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European Experts Panel on SMEs and Research MAPEER SME

European Experts Panel on SMEs:

Organising dialogue and synergy-searching between policies

Measures to foster SMEs’ participation in R&D&I activities and synergies’ promotion in support of

innovation and SMEs IMPORTANT NOTE: This document is the very first compilation of issues under review. It tries to provide elements for discussion to the Experts Panel in order to further motivate debates. The opinions and ideas included in this document do not represent consolidated views from the MAPEER SME project nor from the European Commission. Most of the ideas got and describe in this document are based on the MAPEER SME studies analyzing research and innovation programmes as well as the views collected from SMEs, SME Associations. Depending on the views from the Experts participating in the Panel, a further redrafting of this document will follow. In addition to this debating paper, there are other supporting documents mainly, the reports on analysis carried out for most of relevant research and innovation programmes at regional and national levels.

Main editor (s): Julián Seseña (ROSE Vision)

Contributor (s): MAPEER SME Team

Version 3.0

Measures to foster SMEs’ participation in R&D&I activities and synergies’ promotion in support of innovation and SMEs

Table of Contents

EXECUTIVE SUMMARY ........................................................................................................................... 4

1 NOTES ON THE DEBATES HELD AT THE FIRST PHYSICAL MEETING OF THE EEP-SME, HELD IN BRUSSELS, NOVEMBER 16TH, 2010 ......................................................................................... 6

2 NOTES ON THE EEP-SME MEETING IN BUDAPEST, ON FEBRUARY 24TH, 2011 .................. 18

3 SOME RELEVANT FACTS ON SMES AND RESEARCH ACTIVITIES ...................................... 18

3.1 REGIONAL AND NATIONAL RELEVANT INDICATORS .............................................................................................. 18 3.1.1 Similarities/Differences: the SME Participation and Success Rates of the sector‐independent vs. sector‐specific programmes......................................................................................................................... 18 3.1.2 Distribution of Budget Shares: SME‐targeted vs. non‐targeted by size programmes ................... 19

3.2 EUROPEAN FRAMEWORK PROGRAMMES IMPACT ASSESSMENT ............................................................................. 19

4 SUMMARY OF MEASURES TO ENHANCE SME INVOLVEMENT IN R&D PROGRAMMES .......................... 22

5 DEBATES ON BENEFITS AND APPLICABILITY OF THE IDENTIFIED MEASURES TO ENHANCE THE R&D&I PROGRAMMES FOR THE SMES ................................................................. 24

5.1 RESEARCH PROGRAMMES SUITABLE FOR SMES AND THEIR PARTICIPATING RULES ................................ 24 5.1.1 Programmes’ characteristics responding to SMEs’ needs ............................................................ 25 5.1.2 Simplification of research programmes as a means to attract more SMEs ................................... 28 5.1.3 Support provided to SMEs at national/ regional level vs support given at European level .......... 30

5.2 STIMULUS AND MECHANISMS FOR ASSISTANCE TO SMES ....................................................................... 32 5.2.1 SMEs participation in large European level R&D initiatives ....................................................... 32

5.3 THE WIDER VIEW OF SMES ...................................................................................................................... 36 5.3.1 The definition of SME adopted by the European Commission ...................................................... 37 5.3.2 Identification of cross-sector programs and cross-sector collaboration ...................................... 39 5.3.3 Open Innovation: fostering large industries and SMEs to implement open innovation across global value chains ...................................................................................................................................... 41

5.4 THE FINANCIAL AND BUSINESS PERSPECTIVES ......................................................................................... 45 5.4.1 Venture capital investment for SMEs involved in research projects ............................................. 45 5.4.2 The economical crisis and the financing needs of SMEs ............................................................... 47 5.4.3 The overall approach towards cooperative programmes. What, when and how to strength the cooperation: pre-R&D or post R&D ........................................................................................................... 49

5.5 WHAT TO DO WITH NON-RESEARCH PERFORMING SMES ......................................................................... 51 5.5.1 Measures to approach non-research performing SMEs ................................................................ 51

5.6 THE STIMULUS MESSAGES TOWARDS EXPLOITATION OF RESEARCH RESULTS. PRE-COMMERCIAL (PUBLIC AND PRIVATE) PROCUREMENT. ......................................................................................................................... 53

5.6.1 Engage SMEs in the buying cycles of public and private buyers at the earliest stages of research. 54

6 SOME CASE STUDIES RELATED TO EUROPEAN LEVEL INITIATIVES ............................... 56

6.1 TECHNOLOGY PLATFORMS ...................................................................................................................... 56 6.1.1 Concept and background of the cooperation model ...................................................................... 56 6.1.2 Players involved and its role in the R&D&i activities .................................................................. 58 6.1.3 Critical success factors (CSF) .......................................................................................................... 60 6.1.4 Recommendations for ETPs regarding promotion of SMEs involvement ..................................... 61

6.2 PRE-COMMERCIAL PROCUREMENT .......................................................................................................... 62 6.2.1 Concept and background of the cooperation model ...................................................................... 62 6.2.2 Players involved and its role in the R&D&i activities .................................................................. 64 6.2.3 Critical success factors (CSF) in the pre-commercial procurement procedures .......................... 66


6.2.4 Green Paper from the European Commission on modernization of EU public procurement. ....... 66 6.2.5 Recommendations on pre-commercial procurement approaches ................................................. 69

6.3 EUROPEAN PUBLIC-PRIVATE PARTNERSHIPS (PPPS) ............................................................................... 70 6.3.1 Concept and background of the cooperation model ...................................................................... 70 6.3.2 Players involved and its role in the R&D&i activities .................................................................. 71 6.3.3 Critical success factors (CSF) regarding implementation of PPPs .............................................. 72

7 RECOMMENDATIONS ON BEST PRACTICES AND RULES OF R&DI PROGRAMMES TO FAVOUR SME PARTICIPATION ........................................................................................................... 73

ANNEX I: MEMBERS OF THE EUROPEAN EXPERTS PANEL ON SMES ......................................... 86

ANNEX II. EXAMPLE OF A SPECIFIC R&D PROGRAMME ADDRESSING SMES: THE EUROSTARS ............................................................................................................................................. 90


Executive Summary

Stimulate research and development (R&D) and innovation in small and medium enterprises (SMEs) is a major issue to promote European increased business competitiveness and investment in R&D and innovation. In fact, 99% of European companies are SMEs, but very few are frequently participating in research activities and benefiting from R&D results. Therefore, it is crucial to engage European SMEs in research and innovation activities, with proper tools setting up mechanisms to bring them into the centre of the development processes of European Union’s research programmes and initiatives.

SMEs play a keyrole in European

economy

99,8% of Europeancompanies are SMEs*

65% of European GDP comes from SMEs*

Source: EC Enterprise and Industry. “Putting Small Business First”; 2008 edition

Giving answer to these challenges, the European Experts Panel on SMEs (EEP-SME) is created to bring SMEs into the centre of the development processes of European Union’s research programmes and initiatives. The Experts Panel gathers policy makers, SMEs representatives and other key stakeholders involved on the design and/or implementation of R&D&I programmes and initiatives in Member States. The Experts Panel represents an opportunity to influence European policies in favor of SMEs, sharing experience with colleagues from the 27 Members States facing similar challenges. Currently there are 91 participants within the European Experts Panel on SMEs (see Annex I).

