a number of other VTT projects. VTT has also drawn up investment calculations for the sawmill. Utilising logs to their fullest

Raunio Sawmill simulates its entire production with the WoodCIM simulation programme before buying or sawing any logs..

Kuvateksti

The value of knot-free timber can be several times that of knotty timber. Knots are revealed during scanning.

VTT IMPULSE – TECHNOLOGY

Olli Raunio, Managing Director of Raunio Sawmill, is keen to ensure that logs are utilised to the fullest, and a lot of work has been done to optimise production at the mill. Raunio Sawmill’s wood supply area covers a hundred-kilometre radius, and model simulation plays a central role in directing the mill’s wood procurement. “Competition in the industry is tough and global, and the differences between companies are very small. I would say that cooperation with VTT has given us a small competitive edge,” says Raunio. Last year, Raunio Sawmill had a turnover of EUR 47 million. The sawmill employs around 80 people, and approximately 50 people are employed in the transportation and procurement chain. 70 to 80% of the sawn timber produced at the mill is exported. The mill also sells wood chips and sawdust for energy use as by-products. The sawmill produces around 300 Gigawatt Hours of bio energy annually. 45

Around half of the log raw material is used as sawn timber. Increasing the volume and quality distribution of sawn timber, for example through scanning technology, improves the profitability of sawing.

Bark 10%

Sawdust 10%

Sawn timber 50% Chips 30%

products industry has a chance to grow. The benefits of Finnish slow-grown timber are its strength and stability and reasonable price.” Log scanning for more accurate sawing

In addition to precision harvesting, log scanning will also become more commonplace in the future. X-ray scanning reveals the internal structure of the log, enabling much more accurate sawing. Before the cut-to-length logs are sawn, they are passed through a log station equipped with an X-ray machine.

X-ray scanning improves the predictability of sawing.

In the future, large forestry companies may have their own log scanning stations. According to Usenius, it is worthwhile even for smaller sawmills to establish their own log stations that direct the timber to the right location after scanning. Scanning increases the sales value of products made from raw wood by as much as 10 to 15% as the log can be sawn precisely to requirements. Knot-free and defect-free wood has premium value and, if correctly sawn, has a better range of use than fuel chips or wood that is unfit for further processing. “The sawmill industry has traditionally been a raw material supplier. Sawmills that can deliver precision sawn timber to specific customer requirements are no longer producing just sawn timber, but wood components. For example, furniture producers can order the precise components they need from the sawmill, eliminating the need for sawing from their front-end production,” says Usenius. Such products can be easily up to 30% more valuable than bulk products. Usenius also points out that the entire delivery chain beneVTT IMPULSE – TECHNOLOGY

A lack of standardisation has slowed the adoption of wood as a construction material. fits from the new method: the wood seller gets a better price, and the wood is utilised to a greater extent, while the component user also benefits from not having to pre-process the wood. Wood construction – new solutions needed

According to Antti Kivimaa, the wood products industry needs to change its approach and bring the research and development of new products and services to centre stage in its daily operations. “With the exception of single-family houses, Finland is not a leader in wood construction, but the methods can be imported from Central Europe and Sweden. Competitive and energy-efficient solutions can be developed for construction, utilising wood’s lightness, quick installation and easy transportation of prefabricated elements,” says Tomi Toratti, Senior Research Scientist at VTT. A lack of standardisation and design tools has slowed the adoption of wood as a construction material. There is plenty of software around for designing concrete bridges, for example, but when it comes to wood, the toolbox is notably empty. Finnish Wood Research (FWR), established by Finnish industry, has launched an extensive research project (Teputu) focused on industrial prefabricated wood element construction. Its goal is to create a uniform and open system for wood construction – a system that competing materials have enjoyed for decades. VTT is also strongly involved in several other FWR projects. Wood likes the cold

According to Senior Research Scientist Hannu Viitanen, the pan-European Wood Wisdom project ‘Woodexter’ has investigated the stress conditions wooden structures are subjected to with regard to decay development in different European climates. The project has developed a modelled map showing how the durability of wood in different climate zones compares with Southern Finland. VTT IMPULSE – TECHNOLOGY

“In Finland, wood structures in facades and patios last best in Northern Finland. Here, temperature is the most significant factor, which is significantly higher in the south. No wood decays when frozen, and in the north, winter starts earlier and lasts longer,” says Viitanen. In Europe, the most adverse climates are found on the Atlantic coast, for example in Denmark, Ireland, Norway, Portugal and the UK. In these countries, the sea increases humidity and the temperature remains above zero throughout the year. Additionally, in coastal locations structures are often horizontally exposed to wind-driven water. The myth of ultra-durable northern wood

Hannu Viitanen also debunks the myth of the special durability of northern wood. The growing location of wood does not affect its durability as such. On the other hand, when a tree grows for a long time, such as in the north, and the circumference of the trunk grows, durable heartwood begins to form at the centre of the tree. The proportion of this dead heartwood affects the wood’s overall durability. VTT has a long history of research in decay protection treatments. Heat-treated Thermo wood, for example, was developed by VTT. One of the key lessons learned is that the level of treatment must be in proportion to the need for protection. For example, impregnated wood is rarely needed for facades – painted spruce lasts well enough in Finnish conditions, if the structures are designed and built correctly. Viitanen also considers that the often maligned preservative copper chromium arsenic, no longer in use, could still be the best and most ecological option for wood protection in harsh conditions. It stays in the wood extremely well, and also protects against insects and termites. “The arsenic in the preservative exists naturally in various concentrations in the soil. Of course, impregnated wood is hazardous waste and must be treated accordingly during waste management. The impregnated wood has a chromium content of, at most, a couple of per cent by weight of wood,” says Viitanen. n

Up to date on the latest CE marking requirements? According to VTT Senior Expert Ari Kevarinmäki, although the certification of many wood products is currently voluntary, as of July 2013 CE marking will, under the new Construction Products Regulation, become mandatory for all products that are covered by a product standard. “The certification has the benefit that it helps prove the product’s properties reliably to both authorities and customers. The certification is based on inspection and testing by VTT or another approved body,” says Keva rinmäki. According to Keva rinmäki, it is now high time to check that products meet the requirements for CE marking. This often requires external assessment, inspection and testing services. The manufacture of glued structures, for example, requires external quality control.

