Research connections

Huge opportunities for SMEs

Organised by the Commission's Directorate-General for Research, over 2 000 EU scientists, policy makers and representatives from industry and research organisations gathered at the recent Research Connections event held in Prague. Following the theme of 'Networking our way to a research future', the conference provided invaluable advice on how to take advantage of the various research schemes, and an exciting exhibition showcased a selection of 50 EU-funded projects.

The point where entrepreneurs meet scientists always provides a heady mix of business opportunity, politics and networking. This was especially the case at this month's major event in the EU research calendar, the Research Connections conference and exhibition.

Two SME workshops were organised as part of the event covering three European programmes and supporting the SME offer from lab to market. Moderator for Friday's Research and Innovation for SMEs 2 workshop was Ms Anna Maria Darmanin, a member of the European Economic and Social Committee (EESC - a consultative body that gives representatives of Europe's socio-occupational interest groups, and others, a formal platform to express their points of views on EU issues). Ms Darmanin is also rapporteur for the Exploratory Opinion on Research and development: in support of competitiveness:

"SMEs do not have enough resources to invest in research and exploit innovative ideas and opportunities for research. This is why their participation in our programmes is so important, especially in terms of new job creation, and why we have to create a favourable environment for them," says Ms Darmanin.

Held inside Prague's vast conference arena, scientists from Europe and the new Member States were able to discuss their research priorities in the wake of the Commission's latest progress report for the Seventh Framework Programme (FP7).

SME support

There is no doubt that FP7 is off to a good start In the first two years, SMEs from all over Europe participated more than 6 000 times and received more than EUR 1 billion in funding – a figure which is set to rise.

The flexibility of SMEs means they can quickly implement research results into new products on the market. Therefore the European Commission’s aim is to reach at least 15% of SME participation in the Cooperation programme, representing EUR 6.2 billion in funding during the lifetime of FP7.

But even though FP7 has simplified participation for SMEs, also offering more opportunities and a higher level of funding than previous Framework Programmes, progress in reaching the 15% target for SME participation has so far not been reached.

For further details, see the latest progress report on SME participation in the FP7 Cooperation programme in our Facts & Figures section.

New Member States

There is below-average participation in FP7 for most new Member States. The average success rate of EU-12 participation in terms of applicants is slightly lower than the overall EU-27 average – 17.9% compared to 21.8% respectively.

The potential of the EU-12 has not been fully tapped. Simplifying access to grants and increasing the availability of finance for SMEs should accelerate investment at national and regional level. This is good news for the newer Member States, because the EU offers their SMEs what are perhaps the only real opportunities for developing innovation in their own countries, where public institutions are the main recipients of research and development funding.

Private funding is difficult to procure. Obtaining further financial investment can also be a problem as the process often needs more time than a small business has to spare.

Looking ahead

However, the main message from Research Connections came through loud and clear: The Commission is wholly committed to improving its support for SME research development from lab to market and encouraging further participation of researchers from the new Member States.

In his opening remarks at the conference, the European Commissioner for Science and Research, Janez Potocnik, declared: 'We will continue to help less performing Member States integrate better into the Framework Programmes. We will support capacity building through the creation of better synergies between different Community instruments, such as the Framework Programme, the Competitiveness and Innovation Programme and the Structural Funds … a sign that at all levels, more connection is better than less.'

These research programmes provide an enormous amount of financial help for SME development when they operate individually. 'Taking part in dynamic partnerships and open networks also makes a dramatic difference,' Potocnik underlines.

However, when the programmes work together they can provide true value to an SME working hard to take a technology all the way to market.

Two sessions at the conference were dedicated entirely to SMEs: Thursday's Research and Innovation for SMEs 1 (funding under the three main programmes), and Friday's Research and Innovation for SMEs 2 (SME panel).

Videos of the two sessions will soon be available via the session links above.



How the individual schemes support SMEs

SMEs can now move through the entire funding lifecycle, using a number of programmes to maximise their research and innovation capacity.