The key activities of the Panel are: a) think-tank on new policies approach and disruptive ideas on how to stimulate SMEs involvement in R&D&i programmes and initiatives; b) discussion about the key objectives for the development and enhancement of SMEs advanced research; and c) communicate results of such discussions to DG Research; DG Enterprise and


Industry; DG INFSO and the SMEs’ stakeholders at three levels (regional / national / European).

The experts panel main results consist in creating and establishing the appropriate recommendations to help remove barriers to innovation and foster the development of a wider and more solid base of SMEs active in advance research and innovation activities. It will also strive to promote synergies between the different tools and policy measures from European, national and regional level – gathering their experience in R&D&I related fields: research and technological development, innovation, enterprise and industry, regional policy, and education. Particular attention should be made to the examine of the different policy strands (EAC, Regio, ENTR, etc.) and their existing measures contribute to the objective of "encourage SMEs to innovate".

Within this context, this discussion paper is the result of the ongoing debates within the Experts Panel: preliminary views from the experts of the Mapeer SME project, inputs resulting from interviews to Programme Managers, SMEs, SME Associations and the specific debates which took place within the Expert Panel debates held so far:

- Audio conference July 17th, 2010

- Physical meeting in Brussels on November 1t6th, 2010.

- Physical meeting in Budapest on February 24th, 2011.

- Inputs from EEP Members

The paper intends to detail a series of measures on specific topics affecting SMEs involvement in R&D&I programmes and initiatives. These contributions aim to support new policies approach for the development and enhancement of SMEs advanced research and the results of these discussions will be communicated to SMEs’ stakeholders at three levels (regional / national / European).

Furthermore, reference is made to pay attention to the parallel reports which project MAPEER SME have produced on analysis of most relevant research and innovation programmes from European Regions and Member States. The main objective of this activity is the sharing of experiences between the experts of the panel and the gathering of best practices that can be implemented in other EU regions.

It is important to highlight that this is a specially interesting time to produce additional grounds and highlight those measures which have been proven at national or regional levels – the FP8 is a very good opportunity to push for implementation of new measures that can better engage European SMEs in R&D&I activities, making research an innovation programs more attractive to SMEs – in this sense, the recommendations to be issued by the European Experts Panel on SMEs can have a direct impact on the future research an innovation policies at Regional, National and European levels.


This discussion paper* has been prepared by the European funded Project MAPEER SME, under research area SME-2009-3-01 Studies on regional, national, European SME research support programmes and actions Research for SMEs, and it is intended to serve as a challenging reference and guide to the discussions within the Experts Panel. The Experts do not necessary endorse all the measures indicated in this document. A final document, collecting views, comments, ideas will be issued and, when necessary, proper caveats will be included to highlight the level of support or possible controversies around a given measure.

1 Notes on the debates held at the first physical meeting of the EEP-SME, held in Brussels, November 16th, 2010

Welcome and opening by Dr. Julián Seseña, (ROSE Vision S.L.)

Dr. Julián Seseña, moderator of the meeting and co-ordinator of the MAPEER SME project thanked all Panel members for their presence and expressed his vision of a very successful and fruitful meeting.

Participants of the European Experts’ Panel first physical meeting

Institutional address by Dr. Paul Rübig MEP (European Parliament)

Dr. Rübig opened the meeting and thanked for the opportunity to address the discussion points at legislative level to the experts’ panel, motivating them to hardly work to bring reasons for new legislation and learn from experiences elsewhere in the Union.

He made references to a number of topics which are relevant in the Union and are part of the overall discussion in the Parliament and interest groups on SMEs:

- Discussions are being launched on the new Framework Programme

- New thinking to change to Output Orientated Perspectives

- Simple and simplified programmes

- New monitoring system


- Possible new schemes suitable for SMEs, like lump-sum

- Other tools, like tax deduction on risky activities, while keeping taxes on consumption.

- Focus research on market, services, innovative steps, in addition to research in production or on enabling technologies.

- Comments on some European programmes like CIP, FP, Eurostars, etc. were made.

Dr Rübig stressed the importance of such meetings, allowing listen to the voice of SMEs towards increasing their participation in research activities. He as member of different working groups and panels at the EP is ready to listen to the results of the Panel and to channel them to the European Parliament.

He offered the Parliament as a place to present our views and inform about the demands and perspectives from the SMEs. Views about good practices and actions to be done, as well as those bad experiences or actions which should not be done are certainly very important to know by the MEPs.

From left: Ms Nola Hewitt-Dundas, Mr. Paul Rübig, Dr. Julián Seseña

Experts Panel round of self-introductions.

In order to facilitate the discussion and to help the members to know each other a short self introduction round was done where each member could introduce himself, explain which sector he is active and what kind of experience he has and what expectations he has from the meeting and the work of the Panel.

European Experts Panel on SME Research and Innovation. Setting the scene


Remind objectives and agenda (Julián Seseña, ROSE Vision)

During this very short introduction part, Dr. Seseña reminded the participants that they were invited to the Panel and to this physical meeting in order to work and think together and to draft recommendations on how the situation of the SMEs could be improved in regard of their participation in RTDI programmes and activities.

Dr. Seseña requested the participating experts to concentrate on their own experiences in regard of national and regional programmes: “why have you participated in national/regional RTDI programmes or what were the reasons for not participating in these programmes” “what are your problems; any suggestions to solve them”.

It has been stressed that very singular ideas, different views are welcome, partners do not have to commit to pre-defined objectives, the Panel should create its own ideas.

European Experts Panel: Goals, ambitions (Dr. Julián Seseña, ROSE Vision)

Dr. Seseña gave a short overview on the overall SME situation in the EU and also in regard of their participation in RTDI programmes and activities; he presented the Panel as a mechanism to identify problems and solutions (barriers and measures); he, then, explained the background and the objectives of the Panel. It was pointed out that the final expected results of the Panel would be:

• Creating and establishing the appropriate recommendations to help remove barriers to innovation and foster the development of a wider and more solid base of SMEs active in advance research and innovation activities and to

• Promote synergies between the different stakeholders at European, national and regional level, gathering their experience in R&D&I related fields: research and technological development, innovation, enterprise and industry, regional policy, and education

Structure, working procedures

Dr. Seseña informed the participants that the Panel has currently around 100 persons who already accepted the invitation to become members of the Panel. Panel structure has 5 type of partners but SMEs and SME representative associations are the main members.

Dr. Seseña confirmed that MAPEER is striving to ensure that the findings and results of the Panel will have a real impact by reaching the right persons/bodies. At the moment it seems that the key bodies like different European Commission DGs, EP, other bodies of the EC would take into account the results.

Concerning the way of work of the Panel, it has been explained that the Panel will have 2 audio meetings and two physical meetings during the lifetime of the project but the ultimate goal is to evolve the Panel to a self-sustainable Group, if the participants wish so.


It was mentioned that few people participated in the first audio (13 July 2010) that served rather as a Warm-up meeting, clarifying the overall Panel scope, etc. Accordingly the first physical meeting is now a very important meeting where the true content of the Panel activities is the goal. The work will be finalised only several months later (after the future meetings) when the Panel comes up with its position paper. It has been stressed that there is no pre-defined agenda for the meetings and for the audios, only some guiding “principles”. Dr. Seseña drew the members’ attention to the website of the project that serves on the one hand as a publicity channel for disseminating the results of the performed work and on the other hand it hosts several tools, among other also the Blog of the Panel that is aimed at supporting the communication and expertise sharing of the partners.

