MAGNETIC LATVIA MAGAZINE 2 / 2019 - Startup Latvia
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MAGNETIC LATVIA MAGAZINE 2 / 2019
CONTENTS
2 Why Magnetic Latvia? / Andris Ozols, former director
of the Investment and Development Agency of
Latvia (LIAA)
4 Physicists define magnetism as the capacity to
attract. For everyone else, magnetism manifests
as the desire to have a link with Latvia / What is
Magnetic Latvia?
6 Connect with the world and with Latvia / Calendar of
events organised by LIAA
8 How can LIAA help?
10 Festival iNOVUSS
12 The World Bank’s ease of doing business index has
ranked Latvia No. 19 in the world, but where to invest?
18 China meets Europe in the Baltics. An interview with
Wang Jing, the co-founder and chairman of BGI
22 ‘Riga has demonstrated itself as a place where
people are excited to work and achieve big things.’
Foreign investment experiences in Latvia
24 The six coolest Latvian companies you need to
know about
36 Linking design and technology
42 Latvia – surprisingly rich in places to zen out
Published by Frank’s House, Ltd
Stabu iela 17, Riga 50 Latvia: a heavyweight cultural hub all year round –
frankshouse.lv Why there are no separate words for mountain
Editor in chief: Ilze Pole and hill in Latvian – Where paganism is subtle
Managing editor: Zane Nikodemusa and beautiful. Three essays on unique experiences
Copy editor: Amanda Zaeska
Design: Marika Kossatz
in Latvia
Layout: Inta Kraukle 56 Your city guides: explore Riga, Alūksne, Liepāja,
and Daugavpils, this winter!
Cover photo by Arvīds Barānovs
A view over Murjāņi in Vidzeme 64 What do Instagram stars think about Latvia?
OVERVIEW
ANDRIS OZOLS,
Former director of the Investment
and Development Agency of Latvia
2
Anticipating the future
You’d better be prepared for the future! Have it all
figured out. That’s the fastest route to success.
So they say.
But progress rarely happens overnight. This is why
trying to find the recipe for success is a never-ending
pursuit. And a little help comes in handy. We’ve
therefore prepared a road map to your success
that we’re happy to share. So enjoy exploring it in
the magazine.
We believe that the world needs great stories.
Stories filled with inspiration, smart decisions, and
hard work. We always take pleasure in looking at the
achievements of Latvian companies. Because seeing
those who work with dedication towards turning their
dreams into reality is what motivates us to do our own
job even better.
But speaking of the future, we think a lot about it. And
this year, again, we’ve combined the efforts of our
team to build something that should not be missed by
start-ups, entrepreneurs, scientists, new technology
geeks, or just people needing a little push from the
outside to become great. It’s the iNOVUSS festival.
We’d like to think of it as an event where innovation
starts. Because often it all begins with a useful
thought or the good fortune of meeting the right
people. Get to know this festival and join us next year!
But Magnetic Latvia is not only about trying to outrun
the future; it’s also about being right here and right
now. Engaging all your senses. Exploring the beauty
of Latvia. Don’t miss it.
I encourage you to have a look at what we’ve done,
what we plan to do, and what we can do for you and
together with you. Enjoy!
3
OVERVIEW
MAGNETISM
Great Ķemeri
Bog Trail
4
You might wonder about it, but it Latvia may be small. But that makes
does work. everything closer.
Latvia attracts, and strongly. We don’t have a huge population, but there
Physicists define magnetism as the is no shortage of talent.
capacity to attract. For everyone Not so many orators, but many movers
else, magnetism manifests as and shakers.
the desire to have a link with No great mountains, but great minds.
Latvia, whether that be through Latvia is known for world-renowned
business, culture, recreation, musicians and equally for renowned
entertainment, or personal quantum physicists.
relationships. What’s more, Latvia Latvians may be hesitant huggers, but they
is also able to connect seemingly never shy away from hard work.
polar opposites. We have both the oldest oak trees and the
latest technology.
We have lots of storks – and a surprising
number of robots.
Some think Latvians are predictable. We
call it well-disciplined.
Responsible, reliable, qualified partners,
fluent in several languages.
We keep our promises. We abide by
decisions and act on them.
That, too, is Latvia’s attraction. Or, as they
say elsewhere – magnetism.
5
CALENDAR
LOCAL EVENTS Publicity photos and by iStock
LIAA PROVIDES AN EXTENSIVE LIST OF LOCAL EVENTS, INCLUDING
HIGH-LEVEL CONFERENCES, FORUMS, AND DISCUSSIONS. HERE ARE
SOME OF THE MOST SIGNIFICANT UPCOMING EVENTS IN LATVIA. DEEP TECH ATELIER –
A TECHNOLOGY CONFERENCE
BY MAGNETIC LATVIA
April 3–4, Riga
Deep Tech Atelier focuses on
the creation and development of
international scientific start-ups. At
this conference, business meets
science as start-ups, research
organisations, entrepreneurs,
industry representatives,
and public administration
representatives all come together
in one place. In 2019, Deep
Tech Atelier featured more than
50 speakers (on three stages) from
a variety of countries and attracted
650 conference participants.
deeptechatelier.liaa.gov.lv
BALTTOUR 2020 NATIONAL SELECTION FOR
INTERNATIONAL CREATIVE BUSINESS CUP 2020
TOURISM TRADE FAIR Throughout March
January 31 – For already the sixth time, Latvia
February 2, Riga will organise a national selection
Balttour 2020, the process for the Creative Business
27th International Cup, a business idea competition for
Tourism Trade Fair young entrepreneurs in the creative
takes place at the and interdisciplinary industries. The
Ķīpsala International competition is a global initiative aimed
Exhibition Centre. at supporting creative ideas and
This annual event, fostering innovation.
the largest and most creativebusinesscup.com
significant tourism expo DIGITAL MARKETING AND
in the Baltics, opens the NETWORKING EVENT WITH LIAA
new tourism season in REPRESENTATIVES
the region and brings December 17
together industry Every year entrepreneurs have
professionals and travel a great opportunity to meet LIAA
enthusiasts. The fair representatives abroad to gain
also hosts the Balttour valuable information for business
tourism business forum improvement. We constantly follow
to discuss current the latest trends, and therefore this
issues and trends in the year’s event will also include a digital
industry’s development. marketing workshop for maximising
balttour.lv your company’s performance on
digital media channels.
liaa.gov.lv
6
EVENTS ABROAD EXCELLENT STOPPING POINT
When your flight plans take you
CONNECT WITH THE WORLD AT SOME OF to Sector C at Riga International
THE MOST IMPORTANT BUSINESS VISITS Airport, take the opportunity to
ABROAD ORGANISED BY LIAA. visit the Magnetic Latvia Business
Information Centre established
by LIAA, where you can not
only learn more about Latvia but
also hold business meetings
or presentations.