Structural Funds, with a total of EUR 55 billion, including EUR 27 billion directly targeted at SMEs, for the period from 2007 to 2013, are the largest providers of EU funds for businesses. This includes entrepreneurship, start-ups, access to knowledge and information and communications technology (ICT), support services, incubators, science parks, networks and clusters, as well as access to finance and the development of human resources.

Structural and Cohesion Funds help many SMEs get their project off the ground. The aim of the EU’s Cohesion Policy is to reduce economic and social disparities between the regions to allow for greater opportunities in the more developed regions for new Member State SMEs.

The Structural Funds are defined at regional level, so SMEs need to check with the managing authority responsible for the operational programme in question to see if their particular research or innovation activity is covered. To find out which national authority is relevant for your SME, click here.

The transnational Seventh Framework Programme (FP7) and the Competitiveness and Innovation Framework Programme (CIP) are managed by the Commission, so the criteria and subjects funded do not vary from one region to the other.

FP7 provides financial support for transnational research for and by SMEs wishing to innovate and improve their competitiveness, by enhancing their investment in research activities to acquire new knowledge for growth in Europe's knowledge-based economy. The programme has swept away some of the processes that previously put off SMEs from taking part in EU research.

A new guarantee fund is making most financial viability checks obsolete, and a Unique Registration Facility means SMEs only have to submit legal documents once. This will reduce the need for audit certificates and financial capacity checks.

The new Research Executive Agency becoming operational on 16 June (see our Actions section) should also speed up the proposal evaluation and the validation of project partners.

For more information on SMEs in FP7 please see the SME Techweb.

The Competitiveness and Innovation Framework Programme or CIP, spanning the period from 2007 to 2013 with EUR 3.6 billion for the Entrepreneurship and Innovation Programme, the ICT Policy Support Programme and Intelligent Energy Europe, aims to encourage the competitiveness of European enterprises.

With SMEs as its main target, the programme will:

  • support innovation activities (including eco-innovation);
  • provide better access to finance and deliver business support services in the regions;
  • encourage a better take-up and use of ICT and help to develop the information society;
  • promote the increased use of renewable energies and energy efficiency.

Through the financial instruments, the CIP makes access to finance available for the start-up and growth of SMEs and encourages investment in innovation activities.

The European Investment Fund or EIF manages the programme on behalf of the Commission with the aim of reaching as many growing SMEs as possible.

Small businesses can contact selected national financial institutions to get access to investments or guaranteed lending. For venture capital, the EIF invests in funds focused on the early and expansion stage of specialised sectors, particularly eco-innovation. In these cases, the EIF is usually a cornerstone investor.

For guarantees, the EIF establishes risk-sharing arrangements with intermediaries that provide finance directly to SMEs, such as banks, or with intermediaries that issue guarantees for the benefit of lending institutions.

A list of the CIP financial intermediaries by country can be found online here.

The Enterprise Europe Network, spanning the period from 2007 to 2013 with EUR 320 million, offers a broad range of services tailored for SMEs in the EU and beyond, and the IPR (Intellectual Property Rights) Helpdesk provides free-of-charge information and resources to help EU-funded projects manage intellectual property rights and related issues.



How they can work together

When operating individually, the three EU funding sources of FP7, CIP and Structural Funds provide significant support for research, development and innovation. However, their value can be further enhanced by combining them.

Some rules of the game should be clear: it is about co-funding but not double financing – submitting the same item of expenditure to different sources separately so you can obtain financial support from all of them is clearly fraud.

Below are some examples of complementary financing for related activities.

An SME may be receiving support for an innovative business project in the form of a loan guaranteed by a financial intermediary approved under CIP’s SME Guarantee Facility, while other related but distinct activities – for example, training to upgrade the skills of staff so they can develop and implement new business ideas – can be in receipt of Structural Funds (under the European Social Fund).