Dr. Seseña pointed out (we have to be pragmatic) that most probably even if the Panel succeeds and delivers good measure suggestions, recommendation at the end, the overall wide set of barriers for SMEs participation would not be definitively removed. This means that the Panel would wish to continue working through another way, and most probably it should be self-sustainable; the MAPEER Consortium will assist on alternative ways to evolve towards the self-sustainability of the Panel.

Concerning organisational issues, it was mentioned that however we have a working guideline document, it is not compulsory to follow, new working groups, subgroups are welcome.

Dr. Seseña took over the position of the chair of the Panel in this first period, although the Panel Members were invited to offer themselves to serve as Chair of Vice-Chairs. The Panel appreciated the open perspective and adopt this working structure.

Dr. Seseña thanked to the support that the European Commission and the European Parliament are providing to the Panel and recommended the Panel to formally invite Dr. Rübig as honorary co-Chair of the Panel, in conjunction with a nominated person by the SME Unit of the European Commission. These suggestions was approved by acclamation. Invitations for the Honorary co-Chairs will be sent after the meeting.

It was also explained that the decisions of the Panel are taken normally by consensus. In the event of a dispute, the Chairperson’s ruling shall be final.

Agenda Item 3: Launching the debate

Some considerations: relevant findings, facts, figures, benchmarking data (Olga Munteanu, LUH)

In order to facilitate the work of the present members two presentations were given by the MAPEER partners that highlighted the most important and interesting results of that background research that the MAPEER partners have carried out in the European member states and in Bosnia and Herzegovina. Ms Munteanu presented the first results from the studies carried out by MAPEER SME Project on national research and innovation programmes: the so called national reports on the available or recently closed RTDI programmes in the EU member states + BiH. She presented the identified key factors for


designing SME-friendly programmes.

For whom we work, to whom we should support? (Hartmut Welck, Steinbeis Europa Zentrum)

Mr Welck introduced the results of the studies conducted by MAPEER SME project on direct views and problems identified by SMEs: the so called national SME reports, that investigated the SME’s needs, expectations and barriers in regard of their participation in the identified, available programmes. He pointed out to some interesting results that differs in case of RTD programme active and inactive SMEs.

The shopping list of measures to enhance SME innovation and research activities (Dr. Julián Seseña, ROSE Vision)

After the previous two presentations Dr. Seseña introduced the participants a “shopping list” of SME barriers and potential measures that can be naturally complemented by further thoughts, ideas and other barriers and measures. This list includes on the one hand already identified barriers that hinder or discourage SMEs in participating in RTDI programmes, and on the other side, measures that could facilitate and encourage the participation of SMEs in the RTDI programmes.


Agenda Item 4: Brainstorming debates collectively and by small groups

• Round table debate. Identification of main issues (funding, SME profiling, suitability of programmes, the exogenous variables: market, economy, value chain, the long tail from research to exploitation, etc....)

• Round table debate. Identification of measures for enhancement (funding schemes, training, education, subcontracting, research versus services and applications, R&D programmes design, competitiveness programmes design, clusters, technology platforms, etc, etc.).

Dr Sesena explained how the work should be done by the sub groups (freely arranged sub-groups) after rearranging the tables into smaller ones.

Two 45 minutes sessions were organised where during the first session the barriers and their relevance level were identified, while during the second session the corresponding potential measures and their impacting level were collected on red and green sheets, helping this way the overview.

The Panel members were self-organized into 4 subgroups; each subgroup’s work was moderated by 1 moderator and 1 reporter was taking notes. The MAPEER partners were basically assigned for these tasks but it was highlighted that Panel Members were also welcomed to take over the leadership.


Experts in work


The results of the smaller groups were summarized by the reporters.

MAPEER SME: M12 Meeting Minutes MAPEER SME


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2 Notes on the EEP-SME meeting in Budapest, on February 24th, 2011

For more details on the activities of the EEP-SME and its second meeting, please, refer to the Mapeer SME website (http://www.mapeer-sme.eu)

3 Some relevant facts on SMEs and Research activities In order to better align the debates about the ways to enhance the participation of SMEs in the Research programmes, several relevant indicators have to be reviewed, both at national level and at European level. The national level indicators have been derived directly by the MAPEER SME project, funded by the European Commission under FP7 Research for SMEs programme; the studies have been conducted in all Member States plus Bosnia-Herzegovina. The European data is based on the SMEpact assessment as well as several other indicators.

3.1 RegionalandNationalrelevantindicatorsBased on the MAPEER SME studies on national programmes, a number of indicators have been derived. A summary of the main findings of that study is available in the Mapeer SME website. The study cover 200+ national and regional programmes of the EU 27 Member States plus Bosnia-Herzegovina.

3.1.1 Similarities/Differences:theSMEParticipationandSuccessRatesofthesector‐independentvs.sector‐specificprogrammes

Relevant differences had been identified in the sector-independent and sector-specific groups of programmes, as regards the participation of SMEs and success rates. High participation rates (from 51-100% of SME participants vs. all programme participants) were characteristic for almost 87% of the sector-independent programmes. However, low SME participation rates had been compensated by high success rates in the former group of programmes.

The participation and success rates of the SME Programmes Low

Participation Rates (1-50%) of SME participants vs. all participants

High Participation Rates (51-100%) of SME participants vs. all participants

Total available

Low Success Rates (1-50 %) of SME participants vs. SME applicants

High Success Rates (51-100%) of SME participants vs. SME applicants

Total available

Sector-Independent %

13 % 87 % 100% 46% 54 % 100%

Number 5 34 39 11 13 24 Sector-Specific % 50% 50% 100% 29% 71% 100% Number 9 9 18 6 15 21


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3.1.2 DistributionofBudgetShares:SME‐targetedvs.non‐targetedbysizeprogrammes

As regards the distribution of average budget, 44% of SME-targeted programmes had lower budget rates of up to 100.000 EUR, whereas almost a half of non-targeted-by size programmes received the highest rates worth over 500.000 EUR. Programmes Budget Rates:

Low (>100.000 EUR) %

Budget Rates: Medium to High (100.000-500.000 EUR) %

Budget Rates: High (>500.000 EUR) %

Total available

SME-targeted 44 38 19 100% Number 28 24 12 64 Non-targeted by size 10 41 48 100% Number 9 36 42 87

Participation rates Programmes Low Participation

Rates (1-50%) of SME participants vs. all participants

High Participation Rates (51-100%) of SME participants vs. all participants

Total available

SME-targeted % 6% 94 % 100% Number 2 29 31 Non-targeted-by-Size programmes %

50% 50% 100%

Number 15 15 30

3.2 EuropeanFrameworkProgrammesimpactassessmentThe study published in 2010 on the Impact assessment of the participation of SMEs in the Thematic programmes of the Fifth and Sixth Framework Programmes for RTD does provide a number of relevant recommendations, many of them, have been also undertaken and assumed by the European Experts Panel on SMEs and are debated within this report. Of particular interest is the profile sorting of SMEs which do participated in the FP projects.

