Much easier for SMEs to access transnational research and funding

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SMEs often face challenges getting financial support for their research and development (R&D) projects, but by taking part in the Eurostars programme, they can be in the driving seat, leading market-orientated R&D projects that will help their company to innovate and conquer new markets.

The Eurostars programme has been given the official seal of approval with a EUR 300 million budget and a further EUR 100 million from the Seventh Framework Programme (FP7). The result of a joint effort between the EUREKA intergovernmental network and the European Commission, the programme offers dynamic research-oriented small to medium-sized enterprises (SMEs) the opportunity to lead international collaborations on innovative projects. Eurostars fast tracks applications so projects can get off the ground quickly and results can be rapidly brought on to the market.

The proposed programme is targeted towards small consortia driven by an R&D performing SME from one of the 30 participating countries. They currently include Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom.

It must involve at least one other participant from a Eurostars country, which can be an SME, a large enterprise, a university or research organisation. A typical project could involve two to three SMEs plus an R&D supplier, such as a laboratory or institute.

A Eurostars project can address any technological area with the intention of developing a new product, process or service. The project should be market-driven: it must have a maximum duration of three years, and within two years of project completion, the product of the research should be ready for launching on to the market. The exception to this rule applies to biomedical or medical projects, where clinical trials must be started within two years of project completion.

R&D performing businesses must fulfil the EU-adopted definition of an SME ( and be based in a Eurostars participating country ( To qualify as an R&D performing SME, they must dedicate 10% or more of full-time equivalent or annual turnover to research activities.


Multi-capital events help SMEs with their finances

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Through the Competitiveness and Innovation Framework Programme (CIP), a sizeable amount of money has been made available to help SMEs across the EU to access the loans and equity they need to grow and develop their business.

During their start-up phase, SMEs often face a number of problems which are directly linked to a lack of resources, expertise, contacts and, of course, finance. The Commission has therefore decided to organise a series of 27 one-day events to make SMEs aware of the different sources of finance options that are available to them under the EC's CIP, and put them in touch with the 600 financial intermediaries approved to implement them.

These intermediary companies are members of the Enterprise Europe Network, a new EC initiative which offers SMEs a one-stop shop from where they can seek advice and benefit from a wide range of easily accessible business support services.

Open to 60 SMEs at a time, the EU Finance Day for SMEs series focuses on helping SMEs find access to capital and providing a forum for sharing best practice. The events will be running throughout this year (April: Rome; May: Warsaw; and June: Stockholm) and well into 2009.

The first Finance Day took place in Ljubljana at the end of last month, but each EU capital will host its own event. Our own Head of Unit Bernd Reichert will be participating in the programme, talking about SME funding opportunities in FP7 and Eurostars (see our Eurostars page in this issue).

Points of View:

Coaching creates unique learning opportunities

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While many small to medium-sized enterprises (SMEs) have become reluctant to receive professional consultancy, they tend to be very receptive to coaching. Openly sharing knowledge and network resources with the company is a central part of the value provided by the coach.

The smE-MPOWER project has created a unique learning community of coaching organisations which are sharing best practice ideas with hi-tech SMEs, and advising them on how they can adopt a leading role in major international research projects.

'A team of experts has been at hand to guide, coach and facilitate the SMEs during all stages of their application processes. They were provided with a package that included technical support to help them realise their innovation potential, as well as practical help to ensure their funding application processes progressed as painlessly as possible,' says project coordinator, Katrin Reschwamm from the Fraunhofer Institute for Factory Operation and Automation in Magdeburg, Germany.

The geographically balanced consortium bridges the worlds of industry and academia. It includes the following: SME networks from Ireland and Cyprus; SME intermediaries from Slovakia, Lithuania, Romania, Switzerland, Israel; and researchers from Germany, France and the UK.

smE-MPOWER organised 55 information workshops and attracted over 1 000 SMEs. Direct mailings reached another 10 000 SMEs in 10 countries. Overall, 110 SMEs took part in the project’s coaching process which expanded their ideas into detailed project proposals. Of these, 47 were drawn up for European and national funding.

'The consortium managed to create a lot of awareness and spread the word about European funding opportunities,' says Reschwamm. 'smE-MPOWER also helped SMEs get around the barriers that prevented them from gaining funding for innovative research.

Of the participating SMEs, 30% (per cent?) said that they were so encouraged by the quality of coaching on offer that they would like to continue developing their proposals so they can participate in more international research.