The centre is especially
convenient for travellers who
have to spend a longer time at the
airport before their flight. LIAA has
created a relaxed atmosphere by
way of tree silhouettes that reflect
the Latvian landscape and two
directly adjacent seminar rooms
for meetings and presentations.
LATVIAN STAND AT ITB LATVIAN STAND AT SALON
BERLIN 2020 INTERNATIONAL DE LA LINGERIE
March 4–8 January 18–20
Berlin, Germany Paris, France
ITB Berlin (short for Internationale The Salon International de la Lingerie
Tourismus Börse) is the world’s is the leading global show for the
largest travel trade fair. Cities, intimate apparel and swimwear
tour operators, booking system market. Representatives of Latvian
developers, airlines, hotels, and businesses will be happy to
other businesses concerned meet you and demonstrate their
with tourism introduce products as well as establish
themselves and their services far-reaching contacts and begin
and inspire wanderlust. Sixteen new partnerships. Magnetic Latvia is open to
Latvian tourism businesses saloninternationaldelalingerie.com anyone who wishes to use it
and organisations will be as an office, and it is equipped
represented at the Latvian LATVIAN STAND AT NY NOW 2020 with free high-speed internet
national stand. February 1–5 access. Local producers are
itb-berlin.com New York City, United States encouraged to meet with potential
At this leading trade show for investors and clients to discuss
LATVIAN STAND interior design items, entrepreneurs export possibilities and view
AT VAKANTIEBEURS showcase current trends in the presentations using the centre’s
UTRECHT 2020 industry. It is one of the most 3x10-metre screen. Every day
January 16-19 important meeting places in the from 9:00 to 18:00, LIAA staff are
Utrecht, The Netherlands United States for designers and on hand to provide information
Visited by prospective tourists, manufacturers, combining the best in about Latvia, cooperative business
this is one of the biggest lighting, accessories, textiles, and the opportunities, and interesting
tourism fairs in the world. Visit latest in the realm of technology. The sights to see while in Latvia.
the Latvian stand to meet most important criteria to be selected It is also possible to make an
tourism specialists and industry for participation in the exhibition are appointment to meet with LIAA
entrepreneurs eager to tell high-quality products, innovative specialists in a variety of fields and
about the rich opportunities for solutions, and trends that include get the latest in-depth information
tourism in Latvia. modern nuances as well as creative on business topics such as
vakantiebeurs.nl and individual solutions. investments, innovations, state
nynow.com support programmes, and more.
7
OVERVIEW
HOW CAN HELP?
IDEA DEVELOPMENT
YOU HAVE A BUSINESS IDEA, YOU’VE ALREADY STARTED A
BUT YOU DON’T KNOW WHAT BUSINESS AND ARE LOOKING FOR
TO DO NEXT? DEVELOPMENT OPPORTUNITIES?
BUSINESS INCUBATORS BUSINESS INCUBATORS START-UP SUPPORT
(PRE-INCUBATION (INCUBATION PROGRAMME) A company that meets the
PROGRAMME) A business incubator is a definition of a new business
A business incubator provides combination of infrastructure under the Law on Aid for the
the right support on your path and personnel designed to Activities of Start-up Companies
to a powerful and export- help develop young, viable, and may qualify for the following aid:
oriented company. The aim competitive merchants. The aim Aid programme for attracting
of the incubator is to support of the incubator is to support highly qualified employees.
individuals wanting to start a individuals wanting to start a Aid in the amount of 45% for
business and existing companies business and existing companies attracting highly qualified
(not registered for more than (not registered for more than three employees to address specific
three years) by providing years) by providing the necessary research activities, technological
the necessary environment environment for business start-up problems, or to develop new or
for business start-up and and development, consultations, significantly improved products
development, consultations, training and activities on general or technologies.
training and activities on general business issues, mentor support, Aid programme for
business issues, mentor support, and grant co-financing. fixed-wage payment.
and grant co-financing. In addition to the opportunities Support up to the amount of
During the pre-incubation provided by the pre-incubation two minimum monthly wages for
phase, people with business programme, incubation offers staff costs.
ideas can use the incubator’s the possibility of receiving Personal income tax relief.
coworking premises and office 50% co-financing for the purchase An employee of the start-
equipment, consultations, of services required for the up company is exempt from
training, and mentor support development of your business, for personal income tax.
for six months free of charge in example, accounting, premises
order to validate their ideas and lease, design, marketing, START-UP VISA
viability. They may also qualify for technology consultations, prototype Offered to all non-EU start-
incubation at a later stage. development, certification, up founders who are willing
laboratory costs, etc. LIAA to come and kick off their
provides aid for the purchase start-up ideas in Latvia. One
of these services. As a part start-up may have up to five
of the incubation programme, founders with start-up visas. The
participants may receive a application process takes one
grant (with 50% co-financing) of month. The visa is granted for a
up to 10,000 euros and up to period of three years maximum
5000 euros to cover the cost of and also applies to a spouse
equipment purchases. and children.
8labsoflatvia.com/en/support
Customer services department
Phone: +371 67039499
E-mail: jautajumi@liaa.gov.lv
EXPORT
ARE YOU READY TO
OFFER YOUR SERVICE OR
PRODUCT ABROAD?