The 2010 Council of European Union, at its meeting in November 26th, concluded on the following:

• RECOGNISES the value of SMEs for the European economy and UNDERLINES the importance of SMEs when pursuing the objective of an innovative European Union and; STRESSES the need for governments to set


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framework conditions that are conducive to a business environment supporting innovation in SMEs; CALLS for direct involvement of SMEs and for the “think small first” principle to be applied in the different initiatives, as well as the implementation of the Small Business Act and consideration of more specific actions in relation to knowledge transfer and exploitation by SMEs, supporting innovative SMEs and the participation of SMEs, of fast-growing and of young, innovative enterprises in clusters;

• INVITES the Commission, Member States and relevant stakeholders: a) to consider putting in place financial instruments to increase and improve

access to finance for innovative SMEs and projects and fast growing, innovative companies, and to close market gaps as well as to ensure that venture capital funds can function and invest freely in any Member State.

The annual report on EU SMEs – Sized Enterprises 2009 provides the following relevant data. Between 2002 and 2008, SMEs in the EU-27 grew strongly and turned out to be the job engine for much of the European Economy. The number of SMEs increased by 2.4 million (or 13 %), whereas the number of large enterprise increased by only 2 000 (or 5 %). This growth was also reflected in employment figures. On average, between 2002 and 2008, the number of jobs in SMEs increased by 1.9 % annually, while the number of jobs in large enterprises increased by only 0.8 % annually. In absolute numbers, 9.4 million jobs were created in the SME-sector between 2002 and 2008.

Very relevant is the EURAB 04.028 on “SMEs and ERA” study (old study, but with good comparisons between US and EU), which provide a number of important facts. The European Union’s SME population is extremely large and very heterogeneous. There are between 8 and 12 million SMEs in the EU-15, depending in particular upon how one counts the self-employed, and a further 2.5 million SMEs in the new Member States. They account for over 99% of all enterprises and for two-thirds of all employment in the enterprise sector. The SME sector is a very diverse group, ranging from the local corner shop to sophisticated hi-tech startups.


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Comparisons with the US are instructive in the light of the Barcelona objective of achieving in Europe R&D spending equivalent to 3% of GNP, of which two-thirds by business, the Barcelona target being motivated essentially by a perceived need to catch up with the United States.

1 The data cited in this section are drawn in the main from official Eurostat publications as well as from two further publications: Eurostat: SMEs in Europe: Competitiveness, Innovation and the Knowledge-driven Economy (2002). Ugur Muldur: Is Capital Optimally Allocated in the Overall Process of European Innovation? (2001) Comité Richelieu : Le Livre Blanc des PME innovantes: Vers un Small Business Act européen? (2003)

A striking difference between Europe and North America is the much smaller proportion of “small” firms in Europe (10-49 employees). Other data show that SMEs in the United States tend to be larger than their European counterparts. They also show that American SMEs are much more likely to engage in R&D than their European counterparts. On average, an American small firm has an R&D budget 7-8 times higher than a European small firm. This difference, plus the larger number of small firms in the US, is alone sufficient to explain almost all of the United States’ higher spending on R&D compared with Europe. Other figures show that there is no significant difference between large firms in Europe and the United States in the total amount they spend on R&D. This evidence suggests that higher SME spending on research in Europe, if achievable, could play a key role in helping to achieve the Barcelona 3% target. Striking, too, is the fact that 75% of US large firms founded since 1980 grew from scratch. By contrast, more than 80% of the large European firms created since 1980 were the result of mergers of pre-existing firms. This comparison suggests that part of Europe’s weakness is that new firms, with new products and services, fail to grow significantly. SMEs account for two-thirds of total employment in the EU. They are the principal generators of new jobs, especially new and young firms. Estimates suggest that almost half of all new jobs in Europe are created by less than 5% of, in the main, high-tech SMEs. Recent American evidence shows that of the 24 million new jobs created in the United States in the period 1979-1995, about 75% were created by fewer than 10% of small firms. This finding again underlines the importance of new firms which grow. SMEs are estimated to account for approximately 65% of GDP in Europe. This compares with an SME share in GDP of just 45% in the United States. Thus two-thirds of European Summary of Measures to foster SMEs’ participation in research activities.


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4 Summary ofMeasures to enhance SME involvement in R&Dprogrammes

A number of measures have been identified, based on previous studies, interviews and national roundtables that have been organized by MAPEER consortium during 2010, and comments from the experts Panel, everything aiming to gather new insights for promoting SMEs interests and involvement in regional, national and European research programmes and activities.

These measures are the provisional results of the debates among the EEP-SME members in order to generate recommendations, which could be later on communicated to the SMEs policy-makers and to SMEs representatives at regional / national / European levels, as well as European Commission bodies (such as DG RTD, EU’s SME Envoy; DG Enterprise and Industry; DG INFSO, REGIO, EAC), as appropriate.

Obviously, the measures contained in this document are not excluding other additional ones, nor have to be maintained all of them. The MAPEER SME project acts as secretariat for the Experts Panel on SME Research and will support further editing processes as requested by the experts.

In preliminary think-tanks debates carried out by MAPEER SME Partners working on the Experts Panel task, a set of measures have been identified. These measures have been grouped around main areas of concern, which are considered as having significant impact on the motivation for SMEs to participate in Cooperative Research. A further weighting from the EEP-SME has been made in groups around debating tables, which views are reported in the previous section.

These concerns areas are called as “Improvable Targets”. Each improvable Target represents a major area where it is possible to act; consequently, within each Improvable target, several specific measures are identified and possible mobilizing actors have been identified:

• Research Programmes’ characteristics responding to SMEs’ needs. Calls structure, project duration and results exploitation.

• Simplification of research programmes as a means to attract more SMEs• Support provided to SMEs at national/ regional level vs support given at

European level

Improvable Target 1. Research

Programmes suitable for SMEs and

participating rules.

• European Commission; European ETP managers, Member

States – National entities; Member States – Regional entities

• SME Associations; Others: ________________________

Mobilizing actors

Among other mobilizing actors, the Enterprise Europe Network and Chambers of Commerce are also very relevant.


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• Stimulating SMEs participation in large European R&D cooperation initiatives such as the:• European Technology Platforms, • Public-Private Partnerships

Improvable Target 2. Stimulus and

mechanisms for assistance to SMEs




Mobilizing actors

Among other mobilizing actors, the Enterprise Europe Network, National Contact Points and Chambers of Commerce are also very relevant, although most of the large initiatives are being promoted and initiated by EPTs and efforts should be done to ensure that SMEs are widely involved at all levels in the ETPs activities.

• The definition of SME adopted by the European Commission. Its adequacy to the national / regional context of the European countries.

• Identification of cross-sector programs and cross-sector collaboration between the European Commission

• Open Innovation. Fostering Large industries and SMEs to implement open innovation across global value chains

Improvable Target 3.The wider view of

SMEs




Mobilizing actors

• Venture capital investment for SMEs involved in research projects.• The economic crisis and the financing needs of SMEs.• The overall approach towards cooperative programmes. What, when,

how to strength the cooperation: pre-R&D or post R&D.

Improvable Target 4. The financial and

business perspectives.




Mobilizing actors

In addition, the more extensive use of the European Investment Bank and, in particular, the Risk Sharing Financial Facility should be re-designed in order to match the needs of the SMEs.


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• Measures to approach non-research performing SMEs. Identifying best practice programmes and experiences sharing.

Improvable Target 5. What to do with Non Researching SMEs




Mobilizing actors

• Engage SMEs in the buying cycles of public buyers at the earliest stages of research.