KEY TERMS innovation, research, education, commercialisation of innovations KEY PERSON Tatu Koljonen KEY MESSAGE EIT ICT Labs promotes the birth of innovations by investing in entrepreneurship. VTT CONATCT tatu.koljonen@vtt.fi MORE INFORMATION www.vtt.fi

EIT ICT Labs more innovation through entrepreneurship The European Institute of Innovation and Technology EIT was founded to promote the continent’s sustainable economic growth and competitiveness. Text Sami Stormbom Photo iStockphoto

I T ICT Labs is currently

building centres in Espoo, Stockholm, Berlin and Paris which will focus on research, training and innovations especially from the perspective of entrepreneurship. Dynamic loci of innovation are being established to generate innovations at rates way and above the rest. The Finnish centre comprises an efficient locus of innovation focused in and around Ota niemi, Espoo. “EIT ICT Labs has grabbed the attention of several major international operators. This is bringing benefits to the fields of research, teaching and business,” says Tatu Koljonen, Vice President, Strategic Research at VTT. “Concrete location decisions have already been made. Another indication of the level of interest has been the doubling of capital investment in Finland during early 2011.” The ‘Open Innovation House’, to be completed in Otaniemi in 2012, will bring EIT ICT Labs’ Otaniemi unit and a Nokia research centre under one roof. VTT has been strongly involved in planning the forms of co-operation between the operators and their use of space. 48

A stimulus for internationalisation, innovation and commercialisation

Co-operation with EIT ICT Labs provides smooth support for VTT’s internationalisation goal. “Firstly, the developing locus of innovation is attracting the best international companies to Otaniemi. Secondly, the co-operation is helping us to create stronger research institute networks and develop our international customer relationships,” Koljonen says. The co-operation reinforces VTT’s prospects for supporting the birth of new business. “The community’s prospects will be more evident in the future in VTT’s key and innovation processes, such as commercialisation of inventions and the development of intellectual property rights. For example, a commercialisation plan for a VTT key technology has already been created through the co-operation,” says Tatu Koljonen. Business, research and teaching hand in hand

The idea of combining research, teaching and business is certainly an attractive one. Achieving this prized goal, though, requires ideas to be put into action. “Co-operation between the different fields VTT IMPULSE – TECHNOLOGY

CREATOR spurs on the emergence of ICT growth enterprises

in practise is evident, for example, in the inclusion of VTT’s offering and know-how in students’ study programmes. The goal is an environment where students can, for example, begin taking VTT’s IPR forward, found startup companies, create new business, innovative offerings for companies and well-being for the society,” says Koljonen. Smart combination of technologies

One goal is to develop intelligent environments and provide a richer user experience than before. The Smart-M3 concept jointly developed by VTT, the Aalto University and Nokia is one example. The agile and scalable compatibility solution on the information level expands the usability of different technologies to intelligent environments. Information amalgamated in this way can be used for new purposes, and the virtual and physical worlds can be effectively combined. “The goal of Smart-M3 is that information in different devices and things could be utilised in the creation of new services with a rich user experience. This is the same kind of digital revolution that occurred for the liberation and propagation of the information stored on computers as the Internet expanded in the 1990s,” says Koljonen. VTT IMPULSE – TECHNOLOGY

Smart-M3 allows, for example, augmented reality solutions to become part of everyday life in a useful, experiential and easy way. n

VTT, Institut Telecom and Sirris have launched an innovation concept, CREATOR, which aims to systematically build ICT cooperation networks between small and mid-sized companies. The aim is to solve the European innovation paradox by improving the chances of growth and internationalisation of companies with the help of innovation partnerships. CREATOR helps companies reach the international market, thus making them quicker to produce products and services that are more complete. Furthermore, they are more able to use the latest advances in business and technology. CREATOR is partly funded by EIT ICT Labs.

Strong loci for innovation under construction THE COMMUNITY’S CORE principle culminates in the co-operation between VTT, Nokia and the Aalto University, the core partners of EIT ICT Labs’ Otaniemi unit, where top-class research, teaching and business are interwoven, fostering innovation, entrepreneurship and new business. This will create new prosperity in Europe, while helping the continent meet the challenges brought by the continuously developing information society, the change in methodology and open innovation. “Europe’s paradox has been that although top research has been done here, it’s commercialisation has been left to others elsewhere. The mission of EIT ICT Labs is to change this set-up,” summarises VTT’s Tatu Koljonen, Vice President, Strategic Research. VTT pursues means for developing research operations, new commercialisation channels and customer relationships through the cooperation. VTT also aims to develop its research programme search operations to better meet the needs of its stakeholders.

KEY TERMS wind power, arctic conditions, Estonia KEY PERSONS Esa Peltola, Eero Ülavere KEY MESSAGE Arctic conditions pose a challenge on wind energy production. VTT CONTACT esa.peltola@vtt.fi MORE INFORMATION www.vtt.fi

Northern winters challenge

wind power

Ice build-up on the rotors reduces the amount of electricity generated by a wind turbine. Fortunately, this can be prevented automatically. Text Marjo Kosonen Photos WinWinD

VTT IMPULSE – TECHNOLOGY

he production from wind power plants suffers during harsh winters. When ice begins to accumulate on the turbine’s rotor blades, the blades will lose their aero dynamic efficiency, thus reducing production. This problem exists throughout the Arctic regions, in North America and the Nordic countries, among others. The reduced production is a special challenge, as a lot of electricity is consumed precisely during the winter in a cold climate. Fortunately, ice accumulation on the blades of a wind turbine can be prevented. “In the technology developed by VTT, an electricity-conducting layer is installed near the surface of the blade of a turbine. An ice sensor

detects the accumulation of ice, and heating is automatically switched on,” explains Esa Peltola, Customer Manager at VTT. “The need for heating varies a great deal in different parts of a blade, which means that it is very important to optimise the heating power in different parts.” The electricity consumption of such an electricity-conducting panel equals less than one per cent of the overall energy production of the wind power plant. “But if the blades freeze, the production loss can easily be ten per cent. So the benefit is considerable.” During the early stages of development, it was uncertain whether the ice prevention would ever repay itself. However, piloting in Sweden has shown that the additional investment can be recouped during a single winter

Wind turbines in Oulu, Finland.

VTT IMPULSE – TECHNOLOGY

The power of the plants has grown tenfold in 25 years.

