SME Instrument under Horizon 2020

SME Instrument under Horizon 2020

The Analysis

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

Concept and Design

The SME Instrument is special It is aimed at reducing the risk and bridging the funding gap = valley of death between research grants and private investments, in order to strengthen European competiveness H2020 SME instrument bridge the Password to cross the bridge: Death Valley Question: = High RISK Does this solution have a potential to become a big business and does it solve a real problem for many potential customers? Password: Yes!:

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) 6

Phase 3 = 2% budget Phase 1: Concept and feasibility assessment Input: Idea/Concept: "Business Plan 1" (~ 10 pages) 10% budget Activities: Feasibility of concept Risk assessment IP regime Partner search Design study Pilot application etc. 10% success 30-50% success Output: elaborated "Business plan 2" Lump sum: 50.000 70% ~ 6 months Phase 2: R&D, demonstration, market replication Input: "Business plan 2" plus description of activities under Phase 2 (~ 30 pages) 88% budget Activities: Development, prototyping, testing, piloting, miniaturisation, scaling-up, market replication, research Output: "investorready Business plan 3" 0.5-2.5 M EC funding al 70% ~ 12 to 24 months Phase 3: Commercialisation Promote instrument as quality label for successful projects Facilitate access to private finance Support via networking, training, information, addressing i.a. IP management, knowledge sharing, dissemination SME window in the EU financial facilities (debt facility and equity facility) Possible connection to PPC (and PPI?) No direct funding

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 No obligation for applicants to sequentially cover all three phases; each phase open to all SMEs 70% funding (exceptions possible) 8

Implementation Article 18(2) Regulation [ ] a dedicated SME instrument that is targeted at all types of SMEs with an innovation potential, in a broad sense, shall be created under a single centralised management system and shall be implemented primarily in a bottomup manner via a continuously open call [ ] Implemented centrally by one agency (EASME) Bottom-up approach within the frame of the societal challenges and enabling technologies each SC & LEIT defines a broad topic Continuously open call with around 4 cut-off dates per year: First cut-off for Phase 1 June 2014; first cut-off for Phase 2 in October 2014. 9

Next calls

Themes In 2014 and 2015 the SME Instrument will sponsor SMEs operating within 13 themes: 11

Coaching in practice Objectives: Enhance the commercial potential and impact of SME participation in the dedicated H2020 instrument Achieve tangible organizational change Leave a legacy, H2020 to become the stepping stone to sustainable high growth Delivered by high calibre individuals with substantial experience in working in or with high growth businesses at a senior level (Coaches are independent of EEN) Accessible through the regional EEN which will support the coach by linking the SME to EEN and regional/ national support services EEN Enterprise European Network

Coaching in practice Voluntary coaching offered in Phase 1 and Phase 2: Phase 1 5 coaching days Phase 2 10 coaching days Coaches will drive the performance of the organization by working with the senior management team Coach suggestion provided by the EEN, but final selection by the SME Coach and SME to decide a coaching plan in Phase 1. A summary of coaching foreseen for Phase 2 will form part of application to Phase 2 Coaching paid in addition to Phase 1 and Phase 2 contribution

Suggestions

Phase 1 proposal status 18/06/2014 2.666 proposals received (our estimation was 2.500) theoretical success rate: 6.2% 2507 single company applications 119 consortia with 2 SMEs 34 with 3 SMEs 6 with 4 SMEs

Number of received proposals per topic, maximum number of fundable projects under this cut-off and theoretical maximum success rate per topic Topic Proposals Max. project fundable Max. success rate ICT 37: Open Disruptive Innovation Scheme 885 30 3.4% NMP 25: Accelerating the uptake of nanotechnologies, advanced materials or advanced manufacturing and processing technologies by SMEs 305 14 4.6% BIOTECH 5: SME boosting biotechnology-based industrial processes driving competitiveness and sustainability 73 2 2.7% LEIT Space-SME 128 5 3.9% PHC12 :Clinical research for the validation of biomarkers and/or diagnostic medical devices 213 44 20.7% SFS8: Resource-efficient eco-innovative food production and processing 129 6 4.6% BG12: Supporting SMEs efforts for the development - deployment and market replication of innovative solutions for blue growth 49 2 4.1% SIE 1: Stimulating the innovation potential of SMEs for a low carbon and efficient energy system 372 22 5.9% IT.1: Small business innovation research for Transport 229 24 10.5% SC-5-20: Boosting the potential of small businesses for eco-innovation and a sustainable supply of raw materials 241 11 4.6% DRS17-Protection of urban soft targets and urban critical infrastructures 42 4 9.5%

only countries with submissions are shown

Phase 1: first and second calls Check list of beneficiaries at the end of the presentation

Phase 2: first call Check list of beneficiaries at the end of the presentation

Info on proposals Do proposals describe the disruptive / breakthrough potential in sufficient detail? Can you sufficiently assess the level of market disruption? Did you see a predominant market/sector addressed by the proposers?

What is innovation? New solutions to existing problems New technology or re-use in an innovative way of existing technologies as a solution to unmet needs (e.g. Tetrapack, laser for bio-medial applications) New disruptive markets (e.g. ipad, Skype)

The common denominator There has to be a market Solve a relevant problem & easy to use for the customer and easy to produce for the firm Business model technical solution possible and better than alternatives

The common denominator Customers shall know about the product and it should be easy to deliver There has to be a market...and the customers shall be willing to pay Only competent management can deliver Solve a relevant problem & easy to use for the customer and easy to produce for the firm Business model technical solution possible and better than alternatives...therefore competitor knowledge is essential

Common mistakes Users identified / match users needs / demand Give data/evidence Market: good understanding of market and competitors Size, growth, competitve analysis (why users should prefer the new solution?) Ambition ( my company will hire 10 new emplyoees ) Business model clear (who pays what) Inconsistency with description and TRL IPR / freedom to operate / protection of market Risk analysis Prove capacity of the SME to transform the idea into success (resources, network, skills, commercialization network not just CVs) Not instrument for validating an idea, not instrument to seed a start-up

Useful links EASME SME Instrument http://ec.europa.eu/easme/en/horizons-2020-smeinstrument FAQ http://ec.europa.eu/easme/sites/easmesite/files/documents/faq_sme_instrument_expert_evaluat ors_0.pdf PHASE 1. LIST OF BENEFICIARIES http://ec.europa.eu/research/participants/portal/doc/call/h 2020/h2020-smeinst-1-2014/1637612-sme-instrumentphase1-beneficiaries_en.pdf PHASE 2. LIST OF BENEFICIARIES http://ec.europa.eu/research/participants/portal/doc/call/h 2020/h2020-smeinst-2-2014/1637611-sme-instrumentphase2-beneficiaries_en.pdf

Technology readiness levels (TRL) TRL 1 basic principles observed TRL 2 technology concept formulated TRL 3 experimental proof of concept TRL 4 technology validated in lab TRL 5 technology validated in relevant environment (industrially relevant environment in the case of key enabling technologies) TRL 6 technology demonstrated in relevant environment (industrially relevant environment in the case of key enabling technologies) TRL 7 system prototype demonstration in operational environment TRL 8 system complete and qualified TRL 9 actual system proven in operational environment (competitive manufacturing in the case of key enabling technologies; or in space)