Creating Knowledge Transfer Environment: Case of Estonian Biotechnology Smes

The aim of this article is to evaluate the ratio of expenditures between fundamental research, applied research and technological development, to analyse this proportion in the innovation processes of Estonian biotech public sector and private SMEs, and to shape supportive measures to knowledge transfer and entrepreneurship in the biotechnology sector. The empirical study explores Estonian biotechnology by mapping the strategy, innovation processes and related expenditures of the public sector and private businesses. The author deduced the gross funding structure proportion of basic and applied research, and product/service development in Estonian biotechnology sector according to the formula: 11:5:1. The structure of research expenditures in the public sector mostly reflects the success of Estonian biosciences rather than the success of the biotech as an economy sector. Some options for improvement of sectoral system of innovation are given.