– the production at the pilot sites was clearly higher than it would have been without ice prevention. A long time to break even

Compared to traditional electricity production methods, wind power is an expensive investment. In almost all countries, investments require government subsidies, raising the income to producers to 50–100 % of the electricity market prices. The costs incurred in the construction, repair and regular maintenance of wind turbines are high compared to the energy produced, which means that it will take a long time to break even, let alone make any profit. The viability and profitability of investments is mainly based on wind being a free and limitless source of energy that does not pollute the environment. However, the efficiency of wind power production can be increased further, and profitability improved. “The performance of the power plants have improved as their sizes have increased, as technology has developed and more experience has been gained of their construction. Improvement in regulating and control properties in particular has increased plant-specific electricity production immensely,” says Esa Peltola. The power of the plants has grown tenfold and the total height has tripled or quadrupled in the 25 years during which wind power plants have been built in Finland. More power has been gained, for example, by increasing the rotor’s swept area, while the height of the wind turbines has increased. The annual production of the power plants varies greatly, however, depending on the plant’s age and technology, and the wind conditions of the site. According to production statistics gathered by VTT, the utilisation ratio of some turbines does not reach even 15 per cent, while the best units reach almost 40 per cent. 52

On the whole, large units are efficient with regard to their overall economy, as the fixed operating and maintenance costs are spread over a larger amount of production. “It is worthwhile to utilise the economies of scale, in particular in marine constructions, as the start-up costs are high. The more wind tur-

Devoting a decade to wind power TO REACH THE EU-level renewable energy goals, around 2,500 megawatts of wind power will be installed in Finland by 2020. “In other words, wind power’s share of electricity production will rise from the current 0.5 per cent to around six per cent,” says Esa Peltola, Customer Manager at VTT. In order to meet the goal, a marketbased guaranteed price system for wind power came into force in Finland at the start of the year. Production will be supported through feed-in tariffs, or guaranteed prices, always guaranteeing a certain minimum price for electricity produced with wind power. This has increased interest in building wind power. Several dozen investment projects are currently going through the permits process. However, the goal is ambitious. “Over the next ten years, we should, on the average, build as much wind power every year as the total amount built so far,” says Esa Peltola.

VTT IMPULSE – TECHNOLOGY

Wind turbines will begin to spring up on the coast, in the archipelago and mountains.

VTT IMPULSE â&#x20AC;&#x201C; TECHNOLOGY

bines can be maintained with the same effort, the better.” Extension of maintenance intervals is one way of lowering operating costs. Finns have a strong position

Wind turbines are constructed in particular outside the EU: in China, India, United States and Canada, and increasingly in Latin America. Globally, the market in 2010 was worth around EUR 50 billion. The market is growing by around 20 per cent annually. However, the competition is fierce, both technically and as regards price. Finnish wind power companies such as WinWinD, Moventas, the Switch, Ahlstrom and Rautaruukki have enjoyed a good market position. However, improving the position also requires staying at the forefront of technical de-

velopment. As competition heats up, there must be even greater investment in research and development than before. “Finns have strengths in mechanical engineering know-how, power transmission and electric drives, and a familiarity with arctic conditions,” says Esa Peltola. However, the uncertainty of the global economy has caused many investment plans to be put on hold. “Before the 2008 financial crisis, the wind power market had for a long time grown by 20 to 30 per cent annually. However, the justifications for increasing production have not changed – wind power is an energy production method that is available everywhere in the world, is renewable and saves the environment. It will continue to increase.” n

Estonia developing the power grid IN DIFFERENT PARTS of Estonia, Finland’s southern neighbour, there are a total of 76 wind turbines, the majority of which are located on the Baltic Sea coast. The wind power production capacity is currently 149 megawatts, with projects under development with a total capacity of around 570 megawatts. Wind power’s share of Estonia’s electricity production is currently four per cent – its importance is therefore significantly higher than in Finland, where its 197-megawatt wind power capacity produces only around 0.5 per cent of electricity. The challenge in Estonia is mainly that of developing the power system suitable for wind power. “The production of wind power varies according to the prevailing wind conditions, and these variations are difficult to predict. For this reason, it is important to understand the changes in the weather, for example by studying weather databases and modelling,” says Esa Peltola from VTT. Understanding the behaviour of the power transmission grid and identifying its bottlenecks poses another challenge. The power system must be able to adapt to changes in electricity consumption without having to limit the production of wind turbines, thereby losing part of the production. In practice, electrical power plants react to changes in demand by adapting their production hourly – for example, when a harsh winter increases the need to heat buildings. However, it is not sensible to limit the production of wind power plants; it is better that other power plants adapt their production.

According to Peltola, however, the new wind turbine control techniques allow letting some of the wind go through. “It is like lifting your foot off the pedal to slow down.” Wind scenarios under scrutiny VTT has helped Estonia’s transmission system operator Elering to overcome some of these challenges. Elering maintains and operates Estonia’s power transmission grid and the cross-border connections to the power grids of Finland, Latvia and Russia. In 2008–2010, VTT carried out a study of technically different wind power scenarios for 2010 and 2016. “The scenarios were based on both real and hypothetical situations, including extreme cases. The capacity varied from 173 megawatts to 1,645 megawatts,” says Eero Ülavere, Operative Planning Specialist at Elering. The most important goal was to determine a feasible and ‘safe’ level of overall wind power capacity in Estonia. “It became apparent that it was technically possible to connect all of the capacities presented in the scenarios to Estonia’s power system. It is positive that we have strong connections to the power systems of our neighbouring countries. Further investigations concentrating on certain technical details and the overall technical picture were also suggested.” An additional task was the elaboration of slow dynamics power flow model for PSS/E, a software used primarily by transmission system companies, to model aggregate wind power output impacts. “It allows us to investigate later how sudden changes in wind power will affect the operational stability of the power system,” says Ülavere.

VTT IMPULSE – TECHNOLOGY

BUSINESS OSAAMINEN JA UUSI TEKNOLOGIA

Pages

56–76 VTT IMPULSE – BUSINESS

Making healthy rye a tasty snack Rye poses a challenge to the baker with its bitter taste and difficult baking characteristics. Unswayed by this, Ruisvoima chose the high-fibre rye grain as its main raw material. Text Paula Bergqvist Photos Antonin Halas and Ruisvoima Oy

”T

he taste of rye is strong and bitter, and its baking characteristics make it more difficult to prepare when compared to other bread grains,” says Heikki Matero, CEO of Ruisvoima Oy. “However, with current technology, we are able to utilise the most nutritious part of rye – the bran.” In spring 2011, the innovator in rye-based food products, Ruisvoima, launched a new snack product, Tempo rye chips. Using a new method, fibre and proteins are derived from the prod-

uct’s main raw material, rye, to produce a snack product high in fibre and protein. Linseed is also used to provide valuable Omega-3 fatty acids. Out with the grease and salt

According to Matero, snack foods are usually greasy and salty – in other words, unhealthy. “We found out what the consumers want. The clear response was that people want healthier products in place of the current unhealthy, so-called ‘ill-being’ products on offer. We learned about the good properties of the raw materials and the potential for their use from VTT,” says Matero. VTT IMPULSE – BUSINESS

Research continues, with consumers in mind

Heikki Matero

An invention that had already been extensively developed was found among VTT’s research database, and its customisation as a snack product was begun in cooperation with VTT. VTT was involved in the project developing not only the production method but also the product’s structure and taste. 200 recipes were tasted

Bran is the most nutritious part of rye Rye bran contains plenty of fibre and beneficial bioactive substances such as lignans, phenolic acids, vitamins and minerals. Rye fibre, in particular, has several characteristics that are beneficial to health. Studies show that rye fibre reduces the risk of various cancers, improves bowel movement and lowers blood cholesterol levels. Rye bran also helps in controlling weight by effectively maintaining a sense of fullness.