INNOVATION VOUCHER PROMOTING INTERNATIONAL ENTERPRISE EUROPE
This programme provides aid to COMPETITIVENESS NETWORK (EEN)
companies for the development This programme provides The Enterprise Europe
of new products or technologies. support ranging between Network provides the
Aid of up to 25,000 euros with 25–50% of the costs for following services free
a 45-100% intensity can be participation in international of charge: international
obtained for the following activities: exhibitions, trade missions, partnerships (organisation
feasibility studies, applied research, conferences, and seminars of trade missions and
experimental development abroad with an individual brokerage events, the
including prototyping, development stand as well as for conformity Business Cooperation
of a product’s industrial design, assessment or certification of Database, a selection
registration of industrial property production sites and products. of contacts of potential
rights, certification and testing Entrepreneurs can also receive cooperation partners),
services, and attraction of highly information and consultations advice on aspects of
qualified employees. on foreign markets as well legislation (goods and
as a selection of contacts of services requirements,
AID FOR EMPLOYEE TRAINING potential cooperation partners standardisation issues,
The aim of this programme is to abroad. At present, LIAA CE labelling, the posting
provide support for employee of workers abroad, etc.),
has 20 foreign economic
training to facilitate the attraction and also advice on access
representation offices in 18 of
of investors. The programme to finance (Horizon 2020,
the most promising markets for
is intended for companies that Erasmus, Creative Europe,
Latvian goods and services.
establish businesses in Latvia. Interreg, etc.). The EEN also
In cooperation with foreign
Within this programme, a company provides innovation and
representatives, LIAA organises
may receive support of 50–60% of technology audits for SMEs
the participation of companies
employee training costs. and helps with international
in international exhibitions (via
technology transfer.
national stands), trade missions,
TECHNOLOGY SCOUTS
and visits of public officials
Technology scouts are a team of
abroad. It also provides support
people who spend time among
researchers in Latvia so that they for individual visits to potential
can give companies the most cooperation partners.
up-to-date information about
the directions in which research
organisations are working and
how companies can collaborate
with them.
9OVERVIEW
Publicity photos
INOVUSS: A PLATFORM FOR INNOVATION
FRESH IDEAS, NEW PERSPECTIVES, INNOVATIVE SOLUTIONS –
ALL THIS AND MORE CAN BE FOUND AT ONE OF EUROPE’S LARGEST
OPEN-AIR FESTIVALS DEVOTED TO INNOVATION AND TECHNOLOGY.
iNOVUSS was
recently named
the 2nd place
winner in the
Public Institution
Event category
at BEA World –
International
Festival of
Events and Live
Communication,
one of the most
prestigious
festivals in the
event industry.
This summer, for already the second
time, the iNOVUSS open-air festival of
innovation and technology organised
by LIAA took place on the banks of the
Daugava River in Riga. Over three days,
more than 16,000 participants took part
in 50+ events, all free of charge, featuring
local and foreign experts, entrepreneurs,
scientists, and investors. The uniqueness The Futourist tent was
and attractiveness of iNOVUSS lies in dedicated to the tourism sector
and contemporary travel.
its guiding theme, namely, to talk about
serious and often complex issues in an new occupations, artificial intelligence, tourism,
unusual atmosphere so that each and science, and the future of medicine. In addition
every participant can find inspiration to various business, education, and innovation
for his or her growth and development. topics, festival-goers were also treated to
The festival’s seven different stages an extensive programme of cultural and
hosted discussions about a variety of entertainment events, including fun activities
topical issues, including the future of for the whole family.
education, disappearing and completely inovuss.lv
10• The Business Terrace featured personal • The informal atmosphere of the Smart Café
experience stories and consultations with LIAA served as a backdrop for conversations about how
representatives about various business topics. to encourage collaboration between science and
•• One of the events at the Business Incubators commerce as well as the role of research as an
tent was the ‘Quantified self: self-knowledge element of innovative businesses.
through numbers’ panel discussion, which •• Can classical music be genuinely entertaining
explored the cultural phenomenon of self-tracking and its performances full of clever humour? Festival-
with technology. goers made up their own minds as they watched and
••• LIAA’s Business Incubators Coworking Terrace listened to the Sansusī Battle of the Pianists.
was developed for those who love to work in the ••• Festival-goers learned about how LEGO® can be an
fresh air and surrounded by an exciting atmosphere. educational tool not only for children. The LEGO® SERIOUS
It was a great place to meet friends, customers, and PLAY® methodology is an innovative process designed to
company partners. enhance innovation and business performance.
11BUSINESS
Text by Līga Vaļko
Publicity photos
HOT LATVIAN INDUSTRIES TO INVEST IN
THE WORLD BANK’S EASE OF DOING BUSINESS INDEX (2020), WHICH IS WIDELY USED
BY COMPANIES WHEN MAKING INVESTMENT LOCATION DECISIONS, HAS RANKED LATVIA
NUMBER 19, AHEAD OF SUCH COUNTRIES AS GERMANY AND POLAND.
Latvia’s favourable business environment with one TRANSPORT AND LOGISTICS Photo by Reinis Vilnis Baltiņš
of the highest GDP growth rates in the European These days, transport and logistics make up
Union (EU), low costs of operation, and an admirable a substantial portion of the Latvian economy,
talent pool have encouraged foreign businesses and the industry continues to grow. According
and international corporations to invest in Latvia. The to the Latvian Ministry of Transport (2018),
volume of foreign investments in the country has the entire transit, port, rail, and road industry
increased slightly, reaching a high point in 2018 of brings in more than 700 million euros a year
15.1 billion euros. Sweden is by far the largest investor in revenue and accounts for one third of total
in Latvia (at nearly 17%), followed by Russia (11%), Estonia service exports. This can be explained by the
(10%), and the Netherlands (7%). According to LIAA, fact that Latvia has the largest cargo transit
Latvia is a springboard for high-tech IT companies, industry in the Baltics. A huge amount of
an emerging health tourism destination, and a hub cargo moved in Latvia consists of high value-
for the traditional transport and logistics industry. added products and is dominated by coal and
12oil products as well as related outputs such as including effective customs clearance, excellent
mineral fertilisers. value for money with a beneficial VAT regime,
The excellent geographic location and transit and discounts on customs guarantees. The
between the East and the West have played a current volume of rail freight flowing from China
recurring role in Latvia’s history. Scandinavian to Scandinavia is relatively small, but the New
Vikings used the Baltic Sea and Daugava River Silk Road, also known as the Belt and Road
to reach the Byzantine Empire. During the Initiative, targets Latvia as a gateway that will
Middle Ages, Riga was a large seaport and an connect Xinjiang, Shanghai, other cities of China,
influential city of the Hanseatic League. In the and Hong Kong with northern Europe. Apart from
18th century, Riga was the second-largest city the Chinese market, Latvia is also planning to
in the Swedish Empire and later a leading port focus on the North-South Corridor to connect
and powerhouse of commerce and trade under with India and other Asian countries.
