The ESA SME Initiative
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1 The ESA SME Initiative J. Kauffmann 22/03/2017 ESA UNCLASSIFIED - For Official Use
2 Outline European Space Agency ESA Industrial Policy ESA SME Policy SME Initiative Opportunities ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 2
3 EUROPEAN SPACE AGENCY ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 3
4 European Space Agency Member States ESA has 22 Member States: 20 states of the EU (AT, BE, CZ, DE, DK, EE, ES, FI, FR, IT, GR, HU, IE, LU, NL, PT, PL, RO, SE, UK) plus Norway and Switzerland. Seven other EU states have Cooperation Agreements with ESA: Bulgaria, Cyprus, Latvia, Lithuania, Malta, Slovakia and Slovenia. Discussions are ongoing with Croatia. Canada takes part in some programmes under a long-standing Cooperation Agreement. ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 4
5 European Space Agency Activities ESA is one of the few space agencies in the world to space science human spaceflight exploration combine responsibility in nearly all areas of space activity. * Space science is a Mandatory programme, all Member States contribute to it according to GNP. All other programmes are Optional, funded a la carte by Participating States. earth observation launchers navigation operations technology telecommunications ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 5
6 European Space Agency 2017 budget by domain ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 6
7 ESA S INDUSTRIAL POLICY ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 7
8 ESA s industrial policy About 85% of ESA s budget is spent on contracts with European industry. ESA s industrial policy: ensures that Member States get a fair return on their investment; improves competitiveness of European industry; maintains and develops space technology; exploits the advantages of free competitive bidding, except where incompatible with objectives of the industrial policy. ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 8
9 ESA SME POLICY ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 9
10 ESA SME Policy Definition of SME ESA applies the European Commission's definition *) of an SME: Small and Medium-sized Enterprises, are defined as enterprises which: Employ fewer than 250 persons and Have an annual turnover not exceeding EUR 50 million or An annual balance sheet total not exceeding EUR 43 million ESA grants the SME status only after verification of the data of the candidate companies. *) Recommendation of the European Commission 2003/361/EC of 6 May 2003 ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 10
11 ESA SME Policy Evolution of SME Policy in ESA In 1997 the ESA Member States decided that SMEs shall be granted a special place to SMEs in the definition of the plan of technological actions of the Agency. At this point, SME s were primarily addressed in their R&T role, with respect to ESA s technology activities. In 1999 it was decided to put on a permanent footing the on-going SME initiative and to create an SME coordination unit (SME Office) at ESA. In 2008 a dedicated policy concerning Small and Medium Size Enterprises was adopted as part of 2008 CM decisions on the Evolution of the Agency recognizing SME as an integral part of the space industrial landscape, thus being no longer confined to technology. In 2012, ESA decided to foster the participation of SME s in ESA programmes and to encourage innovation and entrepreneurship stressing that it is essential that all, SME and large companies alike, reap the full benefit of European investments in term of growth and employment. In 2015/16 the Agency discussed the evolution of the SME policy with its Member States and SME s representatives, resulting in an updated SME Policy and associated SME Initiative Programme which was approved at the 2016 Council on Ministerial Level. ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 11
12 ESA SME Policy Continuity And Evolution Although the last 15 years of SME policy at ESA have brought many positive results, certain bottlenecks associated to involving SMEs still exist: Newcomers barriers: specificity of space, of ESA procurement process, difficulty of integration in the existing supply chain No easy access to resources (R&D..) due to the time required to build trust and credibility Limited capacity to benefit from or exploit the access to information Financial issues and limited investment capability ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 12
13 ESA SME Policy Continuity And Evolution The analysis of the involvement of SMEs in ESA contracts over the last 15 years shows: An increase of the share of SMEs over time from 4% between , stabilizing at 6% during the two periods , and A share of contracts in the technology domain with 11% much higher compared with a 4% share in spacecraft development contracts to a certain extent indicating the difficulty to pass the valley of death between a successful technology development and a development of a product for an operational mission. ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 13