Structural Funds first, followed by CIP

An SME is in receipt of grant funding under a business support priority of a Structural Funds programme in its region. It is interested in accessing other financial instruments such as venture capital for the further development of its activities. It applies for an investment by a Venture Capital Fund approved under CIP’s High Growth and Innovative SME Facility and receives funding from this source.

FP7 followed by CIP with Structural Funds

An SME develops a product under FP7 and when tested, can check market replication with the support of the CIP. Afterwards, during its deployment phase, if the issue is included in the operational programme of the region, it might be supported by the Structural Funds.

Around 75% of those that benefited from the 2008 call for proposals related to Eco-innovation pilot projects were SMEs.

Example of support under FP7, followed by the Structural Funds

An SME forms part of a consortium that has received funding through the Research for SMEs action under the FP7 Capacities Specific Programme. This has provided it with support to outsource certain research needs, and receive training for its own staff. As a result, it is now ready to undertake future research activities itself. It successfully applies for funding for capital expenditure to build its research capacity under the research and business priorities of a Structural Funds Operational Programme in its region, or for assistance under the JEREMIE facility.

If you’d like to know more about all the possibilities offered to SMEs, please consult the Practical Guide to EU funding opportunities for Research and Innovation available for download in English, French, German, Spanish, Italian and Polish.



SMEs talk about their scheme experiences


Sensetrix

The company develops virtual reality hardware and software. Sensetrix has been involved in two Framework Programme projects: View of The Future (Fifth Framework Programme or FP5) and CADPIPE (Sixth Framework Programme or FP6). The company’s CEO, Seppo Laukkanen, believes one of the main benefits of getting involved with EU programmes are the connections you can make and of course the knowledge you acquire from other partners.

'The best kind of projects usually contain end-users and developers working together where there are many ideas on the table,' he says.

Mr Laukkanen also believes the programmes should provide an SME with as much money as possible upfront: 'The smaller the SME, the more difficult it is to come up with pre-funding cash. Having to fund up to 100% of the project before getting half of that back via the programme places an enormous strain on the SME. Increasing pre-funding would allow the SME to allocate more time and resources to research and development,' he explains.

Of course, the purpose of EU funding is to help get new products to market and help SMEs to become more competitive. 'However, the more the EU can help the SME develop those products by making the funding process as straightforward and supportive as possible, the better. An SME might have a brilliant idea and the knowledge to develop it, but there won’t be any point if the funding required to turn that idea into reality is insufficient. Sometimes, even 50% funding isn’t enough. Many small SMEs just don’t have sufficient money available,' he adds.


Federation of the Food and Drink Industries

This SME Association has been involved with a range of projects in FP6 and FP7, most recently with ProPraline working with three SME associations, three SMEs, six RTDs and two larger companies. Director General Miroslav Koberna says that in most cases, calculating the real benefit of participating in the different schemes is very complicated.

'Money is not the only factor of course. Collaboration and the sharing of ideas can lead to major breakthroughs and SMEs gain huge competitive advantage just being part of a research consortium,' he says.


Technology and Environment Centre or TEC

As the head of a start-up technology research company, Mitja Grbec has found the funding process for SMEs adequate but would like to see some funds increased and tailored more towards SMEs.

Although he agrees that the different funding schemes are integrated to a certain extent, he feels there is an imbalance between the amount of funding it is possible for an SME to acquire from say, Structural Funds (far too low in his opinion), and the CIP.

Mr Grbec explains: 'Being a start-up, we used the (local) structural funds to co- finance the purchase of some essential equipment, and CIP to co- finance the market acceptance of our new product. Unfortunately, we could not find a suitable programme for funding our research and development phase.'

Mr Grbec also believes the SME community would like to see a single funding mechanism for SMEs: 'The impression I got when I started assessing the various programmes was that they were quite fragmented. Although the programmes have different aims, all an SME cares about is the one continuous process of getting [the] product to market. It would be useful if the programmes were advertised better in the early stages and perhaps [if] certain programmes [were joined up] so they can cover the entire lab to market process.'