the rule of the Russian Empire. The country’s The swiftly developing Eurasian network
transit infrastructure developed rapidly in the requires an integrated terminal and warehouse
late 19th century with the construction of railway infrastructure. Therefore, one of the industry’s
tracks connecting Riga with other cities of the main priorities is the development of logistics
Russian Empire. and distribution facilities in Latvia. The existing
Nowadays, the railway is of great importance in railway network and three major ports are an
the freight transport industry, with rail accounting attractive backdrop for investors looking to invest
for 70% of the total inland freight transport in in this field. However, to successfully develop
Latvia (EU Transport in Figures, 2018). This is well logistics centres, warehouses, and distribution
above the average for EU member states. The services in Latvia, it is important to attract more
vast majority of rail traffic in Latvia is transit, which mass-consumption commodities.
remains a national priority today and in the future. TFS Trans is an excellent example in the terminal
Similarly, like Luxembourg in western Europe, and warehouse field. The company opened the
Latvia has all the conditions to be one of the Kraftool logistics centre, the largest and most
prime logistics hubs in the Nordic region. It is technologically advanced high-bay warehouse
one of the principal routes connecting the EU (HBW) in the Baltics in November 2017. With
with the Commonwealth of Independent States a total investment of 36 million euros, the
(CIS) and Asia. For example, Latvia has the most TFS Trans high-bay warehouse is the second
direct rail route from the Baltics to Moscow. Also, biggest in eastern Europe and accommodates
multimodal corridors and the three main seaports 73,000 pallets. This is equivalent to seven
of Riga, Liepāja, and Ventspils with a total cargo hectares of regular warehouses. Here, pallet
throughput of 66.17 million tonnes in 2018 (Ministry racking is fully automated, and the warehouse
of Transport, 2019) make Latvia an attractive transit has been built using modern energy-efficiency
country to access CIS and Nordic markets. solutions and contains the largest geothermal
It is no coincidence that many Asian countries plant in the Baltics.
also leverage Latvia’s transit infrastructure. As a In the meantime, construction of Rail Baltic,
member of the EU, Latvia offers several perks, a high-speed connection to Europe, is set to
13BUSINESS
begin in 2025 and open up the Tallinn-Riga- works in both directions, because Chinese
Kaunas route. Rail Baltic will also be connected people love local specialty products from Latvia
to Riga International Airport (RIX) and thus help such as Stenders bath and body products and
to promote the fast-growing aviation industry. Ķekavas Avots water.
The airport in Riga is the leading airport in the The positive aspect of this market is a direct
Baltics and serves half of all Baltic passengers connection with China via airports and railway,
and cargo. Full-service, charter, and freight because logistics need to be in place when
carriers offer around 100 direct routes from Riga consumers buy products online. The new facility
to the rest of Europe, which, with 500 million at the Freeport of Riga will promote business
consumers, is the world’s largest economy. exchange between China and Latvia and
In addition to Riga International Airport (RIX), motivate more and more investors to consider
Latvia also has two smaller airports, in Liepāja Latvia as a great place for doing business in the
and Ventspils. e-commerce, transport, and logistics industries.
Over the next five years, the development of
an airport logistics centre will increase air-cargo INFORMATION TECHNOLOGY
traffic and e-commerce, which is becoming an With the sixteenth-fastest internet speed in the
world (Cable, 2019) and being the third country
for mobile data usage (12.8 GB) in the OECD
The development of an countries (OECD Broadband Portal, 2019) as
airport logistics centre will well as one of the first countries to implement
a 5G network, information and communications
increase air-cargo traffic technology (ICT) is one of the fastest-growing
and e-commerce industries in Latvia. In Q4 2018, the industry’s
export increased by 23.5% to reach 226 million
increasingly important channel as the number of euros (Ministry of Economics of Latvia, 2019).
online shoppers grows. Historically, Latvia has had a reputation for being
E-commerce in Latvia lags far behind Chinese a research and development hub in the ICT
e-commerce platforms such as Alibaba and industry. The first steps in this field were taken
Jingdong Mall (JD.com). Therefore, in May 2019, in the 1960s, when the Institute of Mathematics
the China (Ningbo)-Latvia Cross-Border and Computer Science at the University of Latvia
E-Commerce Hub was launched at the Baltic (IMCS UL) and the Institute of Electronics and
Container Terminal, the fastest-growing container Computer Science (IECS) were established.
handling facility in the Baltics, to expand IMCS UL constructed the first computer in Latvia
e-commerce cooperation between Latvia and and developed cutting-edge technologies for
China. It is planned that Latvia will act as a hub Soviet lunar programmes, recruiting hundreds of
between China and 17 Central and Eastern employees for R&D projects. Later, in 1992, Latvia
European Countries (known as the CEE or 17+1), a built its first internet connections, with UNESCO
region with a population of 130 million people. support, and technologies soon expanded. In
Currently, the presence of many middlemen fact, the ICT industry in the Baltics has nowadays
leads to a lack of information and higher prices, reached the level of the high-tech Nordic
but the cross-border e-commerce hub will countries on account of substantial investment
change this and partner with locally grown over the past 20 years. All these achievements
companies and e-commerce platforms to bring have been important in building up a solid
a Chinese shopping experience to Latvia. It is legacy and traditions of technology and R&D
a global business that knows no borders and programmes as well as encouraging companies
14to continue providing high-quality IT solutions.
Over the past few years, computer programming
and information services have increased their
share, because the IT industry is merging with
other business disciplines and acts as a catalyst
and pillar for growth and innovation.