14 ESA SME Policy Continuity And Evolution This analysis clearly suggests that the SME policy must consider and adapt to two different situations: Start-ups or newcomers to the space business, which need general support. Experienced SME s which have a validated technology or product and now have to insert themselves into industrial consortia to gain in-flight experience. ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 14
15 ESA SME Policy The renewed ESA SME policy: The SME Policy aims at an SME friendly Agency with the SME Initiative and other ESA relevant activities to facilitate its implementation throughout the Agency with the national Delegations and their industry The SME Policy aims at: Capitalizing on the innovation and efficiency of SMEs, to the benefit of ESA programmes. General Support Measures Procurement Measures Reinforcing and further developing (space & ground segment, applications) the industrial base of Member States. Addressing the problems that are traditionally faced by SMEs (sustainability, viability, access to in-flight heritage, proper and timely information, etc.). Financial Measures SME Policy Industrial Policy Measures ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 15
16 ESA SME INITIATIVE ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 16
17 ESA SME Initiative SME Involvement in ESA Activities The SME Office is regularly performing statistical analyses concerning the involvement of SME in ESA activities An analysis of the SME involvement in ESA Procurements between shows: Out of 3706 companies 860 are SME UK SME: % of UK companies ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 17
18 ESA SME Initiative General Support Measures Training To complement SMEs core competences with knowledge supporting bidding for and executing ESA contracts such as: proposal writing, procurement rules, IPR, ECSS etc. Networking & Visibility Organise dedicated forums to encourage the business with SMEs such as the ESA Industry Space Days (ISD) in September 2016 at ESA ESTEC (NL) and regional events. Maintain a public (www) SME Database providing information on SME products and services. Exploiting synergies with other ESA initiatives. Supporting Awareness of ESA Business Opportunities Publish list of business opportunities with ESA incl. technology programmes activities with SME procurement clauses. ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 18
19 ESA SME Initiative Procurement Measures Favouring the Adoption of SME s New Technologies by Industry Scrutinise and catalogue on-going technology developments of SME targeting TRL 5/6 as a baseline for promoting these developments to potential customers for future C/D programme developments by improved communication (potential customers in final presentation, key progress meeting ) or specific financing, to favour RFI campaign towards SMEs (not necessarily limited to them). In-orbit demonstration of technologies (hosted P/L on ESA SC, micro satellites, etc.), or the development of parallel flight worthy H/W under the supervision of the prime, in view of favouring in-flight heritage. Code of Best practices for primes and lower level tiers to limit their ITT package complexity to what is strictly required, or to organise their work package so that a number of activities can be handled by SMEs. Standard prime sub-contracts to secure IPR and payment conditions of lower levels. ESA is involved in on-going discussions with industry incl. also SME organisations ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 19
20 ESA SME Initiative Procurement Measures Reserved Share for SME in the Frame of Large Procurements ESA Member States could request to secure a share of their geographical return for SMEs In the event of a conflict between geo return and implementation of such SME measure, geo return considerations should take priority Such an approach was already decided for JUICE and Biomass missions and the lessons learned from these projects will be used for future comparable procurement approaches ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 20
21 ESA SME Initiative Industrial Policy Measures Use of the formal return reviews and special measures for promoting SMEs Evolution of procurement clauses to potentially include an incentive for teaming up with SMEs Reinforced efforts regarding the opportunities to apply the procurement clauses (C3, C4) ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 21
22 ESA SME Initiative Financial Measures Increase attention to the viability of SMEs Measures to insure a neutral cash flow for SMEs, for ESA or prime contracts Note: from 2017 on SMEs (acting as Prime or Subco) are entitled to an advance payment amounting to 35% of their contract share without having to demonstrate that they have a significant need for cash disbursement at the beginning of the contract. Support SMEs in avoiding unnecessary costs in the execution of their contracts Search for joint initiatives to combine budgets, e.g. together with the relevant EC programmes ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 22
23 SME Initiative The ESA Industry Portal The ESA Industry Portal is the main point of information on how to do business with ESA, providing information on ESA's Business Opportunities Informative material on how to do business with ESA Access to useful educational tools Hosts the ESA SME Portal, providing information on SME Definition, Business Opportunities for SME, Trainings/Material, SME related events ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 23