Improvable Target 6. Stimulous messages

towards exploitation of research results. Pre-

Commercial (Public and Private) Procurement.




Mobilizing actors

Table of Improvable Targets and associated measures to address removal of barriers or accelerate engines which make possible the research by SMEs

5 Debates on benefits and applicability of the identified Measures to enhance the R&D&i programmes for the SMEs

5.1 Research Programmes suitable for SMEs and their participating rules

• Research Programmes’ characteristics responding to SMEs’ needs. Calls structure, project duration and results exploitation.

• Simplification of research programmes as a means to attract more SMEs• Support provided to SMEs at national/ regional level vs support given at

European level

Improvable Target 1. Research

Programmes suitable for SMEs and

participating rules.




Mobilizing actors


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5.1.1 Programmes’ characteristics responding to SMEs’ needs

The EU has been working towards creating a friendlier business environment for small businesses and adopted in June 2008, the "Small Business Act" for Europe (SBA) which reflects the Commission's political will to recognise the central role of SMEs in the EU economy and should guide the conception and implementation of policies both at EU and national level.

The 7th principle established in the SBA states the following: “The EU and Member States should promote the upgrading of skills in SMEs and all forms of innovation. They should encourage investment in research by SMEs and their participation in R&D support programmes, transnational research, clustering and active intellectual property management by SMEs.”

Nevertheless, in what concerns the relation between SMEs and research very few programmes have a special scope on SMEs, although this may be not a barrier per se, as SMEs might not even need preferential treatment in terms of funding levels or special conditions to get involved, but what SMEs need is to consider their business priorities and that they do not waste time on meaningless administration. Some of the national programmes seem to work very well without any special focus on SMEs. The measures and comments here highlighted are the preliminary results of the analysis made on research and innovation National and Regional programmes. Therefore, when designing an R&D programme “client logic” should be followed and the industries’ needs should be in the top of the priorities. In fact, the lack of coordination between the research priorities of the programmes and the real research need of industries and SMEs is a major barrier to the success of the support programmes.

Real research needs of industry

Programmedesing

Programmedevelopment

Programmeimplementation


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Among other aspects for the research programmes, the evaluation criteria is a critical item. Although programmes respect independence and neutrality, the criteria can themselves considered as unnecessary obstacles for SMEs participation and SMEs ideal size of project Consortium. The specific criteria of “Impact” which is used by large and ambitious projects in several programmes, at European, National and Regional levels, has been widely criticized by many SMEs, as it imposes an artificial enlargement of the project Consortium to ensure the widest impact, where SMEs become close to dilution in very large Consortia. Many stakeholders criticize that this criteria related to project impact has been wrongly applied or interpreted by the evaluation process of project proposals, as it is understood as a quantitative impact at European level, and not quantitative or qualitative impact at the corresponding level where the participants and researchers do play in their regular business life.

SMEs feel extremely isolated and marginalized when working in large project Consortium, usually forced to take part in this consortium if they want to be part of the research and innovation activities (usually, there would be just one project running per year in this kind of large programmes, example: Spanish Cenit projects), where their role and possibility to influence is minimum and diluted. Consequently, a revision of the criteria “impact” and ambition goals of the research programme might immediately lead to a more natural sizing of projects, where 3 to 5 entities can build a successful research story, not needing an artificial large consortium.

Some measures / discussion topics on this theme:

- Possibility of allowing the SMEs to enter a project in its latest stages: the first activities of an R&D project are very far from the market and this can be an entry barrier for most SMEs. Therefore, it is fundamental to assure the involvement of the SMEs in the exploitation part – where there is a clear perceived benefit by SMEs, once it is the closer stage to the product commercialization. Furthermore, to foster the SMEs participation in R&D, work programmes could include recommendations for the inclusion of higher person-months of SMEs for projects or project activities that are more market-oriented.

- Regarding the programmes’ structure, most of them have closed topics, which are also a limit to the participation of SMEs that find it difficult to adapt their business lines and innovation strategy to such specific research lines. Therefore, a larger number of open calls could be launched as a means to facilitate inclusion of SMEs or, again, the possibility of including SMEs in a later stage of the project.

- Modify the understanding of the “impact” evaluation criteria, towards reliable impact at the level of the participants, their business, markets, etc., and not wrongly interpreting the impact at its widest European level.

Other programmes characteristics that could attract SMEs into R&D projects are the following:


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- Include in work programme description market studies to allow the interested SMEs to understand which concrete opportunities existing behind a specific R&D line. This would be included in the in work programme description. Obviously, there is a need of promoting research excellence, but also delineating the mechanisms to convert the research excellence into innovation. Many SMEs do comment on the attractiveness of the research programmes when they perceive innovation opportunities.

- Reduce the time of evaluation for RTD projects acceptance and implementation. This not only has implications in the financial efforts that need to be done, but also in the human resources management implied for companies with small teams, once it is difficult to compromise resources for a long period of time.

- Use of 2-step proposal submissions (pre-proposal / full proposal if successful), where only the best proposals would pass to the second stage, so that SMEs could be better advised and the preparation effort would only be dedicated to the best proposals. Previous studies on impact analysis conducted by the Commission indicate that the 2-sept proposal submission would have benefits but also risks, as it should be necessary to avoid even a longer 2-step process; the possibility that the first stage would just be a short SME-business needs test, not based on the fully drafted research project proposal, seem to be a crucial element for the success of this process.

- Launch the “SME research vivero or VESTREP-Very Specific and Targeted Research Project”. All research Calls and objectives within the work programme should include parallel streams, where simpler, faster project proposals can be built and evaluated. This would allow many projects surrounding other core projects. A budget of about 15 to 20% of the respective Call should be preserved to this kind of parallel SME research viveros. This SMEs Viveros could run 5 to 10 very small targeted projects, which would include 50% or more SMEs in the Consortium and would work around specific and limited ranges of research challenges. For example, a typical Research Programme call for a given objective might be structured around the following scheme:

o Large Projects,35 to 60 % of the budget

o Small focused projects, 25 to 50% of the budget to an avarega reader this means nothing! This is FP6 jargon anyway. A discussion paper should be – at least – up-to-date with current figures and funding schemes.

o VESTREPs, 10 to 30%, of the budget, with specific research technologies being invited, out of the overall research topics of the objective.

o Others 2 to 10 %


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However the above comments about possible minimum repartitions for each instrument, it is generally thought by SMEs that large project represent very usually insurmountable obstacles for effective SME participation. In those projects, the contribution from SMEs become diluted in such large Consortia.

It would be necessary to assess the impact of such partition: new winners, new losers of the above approach. More information:

- “Think Small First” - A “Small Business Act” for Europe - http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0394:FIN:EN:PDF

5.1.2 Simplification of research programmes as a means to attract more SMEs

The European Commission has presented a Communication1 on simplifying the implementation of the Research Framework Programmes, which should be also taken into account when comparing measures at European level and measure and synergies with National and Regional level . According to the Commission, for the future Europe 2020 Strategy to be successful, simplification of the access to these programmes is still needed despite the concrete measures took in FP7 to reduce time-to-grant and the administrative effort for managing projects.

In fact, when compared with previous Framework Programmes, FP7 brought a considerable number of simplifications:

80% of FP7 participants are exempt from ex‐ante financial capacity

check.

Major reduction of the number of certificates on financial statements to be provided with periodic cost

claims.