During the product development stage, around 200 different recipes were trialled before a product that fitted the Finnish taste was found. Tempo’s main ingredients are rye bran – the most nutritious part of rye – and linseed, which is an important source of Omega-3 fatty acids. The low-calorie rye bran contains as much as 22 per cent fibre and keeps hunger well at bay. “The product is designed for the Finnish market, but we are also interested in foreign markets – especially the Saint Petersburg region in Russia,” says Matero. The main owners of Ruisvoima are Primula and Food Process Innovations (FPI), established five years ago to spur the creation of food innovations. Several scientific and business forces are behind the company, including the University of Helsinki. FPI’s task is to connect research organisations and companies and thus speed up innovation. “The product is designed for the Finnish market, but we have also began cooperation with a couple of partners in Russia,” says Matero. “In the future, the innovation will be leveraged for other kinds of food products. We have already began development in cooperation with VTT.” n

VTT IMPULSE – BUSINESS

CURRENT BREAD PRODUCTION methods do not sufficiently utilise the outermost layers of the grain kernel, which provide protection against numerous illnesses. “At VTT, we have developed techniques that allow the inclusion of the health-beneficial compounds in the outer layers of grain without compromising the product’s taste. These techniques, based on microbes and enzymes, can also be used to improve the food product’s taste, structure, shelf life and safety,” says Anu KaukovirtaNorja, Technology Director at VTT. Development work takes consumer wishes into consideration. “In addition to good taste and healthiness, people are also increasingly demanding production methods that support sustainable development,” says Kaukovirta-Norja. In 1994, the Nordic ‘Rye and Health’ network was established, comprising experts from bakeries and research institutes. A lot of new information was gained through the network’s activities, for example on fibre, which was found to have a beneficial effect on intestinal health and the prevention of serious illnesses such as prostate cancer. During the 2000s, the European HealthGrain project, coordinated by VTT, has gathered information on, for example, the effect of rye on insulin metabolism and how the taste of rye can be improved with enzymes. The research continues. The goal of VTT researchers is to provide assistance in the production of rye products that are suitable for many tastes and do not cause indigestion.

Boats with soul Utility and fitness for purpose are rarely the sole criteria in mind when buying a boat. Text Katri Isotalo Photos Hannu Miettinen

VTT IMPULSE – BUSINESS

innish boats have traditionally been known for practicality and reliability, even in demanding conditions. “Nowadays, the purchase decision is based on other factors that are often not mentioned by the buyer. These can often influence their decision just as much as practicality,” says Raimo Sonninen, CEO of Bella Boats. These include a large swimming deck, a water ski pole and large-looking cabin windows. In the design of Bella’s new models, special attention was paid to illumination, functionality and cockpit ergonomics in addition to appearance. You can move around the boat easily without stepping on the upholstery. The upholstered bench seats are designed not only for sitting, but with sleeping and sunbathing in mind, too. At first, the Bella staff were doubtful whether all the details and added extras were needed. But needed they are. While many boaters are still simply looking for something that can get them from A to B without getting their feet wet – be it to their island hideaway or out and about for fishing – a significant proportion of boats sold are not bought out of necessity. “You could say we’ve been too practical, even,” says Sonninen.

In the design of new models, special attention was paid to cockpit ergonomics, among other things.

Sense and sensibility

All this means that building a good boat requires more than just cold logic. “Money and know-how aren’t enough. You also need soul,” emphasises Raimo Sonninen. Bella Boats, founded by Sonninen, is the largest man-

Raimo Sonninen

ufacturer of fibreglass motorboats in the Nordic countries. Sonninen has been building boats for 40 years, and he knows his stuff. In the early 1990s, when Bella bought Flipper boats from Rapala, money was not an issue. Flipper was paid for in cash. “We had the know-how for Flipper, but not enough soul, so the product never really took off,” confesses Sonninen. Ever since, the owner-CEO has invested wholeheartedly in each of his company’s three brands, Flipper, Aquador and Bella. Sonninen describes Bella boats as Volkswagens; they are safe and reliable vehicles for the entire family. Flippers are for the more sporty boater who enjoys speed, and Aquador is for those who want that little bit extra. Raimo Sonninen has learned that good is not enough. You have to be the best. A couple of years ago, Bella Boats set the goal of making Flipper the best outboard motor boat in Northern Europe. VTT IMPULSE – BUSINESS

Petri Heikkinen

llumination and functionality are increasingly important criteria to be considered when buying a leisure boat.

Services level out trade cycles BOAT SALES ARE sensitive to trade cycles: during the recession of 2009, the turnover of the Finnish boat industry fell by 40%. Levelling out the effect of trade cycles has been one of the goals of the Tekes Boat programme. “Increasing the service business is one way of doing this, as the expectations of leisure boaters are changing,” says Markku Hentinen, coordinator of the Boat programme at VTT Expert Services. Not everybody is willing or able to service their boats themselves. Many boat owners expect a similar level of service as they would expect for their car. Some do not even aspire to own their boat, preferring instead to hire for a week or two each year. There is also demand for various training services and boat storage. Young women account for an emerging segment in boating, both in Finland and globally.

VTT IMPULSE – BUSINESS

“Boat sellers, renters and, for example, training providers, could merge their offerings. New service concepts would be created through this cooperation,” suggests Markku Hentinen. The Boat programme has surveyed boating trends, target groups and new business opportunities since 2007. The programme, ending in 2011, has leveraged the know-how and cooperation of companies and subcontractors in the field, research institutes and universities in order to provide both consumers and professionals with better boats and improved services. The programme has funded a total of over 60 company and research institute projects. VTT has acted as the programme coordinator together with the Finnish Marine Industries Federation Finnboat.

Aquador, acquired by Bella Boats in 2000, is the fastest growing boat brand in the Nordic countries.

