R&D funding for SMEs in the 7th Framework Programme

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1 R&D funding for SMEs in the 7th Framework Programme Dr Bernd Reichert Head of Unit Small and Medium-Sized Enterprises Research Directorate General European Commission

2 Why should SME participate in the R&D Framework Programme? Internationalization of SME New business partners, new markets Best resources for technological innovation SMEs are best suited to take up new market opportunities for which they need new technology

3 Economic benefits (research) at European level R&D Framework Programmes: significant impacts on S&T and the economy (long-run, econometric models) Reduced commercial risk increased turnover and profitability enhanced productivity and market share Innovative performance Enterprises participating in FP: tend to be more innovative more likely to patent engage in innovative co-operation with other firms and universities

4 Categories of SMEs % Basic SMEs 70% Technology adopting enterprises 20% Leading Technology users <10% Technology pioneers <3% 0 None or few R&D activities Adapting existing technologies low innovative SMEs Source: EURAB s report on SMEs and ERA Developing or combining existing technologies on an innovative level High level research activities

5 Opportunities for SMEs R&D-performing SME R&D Outsourcing SME Cooperation Research for the benefit of SMEs FP7 Measures with Member States

6 Typology of SMEs in the FP Legend: Technology Developpers Technology Networkers

7 FP Specific Programmes Cooperation Collaborative research Ideas Frontier Research People Human Potential Capacities Research Capacity + Joint Research Centre Euratom

8 SME support in FP7 Cooperation programme SMEs are encouraged to participate in collaborative research project within the theme-driven FP7 Cooperation programme In order to form a favourable environment, a target of 15% SME participation has been set This representing an amount of about 5 bn until 2013 Simplified financial and administrative procedures (e.g. 75% funding rate for SME, reduced requirements for audit certificates) Identification of areas and specific measures of particular interest to SME in the individual work programmes

9 Cooperation specific programme 1. Health 10 Themes 2. Food, agriculture and biotechnology 3. Information and communication technologies 4. Nanosciences, nanotechnologies, materials and new production technologies 5. Energy 6. Environment (including climate change) 7. Transport (including aeronautics) 8. Socio-economic sciences and the humanities 9. Space 10. Security

10 SME support in FP7 People programme Industry-academia partnerships and pathways support cooperation between academia and industry encourage SME participation through: Staff secondments between academia and industry Temporary hosting of experienced researchers from outside

11 SME support in FP7 Capacities Research for the benefit of SMEs Objectives: Strengthen the innovation capacities of SME to develop new products and markets by outsourcing of research Target group: Research for SMEs: Low to medium technology SMEs with little or no research capability Research intensive SMEs that need to outsource research to complement their core research capability Research for SME associations: SME associations representing their members and their common technical problems bottom-up approach, no thematic focussing

12 SME specific measures: outsourcing of research activities 1/3 of participants are medium- to high-tech SMEs Reasons to participate: bottom-up: focus on technical problems; closer to market (more application, less basic research); shorter project duration (1.5-3 years); smaller consortia (more influence on project implementation); complementary expertise sought less economic risk; SMEs owns IPR (even if collective ownership often seen as hindrance to exploitation); Medium- to high-tech SMEs more likely to exploit results; Gap btw pre-competitive research and exploitation still problematic

13 Eurostars Joint Programme EUROSTARS *: Article 169 Initiative EUREKA initiative with a joint programme, based on national schemes. Supporting trans-national, multi-partner R&D projects initiated and led by at least two R&D-performing SMEs (bottom-up approach). Budget: EUR 300 M from participating countries + EUR100 M from the Community between 2008 and Upcoming calls for proposals 2010: 25 February and 30 September For more information:

14 Budget allocation to SMEs in FP7 million FP7 FP7 annual average SME specific measures SME participation (15% target) Total

15 The 15% budget target % of budget and nominal budget per theme going to SMEs - 31/12/ % 20% 15% 11,2% 166 M 13,5% 365 M 22,5% 216 M 18,7% 96 M 17,0% 150 M 20,3% 38 M 14,0 % M 10% 5% 7,6% 34 M 9,2% 52 M 3,9% 6 M 7,3% 14 M 0% HEALTH KBBE ICT NMP ENERGY* ENV TPT SSH SPA SEC FP7-COOP

16 Opportunities to come 15% target to be met by the end of FP7 18% 16% 14% ~2.800 SMEs ~3.200 SMEs ~3.650 SMEs 12% ~4.000 SMEs ~2.200 SMEs 10% 8% 6% 4% 14,0% 14,0% 16,1% 16,1% 16,1% 2% 0% WP WP 2010 WP 2011 WP 2012 WP

17 % EU funding going to SMEs 25% 20% 15% 10% 5% EU-12 SMEs have a fair chance FP7 - Cooperation - GA's as of 1 April 2010 % EU contribution going to SMEs per group of countries 13,7% 21,6% 14,4% 8,0% 0% Old Member states New MS Associated countries Third countries Countries grouped, millions of euros going to SMEs

18 SME Participation rate EU-12 New Member States SME Other FP7-COOP - Participation SMEs versus others EU-12 New Member States Bulgaria Cyprus Czech Republic Estonia Hungary Latvia Lithuania Malta Poland Romania Slovakia Slovenia 16% 21% 17% 27% 24% 10% 17% 19% 14% 22% 19% 22% Percentage of SME Participations

19 Intellectual Property Protection Who owns the foreground? What conditions, if any, apply to access to background? What is the price to be paid for ownership? What is the cost/ benefit ratio? Who is in charge of the exploitation strategy? Who exploits the foreground? Who benefits from exploitation? Commercial(isation) interest of the SME

20 10 tips for participating in Framework 7 1. Regard the Framework Program as a means of expanding your organization s R&D rather than as a source of money. 2. Consider whether there is coherence between the research strategy and goals of your company and the objectives of the work the EU wants to fund. 3. Be prepared to accept losses. 4. Proposal preparation and consortium development should begin before calls open. 5. Build the project consortium from existing networks and relationships. This helps to create trust. 6. Ensure that the consortium has a first-rate coordinator, with a strong scientific reputation, proven organization and project management skills. 7. Read the work program for the call you are interested in carefully. 8. Address all the evaluation criteria and tailor your proposal to what those people assessing your proposals will be looking for. 9. Aim to deliver value for money with a realistic requested budget. 10. Seek advice from your national contact point.

21 More information Research for the benefit of SMEs: SME TechWeb: National Contact Points

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