Several successful local and multinational IT
corporations have established a presence in
Latvia, including Atea, Tieto, Visma, Cognizant,
Accenture, Oracle, Evolution Gaming, and
Microsoft, with the first innovation centre of its
kind in northern Europe. In addition, a new city The DEAC Data Centre, one
district and smart-city movement in Riga called of the largest data centres
in northern Europe
VEFRESH hosts the highest concentration of IT
companies and professionals in Latvia.
The industry’s success in Latvia is attributed to a
combination of skilled people, research facilities,
and products produced by IT companies. For
example, DEAC is a world-class data centre
based in Latvia that serves customers in more
than 40 countries. For many years, DEAC has
been positioning itself as a bridge between the
markets in the East and West, a place where
different mentalities meet and are driven by
joint economic interests. In addition, the data
centre industry in Latvia is not exposed to
political speculations, economic risks, or climatic Server cabinets
at the DEAC Data Centre
changes, which have become major risk factors
in other regions of the world. in the IT sector has increased by 24% (Lursoft,
DEAC is backed by professional IT expertise 2019), with 6317 IT companies registered in
and tailor-made services to meet business Latvia, of which 16.35% are driven by foreign
needs. The company recently announced that a investment. The growth of the IT industry
new data centre worth 10 million euros is under owes itself to funding and R&D activities that
development and is expected to start operating have been fuelled by hundreds of start-up
in 2021. The new data centre will serve as a companies, a pool of investors, business angels,
springboard for DEAC’s next big development. and dozens of business incubators. Estonia
The company is actively working to expand its is very often internationally recognised for its
operations and attract the world’s biggest IT e-government and start-up ecosystem, but it
players, such as Google, Microsoft, Amazon, turns out that Latvia was the first country in the
Nvidia, and Oracle. Therefore, the current Baltics to introduce laws and a special tax regime
challenge for DEAC is to attract anchor customers that promotes the formation and operation of
and fill up at least 50–70% of the new data centre. start-up companies.
Latvia is first in the Baltics in terms of the number The IT industry wouldn’t be the same without
of IT companies and employees. In the past highly qualified employees, who are the
five years, the number of companies working greatest asset and the industry’s gold. The
15BUSINESS
annual report published by the International In the second half of the 18th century, the area
Telecommunication Union (2018) reveals that of present-day Latvia became a popular resort
Latvia has the most skilled citizens in the Baltics. and wellness destination in the Russian Empire.
The network of qualified specialists explains why The sulphur springs and mud baths at Ķemeri
the global business services (GBS) and other were widely used in traditional medicine. By
sectors regard Latvia as a go-to destination, the 20th century, several sanatoriums had been
ahead of other European countries. opened in Latvia, and the nearby resort town
The majority of IT companies in Latvia are of Jūrmala became a popular spa town among
characterised as small and medium-sized wealthy civilians and military personnel.
enterprises. This explains why only 5% of the Today, the Export Development Plan of Health
working-age population are employed in the Care Services for 2019–2023 (Latvian Ministry
industry. The number of employees in the of Health, 2019) has defined health tourism as
industry in Latvia has increased by 46% from the country’s priority to promote such areas
18,900 in 2008 to 33,900 in 2018 (Central as wellness, rehabilitation and spa treatments,
Statistical Bureau of Latvia, 2019) and will medical tourism, and folk medicine.
More than 30% of patients arrive in Latvia from
Private clinics and centres Russia (LVTK, 2017). This can be explained by the
historical context and the absence of a language
in Latvia have continuously barrier. Russian-speaking medical tourists and
invested tens of millions Latvian citizens now living abroad return for
medical treatments or rehabilitation driven by
of euros to develop nostalgic feelings for the country’s sanatoriums
private medicine and medical institutions. Medical tourists also
travel from Germany (13%) and the United
continue to rise in the future. Overall, the number Kingdom (7%), with smaller numbers representing
of IT students is growing, and computer science the United States, Ukraine, and Scandinavia.
is among the top three university programmes Health tourism is a high value-added product that
chosen by high school graduates. requires not only top-quality healthcare providers
but also a well-developed transport infrastructure,
SPECIALISED MEDICAL SERVICES hotels, restaurants, and other services offered by
High-quality care and health facilities have the hospitality industry. Because of its geographic
accelerated the growth of health tourism and location, Latvia is very easy to reach by all means
travellers seeking treatments and therapies of transport, whether airplane, train, ferry, or car.
abroad. With aging populations, lifestyle diseases, Latvia has an international airport connecting the
and growing social awareness, more people are capital city with the rest of Europe and the CIS
travelling across borders for medical treatments. region. Many factors come together to form the
Accessible, high-quality health care at a good basis of a competitive offer in the field of health
value for money, wellness services, and an care. First of all, Latvia has world-class doctors, a
opportunity to visit a new country are some of the dynamic network of private clinics and medical
rational factors that shape and promote health providers, and the internationally recognised Rīga
tourism all around the world, including to Latvia. Stradiņš University, which attracts many foreign
Health tourism may seem like a new industry in medical students from Scandinavia and other
Latvia created in 2009, after the introduction of European countries.
an initiative by private clinics, but its roots can in Among the most popular services are
fact be traced as far as back as the 18th century. diagnostics, medical rehabilitation, phlebology,
16dermatology, and plastic surgery. Patients from iVF Riga, a clinic using cutting-edge
abroad travel to Latvia not only because of technologies for infertility treatments
these superior technologies but also for fast and and reproductive genetics services
effective treatment at affordable rates that are
often several times lower than in western Europe.
The price index for hospital services shows that
prices in Latvia are four to five times lower than
the average in OECD countries (OECD, 2017).
Private clinics and health centres put the well-
being of the community first and are ready
to help those in need. Clinics in Latvia recruit
professional teams with European-level quality
standards, and employees on average speak
at least three languages: Latvian, Russian, and
English. Health care is still one of the largest Embryolab at
industries in the Latvian economy in terms of the iVF Riga clinic
employment, with a total of 67,900 people
working in the industry in 2018.
Last but not least, medicine, like other industries,
is undergoing a digital transformation that
provides new opportunities for cross-border
health care. Data-driven solutions encourage
patients to become more involved in managing
their own health and seek specialist help in
Latvia at a wide range of healthcare facilities. In
recent years, private clinics and centres in Latvia
have continuously invested tens of millions of
euros to develop private medicine.