It usually takes a year to prepare a project and apply for funding. 'This is quite a lot of time. Once you finish the first phase, you’re faced with the problem of how to continue. Maybe this is not such a problem for medium and large enterprises, but with an SME with limited resources it’s difficult to know what to do next.


Biotie

This pharmaceutical SME produces drugs used to treat serious human diseases. Biotie has been involved with many EU programmes, either as a coordinator or partner, dating back to the Fourth Framework programme (FP4). Currently working on LEVITATES (FP6) Biotie is developing new ways of treating inflammation of the liver.

The company has used Marie Curie funding to strengthen links between the company and its key academic collaborator – the UK’s University of Birmingham Medical School and the largest liver transplant centre in Europe.

'This was the reason for our funding request. Birmingham had access to tissue, usually difficult for a commercial company to get, key technologies and skills we didn’t have. We thought one of the best ways we could cement our relationship would be to exchange personnel so we could learn from each other and transfer information and technology,' says Biotie’s Head of inflammatory diseases drug development, David Smith.

'Additionally, we could perform joint research in our area which would benefit our drug development activities. From the partner’s perspective, experienced researchers from a commercial company would be working in their labs over four years - three researchers working two years each, bringing new skills into their academic environment,' he notes.

As a result, Biotie has made quite significant advances in the understanding of how inflammatory liver disease is caused. 'Now we have some idea of how it might be treated. Within the company we are taking some of this information and using it to improve a drug we have in development to treat the disease with the intention of taking it forward for testing in clinical studies in patients. For us this has been a small but very successful programme,' concludes Mr Smith.


B&M InterNets

The company develops systems for the computing and control markets and is currently involved with three projects supported by EU programmes, such as the FP7 Eurostar-funded DYSLEXTEXT which is carrying out research into dyslexia. The company is developing a learning system to help different types of sufferers cope with the condition, and collaborating with a leading Spanish information technology multinational, Indra Systemas, to help build it.

'Sometimes is can be difficult to obtain finance for a big project because we’re a small company with limited resources so without EU funding programmes such as Eurostar we wouldn’t be able to take part in such projects,' says B&M InterNets’ Marketing Manager, Marika Hrubešová.

The project’s success also depended on the company developing its research with a big market player. 'For commercial success you need a foreign partner with experience of different languages and markets. This makes it easier for us to enter large markets. It’s too early to talk about commercial benefits but we fully expect to be competitive from day one,' says Mr Hrubešová.


NaKu

The company develops biopolymer products and has used Cornet II funding to develop a new form of bio-based packaging. This large FP7 project has 22 partners in NaKu’s home country of Austria, and 40 internationally. SME Associations play a key role in the project.

'This can be a double-edged sword. If the local Association knows you, and you get on with them – as we did – you’re fine. However, if it is not very strong and committed to you, then you’re lost,' says CEO, Johann Zimmermann. 'Local and international partners are working together, and our coordinator is really on top of the project’s management. But the great thing about the project is that it starts with the raw material and follows through to the end product, currently a bio-based bottle, being sold in the shops – a true lab-to-market experience.'

Mr Zimmermann feels it’s invaluable to be an SME in this kind of environment. 'We bring practical, yet innovative ideas and we can move quickly, unlike a much larger and heavily structured organisation. Three years ago, companies of this size wouldn’t have recognised us. Now we’re part of this EU project, they rely on us. We’re an equal because they are depending upon us to deliver a vital element of the project.


BAM or Federal Institute for Materials Research and Testing

The organisation is a building materials and producers group that coordinates research among its members. Its current project, looking into how concrete can repel dirt, contains nine SMEs from all over Europe, and three RTD performers.

Head of BAM’s Advanced Performance Working Group, Hans-Carsten Kühne, believes the pressure on SMEs is much higher now because the financial risk is much higher. Pressure is also on the RTDs to produce results very fast and reimburse their contribution to SMEs in a short time.

