< RESEARCH - SME Update: Issue 5 - 20 May 2009
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The second benefit for SMEs, says Luizi, is collaboration.

'Through the EU projects, we've established agreements with a range of universities and research centres. This has become a real win-win situation where we bring to them market opportunities, access to markets and a product-driven approach. In return, they provide a great deal of expertise, and access to large-scale facilities which we could not afford to pay for ourselves,' says the Executive Director.

An example of this is Nanocyl's relationship with the Department of Materials at the college of Queen Mary, University of London, whereby plastics are processed into textiles, injection parts, and other materials.

'If we share an opportunity to address a new market, such as textiles, we could not afford to invest in the appropriate equipment from day one. Thanks to our collaboration, we have the opportunity to demonstrate the feasibility of the added value of our material in such a field,' notes Dr Luizi, adding that the company's relationship with Queen Mary blossomed as a result of the contribution both entities made to EU projects.

'This has now evolved into a much stronger collaboration, which has grown well beyond the projects themselves,' he adds.

The funding process - where it can be improved

Progressing from lab to market is perfectly possible with the current funding mechanisms. If you have the right profile and fulfil the criteria, then the funding model fits. If you're determined to grow into a medium- or large-scale enterprise, then you will have investment, product and business development strategies in place already and will be able to raise the funds in a way that is compatible with the existing system.

'When I compare the current programmes with what I see in other countries outside Europe, we're well supported. Research funding allows us to invest and take risks in areas we'd never be able to afford to explore if we were going out on our own. The level of funding we receive is making us competitive, even compared with low-cost countries,' says Dr Luizi. 'There are places where it is much cheaper to do research, but because of the significance of the support we get, we can now afford to be competitive with Asia and the US.'

According to Dr Luizi, research funding can propel an SME on to the European stage from day one. 'This European dimension is significant in keeping us competitive. You also feel it's fair - where the processes operate in a politics-free zone, open to everyone,' he explains.

However, Dr Luizi admits the funding process can also frustrate: 'Sometimes the most innovative projects are simply not being selected because the risk factor is deemed too high.' The time between writing up the project on paper and getting the prototype data together that leads to a product being adopted by the market is probably a minimum of five years. 'This means we must be at least that far ahead of our competitors. But it's difficult to fulfil all the programme criteria and still have something this far on that remains innovative,' he adds.

As a solution, Dr Luizi suggests research funding for a Fast-Track, short project route to market. Working at European level, it would last for six months or a maximum of a year, and consist of one or two companies and a research facility. Their sole focus would be to demonstrate a project's feasibility.

'We're patenting a development with a very narrow field of application. While the idea four to five years ago was unique and really advanced, if we'd been able to run a very limited project to show its potential, we could have built a much larger consortia. In terms of competition this would have put us in a much stronger European and worldwide position than we are currently in,' admits Dr Luizi.

This can be a really critical point for an SME. Once you've got a good demonstrator, something coming out of the lab, you've still got to invest in large-scale production. But then the time to market can be extremely long, and as an SME in an environment nowadays where there are so many regulations to take into account, it can take an enormous amount of time to convert that first prototype into a product.

'Using a Fast-Track process, an SME could patent the technology and then apply for a large-scale consortia to really develop and [fine-tune] it to suit various fields and demonstrate that it can be cost effective. The objective would ultimately be a world or EU patent which could be available in a portfolio available for licensing to other partners,' Dr Luizi observes. 'If it formed part of the evaluation framework, we could pull away from research for six months or so and really demonstrate what we could do with our development, yet remain within the total framework of the subsidised project.'