When it comes to a strategic vision, specialising in of disease and wellness. For example, iVF Riga is
a particular service can be a good way to compete a widely known one-stop clinic with state-of-the-
with other health-tourism countries. For example, art technology treatments and diagnostic facilities
health tourism can be linked with the healthy that combines several innovative institutions: a
lifestyle trend that is all about preventive care, for reproductive and andrology clinic, a genetic centre,
example, natural healing and mud and mineral and a stem-cell centre. CastPrint is a Latvian
water baths. Both local patients and patients from health-tech pioneer that has created hundreds of
abroad come to Jaunķemeri in Latvia, which is 3D-printed casts. Patients from around the world
a multi-profile resort and rehabilitation centre also travel to Latvia to have individual glass and
offering customised rehabilitation and wellbeing synthetic ocular prostheses constructed. Valters’
programmes combining modern and historical Prosthetic Laboratory is the only ocular prosthetics
rehabilitation technologies. company in the Baltics with more than 25 years
In this era of personalised and precision medicine, of experience in the industry. The company
recent discoveries have propelled new healthcare has invested in cutting-edge technologies and
developments in Latvia and the rest of Europe. successfully operates in the Baltics, Ukraine,
More and more often patient care is based on a Georgia, and the United Kingdom and plans to
customised approach and a genetic understanding enter the United States market as well.
17BUSINESS
Text by Līga Vaļko
Photos by Shutterstock and
courtesy of LIAA and BGI
BGI: CHINA MEETS EUROPE IN THE BALTICS
INTERVIEW WITH WANG JIAN, THE CO-FOUNDER AND CHAIRMAN OF BGI
An attractive and dynamic business climate for co-founder and chairman of BGI, at Lidostas
high value-added products – indeed, that is Parks, an upcoming BGI production facility in
what we see in Latvia. BGI, one of the world’s Europe. This was his second time in Latvia. On
largest genomics organisations, is a striking his previous trip, he went for an eye-opening
example of how LIAA attracts foreign investment stroll through Latvia’s forests to get to know the
and successful companies to Latvia. BGI is a traditional hobby of mushroom picking.
new type of technology organisation in China Jian has received several international awards
that contributes to research and the application for his work in research and has been listed by
of genomics across multiple fields, including Clarivate Analytics (formerly Thomson Reuters)
healthcare, pharmaceutics, conservation, and as one of the world’s Highly Cited Researchers.
the environment. Genomics is a huge industry in He has also joined forces with the Bill and
China, given its population of 1.43 billion people. Melinda Gates Foundation as part of BGI’s
According to Beijing-based CCID Consulting, partnerships to make a meaningful contribution
China’s gene technology market will double to global health and agricultural developments.
in the next five years and be worth more than Jian is currently focused on research and the
18.3 billion yuan (2.6 billion dollars) by 2022. application of genomics and bioinformatics in
We recently met up with Dr. Wang Jian, the different areas of life sciences.
18What is the current role of genomics in the life
sciences field? I believe that very soon
By principle, genomics is the most important genomics will be the biggest
field in life sciences. We have to realise that
without genes there is nothing. Most of the
business in the world
scientific disciplines are based on genes.
Since American biologist James Watson and
© BGI
English physicist Francis Crick discovered
DNA, the industry has moved from the West to
Asia, with BGI becoming one of the principal
providers and innovators of gene sequencing
technologies. Until then, the United States
and United Kingdom dominated the industry,
but nowadays BGI has discovered new,
fascinating insights into human evolution.
Statistically, BGI has conducted innovative,
high profile research, which has generated
more than 2000 publications. Wang Jian in a meeting with
Microsoft founder Bill Gates
What possibilities and opportunities does gene
sequencing create for the future of healthcare
and the pharmaceutical industries? implement all of these findings into our everyday
With a microscope, you can open up a whole life, because gene sequencing can help to
new world. From metres to centimetres, from increase average life expectancy and diagnose
micrometres to nanometres, gene sequencing the majority of genetic diseases.
can help us analyse processes at the nano I believe that very soon genomics will be
scale and offers much higher precision and new the biggest business in the world and will be
opportunities for mankind and life sciences. incorporated into every discipline of health and
In 1999, the first sequenced human genome cost medical care. Our aim is to transform DNA into a
roughly three billion dollars. A couple of years universal reference library like a mobile phone,
later, in 2007, the cost had fallen to a few million which we use daily.
dollars, and today it’s around 1000 dollars. We at
BGI believe that we can drive the cost down to What is the nature of the organisation and
500 dollars. The costs of gene sequencing have your vision?
fallen as a result of our accomplishments. BGI At first, BGI wasn’t a company but a non-profit
has invested hundreds of millions of dollars in organisation. Originally known as the Beijing
next-generation sequencing to allow testing at a Genomics Institute, BGI was founded in 1999
scale and speed that was previously impossible. to participate in the Human Genome Project.
Today, we sequence more DNA than any other Then later it became an affiliate to the Chinese
organisation around the world. We’ve mapped Academy of Sciences. Back in the days when
out the genomes for humans, plants, insects, our team set up BGI, we initiated China’s super-
and animals, for example, the giant panda hybrid rice genome research and other great
genome. Our organisation is looking for ways to research projects.
19BUSINESS
Nowadays, BGI has eight non-profit and for- have offices and laboratories located in Europe,
profit subsidiaries. With our capabilities and North America, and the Asia Pacific region.
technologies, we successfully operate worldwide
and consider ourselves global citizens. How did you choose Latvia as the location for
We pride ourselves on going the extra mile in your first European factory?
testing and research. And because of that, we’ve A couple of years ago we established our
delivered phenomenal results. From the first first European Genome Research Centre
Asian genome project to the 1000 Genomes in Copenhagen to accelerate innovations,
Project. From 140,000 genomes to a million genomics, and research and applications
genome projects. From 3.8 billion dollars for the across Europe. In November 2019, MGI Tech
first human genome two years ago to 500 dollars Latvia, a subsidiary of BGI Group specialising
per genome today. in the development and manufacturing of gene
sequencing equipment, opened the first state-
The company was founded more than 20 years of-the-art production site in Europe. Our plans
ago. How has its vision and structure changed are to export gene sequencing equipment to the
over the years? European Union, Africa, and the Middle East.