'What might help is perhaps a fast track approach involving a small amount of funding [that] could get a product to demonstrator stage as a proof of concept. Currently there is no way for new partners to come into an existing consortium. The contract is fixed and those partners can use the results of that project. So to introduce new partners you’d have to create a new contact. Fast track therefore could form the basis of a separate proposal and have the potential to open up research to new partners earlier,' says Mr Kühne.




Actions:

Research Executive Agency - good news for SMEs?

Seventh Framework Programme (FP7) small to medium-sized enterprise (SME) projects should eventually get to contract faster and be paid in less time. These are the main benefits expected from the Research Executive Agency (REA), a new body which will soon become responsible for SME management. As of June 2009, the REA will receive the proposals, organise their evaluation, validate project partners and support the whole project lifecycle. Corinna Amting, Head of the REA SME Unit (S1), shares what she thinks SMEs can expect from the REA.


Created in December 2007, the REA is due to gain its autonomy from the Commission on 15 June. The pressure is on for the new Brussels-based REA to perform. And its team - which currently stands currently at 250 members and is expected to grow to 558 members - is raring to go.

'My colleagues are highly motivated to work in this new, challenging environment. We all want to make the REA a success,' says Ms Amting.

Managing a budget of around EUR 1 billion each year (rising to EUR 1.6 billion in 2013) from its new, purpose-built facilities in the heart of Brussels, the REA is expected to continue managing FP7-funded projects until 2017.

Despite being supervised and controlled by the European Commission, the REA has no responsibility for research policy. This means it can develop genuine expertise in project management, becoming more effective and efficient in the way it responds to the needs of the research community.

Liberated from the political decision cycle, the REA should be able to devote more energy to efficient management of projects and proposals. For example, it is setting up its own business processes as it begins to incorporate work that was previously carried out by two units into one unit.

'There will be one team with complimentary expertise taking responsibility for all aspects of an SME project. With this, we have simplified our internal communication channels,' says Ms Amting. 'Getting prepared for the autonomy, our priority is to minimise the impact of the changeover on our beneficiaries. We are working in full cooperation with Commission services on a smooth transfer of activities. This includes best practice exchanges on the whole lifecycle of project management to the benefit of our clients.'

SMEs must be more proactive

SMEs are recognised as key clients in FP7. The Commission is therefore encouraging their increased participation. However, SMEs should identify their research needs early on. 'We'd advise applicants to make sure their proposal addresses all aspects of the call. Think about the quality of the proposal and how the SME is going to manage the project. Identify what you are good at and then choose a suitable call. Perhaps most importantly - get networking. Hunt out partners with a good knowledge of the research area,' says Ms Amting.

Moreover, the quality of a project proposal also takes into account how it will be managed and the consortium's composition. SMEs themselves can take steps now to help to speed up the application process. Instead of providing their legal and financial information each time they submit a proposal or negotiate a contract, SMEs now only need to register online once in a Unique Registration Facility.

'SMEs shouldn't wait until after they've linked up with their project partners. They must be pro-active. In fact, I would recommend you do as much in advance as possible. This will help avoid delays in processing applications later,' says Ms Amting.



Points of View:

Nanocyl's Executive R&D Director puts research funding for SMEs under the spotlight

Points of View image

European research programmes have helped Belgium's nanomaterials producer, Nanocyl, fend off competition from large international companies, including those from low-wage countries such as China, and build up wide-ranging business and research networks. The company's Executive Director of Research and Development, Dr Frederic Luizi, now puts forward his views on what SMEs really get out of the EU's research programmes and suggests some improvements.


Dr Frederic Luizi is an old hand at European projects, with a lot of experience under the Sixth and now the Seventh Framework Programme (FP6 and FP7 respectively). He is in no doubt about the strategic benefit for small-to-medium-sized enterprises (SMEs) of participating in European programmes.

'The project consortia that bring together partners ranging from manufacturers to end-users, help an SME gain a perspective across the entire value chain. This allows us to develop products at a much faster pace than we'd be able to on our own - if at all,' he explains.