'The SMEs received individual guidance on consortium building. This encouraged them to resubmit a proposal or identify other relevant funding frameworks for the project,' says Reschwamm.

The impact of smE-MPOWER

smE-MPOWER should lead to more SME-driven proposals in European research as motivated SMEs think more strategically about innovation and engage in long-term RTD activities.

The project learned that while many SMEs have become reluctant to receive professional consultancy, they tend to be very receptive to coaching. Openly sharing knowledge and network resources with the company is a central part of the value provided by the coach.

This European consortium of innovation coaches — now called the smE-MPOWER Community — is continuing to provide coaching services after the project. 'Faced with the complexities of international RTD collaborations, SMEs usually need the assistance of professionally equipped, empowered coaches who can speak the SME’s language,' adds Reschwamm.

But to become a truly effective system for SMEs, this approach to mentoring needs to be integrated into existing regional support frameworks. 'If it is, it has the potential to empower all the regions towards the goals of the European knowledge economy,' says Reschwamm.

To that end, the smE-MPOWER model has already been adopted by the canton of Fribourg to train up SME coaches in Switzerland.

Success Story:

Food traceability solution helps SMEs win businesss

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European legislation is forcing companies to track their products wherever they are in the food chain. Research partners and industrial groups from the 24-month food traceability project P2P have been working with small to medium-sized enterprises (SMEs) in the pork industry to create an easy-to-use software system for monitoring foodstuffs that is also good for business.

A 22-partner consortium from the P2P project, which officially ended in 2006, have continued working together to create a food traceability software environment called Trace. Providing large numbers of predominantly SMEs in the pork industry with competitive advantage, Trace should help SMEs win business by helping them keep on top of food safety legislation.

Companies in the food industry must now register every item they buy and sell, including buyer and seller details, so that ingredients can be traced from one end of the food chain to the other. When a case of contamination is confirmed, the food authorities use this traceability data to identify which products must be recalled.

Small, independent companies are often the weak link in the audit trail because they can’t afford to invest in what is a complex data collection exercise, or buy the latest software to manage it. Although they usually comply with the law, SMEs can hinder the tracking process.

The P2P consortium’s new environment pulls together information from different traceability systems so that the appropriate health bodies can access it much more easily than before simply by using a standard Web browser. The former project’s research partners (RTD performers) have developed the software tools used to create this new environment, which now automatically collects traceability data from the in-house databases of large companies and SMEs alike to produce a readily accessible audit trail. The project’s industrial groups (IAGs) have created the software services that link the SMEs up to the new system and helped them adopt it.

Making Money

According to Anna Tavernari, P2P coordinator for CNA Associazione Provinciale di Modena and Massimo Garuti, coordinator for project partner Democenter, just to have their products monitored in such an open way will bestow a huge competitive advantage on the SMEs using the environment. 'Being able to show the position of their products in the food chain will build trust and attract customers who until now have been reticent about buying from suppliers which couldn’t produce a verifiable audit trail,' says Tavernari.

Free to those SMEs which took part in P2P, the traceability software TraceSW can be integrated with the SME’s own IT system, or shared as a service with other SMEs from Centres run by the IAGs themselves. Trace can also be used by companies in other sectors and it’s expected that each IAG will sell the Trace software to outside consultancies, providing a valuable revenue stream for its own members.

A downloadable version of the Trace browser has been made available to interested parties, and it’s hoped that the Service Centres will help SMEs further by promoting their business through a web-based portal, a kind of shop window into their activities which should reassure consumers these are the kinds of businesses they should be buying from.

A mobile version of Trace will also be made available to vets and other officials who spend a large part of their time out of the 'office' yet need to access traceability data as part of their job.

'More revenue can be earned by customising this mobile version for distributors and supermarkets,' adds Garuti. 'Being able to let customers see where the food they’re about to buy has come from, as well as its composition, will bestow these companies with huge competitive advantage.

Policy Update:

Enhancing the impact of SME participation in research

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The small to medium-sized enterprise (SME) Unit is pursuing a comprehensive strategy to optimise SMEs’ participation in and benefit from Community research Framework programmes. The first wave of activities is the implementation of three projects funded under the call FP7-2007-SME-3.

The USEandDiffuse and ECOinno2SME projects will identify good practice for disseminating and then exploiting research results. USEandDiffuse is targeting the health and information and communication technologies (ICT) sectors. A central component of the project will be the creation of a Best Practice Manual which will illustrate the most effective ways of presenting and exploiting RTD results. A series of methodologies should also evaluate their market potential.