We actually discovered Latvia by chance. I learned
In Latvia we have access about the country from a businessman who had
already established a company here in Riga.
to a skilled workforce and Unlike in previous years, when we faced some
high-quality infrastructure difficulties in laying down our plans in the United
Kingdom, Latvia left a great first impression. For
We call BGI an organisation because we have example, if we opened a factory in Stockholm,
both non-profit and for-profit sectors. We don’t Sweden, it would be far more expensive than
feel we operate in the same way as a typical doing so here. In Latvia we also have access to a
company does. However, we also haven’t skilled workforce and high-quality infrastructure –
completely embraced a non-profit model. our production site at Lidostas Parks is five
To explain how our structure has changed, I minutes from Riga International Airport. Besides
have to say that BGI has two birthdays. BGI the attractive business environment, I truly
was born in 1999, but in 2007 we took a step appreciate the friendly and welcoming people
into the commercial world and established here as well as the beauty of Latvia’s nature. And
our headquarters in Shenzhen. Today, BGI is mushroom picking!
one of the world’s leading gene sequencing
organisations. Two decades later, we still firmly What are your future plans for Latvia?
hold to our mission of thinking big and making We’ve already invested 15 million euros and
state-of-the-art genomics highly accessible to the are planning to recruit around 100 highly skilled
global research community and clinical markets. professionals. In the first stage, we’ll continue
BGI operates in more than 100 countries around to promote the field of gene sequencing with
the world. Our global partnerships are run in our laboratory and production site here. In
cooperation with more than 5000 scientific the next stage, we’re planning to develop a
research and other institutions worldwide and technology centre, which will help Latvia become
many more in China. BGI is headquartered in one of the leaders in life sciences in Europe.
Shenzhen, China, with branches and laboratories Everyone has probably heard in the news that
in major cities of China, including Beijing, BGI, the Wuhan National Bioindustry Base, and
Shanghai, Guangzhou, and Hong Kong. We also the Ministry of Economics of Latvia signed a
20Memorandum of Understanding at the annual
16+1 summit last year to build a Life Science and
Technology Centre in Latvia. The centre will
serve as a platform for research and innovations
in life sciences.
We don’t want to only set up a manufacturing
plant in Latvia; we’re also looking for ways to
help the country advance its research and
development. That’s exactly what we did in
Shenzhen. Eventually, in three to five years,
Wang Jian meeting the then
everyone will tap into the potential of genes. It’s
prime minister of Latvia,
important for us that Latvia and its citizens benefit Māris Kučinskis, and LIAA
from science. I have to say that, in the field of director Andris Ozols in 2017.
genomics, Latvia has a population size that’s
easy to operate with.
You’ve already partnered with the University
of Latvia. What are your plans regarding
cooperation with local universities in Latvia?
In China, we have BGI College, which has
established various joint undergraduate and
graduate programmes in collaboration with local
universities. A business should be created by
people who are full of passion and less restricted
in their thinking. We would like to push young Wang Jian engages
professionals to join our basic research unit. in a popular Latvian activity in
autumn – mushroom picking.
In Latvia’s context, we’re very serious about
setting up research facilities and educational
programmes. For example, we’ve already put up So BGI has several non-profit and commercial
a genetic sequencer at the House of Science of divisions. We have BGI Research doing basic
the University of Latvia. research. We have BGI College for master’s and
doctoral studies. We have the China National
Where do you see BGI in the next five to GeneBank, which is a huge library based on the
ten years? DNA of many millions of people. GigaScience is
DNA sequencing is the springboard for genetic a new open-access online journal. These all are
research, novel drug discoveries and treatments, our non-profit organisations. Then we also have
and the progression of health and medical commercial subsidiaries, such as BGI Genomics,
care systems. First, we’re looking to cover MGI (manufacturing of biological equipment), BGI
new countries and regions. BGI encourages Agro (agriculture), and FGI (forensic genomics).
and helps people to jump into the field of life We definitely have some big plans for Latvia.
sciences. One day, we’d like to cover everybody MGI is already here. We’d like to bring at least
and make gene sequencing easy and affordable. half of our subsidiaries to Latvia, including the
If we become commercial, we lose sight of the educational division, basic research, the National
future and innovations. But focusing only on the GeneBank, BGI Agro, and maybe even build a
future – in today’s world that just doesn’t work. future hospital together.
21BUSINESS
INVESTMENT EXPERIENCE Text by Līga Vaļko
Photos by F64
FOREIGN INVESTMENT SUCCESS STORIES IN LATVIA
THE COMPANY’S MAIN FOCUS a complete understanding of the
Chess24 was born out of a product creation process.
successful partnership between
businessman Enrique Guzman STARTING POINT
and Grandmaster Jan Gustafsson The decision to expand the group
in 2014. Over the years, it has in Riga was the result of a visit by
turned into the world’s best former LIAA director Andris Ozols
all-around chess platform for to the Chess24 office in Hamburg.
learning and playing the game, During a trip to Germany on
watching top chess tournaments, a different matter, he reached out
and interacting with other chess and suggested that we consider
enthusiasts. The ChessX office in Riga for our expansion. Since then,
Riga recently joined the group’s LIAA has been a huge supporter
list of exciting locations from which in attracting a chess company to
people are promoting chess all Latvia, a country where people feel
around the world. ChessX’s first they can make a difference. LIAA
product in Latvia will be CoaChess, has helped connect ChessX with
a marketplace offering a personal the right people from the Ministry
touch and superior customer of Education and Science, Riga
experience in mastering the game Technical University, recruitment
Q&A WITH with real-time help from another and rental companies, and the
SEBASTIAN KUHNERT, human being. Latvian Chess Federation.