Nanocyl develops new properties for materials that will eventually form part of products sold to end-users. To develop a highly targeted product, Nanocyl needs to understand what the customer requires. However, this would be very difficult if it had to rely on receiving its information via the standard commercial process. Because several companies can lie between Nanocyl and the final manufacturer, getting accurate end-user specifications that the company could use as the basis for its targeted research would be nigh on impossible.

'This is where EU projects are quite unique. You can get around the same table with everyone involved in the chain, discussing all the issues with large companies which otherwise wouldn't talk to you,' says Dr Luizi, who quotes a recent example of Nanocyl's automotive development, where the company sat down with representatives from Fiat Research Centre and its suppliers, including large chemical companies.

'When we met the reps from all these groups' research divisions and their associated universities, we gained a clear understanding of the real market need - where the added value will be. This is helping us focus our research in the right direction,' he notes.


The funding process - where it can be improved



Collaboration

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.'


Success Story:

The power of association

its belgium

Transport is evolving. Intelligent transportation systems (ITS) will have a huge effect on the way we think about travel in the future, especially how we move around our towns and cities. Making transport greener, reducing congestion, improving the quality of travel and at the same time making it safer are just a few of the areas being funded. Now EU support for research pioneered by one Belgian company is helping it get in on the ground floor, linking it up with other small to medium-sized enterprises (SMEs) and technology providers, to create an eventual ecosystem of ITS standards, products and services right across Europe.


Over the next 10 years, it's expected that car traffic in Europe will grow by 30% and freight by 60%. Intelligent transportation systems are the weapons European governments will use to fight congestion and environmental pollution, as well as improve safety.

Regional and national 'test beds' - where companies collaborate on all aspects of future ITS development - play a vital 'intermediary' role before such systems are deployed. But getting in on the ground floor to develop applications and services for such systems as well as standards that will help them work together is nigh on impossible for individual SMEs. However, associations of SMEs, such as the national ITS associations - with their strong networking expertise - are well placed to do so.

Research for SME Associations funding is therefore helping the ITS TEST BEDS project research how an expected myriad of applications and services, ranging from in-vehicle technologies to national infrastructures, will work together and provide a range of new business opportunities for SMEs across Europe.

'The Commission agreed funding for the Europe-wide project because of its span and the strong industry involvement and collaboration with the research partners,' says Karel Renckens, Project Manager at ITS Belgium. The company's research into ITS has led to the project being created.

'When fully deployed, we expect that the new ITS ecosystem this project creates will generate tens of thousands of European jobs, many of which will be offered by SMEs,' adds Mr Renckens, who points out that their flexibility, drive and ability to innovate makes SMEs stand out as the perfect candidates for ITS development.

The future


The future

A test bed in which all interested parties can plug in their applications or components is simply essential for SMEs, as this cannot be set up by them individually. Even large players, such as the national research institutes, cannot set standards for vehicles to interact with all the different elements of a traffic infrastructure, like traffic lights, for example.


Regulation issues such as liability, privacy, or whether some applications or systems will be made mandatory can't be addressed in isolation either, and a whole range of standards have also been proposed to a number of European bodies. Collaboration on a test bed makes sure these, and the associated intellectual property rights (IPRs), are supported.

'Obviously the technology has to be interoperable throughout Europe, and there is a need to cooperate closely. SME ITS Associations have therefore sorted out the partnerships, and some of the larger SMEs are helping to set requirements, provide feedback and follow up on developments,' says Mr Renckens. 'The project also provides clusters of SMEs with a way of getting involved in European-wide pre-standardisation, and it's a channel they can use to talk to governmental authorities and follow up on the directions governments are moving in.'

The timing of ITS TEST BEDS is also crucial. Similar test beds are being set up in competing markets such as the US and Japan, so a response to this potential threat has to be carefully coordinated at European level.

'The DG [Directorate-General] Research Programme creates a great opportunity to make this kind of response possible,' declares Mr Renckens.