To reinforce their Nordic identity, Bella brought in Norwegian top designer, Espen Thorup. Three entirely new Flippers will be introduced at the Helsinki International Boat Show in spring 2012. In addition to the Flippers, an all-new hybrid Bella model will be unveiled. Pleasure boats for the neighbours

Finland has the second highest number of boats per capita in the world at around 700,000, second only to New Zealand. That said, Finland alone is not a big enough market. Around three quarters of the value of Finnish boat manufacturing goes to export. The most important export countries for pleasure

boats are Sweden and Norway. After a short hiatus, Russia is showing interest, in particular in fast and ostentatious boats, with Aquador deliveries on the up â&#x20AC;&#x201C; Putin and Medvedev included. The market for Finnish boats designed for occupational and professional use is traditionally focused around the Baltic Sea. Loviisabased Boomeranger Boats is fast breaking that rule though, with exports expanding to a global scale. Quiet hybrid

The five-year Boat programme by the Finnish Funding Agency for Technology and Innovation Tekes has studied the future prospects in

A long service life is key in professional use. 62

VTT IMPULSE â&#x20AC;&#x201C; BUSINESS

the field and the competitiveness of the Finnish boat industry. One of the programme projects, Open Wave, aims to determine the profile of the boater of the future and how international market information could be utilised in the development of boat products and services. Environmental awareness is finally reaching the boating world, too. To mark this development, one of the spring 2012 novelties will be a hybrid Bella which runs on electricity in addition to diesel. “The hybrid offers an alternative to environmentally aware boaters, while making Bella better known to those who end up choosing a traditional motor. If the reception is good, we will also build a little brother for the nine-metre hybrid,” Soininen plans. Boating with a virtually silent electric motor is nature tourism at its best. Bella Boats has also been active in the Quiet Boats project spearheaded by VTT, searching for ways of reducing cockpit noise. Environmental considerations have been prioritised more in the work boat sector than on the consumer side. “Vessel longevity and low operating costs are clearly growing in importance. More and more attention is being paid to emissions and maintenance costs,” says Jussi Mannerberg, CEO of work boat manufacturer Boomeranger Boats Ltd. From boat builder to brand builder

Since 2003, the world’s largest boat group Brunswick Corporation has been a key owner of Bella Boats with a 26 per cent share. Brunswick is best known by boaters for its Mercury motor range, also used by Bella. “The market expertise of a large company has proven very useful, for example with respect to international expansion,” acknowledges main owner Sonninen. Bella employs around 270 people in Finland, with around two hundred or so in Eastern Finland. According to Sonninen’s estimate, the company employs around 550 people in total when subcontractors are taken into account. In 2010, Bella Boats had a turnover of around EUR 35 million. In addition to volume, production chain management and smooth cooperation with subcontractors form an essential part of costs and quality. “The best design and reliability combined with moderate production costs. That’s the recipe that I think will keep boat industry jobs in Finland. Today, however, it is not enough that you can build boats. You must also know how to build brands,” emphasises Sonninen, who built his first boat when he was 12 years old. n VTT IMPULSE – BUSINESS

Boats to fight pirates BOOMERANGER BOATS LTD., celebrating its 20th birthday this year, designs and manufactures Rigid Inflatable Boats (RIB). The vessels are custom built to customer requirements and their materials, structure and construction are extremely durable, providing high performance. The clientele of Boomeranger Boats mainly comprises the defence forces, border guards and marine rescue authorities of different countries. Their selling points are individuality and durability. A good example of this is the carbon fibre boat built for the Swedish Navy for fighting pirates, which has proven successful in the harsh conditions of the Somalian coast. This year, Boomeranger Boats also delivered support boats for the Volvo Ocean Race. The boats are built in Loviisa by hand, which enables the use of alternative materials. Boomeranger Boats began cooperation with VTT in 1996 during a project to investigate means for improving the sea-worthiness of patrol boats together with the Finnish Border Guards. The company has been involved in a VTT project under the Finnish Funding Agency for Technology and Innovation Tekes Boat programme aimed at creating a prediction method for the load subjected to the transom of an outboard motor boat. VTT Expert Services also acts as the official inspector of Finnish work boats. Its work boat inspection guidelines were recently implemented by the German Defence Forces. Boomeranger Boats Ltd. is part of the Finnish Revenio Group Corporation listed on the Helsinki Stock Exchange. The company currently employs over 20 persons, and its turnover in 2010 was EUR 3.4 million.

Deinococci – real survivors

The French company Deinove is developing new bioprocesses, biofuels and chemicals by exploiting the unique Deinococcus genus. Text Paula Bergqvist Photos Michael J. Daly, Uniformed Services University of the Health Sciences

he Deinococcus genus of bacteria has been knowns since 1956 when Arthur W. Anderson at the Oregon Agricultural Experiment Station discovered the strain in a radiated can of meat during an experiment. The bacteria had survived a very high dose of radiation. Decades of study have been devoted to the strain because of its radioresistancy. In 2006, Professor Miroslav Radman discovered the genetic basis of the robustness of Deinococci bacteria, and the molecular mechanism which enables them to repair their genome after being damaged by radiation or a major stress. It was Radman’s studies which led to the idea of using the exceptional properties of the strains – robustness and the capacity to digest complex sugars – in turning biomass into bio fuels and biochemicals. 64

Deinove’s innovation strategy is based on Professor Radman’s research, a co-owner of the company. The French greentech company is dedicated to the development and commercial exploitation of innovative processes for the production of biofuels and chemicals. It is aiming at creating breakthrough technologies in second-generation biofuel production and green chemistry. Deinove is now focusing on achieving the next milestones in its biofuel and antibiotic projects with the help of these exceptional bacteria. The company is currently selecting partners and subcontractors for its green chemistry project. “We are exploiting the exceptional properties of Deinococci for application in industrial processes,” says Angelita de Francisco, Vice President of Institutional Affairs & Licensingin at Deinove. “In tapping into the immense genetic biodiversity of the genus we have been VTT IMPULSE – BUSINESS

selecting the best candidate strains and improving their fermentation capacity, as well as their metabolic properties for digesting biomass.” Tough and robust bacteria

The Deinococci bacteria are among the oldest living organisms on Earth, and are known to be tough and robust – even radioresistant. The bacteria have the splendid ability to digest biomass, which is useful when developing 2nd generation biofuels. Deinococci has the capacity to digest C5 and C6 sugars, starch and xylane, for example. Deinove currently maintains a collection of over 7,000 Deinococci strains – all of them rare, original and still unexploited. The company has patented proprietary technologies for collecting, selecting and characterising the bacterium. Patents have also been obtained for metabolic engineering tools to boost up the properties of the bacteria, turning them into efficient cell factories for producing valuable compounds – bioethanol and other chemicals – from biomass. Partnership with VTT

“As in most biotechnology companies, we do not have all the key expertise in-house that we need for the development of new bioprocesses,” says CEO Jacques Biton. “Deinove therefore operates closely with several academic partners: the CNRS in Montpellier and Marseilles, the University of Paris V, INSA Toulouse, and now also with VTT.” In 2009 Angelita de Francisco and JeanPaul Leonetti, Vice-President R&D, seized the VTT IMPULSE – BUSINESS

opportunity to take part in a Finnish-French meeting in Finland involving a visit to VTT. “The excellent and well-organised R&D performed at VTT soon convinced us to sign a partnership to help us in achieving the key milestones of our core project, Deinol,” says Jacques Biton. Deinove signed a 20-month research service agreement aimed at developing Deinococci enzymes, especially cellulases and hemicellulases, and at selecting the candidate strain for the Deinol processes. Study of the physiology and metabolism of the bacterium was also included in the deal. “Working in a new area was very challenging,” says Jean-Paul Leonetti. “In the beginning we did not really understand how interesting the research target was. Now, after one year, we know so much more.” Discussions for extending the cooperation between Deinove and VTT are currently in progress. Building an IPR portfolio