Introduction of a unique registration facility, avoiding

repeated requests for the same information.

Possibility of ex‐ante certification of the accounting methodology for recurring participants (currently under restrictive conditions).

FP7

1 http://ec.europa.eu/research/fp7/pdf/communication_on_simplification_2010_en.pdf


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However, according to the feedback received in stakeholder consultation developed by the Commission, improvements on process simplification should still be done at the following levels:

• access to the programmes and preparation of proposals are still too difficult, in particular for newcomers

• administrative burden for project administration and accounting is perceived as too high

• time-to-grant and time-to-pay are still too long and, for some Regional and National programmes, the grant agreements are set even after the project should have started, being this a crucial barrier for SMEs, who do not have the financial capacity to launch the project without certainty on the research programme funding available.

Taking these issues into account, a simplification strategy has been presented focusing in three parts:

• Changes that can be made under the current legal framework and includes the reduction of the time taken to award grants and make payments, fixing the calls for proposals’ deadlines taking into account major holiday periods and ensuring that projects can certainly start the activity once the Grant is known.,

• Radical changes to the current financial rules. A wider use of “average cost methodologies” or lump-sum payments to personnel without any need of recording time for account purposes are some of the ideas in this field. Discussions on the use of average costs are still ongoing in several SME Associations to make proposals in this respect. No use of this concept is used at National/Regional programmes. It has been demonstrated that the traditional time sheet recording systems were designed for the factories, large industries, or other less modern systems of work. Teleworkers, working time outside the office (outside the factory), working time in a creative environment, work flexibility to reconcile work and home duties, etc, etc, are making the recording system less and less efficient. Nowadays, it is more relevant to establish good planning, trusting the researcher capability and facilitating the flexibility of the working conditions. In large entities, there are several levels of controls and intermediate managers, but for SMEs, the organizations use to be flat levels where managers are also technical people or experts and employees use to work under trusting conditions and based on the experience of the supervisor/manager.

• Changes which could be implemented under future framework programmes moving from cost-based funding to a result-based approach. That is to say, payment of full amounts would be linked to whether the research objectives are achieved.


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Simplification is also a major goal of the upcoming Commission proposal on the triennial review of the Financial Regulation. The Commission intends to seize that opportunity to review budget delivery mechanisms and set financial rules for the next financial framework.

Since the Financial Regulation provides the general framework for the implementation of the EU budget, including research expenditure, its successful review will allow further progress in simplification in the research area, including through translating it in the sectoral RTD legislation. Simplification will therefore be one of the key elements of the preparation of the future Framework Programmes for Research and Technological Development (FP8).

More information:

- Communication from the commission

5.1.3 Support provided to SMEs at national/ regional level vs support given at European level

Though the regional/national programmes are usually the first step for companies that are entering R&D support programmes, their administrative requirements are usually more time-consuming and complex than in the European programmes.

Two European good practices to be followed at national and regional levels are:

• The PIC (Participant Identification Code) number that is required in FP7 to facilitate the identification of the participants in any stage alongside the R&D


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funding management process of the programmes. Participants do not have to submit their legal and financial information (and supporting documents) each time they submit a proposal; there are some similar registries in some countries (Spain among others), but the possibility and effectiveness of the use of the PIC code is not found similarly in any other national and regional programme.

• The creation of a database of project results of the National Programmes, accessible by researchers, businesses and management bodies, which could contain project information useful for different purposes (like helping in the search for partners), following EU CORDIS as a reference. Some comments and suggestions have been provided by other projects (ie: EcoInno2 SME) on measures to improve the search tools.

• In terms of human resources, a similar service to the one provided at EU level in what concerns project management could be implemented by the national and regional authorities by designating project officers to offer some guiding and control over project development and implementation. This would not only be a means of assuring the best results and application of the national / regional funds of R&D, but also a useful help for the companies with reduced experience in project management.

In what concerns the support provided to companies, a good practice to be followed could be European CELTIC programme within EUREKA (http://www.celtic-initiative.org), which offers a closer advisory and assistance/guidance before the submission of the proposal. In what concerns proposal preparation, such service could be made available by managing entities and/or multipliers to help SMEs initiating their participation in R&D proposals. Also, at EC programme, there used to be Exploratory awards for proposal preparation under FP5 that was brought up as good practice all the time by stakeholders.

Some good practices that could be implemented at national level are some rules inspired in FP7, to increase the involvement of SMEs:

• At least 25 % of the funding available under any Research programme should be allocated to SMEs; the current target figure of 15% of the Research Cooperation Programme of the European Commission should be improved.

• Financial and administrative procedures should be simplified. Specific measures are described in this document and others are suggested in the analysis report of each country research programmes.

• The SMEs demand that funding rates for the R&D activities of SMEs should be increased to 75%.


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National/regional programmes

Europeanprogrammes

More Information:

- http://cordis.europa.eu/fp7/pp-pic_en.html

- http://cordis.europa.eu/home_es.html

- http://ec.europa.eu/research/sme-techweb/index_en.cfm?pg=cooperation

5.2 Stimulus and mechanisms for assistance to SMEs

• Stimulating SMEs participation in large European R&D cooperation initiatives such as the:• European Technology Platforms, • Public-Private Partnerships

Improvable Target 2. Stimulus and

mechanisms for assistance to SMEs




Mobilizing actors

5.2.1 SMEs participation in large European level R&D initiatives

Stimulate research and development (R&D) and innovation in SMEs is a major issue to promote European increased competitiveness. Nevertheless, few SMEs are frequently participating in research activities and benefiting from R&D results, in comparison with the SMEs economic activity proportion in the market and the total number of SMEs. it is crucial to engage European SMEs in research activities, with proper policies and setting up mechanisms to bring them into the centre of the development processes of


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European Union’s research programmes and initiatives, taking into account mechanisms available to promote R&D, such as European Technology Platforms and emerging Private-Public Partnerships would merit a more detailed discussion, ensuring that these mechanisms do not create additional barriers for SMEs participation in the European A specific document has been provided by MAPEER SME and it is available as Deliverable D4.1, “Draft measures to foster SMEs participation at research programmes”.

As examples of case studies, the European Technology Platforms and the Public-Private Partnerships do represent opportunity vehicles for SMEs to get involved in large research initiatives.

European Technology Platforms

ETPs boost European research by linking different stakeholders around specific needs of an industry. This is especially important taking into consideration that the future competitiveness of European industry relies on the development of innovative products and services. Evidence of contribution to competitiveness through research is highlighted in many European Union communications, conclusions as well as it is ping pointed in the new European Digital Agenda and Innovation Union policies. ETPs have created vertical focus areas concentrating on particular segments of the industry. Their objective is to provide focused thematic priority topics in relation to the specific needs of the industrial segment or stakeholder group concerned. Some ETPs are paying special attention to the active involvement of SMEs and consequently, specific ad-hoc work groups or activities have been created, for example NEM SME, NESSI SME. See point 2.1 for more details.


Increase the involvement of SME stakeholders in the ETPs

Better knowledge of the current SMEs

representation in ETPs

The benefits should be disseminated in a language easily understood by the

SMEs

Internal coordination mechanisms and workgroups of the ETPs

Scanning of SMEs priorities to reflect them in the

research priorities of the ETPs.

