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Final call for Demonstration Activity under 2013 Work Programme

As part of the 2013 Work Programme (WP 2013), the specific Seventh Framework Programme (FP7) initiative supporting SMEs, the 2013 call for Demonstration Activity proposals has been announced. This is the third and final call for these funding packages, and is worth EUR 27 million. An online web briefing has been provided by the Research Executive Agency (REA) to assist applications. The deadline for submissions is set at 15 November 2012.

The Demonstration Activity helps SMEs to bridge the gap between developing a product or service and exploiting it on the market. Applicants must have already participated in a successful project under the FP7 Capacities work programmes 'Research for the benefit of SMEs' or ‘Research for the benefit of SME Associations’. The demonstration follow-up aims to prove the viability of a new solution produced in this project which offers a potential economic advantage but which cannot yet be commercialised because some further technological or other development is required.

‘The great thing about the Demonstration Activity is that it provides the type of fund which can facilitate the transformation of a prototype into an innovative product with genuine market potential,’ says Giorgio Costantino, Project Officer at the REA. ‘So the most important reason for providing this funding to the SMEs is to complement the good work done on the research project, and to support the effort which is still required to bring the new product, service or process to the end user or customer.’

The value of demonstration

Demonstration projects can comprise up to three different types of activities (demonstration, management and other) but research and development activities are not covered. Demonstration activities cover not only the testing of the prototypes and verifying their performance, but also activities such as scaling up, market studies and developing business plans.

Mr Costantino explains: ‘SMEs also benefit from demonstration projects because within the project they can develop a focused business strategy – they can have as a partner or sub-contractor companies which specialise in the examination and exploitation of results. This is a relationship which can be very valuable for SMEs planning to launch a new product on the market.’

The WaterBee smart irrigation project is funded as one of the first demonstration projects from the 2011 call. Dr John O’Flaherty, the technical director of Ireland’s National Microelectronics Applications Centre, the SME coordinating WaterBee, believes that the scheme has made an invaluable contribution to the project’s progress: ‘The EU funding of the demonstration trials has been essential in allowing the consortium to work together, to scale-up, validate and demonstrate this very innovative smart irrigation system. The funding has enabled the gap from the previous research project prototype to be bridged to a scaled-up fully reliable operational field prototype service, and enable the WaterBee SMEs to address a significant market opportunity, which is estimated to be worth EUR 1.7 billion by 2020. Once the current project is complete, the consortium partners plan to collaborate in finalising the system for commercialisation and deployment to the market.’ Dr O’Flaherty adds that without the funding, it would have either not been possible to achieve the same progress, or else it would have taken much longer.

The application trail

One notable feature of the scheme is that their success rate is relatively high. In the previous two calls this rate was 50%. The main reason for this high rate is that the target beneficiaries are a small and defined group.

Applicants can maximise their chance of success by avoiding various pitfalls. In previous calls some incorrectly assumed that the assessors were already acquainted with their research project, and so failed to properly describe it. Every proposal is evaluated on its own merit and must be self-sustaining. 'It is up to the applicants to describe the results and how successful the previous project was,’ Mr Costantino says. ‘It is important to take care in describing the state of the art of the demonstration proposal – which is what has been developed in the previous project.’

In the application, it is also essential to describe the expected economic impact of the demonstration project on the participating SMEs, such as the impact on turnover, employment, target markets, increase of market share, time to market, foreseen and/or existing patent applications and licence agreements. Mr Costantino explains: ‘This is not a standard FP7 project in which the core element is its S&T excellence. Innovation and competitiveness are the key words for this type of project. With the Demonstration Activity, the most important criterion to fulfil in the proposal is the impact. The REA expressly assigns independent experts with business backgrounds in order to properly evaluate the impact section of the DEMO proposals. Thus, it is essential that the business case is well presented and documented (including the estimated return on the investment) – you need to present it as a company would to a private investor. This is not always well done in the proposal, and this can cause the proposal to fail.’

Mr Costantino concludes: ‘In a time of crisis more than ever innovation is the key to sustainable growth. SMEs benefit from the Demonstration Activity because they get the financial support to innovation which is not easy to come by these days. If SMEs have good results for their projects, then they should not miss this opportunity.’

Dr O’Flaherty concurs: ‘Our advice to other SMEs would be to get involved in demonstration actions, as they provide an ideal path to commercialising technology and working with partners to get it to a Europe-wide market.’