“Deinove is the only company in the world that systematically explores the Deinococci,” says Jacques Biton. “Despite its exceptional biodiversity, it has rarely been studied and never exploited commercially.” Deinove builds its IPR portfolio and biomanufacturing processes by combining bacterial engineering with a selection of wild strains with natural properties that are already of industrial value. “This approach,” continues Biton, “separates us from companies that try to design complex, genetically modified organisms from bacteria that lack the metabolic properties of industrial interest to start with.” “In the past 3 years we have witnessed fierce competition in developing new bioprocesses worldwide,” adds Angelita de Francisco. “This can be seen especially in the increase of governmental support for renewable products and processes in the USA – but also in Europe.” By now, Deinove has filed 10 international patents and partnered with Tereos, a leading sugar, ethanol and starch company, to develop a process for producing cellulosic ethanol in an existing industrial facility. “Industrial pilot testing will start in 2012,” says Biton. “The objective is to bring the new process to the market by 2014. In addition to the Deinol project, at the moment we are filing for a grant launched by the French government for a green chemistry project.” n

Deinove sets sights on the industrial market Deinove is aiming at creating breakthrough technologies in second-generation biofuel production and green chemistry. The company intends to leverage its proprietary bacterial strains, technologies and processes by out-licensing to industrial partners. Deinove was established in 2006 through the impetus of Dr. Philippe Pouletty and Professor Miroslav Radman. The company was successfully floated on the Alternext Stock Exchange in April 2010. Deinove’s headquarters are located in Paris, and it has a laboratory in Montpellier in Southern France. The in-house scientific team consists of 19 researchers and engineers led by Dr Jean-Paul Leonetti in Montpellier. The total number of staff is 25.

Laser precision Veslatec, the first company to import an Nd:YAG laser into Finland is constantly on the lookout for new machining applications for its lasers. The precision of these lasers is in a class of its own – with laser technology constantly improving, other characteristics of lasers are also being improved, thus opening up new possibilities. Text Anne Hänninen Photos Veslatec Oy, iStockphoto

VTT IMPULSE – BUSINESS

A laser can cut electric circuit board at a pace of six metres per minute.

VTT IMPULSE â&#x20AC;&#x201C; BUSINESS

aser has revolutionised fine mechanical machining. Conventional methods such as lathing and milling now have a competitor in laser machining, the precision of which is in a class of its own. One of the frontrunners of fine mechanical laser machining in Finland is Veslatec, which has advanced the field since the 1980s led by Olli Saarniaho. Market research carried out in 1987 led to the acquisition of the first laser in 1989. “As a company, we were pretty much a lone wolf in Finland. We were the first to import an Nd:YAG pulse laser, its neodymium-yttriumaluminium garnet being the most commonly used material in lasers,” Saarniaho reminisces. Veslatec started developing precision laser machining: marking, cutting, drilling and welding. VTT was involved in the work right from the beginning. In the early days, one of the most important customers was Vaisala which was productising its acceleration sensor and needed tools for its manufacture. Laser was the only tool available with enough precision for manufacturing the masks used to apply the desired geometrical pattern on silicon during production.

In addition to its extreme precision, the benefits of laser machining include its energy efficiency, high machining quality, faster production and improved productivity. Laser can also be used to machine a wide variety of materials. Better precision – lower price

Today, fibre lasers have partially replaced the old pulse lasers, enabling new applications. Current fibre lasers achieve an entirely new category of speed. A five-axis 3D laser can cut thin materials at a speed of 25 to 35 metres per minute. The speed is over ten times that of a pulse laser. “We manufacture, for example, motor plates, and are very close to the point where laser beats stamping. With small production batches in particular, the price of laser machining is already competitive.” The use of a fibre laser is also supported by quality. “The results are absolutely unbeatable. All of our customers have been satisfied with the quality of the work,” praises Saarniaho. The mechanics of the lasers have also been developed, which has further increased their speed and precision. With a five-axis laser, a positioning accuracy of as high as 15 micrometres can be achieved reliably. For comparison purposes: a single strand of hair is 17 to 180 micrometres thick. The technology is constantly developing. The beam quality of diode lasers is improving and equipment prices are dropping. Devices are

Current fibre lasers achieve an entirely new category of speed.

VTT IMPULSE – BUSINESS

Laser is the only tool that can work 0.03 mm wide grooves with precision.

also getting smaller. The combination of affordability, reliability and precision opens possibilities for using lasers in entirely new applications. New problems for an old solution

When laser was first invented 50 years ago, it was known as the ‘solution looking for a problem’. True to the saying, problems have indeed since been found in numerous fields over the years. Traditionally, Nd:YAG lasers have been in medical use, for example in eye surgery and the treatment of skin problems. Their use has since expanded to cover a vast range of applications, from military weapons to CD discs. Laser marking was the first application to be widely adopted in industry, with other processes following suit as the lasers developed.

Parts of a watch

VTT IMPULSE – BUSINESS

Solar cells are one of the most interesting future applications. Here, production speed is important as the price of the products must be kept low. Veslatec has researched the cutting and welding of the aluminium parts of solar cells. Today, the cutting technology is already well developed, but challenges remain with respect to welding. The future outlook is good, as EU has set strict requirements on the use of renewable energy. The field must grow extremely quickly, which opens the doors for new solutions and entrepreneurs. “The solar cell market is so large, that getting into it would expand our potential ten times,” says Saarniaho. The laser machining market is constantly growing and new areas of application for lasers are still being found.

A brief history of the laser • 1917: the theoretical basis for lasers is established following Albert Einstein’s proposal, based on Planck’s law of radiation, of the idea of stimulated emission. •1953: Charles Hard Townes and his postgraduates build the first microwave amplifier, the maser, which has the same operating principle as a laser. However, Townes’ maser does not produce a continuous beam. • 1960: Theodore Maiman Hughes and his team present the first functional ruby laser at the Research Laboratories. The first gas laser is built during the same year. • 1962: the first semiconductor laser is built, first producing infrared but, later that same year, a visible wavelength laser is built. • 1970: the first continuously operating laser diode that can be used at room temperature is developed. Earlier lasers producing pulse light required continuous cooling with liquid nitrogen. • 1982: the first consumer application using a laser is launched on the market – the CD player.

Laser was called the ‘solution looking for a problem’.