ECOinno2SME has as its focus the ECO-innovation segment, more specifically life sciences (biotechnology and agriculture), environment and energy. It will evaluate completed FP5 and FP6 projects, emphasising SME involvement to identify why these companies performed successfully, and then explore ways of publicising the findings effectively.

The aim of the third project — PRESTO — is to identify priority research topics for SME Associations by establishing a close and sustainable dialogue with European Technology Platforms (ETPs). These help industrial and academic research communities to coordinate their research and tailor it to a common strategic research agenda (SRA) which sets out research and development goals.

PRESTO will address the construction sector, especially three construction-associated domains — energy, ICT and new materials — and encourage SME Associations to create ETP working groups.

All three projects started on 1 February 2008 and meetings kicked off at the end of February, involving 21 participants from 10 different countries.


Worthwhile briefings for the SME community

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We’ve put together details of a Berlin event which introduces life sciences researchers to basic management skills. The biennial ICT conference and exhibition will create an invaluable networking environment, where SMEs can learn more about funding opportunities in FP7 and meet potential partners.

Management Training for Life Sciences Researchers 5-9 May, Berlin (Germany)

Supported by the EU-funded TRAYSS PRIME project, this course will provide junior group leaders, postdocs, advanced PhD students and other scientists in the life sciences sector around the Baltic Sea region with the opportunity to acquire knowledge about important aspects of scientific management.

During the week, participants will learn the basic skills of how to manage projects and intellectual property, exploit research results and acquire EU funding. 'Soft skill' topics, such as self management and conflict management, will also be covered, and bioethical issues will be discussed with experts.

Courses will include extensive hands-on exercises and be conducted by international experts from industry, consulting and management companies, as well as EU funding experts.

Eureka Ministerial Conference 6 June, Ljubljana (Slovenia)

Please use the link I send to say a few words about the conference in general this is for information only but to highlight the fact that Commissioner Potocnik is expected to announce the approval of the Commission Eurostars proposal to fund in total 100 million € from FP7.

ICT 2008 25-27 November, Lyon (France)

This biennial Information and Communication Technologies (ICT) event is organised by the European Commission’s Directorate General for the Information Society and Media.

The 2009-2010 Work Programme for ICT research in the EU’s Seventh Framework Programme (FP7) will be presented in detail. Other sources of EU research funding for ICT will also be examined, including the new Joint Technology Initiatives (JTIs) and the Competitiveness and Innovation Programme (CIP). Together, these initiatives represent more than EUR 2 billion in EU support for ICT research over the next two years.

Special activities for young people and students — the researchers of tomorrow — are also taking place around the event. An exhibition will be showing examples of leading-edge research. But perhaps most importantly, ICT 2008 will provide small to medium-sized enterprises (SMEs) with the opportunity to meet and discuss possible research activities with potential partners interested in similar areas of work.

Facts & Figures:

Trend shows EUR 1 billion could be available to SMEs annually in the Co-operation programme.

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The Seventh Framework Programme (FP7) is designed to support a wide range of participants, but first indicators on small to medium-sized enterprise (SME) participation show organisations are enjoying increased access to community-funded research programmes.

The first report on SME participation in FP7, which focuses on the Cooperation programme, reveals that increasing numbers of SMEs are participating in the various themes of FP7 compared with its immediate predecessor, FP6. This also means that consortia are increasingly disposed to including SME participants in their research.

It seems that FP7’s simplification procedures have contributed to SMEs increasing their share of the research pie. Such procedures include less frequent reporting, the reduced need for audit certificates and bank guarantees, and increased funding levels for research - with the upper funding ceiling for SMEs being increased to 75% from the 50% that was available under FP6.

Throughout the seven years of FP7, the Community will have allocated over EUR 32 billion to collaborative research projects under the banner of the Cooperation programme. Divided into 10 distinct themes, the programme supports all types of research activities carried out by different research bodies in transnational cooperation. Within each theme, there are a variety of SME-targeted topics in which research-intensive SMEs should play a leading role.

If this positive trend continues, it is estimated that on average, EUR 1 billion in research funding will be made available to SMEs annually throughout the lifespan of FP7.

The 10 themes reflect the most important fields of knowledge and technology where research excellence is particularly important to enhancing Europe’s ability to address its social, economic, public health, environmental and industrial challenges of the future.