24 SME Initiative The ESA SME Database The ESA SME Database was established in 2003 as a platform for SME allowing to Provide company information and background Improve awareness of SMEs' expertise, Facilitate partner search and cooperation between SMEs and other enterprises and organizations The database contains more than 1000 SME s A modernized version allowing for better matchmaking between companies is under consideration ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 24
25 SME Initiative The ESA Industry Space Days (ISD) B2B meetings Conferences Exhibition The ISD are a B2B event organized by the SME Office to facilitate business among European space companies with a special emphasis on increasing the involvement of SME in space activities. The 6th edition of the ISD took place from the 20 th to 22nd September 2016 at ESA ESTEC participants from 760 companies from 35 countries, including ~600 SMEs, participated in about pre-arranged business meetings (UK: 50 companies, ~620 meetings). Next ISD planned for Autumn 2018 ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 25
26 OPPORTUNITIES ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 26
27 Opportunities All ESA activities are accessible for SME. Some are reserved for SME while others are particularly suited for SME. Procurement actions reserved for SME and "Non-Primes" (C1-C4 clauses) Technology Research Programme (TRP) General Support Technology Programme (GSTP) R&D Open Calls General Studies Programme (GSP) Advanced Research in Telecommunications Systems (ARTES) ARTES Entry initiative ARTES IAP Kick-Start Permanently Open Calls for New Member States (NMS) For more information and links see Opportunities for SME at ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 27
28 Specific opportunities for SMEs Procurement actions reserved for SME and "Non-Primes" To guarantee fair access to its programmes for all categories of companies, ESA has designed and implemented "the C1-C4 clauses that are applied for certain types of procurement mainly in the technology programmes (TRP, GSTP, ARTES, etc.) of ESA. C1: Activities in open competition, limited to the non-primes C2: Activities in open competition, where a significant participation of non-primes (including SMEs) is requested C3: Activities limited to SMEs & R&D organisations, preferably in co-operation C4: Activities in open competition, subject to the SME subcontracting clause, enforcing the subcontracting to SME An up to date list is being maintained on the ESA SME Portal. ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 28
29 Specific opportunities for SMEs Artes Entry ESA Directorate of Telecommunications & Integrated Applications offers opportunities for SMEs interested in entering into the field of satellite communications with the ARTES Entry Initiative as part of the ARTES Competitiveness & Growth Programme Element. This initiative is designed to support SMEs through the early stages of research and development of services for the satcom market. Artes Kick-start Kick-start Activity is ESA s new Integrated Applications Promotion (IAP) funding scheme which is being launched in Activities will be funded at 75%, with ESA providing up to 60,000 per contract. Kick-start call for ideas are open to any industry in IAP participating Member States. They are expected to be particularly interesting for SMEs and start-ups looking for opportunities to develop their ideas for new services. IAP Ambassadors ESA s Integrated Applications Promotion (IAP) programme supports the development of new applications in cooperation with end users and relevant stakeholders with the IAP Ambassador Platform for SMEs (APsme). See local UK Ambassador ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 29
30 Specific opportunities for SMEs TRP: Innovation Triangle Initiative (ITI) The ITI is a mechanism to support the introduction and fast validation of innovative concepts or technologies for space applications based on the collaboration of three different entities: an INVENTOR, a DEVELOPER and a CUSTOMER. The ITI is implemented through a continuously opened Call for Ideas. GSTP 6.3: Technology Flight Opportunities (TFO) GSTP 6 Element 3 aims to match flight demonstrator needs with available carrier flight opportunities, conduct accommodation studies and support the preparation of flight demonstration payloads and their integration/operation on the host carrier. To facilitate this process, ESA has launched an Open Call for Technology Flight Demonstrators and Carrier Flight Opportunities. This Open Call is open to the space industry, research institutions and national agencies of all GSTP-participating ESA Member States for the entire duration of GSTP Period 6 ( ). ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 30
31 THANK YOU! For more information visit the ESA SME Portal: and/or follow us on Contact ESA s SME Policy Office SME-Office@esa.int or Mr. Jens Kauffmann Head of SME Policy Office Jens.Kauffmann@esa.int ESA UNCLASSIFIED - For Official Use J. Kauffmann 22/03/2017 Slide 31
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