SME support

under
HORIZON 2020

Dr Bernd Reichert
Unit "Small and Medium-Sized
Enterprises"
DG Research and Innovation

1
Research and
Innovation
The Analysis
 Framework 7

SME support under FP7: 16.7%

 Outcome of impact assessments
Less than 50% of industrial partners use the publicly funded
applied research projects strategically
Only about 22% of SMEs participating in EU research programs
are strategic innovators
Most academics engage with industry to further their research
rather than to commercialise their knowledge
Results are not exploited because projects were not designed for
exploitation
There is a strong relationship between internationalisation and
innovation, but SMEs are not aware of internationalisation support
programmes.
The information environment of (European) R&D programmes is
unattractive and repelling to SMEs
 Funding Gap
(range: 1-3 M)
Innovation Union Commitment n7

Ensure stronger involvement of SME in

future EU R&I programmes
*
European Council 4 February 2011

Commission is invited to explore the

feasibility of a Small Business Innovation
Research Scheme
Concept
and
Design
 Horizon 2020

Why participate?
To compete among the best European companies
"Champions league" with only very few winners,
quality label based on a rigorous assessment
Visibility at European level
Possibility to receive business/management coaching
Networking possibility with investors and customer
networks
Preferential treatment for subsequent financing (EU
Financial Instruments: loan and equity facilities)
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 The Innovation Funnel

Regional European "SBIR grants" Finance Instruments + Private Risk capital

 Horizon 2020

SME support: integrated approach

20 % Collaborative
budgetary SME instrument
projects
target in 7%
LEITs & SC
13%

'Innovation Eurostars II
Enhancing Innovation
in SMEs' Capacity
Market-driven Innovation

Access to Risk Finance

10
SME instrument

? Procurement

Demonstration
Concept & Market Replication Commercialisation
Feasibility Research
Assessment Development SME window EU
financial facilities

IDEA business coaching throughout the project MARKET

11
 Phase 3 & coaching = 2% budget

Phase 1: Concept Phase 2: R&D, Phase 3:

and feasibility demonstration, Commercialisation
assessment market replication
Input: Idea/Concept: Input: "Business plan Promote instrument as
"Business Plan 1" 2" plus description of quality label for
(~ 10 pages) activities under Phase successful projects
10% budget 2 (~ 30 pages)
Facilitate access to
90% budget
private finance
Activities:
Activities: Support via networking ,
Feasibility of concept
Development, training, information,
Risk assessment
prototyping, testing, addressing i.a. IP
IP regime
piloting, management,
Partner search
miniaturisation, knowledge sharing,
Design study
scaling-up, market dissemination
Pilot application
replication,
etc. SME window in the EU
research
10-15% success 40-50% success financial facilities (debt
facility and equity
Output: "investor- facility)
Output: elaborated ready Business plan 3"
Possible connection to
"Business plan 2"
PPC (and PPI?)
Lump sum: 50.000 1-3 (5) M EC funding
No direct funding
~ 6 months ~ 12 to 24 months
 Main features

Targeted at all types of innovative SMEs showing a strong

ambition to develop, grow and internationalise
Only SMEs will be allowed to apply for funding and support
Single company support possible
Bottom-up approach within the frame of the societal
challenges and enabling technologies each SC & LEIT
defines a broad topic
No obligation for applicants to sequentially cover all three
phases; each phase open to all SMEs
Combination of demonstration activities (testing,
prototyping, ), market replication encouraging the
involvement of end users or potential clients, and research
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 Demand

Based on various surveys (EVCA, EIM, NESTA), it is estimated

that about 1 to 6 % of all SMEs belong to the target group, i.e.
200,000 to 1.2 million SMEs.
Without restrictions it is estimated to receive 10 to 15,000
SME applications for Phase 1 every year.
This number is limited in case of topic oriented calls
Measures to "reduce" applications:
1. Only one application per company (in both phases)
2. This implies: no possibility to apply for Phase 1 during the
submission and/or implementation of a Phase 2 project and
vice versa.
3. Advice by the support network(s)
4. SMEs should be encouraged to enter the scheme in Phase 1
 Implementation

Phase 1: fixed lump sum of 50 k

Phase 2: assumed average project size 1.5 M, in order to
guarantee short Time-to-Grant it is suggested to fund projects
with below 2.5 M EU funding

Over 7 years:
5,200 Phase 1 projects will be funded
1,700 Phase 2 projects with an average size of 1.5 M can be
funded (or 2550 of an average size of 1 M, 1250 of an average
size of 2 M)

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 Evaluation

1. Remote evaluation throughout the process

2. Suggestion to abandon consensus meetings

3. Long feedback loops ("ESRs") slow down the process

4. Evaluation criteria to focus on excellence in innovation,

commercialisation potential, economic impact and the
companys potential achieving the envisaged results.

5. The profile and competences of evaluators is highly

important.
 Coaching
and EEN support

Phase 1 Phase 2 Phase 3

Regional
EEN
Initial HR
Assessment

Facilitation and Moderation

SME
Instrument
TO/TR
EU Funds

Coaching

Support for Support for EU Support for Access

Application project Management to Finance
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Thank you very much for
your attention