“This is a good field to be in because laser applications are so new, so we’re not taking much business away from others. The exceptions to this are mainly traditional spot welding, soldering and possibly ultrasound welding.” The fruits of Veslatec’s efforts

An example of Veslatec’s own research and development is the segmented ink blade for offset printers, developed in the early 1990s. The segmented ink blade allows a more accurate adjustment of the amount of ink used in printing. This improves the print quality but also reduces the number of ruined print products during the printing process and the use of expensive ink. Laser was the ideal method for manufacturing the segmented ink blade due to its precision. During the process, 0.03 millimetre wide grooves are precisely machined onto the metrewide blade. The process is made additionally challenging by the fact that the groove edge

must be as even as possible. No other tools can attain this level of quality. The ink blade is still being developed: in cooperation with VTT, Veslatec is currently investigating the possibility of manufacturing the blade by welding from pieces. Veslatec is researching new possibilities and applications in laser machining, both on its own and in cooperation with VTT and, for example, the Tampere University of Technology. “The ink blade became almost too important to us, and during the finance crisis the market shrank significantly,” says Saarniaho. Today, Veslatec has customers in Finland, Germany, China, India and the United States. Next, Veslatec has its sights on Sweden. “Our belief in the future of laser machining is strong. Acquiring our own fibre laser was a large investment, but we believe it will be worthwhile. We need to find new applications and, in that way, new customers in order to remain frontrunners in laser machining.” n

Laser cutting and spot welding enable great precision.

VTT IMPULSE – BUSINESS

Olli Saarniaho

Bouncing ideas to break new ground COOPERATION BETWEEN VESLATEC and VTT began back at the turn of the 1980s and 1990s in the form of small-scale subcontracting. Since then, they have been involved in numerous joint projects, including several shared projects with the Finnish Funding Agency for Technology and Innovation (TEKES). The companies use each other as sounding boards for new ideas, breaking new ground in the process. “Olli Saarniaho has been a genuine pioneer in laser technology as an entrepreneur, and he has long been a regular customer and cooperation partner of VTT: He likes to be fully up to date with all the latest advances, so he maintains close contact with us at VTT and with technical universities,” says Team Leader Ilkka Vanttaja from VTT. Veslatec gives VTT researchers a view of the everyday routines and operations of a small

VTT IMPULSE – BUSINESS

and medium-sized enterprise, which helps them understand the needs of the customers and the requirements of business operations. For Veslatec, VTT is an impartial expert which not only has a vision of the future of laser technology but also has connections to different fields of industry and markets as a multi-technology house. “Our main market, Finland, is small, so we need to consider carefully which future paths to choose. VTT provides us with technical information on the direction in which lasers are developing,” explains Saarniaho. As their latest joint project, the partners are embarking on a new cooperation arrangement in which VTT performs market analysis for Veslatec, in particular for the purpose of finding new customers. “VTT’s knowledge and connections help us to see where we need to invest at Veslatec.”

VTT IMPULSE – BUSINESS

The art of automation in

traditional handicraft

Kalevala Koru looks to boost its jewellery manufacturing through technology and automation – through its handicraft.

Text Mirkka Isotalo Photos Matti Immonen

he tradition of Finnish craftsmanship is alive in Helsinki. Annually; around half a million pieces of silver, bronze and gold jewellery are manufactured at Kalevala Koru group’s factory every year. Traditional goldsmithing still plays a significant role in the manufacturing. Half of the around 160 production employees are goldsmiths. In addition to the goldsmiths, they employ casters, pressers, wax makers, stone setters and finishers. Jewellery largely remains a handicraft. On the average, one piece still travels through 16 pairs of hands. Help from nanotechnology

However, the globalisation of the market, for example due to the increase in cheap imports, is forcing Kalevala Koru to look for new ways of surviving the competition. “We need to find solutions for making jewellery manufacturing in Finland more affordable,” outlines Mika Elamo, Production Manager at Kalevala Koru. Technology is coming to the rescue. The jewellery business has traditionally only rarely adopted technological innovations. However, Kalevala Koru has managed to improve significantly the profitability of jewellery manufacturing with the help of technology. In 2006, the company was the first in its field to start using a new, nanotechnology-based ALD coating method. Protecting the jewellery from tarnishing, the method has both improved the quality of the products and saved costs.

VTT IMPULSE – BUSINESS

Lathes have increased automation in ring manufacturing. Also bench pins (pictured) are a part of the manufacturing process.

“The Lapponia silver jewellery used to be lacquered. However, many pieces were returned, because the lacquer coating didn’t stick and had to be redone. These problems no longer appear,” says Elamo. Major investment

Kalevala Koru is now pursuing a similar, permanent competitive edge with an extensive technology programme, for which it has applied for funding from the Finnish Funding Agency for Technology and Innovation for the years 2011 to 2015. The goal is to develop future jewellery manufacturing techniques, create new know-how and new methods, and to enable innovations. According to Mika Elamo, a major investment is essential for the company. “There are no longer many fields where handicraft is prevalent in Finland. Running a business here is possible, but it requires investments and streamlining the manufacturing.” In spring 2011, VTT carried out a technology survey as a basis for the development programme, itemising the development areas of current jewellery manufacturing and identifying four areas on which Kalevala Koru should focus in its technology programme. These are the development of production technology, increasing automation in production, and the implementation of new, innovative jewellery manufacturing technologies.

ALD coating protects silver jewellery from tarnishing.

The procedures will also be made more efficient and flexible than before. Cost-effectiveness must be achieved not only through making production more efficient but also by refining the procedures. Unique designs, large production lots

According to Mika Elamo, in the future Kalevala Koru intends to manufacture more jewellery by pressing, which is significantly faster and more industrial than the traditional casting process. However, the change is not simple, as casting allows unique designs that cannot be manufactured by pressing.

A method for protecting jewellery from tarnishing has both improved the quality of the products and saved on costs. 74

VTT IMPULSE – BUSINESS

Mika Elamo

Kalevala Koru draws from its Finnish roots BEING FINNISH HAS always been important for Kalevala Koru, which started operations in 1937. The largest manufacturer and designer of jewellery in Finland is known for its Finnish design and national motifs. Kalevala Koru manufactures all of its products in Finland, which is rare for an industry where handwork is prevalent. When the company bought the internationally famous Finnish jewellery brand Lapponia Jewelry in 2006, all of its production was also moved to Finland. Previously, some of the products were manufactured in China. “Manufacturing our jewellery in countries with cheap production and selling it in Finland is just not possible. We want to keep the brand untarnished, Finnish and handwork-intensive,” states Production Manager Mika Elamo. Rough challenges The jewellery market has become global. Cheap imports have made the competition significantly tighter in Finland,

VTT IMPULSE – BUSINESS

Kalevala Koru’s main market area. As the products cannot compete on price, they must rely on the attraction of quality and design. Lapponia, known for its unique design, has fared well on the domestic market: its sales have increased in Finland. The situation of the Kalevala Koru brand is more difficult. “We must fight for our market share,” Elamo admits. Even Lapponia has problems in the export business, as the sales of design jewellery in Europe are hampered by the bleak economy. Jewellery manufacturers are also burdened by the radical price increase of raw materials, which eats into the margins. For example, the price of silver, important to Kalevala Koru, has almost tripled in three years. “Manufacturers cannot add the price increase of raw materials to the jewellery prices, as people are not prepared to pay so much for jewellery.”