Creation of workgroups/activities/initiatives on behalf of SMEs for improved integration between the different research priorities

Liaison with international and national initiatives promoting SMEs’

interests

Establishment of cooperation agreements with clusters and SMEs

associations

Implementation of national technology platforms in

more countries

More Information:


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- http://cordis.europa.eu/technology-platforms/home_en.html

- ftp://ftp.cordis.europa.eu/pub/technology-platforms/docs/evaluation-etps.pdf

Public-private partnerships:

European PPPs represent a powerful means of boosting research efforts oriented towards generating new knowledge and technological breakthroughs. The outputs are therefore less predictable and tangible than for investing in infrastructure and services.

Taking into consideration that more than 99% of European companies are SMEs, the PPPs discussions about the future research priorities of Europe should be built with a "bottom up" approach – listening to a large number of innovative companies and other stakeholders active in EU research projects and sharing ideas about the future implementation plans of the PPPs.

The European Economic Recovery Plan adopted by the European Commission on 26 November 2008 and endorsed by the European Council on 11-12 December 2008 proposed PPP initiatives to develop new technologies and increase productivity of several key sectors as they have experienced significant downturns as a result of global financial recession2. Within this context, the Commission and the industrial partners have worked together to develop the implementation plans for four partnerships:

1. Factories of the Future (FoF)

2. Energy-efficient Buildings (EeB)

3. Green Cars (EGCI)

4. Future Internet (FI)

See point 2.3 for more details.

Although the goals of emerging PPPs are well justified and well focused in order to create critical masses of research power on specific technologies which represent major challenges for Europe, there is a risk that the results of PPPs would encourage even larger Consortium, where SMEs could be spread and their contribution be too small. There may be a need of specifically encouraging the participation of SMEs in PPPs and create specific areas of research, within PPP objectives, where research by SMEs can play a reasonable role. The current strategy of the PPP-FI has demonstrated the need of specific calls for SMEs where there can be room for SME proposals on reasonable footing with respect to other large entities. If there are not such positive discrimination measures in favor of SMEs, the participation of SMEs in the PPPs would be certainly very difficult. 2 http://ec.europa.eu/research/industrial_technologies/pdf/brochure-ppp-090622_en.pdf


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How to develop a holistic approach congregating multi‐lateral interests

Aggregation of research, development and innovation

perspectives and the engagement of a multiplicity of

actors.

Cross‐thematic approach going from basic and applied research through to validation and large‐

scale demonstration.

Bottom‐up approaches must be stimulated, allowing new

players, such as SMEs, to take part of the definition and implementation processes.

How to connect SME research priorities with PPP

priorities

Cross‐functional and cross‐sector identification of the SME R&D priorities that are related to the fields covered by the PPP

Identify the current needs of the most active R&D&I SMEs and,

on the other side, the requirements of the least active

SMEs in R&D&I

Develop measures to promote the PPPs approach at national and regional level as a means to reach the SME stakeholders

More Information:

- http://ec.europa.eu/research/industrial_technologies/lists/list_114_en.html

- http://www.r2sconference.eu/intranet/uploads/noticias/adjuntos/7_NonPaperPPPs-R2S-thewayforward.pdf

- http://ec.europa.eu/research/industrial_technologies/pdf/brochure-ppp-090622_en.pdf

5.3 The wider view of SMEs

• The definition of SME adopted by the European Commission. Its adequacy to the national / regional context of the European countries.

• Identification of cross-sector programs and cross-sector collaboration between the European Commission

• Open Innovation. Fostering Large industries and SMEs to implement open innovation across global value chains

Improvable Target 3.The wider view of

SMEs




Mobilizing actors


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5.3.1 The definition of SME adopted by the European Commission

Definition: SMEs employ fewer than 250 persons and have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million. Additional conditions for autonomy apply.

The concept of SMEs includes micro, small and medium enterprises; nevertheless it is clear that the positioning, priorities and even financing capacity of a 200 people company is different from a 10 employee company. This classification could, therefore, be rethought in order to serve the different needs of the companies under this classification, namely the R&D needs.

The typical European firm is a micro firm. This is especially important taking into consideration the weight that SMEs have in European economy, being a major job engine for Europeans.

Number of enterprises and occupied persons per enterprise, by size class, In the non-financial business economy, EU-27, 2008 estimates Within the non-financial business economy enterprise population, almost 92 % are micro enterprises, having a staff headcount of less than 10. There are about 1.4 million small enterprises, representing 7 % of the stock. About 1 % (226 000) of enterprises are medium-sized. On average, an enterprise in the EU provides work for 6.4 persons;

Fig. 1 - SME Definition. Source: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/index_en.htm


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within individual size-classes, average enterprise size varies between only 2 in micro enterprises and about 1 000 in large scale enterprises (LSEs)3. Furthermore, from the figure below we understand that 54,6% of the people employed in the R&D sector are working in SMEs. This scenario shows a tremendous contradiction with respect to the participation of SMEs in the cooperative research programmes, as they participate below 15%.

Eurostat: Number of persons employed in SMEs by enterprise size-class in the EU-27 in Research and development (2005) A further definitive splitting of SMEs and divide into the following structure, with different measures for each group would allow to better focus the efforts to assist SMEs:

- Micro Enterprise, which would include enterprises with less than 10 employees and less than 5 M€ annual turnover.

- Small Enterprise, which would include enterprises with less than 50 employees and less than 20 M€ annual turnover.

- Medium Enterprise, which would include enterprises with less than 250 employees and less than 50 M€

Consequently, it can be derived that SMEs are very active in the R&D activities at private level, likely acting as subcontractors of larger entitiies, but SMEs are not attracted by the public funding Research programmes.

Some further measures / discussion topics on this theme:

- Besides differentiating large companies and SMEs, the policies and programmes fostering R&D should take the micro, small and medium sub-classification into

3http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/pdf/dgentr_annual_report2010_100511.pdf


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consideration in terms of rules for participation and funding. For example, a possible funding revised rate for R&D activities would be:

o Micro E, up to 90% of eligible costs o Small E, up to 80% of the eligible costs o Medium E, up to 75% of the eligible costs

- It has to be recognized that there are several profiles of SMEs regarding their capability to carry out research activities. For example, measures should be favourable to benefit those high research intensity SMEs in order to allow them to compete and get involved in the cooperative programmes, while other incentives should be made available to other types of SMEs which are much less intensive on their research capability or, even, they are not active in the research activities.

- The differentiation between Medium, Small and Micro enterprises could be applied to programme structure and participation rules and similarly to what happens in FP7 projects where it is recommended that SMEs represent 15% of the participating entities, a similar recommendation should exist for micro and small companies.

More Information:

- http://ec.europa.eu/enterprise/enterprise_policy/sme_definition/index_en.htm

- http://ec.europa.eu/research/sme-techweb/index_en.cfm

- http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/pdf/dgentr_annual_report2010_100511.pdf

5.3.2 Identification of cross-sector programs and cross-sector collaboration

Instruments and programs should enable cross-sector initiatives in order not to only support R&D and innovation meeting Europe’s grand challenges, but also to enable the birth of potentially new successful industries in Europe. This is particularly important as many SMEs do cover a number of services, products and applications which are cross technology, crossing the typical science and technology borders

Therefore, co-operation and coordination should be sought among different research and innovation programmes in a way that new synergies could arise to cover SME research needs in a systemic way.