Policy Update:

The challenge of sustainable energy fires up SMEs

The rapidly growing field of sustainable energy has become a key area for the EU's research framework programmes. This is also true for the Specific measures for small to medium-sized enterprises (SMEs) funded under the Sixth and Seventh Framework Programme (FP6 and FP7 respectively). Now SMEs are playing an important role in the research process as the number applying for project funding increases.


Forming part of the recent EU Sustainable Energy Week, an SME Workshop organised by the SME unit (T.4) of the Directorate-General for Research (DG RTD) showed that SMEs are making a big impact on sustainable energy research. Opening the event, T.4's Head, Bernd Reichert also noted that his department was seeing increasing numbers of SME projects in the energy field.

Workshop moderator Jos Beurskens from the Netherlands' Energy Research Centre commented that the presentations had enhanced his view that 'SMEs are a major engine of innovation', a remark made all the more significant being delivered by the 2008 winner of the prestigious energy prize "Poul la Cour".

A string of innovative project presentations made it clear during the workshop that not only do these kinds of research initiatives focus on core problems in the sector as a whole, but also that they contribute substantially to the increasing knowledge in the politically important field of sustainable energy.

During the workshop, several project presenters made a general remark, stressing that further support is needed after the end of the project. This is required for further development and optimisation of the pre-commercial version of the project outcome - usually a prototype - in order to place it on to the market. Consequently, it would foster the economic benefits of the participating SMEs.

SME innovation

The initiative for the PROBIO ('Integrated promotion of the biodiesel chain') project came from an SME with an idea for a device that could turn substances such as straw and wood into biogas and fertiliser pellets.

Funded under FP6, PROBIO has developed a working prototype that the SME is using and refining. Patents covering some of the innovations generated by the project are also being prepared. Although the PROBIO project ended over two years ago, the five SME partners participating in the project are still in touch and working together on further initiatives.

Another SME project highlighted during the workshop was the FP6-funded NODESZELOSS ('Novel device to study pulp suspensions behaviour in order to move towards zero energy losses in papermaking'). According to Leon Joore of project partner Millvision, energy is one of the highest costs in a paper mill. The project partners - eight SMEs in all - have developed a device that will help the paper industry improve the design of the pipes and pumps involved in the paper production process, and so drastically reduce energy use and hence cost. Meanwhile, the project partners are continuing to improve the device and hope to take it to market soon.

A total of 2 SME Associations and 19 SMEs from 11 countries, including participants from the new Member States, participated in the FP6 SHERHPA ('Sustainable heat and energy research for heat pump applications') project to develop cost-energy efficient heating pumps that will comply with future environmental regulations. The research and technological development (RTD) work was performed by nine centres of excellence, and the project was able to show how natural refrigerants could perform efficiently and yet be sustainable and function safely.

DESOL ('Low-cost low-energy technology to desalinate water into potable water') has developed the prototype of a low-energy desalinisation system. Its most innovative feature is the way the system uses the height difference between its water columns to generate the vacuum needed to lower the boiling point of the water (at lower pressures, water's boiling point drops considerably). The small amount of energy needed to operate the system comes from a solar panel. The partners are now looking for further funding to refine their device and bring it to market.


Events:

We've put together details of a wide range of research conferences and seminars, all of which are geared towards valuable networking, information gathering and getting support for your projects.



Sustainable development - a challenge for European research
26-28 May 2009, Brussels, Belgium

This three-day event highlights the multiple ways in which European research contributes to global sustainable development. These include understanding the environment, technological solutions and influencing mindsets and behaviours.


Forum on the global recession and implications for European development cooperation
27 May 2009, Brussels, Belgium

Leading experts will analyse critical issues surrounding the current global recession and its effects on developing countries. This is organised by the 'European development cooperation to 2020' (EDC 2020) project.


European research career fair
28 May 2009, Berlin, Germany

Organised by the Association for the Employment of Managers (APEC) and the Franco-German Forum (FFA), this event is expected to attract 60 exhibitors and 1 500 European researchers, offering the chance to obtain personal professional advice.