“Annually, we publish around one hundred new designs. In many of them, the artist’s vision cannot be realised with the pressing technique,” says Mika Elamo. Some of the jewellery that used to be manufactured by casting is, however, currently manufactured by pressing. This allows the efficient manu facturing of large production lots. What will happen to handicraft?

Even if pressing were to become more common, Mika Elamo says that the casting of jewellery would not be significantly reduced. However, investing in pressing techniques would improve the profitability of jewellery manufacturing, allowing the sale of jewellery at more affordable prices than currently. Increasing pressing is part of the plan to increase the share of automation in jewellery manu facturing. This is a difficult issue in a field where handwork adds value to the product. In Kalevala Koru’s production, automation is also represented by, for example, wax, casting and inlaying machines, grinding and polishing drums, and automatic lathes for ring manufacturing. “It is difficult to add automation to smithing. In other parts of the process it is difficult but not impossible,” says Mika Elamo. He believes that the full automation of casting production may be possible in the future. Surface finishing is another possible application. Another ambitious goal is the introduction of completely new technologies and manufacturing methods to jewellery manufacturing. Potential technologies are being sought in other fields of industry. According to VTT, examples of new, innovative technologies include ALD coating, utilisation of laser technology, and new ring manufacturing technologies based on serial production. Mika Elamo emphasises that the importance of handwork in jewellery manufacturing will not be reduced even if automation is increased and new technologies adopted. “We will continue to be a field where handicraft is prevalent.” Agile trendsetting

In addition to making production more efficient, the technology programme has the goal of refining Kalevala Koru’s organisation into tip-top shape. Through the development of new ways of working, competence and leadership, the company intends to ensure that it is able to react agilely to quick changes and trends in the market, and identify needs for development at a sufficiently early stage. An indicator of the speed of the change is that, when Mika Elamo started work at Kalevala Ko76

ru during the late 1990s, the company launched a couple of new products per year. Today, around one hundred new designs are released every year. Elamo is convinced that the technology programme will improve the competitiveness of Kalevala Koru and thus the entire Finnish jewellery industry. Although the collections have increased in size and the company’s jewellery attracts new users all the time, there will also be enough potential customers in the future. “Men wear jewellery more often these days. That is one possibility.” n

The final piece of jewellery is cast with the help of plaster moulds packed into a metallic cylinder.

Casting takes time Currently, 80 per cent of Kalevala Koru’s and Lapponia’s jewellery is manufactured by casting, with the rest manufactured by pressing. Casting is a multi-stage process involving a lot of handwork. Once a designer has designed a new piece, digital image is created with 3D modelling software. Next, a mock-up of the piece is made and this is used to manufacture the rubber mould required in the casting. The mock-up is placed between two plates of natural rubber, and the rubber plates are pressed together and heated. Once the rubber has cooled, it is cut into half and the mock-up removed from between the halves. An empty cavity in the shape of the piece of jewellery to be cast is left between the halves of the rubber mould. The finished rubber mould is used in the creation of wax blanks. The rubber mould is filled with molten wax in the wax machine. Once the wax has set, it is removed. The wax models of the pieces to be cast are then fixed into a metal frame, and a metallic cylinder is placed around the resulting wax tree. The cylinder is then filled with liquid plaster. Once the plaster has dried, the mould is first heated to over one thousand degrees and then cooled down to around 700 degrees for casting. The plaster mould is placed in the casting machine, where it is filled with molten metal. Once the casting has cooled, the mould is broken and the surface of the blanks ground and cleaned. Finally, a goldsmith makes the final piece of jewellery from the cast blank. Manufacturing a single piece of jewellery by casting takes several days, and up to a week for new designs. Pressing is a faster and more industrial manufacturing method compared to casting. A piece of a metal plate is pressed between two metal plates, and the designs in the mould are copied onto its surface. The finished jewellery blank is removed from the piece of metal plate. VTT IMPULSE – BUSINESS

CURRENT

New system improves intersection safety up to 80% THE INNOVATIVE VEHICLE and infrastructure technology, developed in the European INTERSAFE-2 research project, can reduce accidents at intersections by as much as 80 per cent. Intersection safety was developed with the help of four systems: Right-turning assistant, Left-turning assistant, Intersection assistant and Violation of obligation to give way. These safety systems enable the anticipation of routine traffic situations, allowing the driver to be assisted during dangerous situations. Sensors communicating with each other were installed at intersections and on vehicles. VTT has been building a roadside system that measures the friction of the road surface using a camerabased technology. VTT has also developed sensor data fusion allowing the data from the roadside systems to be combined with a map database, sent as a single packet to vehicles approaching the intersection. VTT is also involved in the assessment of the safety effects of interoperating systems when their utilisation begins during the period 2015–2025. Involved in the project were BMW, IKA, INRIA, NEC Europe Ltd., SWARCO, TRW Conekt, SICK, the Technical University of Cluj-Napoca, Volvo, VTT and Volkswagen. Further information: Matti Kutila, matti.kutila@vtt.fi

Rain obstructs traffic in Europe the most THE INTERNATIONAL RESEARCH project Extreme Weather Impacts on European Networks of Transport headed by VTT shows that in Europe rain causes the greatest hindrance to traffic. Heavy rain causes floods cutting traffic connections, preventing the sailing of inland waterway vessels and causes damage to earth constructions. The project is investigating the impacts of extreme weather phenomena on various forms of transport. The aim is to determine which weather phenomena are the most harmful for transport and what the costs of their impacts might be in the EU. High winds are bad for aviation in particular, but maritime and rail transports are also affected by them. Thunderstorms cause disruption mainly when lightning strikes incapacitate traffic control systems. Rail transport and aviation are particularly susceptible to this, as they require traffic control systems to be fully operational all the time. From Finland, the Finnish Meteorological Institute and Foreca Consulting also participated in the project. Further information: Pekka Leviäkangas, pekka.leviakangas@vtt.fi

VTT IMPULSE – BUSINESS

VTT Vuorimiehentie 5, Espoo P.O.Box 1000, FI-02044 VTT, FINLAND Tel. +358 20 722 111 www.vtt.fi