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SMEs talk about their scheme experiences

Here are some first-hand testimonials from SMEs that have taken part in projects in the three European Programmes - The Seventh Framework Programme, the Competitiveness and Innovation Framework Programme, and the Structural Funds. They shared their experiences in Prague and encouraged others to see the economic benefits the Programmes offer from ideas to market.


Sensetrix (Finland)

Federation of the Food and Drink Industries (Czech Republic)

Technology and Environment Centre or TEC (Slovenia)

Biotie (Finland)

B&M InterNets (Czech Republic)

NaKu (Austria)

BAM or the Federal Institute for Materials Research and Testing (Germany)


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.


How the individual schemes support SMEs

How they can work together

SMEs talk about their scheme experiences