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Agriculture, fisheries and foods•CAP, rural development, Aquaculture, CFP, food safety

Business•Industry sectors, enterprise policies, SME's, Single Market, free movement, competitiveness

Climate action

Cross‐cutting policies•Economic crisis, growth and jobs, regulation, sustainable development, multilingualism, climate action

Culture, education and youth•Audiovisual and media, culture, education and training, sport, youth

Economy, finance and tax•Financial Services, Budget, Competition, Customs, Economy, Fight against fraud, Taxation

Employment and social rights•Employment, social affairs and equal opportunities

Energy and natural resources•Climate action, Energy, Trans‐European networks

Environment, consumers and health•Consumers, Environment, Food safety, Health, Maritime policy, Sustainable development

External relations and foreign affairs•Security Policy, Foreign policies, Cooperation, Enlargement, Human rights, Aid, External trade

Justice and citizens' rights•Freedom, Security and Justice

Regions and local development•Regional policy, Regional Development Fund

Science and technology•Ethics, Information Society, Audiovisual and Media, Media, Research

EU explained•Civil Society, NGOs, EU Institutions, EU Treaties, Future of Europe, Treaty of Lisbon

Transport and travel•Tourism, Trans‐European networks, Transport


- Is there an opportunity for SMEs on working under cross-sector work programme and cross thematic calls., for example, a multimedia enabling technology developed by a technology-driven SMEs, having its application in the health sector, being the services and applications provided by other SMEs?.


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More Information

- http://ec.europa.eu/policies/index_en.htm

- http://ec.europa.eu/research/industrial_technologies/lists/cross-thematic-calls_en.html

5.3.3 Open Innovation: fostering large industries and SMEs to implement open innovation across global value chains

Recently, growing attention has been devoted to the concept of "Open Innovation", both in academia and business. Definition: ‘Open Innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the the markets for external use of innovation, respectively.’

Traditionally, new business development processes and the marketing of new products took place within the firm boundaries (Figure 1).

Closed innovation

However, large amounts of knowledge exist outside the research laboratories of large companies and academia:

- when employees change jobs, they take their knowledge with them, resulting in knowledge flows between firms.

- the availability of venture capital makes it possible for good and promising ideas and technologies to be further developed outside the firm,

- the possibilities to further develop ideas and technologies in the form of spin-offs or through licensing agreements, are growing.

- other companies in the supply chain, for instance suppliers, play an increasingly important role in the innovation process.


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As a result, it is possible to find other ways to foster R&D by combining internal and external ideas as well as internal and external paths to market to advance the development of new technologies.

Open innovation

As global competition intensifies and innovation becomes riskier and more costly, the business sector has been opening knowledge-intensive corporate functions, including R&D - companies are increasingly sharing their innovation processes and collaborating on innovation with external partners (suppliers, customers, universities, etc.).


Today, open innovation and globalization are fast redefining the way businesses develop and source knowledge to innovate. But what can be done to facilitate this practice?

- Research programmes should stimulate this approach by bringing together business representatives and research communities to highlight the value added of open innovation


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- Identify best practices for implementing open innovation strategies in a global context and foster its application in (national/regional) innovation policies

- Building business models inspired in open innovation and describing how value can be created from innovations and which elements have to be sourced internally or externally

- Creating formal structures of open innovation pushing for the inclusion of a large number of SMEs.

- Developing solutions to allow companies to profit from each others' use of Intellectual Property Rigths (IPs).

- Facilitate the adoption of open innovation practices to facilitate better inter-firm collaboration (ie. SME-SME and SME-Large firms). Potentially, this could be a significant policy lever to address the reluctance of SMEs to engage in R&D&I because it explicitly demonstrates that if a direct (linear model of innovation and R&D) is not successful, then there are still opportunities to receive economic benefits from unused IP and R&D outputs.

- There are already new emerging policies that are trying to exploit unused IP and R&D. For example the Nokia-Technopolis Innovation Mill in Helsinki, Finland is a recent example of an open innovation policy that is being lead by Nokia. Essentially Nokia are inviting SMEs to engage with them to explore ways to exploit unused Nokia IP in a bid to gain economic value in terms of the creation of new business models. This is an open innovation policy that is lead by the large firm that aims to gain inter-firm collaboration with SMEs. There is scope to scale this programme up to important lead market sector and create additional SME-SME policies and Large-SME open innovation policies similar to Nokia-Technolopolis Innovation Mill.

In addition, a wider debate could be established to try to respond to the following questions:

- XXI century companies use internal and external resources depending on the situation of each market, each business scenario, and each customer service. It is impossible to assume that all resources necessary to provide a specific service should be available within the entity itself. It is mandatory, even to survive in the market, to outsource; and outsource should not be purely an economic practice, but a way of working for integrated research teams, where SMEs could easily be subcontracted for specific tasks. This practice is fully accepted in the economic and industrial world, but it seems to be rejected or underside by the practices of Research programmes at European, National and Regional level.


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The following figure shows the typical distribution of activities in a structure of Open Innovation:

The above model has been developed by the Spanish Association AMETIC and further endorsed by the R&D Cluster of Digital Europe (former EICTA).

Outsourcing has become a key business success. The traditional view that only marginal parts and low cost areas are outsourced does not comply with the current practices of today’s businesses. Companies outsource very relevant parts of the value chain, including the efforts of R&D. It is important that the authorities defining the strategies to be followed by the European Member States take into account the business realities and arbitrate the rules of participation in R&D programmes in a consistent manner with the usual business practices, aligning R & D with the dominating business mentality.

According to the concept of open innovation, large corporations, small, medium and micro enterprises, universities, technology centers, associations must work together. Furthermore, the traditional concept of classifying the entities participating in the Research Programmes according to their legal form, regardless of their business environment, should be revised to align the potential contribution of research programmes to the overall challenges of the economy.

The new business through networking. Many SMEs do belong to networks of companies where they develop successfully their business propositions. Consequently, the Open Innovation concept should include also those scenarios where the SMEs are groups of SMEs who are perfectly combining their knowledge in order to make a value

Example of the XXI century Entrepreneurial structure

In simplifying and making more efficient the FP7. Innovación Abierta

AssistantFinancial

Entity ( Outsourced)

InnovatingCorporation

(Vision, design , saling, IPR, …)

Entrepreneur to be cared and fostered.

ManufacturingAnd PartsProduction

(Outsourced)

UniversityDepartment(Outsourced)

Marketing Assistance and TechnologicalSurveillance(Outsourced )

Subcontractor for- certain complex modeling, design and simulations

Subcontractor for- Prototyping- Production

Subcontractor for - Management- Financial, Tax

Subcontractor for - Technology- Technology monitoring

The new company arrangementsare driven by proper and intelligence contractual relations


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proposition. It should be natural and a demonstration of good business health that SMEs get involved in the research cooperative projects as groups of Entities, not just isolated in a traditional supply-demand bilateral relations.

More Information:

- http://www.openinnovation.eu/

- http://ec.europa.eu/information_society/activities/livinglabs/index_en.htm

http://conversations.nokia.com/2009/05/12/nokia-technopolis-innovation-mill-giving-good-ideas-a-chance/ (Nokia-Technopolis Innovation Mill).

5.4 The financial and business perspectives








Mobilizing actors

5.4.1 Venture capital investment for SMEs involved in research projects

The SMEs participating in research programmes are challenged by the need of subsequent extern

european experts panel on smes - european commissionec.europa.eu/research/horizon2020/pdf/... ·...

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