CEO OF CHESS24 AND CHESSX
WHAT’S UNIQUE ABOUT RECOMMENDATIONS
THE COMPANY Speak to LIAA from the very
Chess24 is the world’s most The company boasts a wide beginning. The help from LIAA
advanced chess platform for portfolio of online chess games. made us feel comfortable in
chess players of all levels, from It has created a truly global web expanding to Latvia. We also
complete beginners all the platform available in English, recommend visiting Riga to
German, French, and Spanish, and get a feel for the location
way up to professionals, and
its mobile apps allow chess players and the people. Next, finding
provides the highest-quality to connect wherever they go. good legal, accounting, and
chess content online. This year, recruitment firms is important to
it merged with Play Magnus, ADVANTAGES FOR BUSINESSES get the business up and running
the company founded by IN LATVIA quickly. Apart from this, setting
Building the company and the up an eParaksts (e-signature) is
chess world champion Magnus
CoaChess product in Latvia has highly recommended.
Carlsen, and expanded its helped accelerate the company’s
operations by opening ChessX, progress. Riga has demonstrated FUTURE PLANS IN LATVIA
a company developing online itself as a place where people are Our vision is to become the
chess coaching products excited to work and achieve big number-one live learning platform
in Latvia. things. Some might still think that in the chess world. After that, we
the eastern European countries plan to build mixed teams from
are the best for simple tasks, but different countries and involve the
CoaChess has had a very different ChessX team in other new and
experience. The ambition of our existing product developments.
team has attracted many highly- The next exciting idea is already
skilled senior developers who have currently being researched in Riga.
22THE COMPANY’S MAIN FOCUS field. Other advantages include
FTS Baltic currently works directly the competitive cost environment
with Schock Metall, a globally as well as the experienced and
recognised company with over skilled labour force in such a
40 years of experience in the field specific field as the metal industry.
of ball-bearing slides and special
profiles tailored to customer needs. STARTING POINT
Before FTS Baltic was founded, FTS Baltic was established
Schock Metall outsourced by three German investors.
manufacturing to a variety of Two of them are shareholders
locations in Europe. The decision of Schock Metall, and one is
to produce everything under one connected to Latvia and Liepāja
roof was made to optimise the through his family roots. After
supply chain process and to have discussions with the former
a solid platform for the future deputy mayor of Liepāja, the
growth of the company. From now investors decided to establish
on, FTS Baltic will act as a one- a company and build a factory
stop-shop platform for producing in the city within the Special
and assembling tailor-made ball- Economic Zone, a favourable
bearing telescopic slides. area for export businesses with
Q&A WITH available infrastructure to set up a
EDGARS DOLMANIS, WHAT’S UNIQUE ABOUT
THE COMPANY
production plant in a short period
of time.
HEAD OF LOGISTICS AND
We pride ourselves in successfully
PROCUREMENT AT FTS BALTIC, integrating our manufacturing RECOMMENDATIONS
LĪGA CĒRPA, HEAD OF process in Schock Metall’s global
supply chain. What’s more, our
We suggest revising and
simplifying support programmes
FINANCE AND PERSONNEL
Latvian factory does not offer for companies that bring
mass-produced items. Schock investments, create new
FTS Baltic is a German capital Metall engineers work closely with workplaces, and add value to
company operating in Liepāja, clients to create tailor-made slides the country’s economy and
the third-largest city in Latvia. and systems that are later used in local communities.
Located in Liepaja Business the production of other industries’
end products. Strategically, the FUTURE PLANS IN LATVIA
Centre (LBS), one of the biggest
vast majority of the products We plan to recruit more than
industrial parks in the Baltics, are intended for the electronics 180 people this year and have
the company manufactures industry and are used for home up to 250 employees by the end
and assembles various types of and kitchen appliances. of 2020. Also, we plan to invest
slides and sliding systems for in new equipment for assembly
ADVANTAGES FOR BUSINESSES lines, presses, and turning and
the appliance, automotive, and
IN LATVIA milling equipment as well as
furniture industries. Its products Mechanical engineering and to start manufacturing plastic
are used by such brands as metalworking have traditionally components and products.
Mercedes, Renault, Siemens, played an important role in Latvia’s
and Bosch. economy. FTS Baltic chose
Liepāja as a production location
because this industrial city has a
rich history and traditions in this
23START IN
BUSINESS
LATVIA. GO
GLOBAL.
THE
COOLEST
LATVIAN THE RISING STAR
COMPANIES
YOU NEED
TO KNOW BABBIT
ABOUT. A children’s toy for all to enjoy
Co-founders of Babbit: Liene Roga and Aleksandrs Roga Text by Christopher Walsh
Photos by Jānis Saliņš
Style by Līga Vekmane
24For some, it’s a key goal of parenting: how can
I make sure my kids have good taste in music?
The idea that music plays an important role in a The goal was to
child’s development – whether it’s by listening create a hi-fi speaker
to classical music while they’re in the womb or
sharing your favourite bands with a child even intuitive enough for
when they’re a baby – has a tremendous amount a child to use
of cachet among parents throughout the world.
And Babbit, one of Latvia’s most exciting startups,
believes that parents shouldn’t sacrifice on quality
when it comes to playing music for their children.
Babbit’s product is like nothing you’ve ever seen
before: a high-quality speaker housed in a sturdy,
oblong wooden shell. The front is defined by two
small buttons and a wooden knob, while the top
is centred by a flat panel. That flat panel is key
to the device’s innovation, because each Babbit
speaker comes with a set of cards which, when
placed on the panel, begin streaming music from
a predefined playlist. Some of these playlists
are curated by experts for specific global music
experiences, while others can be programmed
by the parents themselves.
According to Liene Roga, co-founder of Babbit,
the goal was to create a hi-fi speaker intuitive
enough for a child to use, but nice enough for
parents to enjoy. ‘We’re used to putting high-
quality things on high shelves. Good quality
usually means that it’s not for kids,’ says Roga. But
by focusing on delivering a high-level experience
in a durable package, Babbit has created a
prototype that can be used and enjoyed by the
whole family.
As Babbit works to bring its speaker to market,
the company acknowledges the advantage of
launching a business in Latvia. ‘In Latvia you
can start with just one product, and the cost to
develop it is only a third of what it might cost in
somewhere like the United Kingdom,’ says Roga.
For the company, the sky is the limit with regard
to potential revenue, as new products and
new markets offer unlimited avenues for profit
and growth. It won’t be long before Babbit’s
oddly-shaped speaker is as recognisable as
Rubik’s Cube.
babbit.com
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