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Facts and Figures

The proportion of Cooperation programme funding going to SMEs continues to rise

Fragkiskos Archontakis

The ninth SME progress report, published on 25 October, reveals that SMEs have received 16.3% of Cooperation programme research funding as of the end of September 2012, up from 15.2% in January. The primary reason for this increase is the SME-friendly measures that were applied in 2011 and 2012.

The aim of these biannual progress reports is to monitor the participation of SMEs in the Cooperation programme (2007-2012), which is part of the Seventh Framework Programme (FP7). The figure of 16.3%, which equates to about EUR 3 billion, demonstrates that the 15% formal target that was set for FP7 in a Council decision has now been significantly surpassed.

Fragkiskos Archontakis, Policy Officer at Directorate-General for Research and Innovation, emphasises: ‘As innovative SMEs are an important engine of job creation and economic growth in the EU, it was important to recognise their merits and give them more chances to benefit from EU funding, especially given the challenging economic context. Since last year, SMEs have increasingly benefited from the Cooperation programme, which is for us confirmation that we support those who need it most. The 16.3% figure shows that when the right conditions are in place, there are SMEs out there interested in programmes connected to research and innovation.’

The impact of strengthening measures

The increase of the proportion of funding going to SMEs is due primarily to the implementation of strengthening measures in the calls for the 2011 and 2012 work programmes (WP 2011 and WP 2012). These measures were designed to create an environment which would enable more SMEs to take part in RTD projects, and SMEs have responded well to them.

Before the measures were implemented, it was not certain to what extent the response would be positive. Mr Archontakis explains: ‘We have seen important surges in SME participation to FP7 since the start of the implementation of WP 2011. Recent figures show that SMEs active in the field of certain FP7 thematic priorities have benefited from more than double the funding that they had before.’

In WP 2011 some 50 specific research topics were presented in order to increase the participation of SMEs, and in WP 2012 there were more than 90 research topics that specifically addressed SMEs. Graph 1 below plots the difference between the periods before and after the implementation of the WP 2011, for each of the thematic priorities (themes). The increase is significant, especially for the themes HEALTH, KBBE (food, agriculture, fisheries and biotechnology) and ENV (environment research).

Graph 1

Graph 1: Share of EU contribution going to SMEs, for each theme within the Cooperation programme (2007-2012), as of 30 September 2012

Theme acronymTheme description
HEALTHHealth research
KBBEFood, agriculture, fisheries and biotechnology
ICTInformation and communication technologies
NMPNanosciences, nanotechnologies, materials and production technologies
ENERGYEnergy research
ENVEnvironment research (including climate change)
TPTTransport research (including aeronautics)
SSHSocio-economic sciences and humanities research
SPASpace research
SECSecurity research

The implemented strengthening measures were of various types. These types included: calls with broad and/or SME-friendly topics; streamlined application processes; making modest-sized consortia more eligible for funding; placing greater stress on ‘close-to-market’ or demonstration activities (which are important given SMEs’ need for quick return on investment); and the inclusion of specific criteria in calls, such as explicitly stipulating SME participation or SME coordination in projects, and output for the benefit of the participating SMEs. In addition, ring-fenced budgets for SMEs allocated a minimum share of the budget to participating SMEs. All these measures managed to lower the threshold for SMEs to be involved in FP7 projects. A typical example of a call that was launched to trigger more important SME participation was the 'FP7-Health-2012-Innovation-2'-call, which boasted a budget of € 86.57 million under WP 2012.

The particular strengthening measures implemented vary from one theme to another. The identification of the themes which required such measures, and of the strength of measures required, was importantly informed by the monitoring of the levels of SME funding, most particularly in the bi-annual progress reports. The degree of detail described, especially in providing statistics for each of the themes, was particularly important. In this way, the monitoring has made a major contribution to achieving and exceeding the 15% target.

Mr Archontakis says: ‘What I would like to stress is that the publishing of the report twice a year over recent years contributed greatly to achieving the 15% and further increasing SME participation. Even though the 15% refers to the Cooperation programme as a whole, the fact that our unit regularly publishes a report that shows clearly the figures on SME participation in the different themes, contributed to steps being taken to increase SME participation where there was still room and a good case for it.’

Other notable statistics

The report also presents further indicators of SME participation in FP7. Notably, SMEs participate in the great majority of Cooperation programme projects. At least one SME is involved in 74.5 % of all signed grant agreements, and this figure is high across all the themes except SSH, ranging from 67 to 87%, with TPT top at 87.7%. Many SMEs also participate in more than one project – indeed the average is 1.6 projects.

SMEs do not merely contribute to the project, of course, since many actually coordinate it. The report reveals that 11.1% of the FP7 projects are now coordinated by an SME, which is a significant increase on the 10% figure of the previous report (January 2012).

Future developments

Horizon 2020, the framework programme for research set to follow FP7, will incorporate a special instrument for SMEs. This new instrument, which draws inspiration from the US Small Business Innovation Research (SBIR) programme, will encourage all types of innovative SMEs to put forward inventive ideas which demonstrate a clear EU dimension and strong market-orientation. It will have three seamlessly connected phases – a feasibility phase, a development phase and a commercialisation phase.

Mr Archontakis explains: ‘The positive response to the special SME strengthening measures in FP7 shows that we are on the right track, and also with view to promoting the participation of SMEs in Horizon 2020.’