European summer school on technology-enhanced learning (TEL)
30 May-6 June 2009, Terchová, Slovakia

The programme includes lectures and working sessions from professors in TEL, and tutoring, mentoring and joint research opportunities. Additionally, the school will offer practical sessions in research methodology for TEL.


EuroNanoForum 2009
2-5 June, Prague, Czech Republic

The event - the fourth of a set of international nanotechnology conferences - addresses the contribution and challenges of nanotechnology research. An industrial exhibition will highlight the latest in implementation of nanotechnology and industrial products.


The innovation economy - getting new ideas, new partners and new growth for the global economy
2 June, Brussels, Belgium

The conference is focused on how to go about creating the right global climate to deliver innovation. An estimated 200 participants will discuss a range of topics relevant to small to medium-sized enterprises (SMEs), including high-growth entrepreneurship and getting ideas from lab to market, university research - competition versus collaboration, and international research and development collaboration.


SERI
3-5 June 2009, Paris, France

The fifth edition of the European Research and Innovation Exhibition (SERI) provides an opportunity to explore and analyse how the role of research and innovation functions in connection with current scientific topics.


Eurodigimeet 2009
5 June, Paris, France

The main aims of this event are to match the needs of European digital businesses and technology and encourage scientific, industrial and technical cooperation between European companies.


Nanotechnologies partnering event
9-11 June 2009, Turin, Italy

The fifth Nanoforum offers opportunities to learn about the latest trends in nanotechnology on a global level and to establish contacts with Italian and foreign researchers.


Transporta
16-19 June 2009, Poznan, Poland

This is an exhibition and conference for SMEs working in surface transport. International experts will give SMEs an overview of the existing mechanisms to support research and development activities under FP7, and provide guidelines on how to build a successful strategy, from generating ideas to submitting proposals.


EU Finance Day for SMEs
28 May 2009, Sofia, Bulgaria
16 June 2009, Dublin, Ireland
30 June 2009, London, UK

This series of events is being held to raise awareness about the different EU finance sources available to SMEs.


Facts & Figures:

More to be done to encourage SME participation

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SMEs are coming in higher numbers to FP7 than to any of the previous Framework Programmes. There is an overall increase in SME-relevant research topics, especially in the Life Sciences. The 75% funding rate available to SMEs and the overall simplification of FP7 itself are certainly contributing to attract more SMEs. Nevertheless, more can and should be done, since the budgetary target of 15% has not been reached yet.



Our first report on small to medium-sized enterprise (SME) participation in the Seventh Framework Programme (FP7) revealed that increasing numbers of SMEs were taking part in the programme's various themes compared with its immediate predecessor, FP6. The second report supported this, and showed that SMEs in FP7 were also receiving increased financial support for their participation versus those in FP6.

Now our third progress report on SME participation in FP7 reveals more information about the funding process to date, and the type of SME applying for Framework Programme funding.

Covering the Cooperation Programme, the Capacities Programme (with Research for the Benefit of SMEs), and the People Programme, the report has analysed more than 300 technical annexes from grant agreements. Sixty per cent of these signed agreements contain at least one SME participant.

The report shows that SMEs have already participated more than 6 000 times in projects financed during the first 2 years of FP7. Over 1 500 grant agreements have been signed to date. These SMEs will receive an estimated EUR 300 000 to EUR 350 000 each in funding for their participation.

Overview of adjusted SME participation and requested EU contribution

Research Projects SME Participations SME Requested EU Contribution
Grant agreements 14.7% 12.6%

The type of SME applying for funding

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The report also reveals information about the type of SME applying for funding. Firstly, most participating SMEs were established within the last 20 years.

Company formation year



SME sectors

Most (70%) have fewer than 50 employees. Overall, most of the SMEs are delivering high-tech services, or are research companies.


Breakdown of SME funding across the themes

Health, ICT, NMP and Transport are the most attractive thematic areas for SMEs


SME sectors per Theme

A comprehensive summary will be available on the SME Techweb in the coming weeks.