SMEs in FP6
Sharing in Europe’s future
Directorate-General for Research
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Introduction SMEs in Integrated Projects View from the Commission – SMEs in life sciences and industrial technology research SMEs in Networks of Excellence SMEs in Speciﬁc Targeted Research Projects View from the Commission – SMEs in aeronautics, energy and environmental research Speciﬁc Support Actions Horizontal research activities Marie Curie Assistance and further information The new deﬁnition of an SME 15 16 18 21 22 23 9 10 12 5 6
SMEs – natural partners for international collaboration and research
EU Framework Programmes for research offer SMEs a fast track towards the knowledge economy by expanding their international networks and their ability to respond effectively to market developments and increasing global competition. Enterprise per se but especially SMEs must become more ﬂexible in the manner in which they respond to paradigm shifts in technology and demand. They must be able to innovate constantly in order to remain competitive.
Speciﬁc measures to address speciﬁc needs
Research-intensive SMEs play a vital role in FP6, as they have done in earlier programmes. Energetic and specialised, they supply key scientiﬁc and technological inputs to many projects. The involvement of market-oriented technology-based SMEs is also crucial as such ﬁrms tend to have shorter lead times than larger companies with regard to new product development, and are also more likely to adapt innovative technologies to prevailing and potential needs. Nevertheless even low- to medium-technology SMEs need access to new knowledge if they are to grow and prosper as new technologies will help them achieve a competitive edge. FP6 aims to fund SMEs to the tune of around €2.3 billion throughout its four-year lifespan. At least 15% of the budget across its seven ‘thematic priorities’, adding up to about €1.865 billion, are foreseen to be assigned to SMEs. In addition, about €470 million is allocated to horizontal research activities for SMEs and SME associations. Nevertheless, many small ﬁrms be they high tech or not often ﬁnd it hard to dedicate management resources to participation in research projects. Consequently, the Commission has put in place a range of special measures to further assist them. FP6 commenced at the end of 2002, but calls will continue to be launched until early 2006, with ongoing opportunities for new partners to join the various projects along the way. The message to SMEs is simple – get involved!
SMEs and EU policy objectives
SMEs represent more than 99% of Europe’s 25 million private businesses, ranging from specialist high-technology companies to conventional ﬁrms in traditional sectors. They account for two-thirds of the EU’s GDP and two-thirds of its employment, generating half of all its new jobs. Among them are the nimble, innovative and entrepreneurial ﬁrms that have the greatest potential for rapid growth and knowledge transfer between sectors and regions. SMEs are therefore primary targets of, and essential partners in the EU’s current strategy for knowledge creation and growth as outlined in the Lisbon agenda. A central component of this strategy is the Sixth Research Framework Programme (FP6), and the many opportunities it offers SMEs are presented herein. This brochure explains how SMEs can become involved in research initiatives, describes the dedicated assistance available to help them do so, and provides examples of the variety of ways in which SMEs and their trade associations are already beneﬁting from their participation.
SMEs in Integrated Projects
Opening the door to international competitiveness
Integrated Projects (IPs) are heavyweights of FP6, designed to strengthen European competitiveness and address a range of societal and environmental challenges. Tackling complex research goals, they have budgets counted in millions of euro and can last up to ﬁve years. Project consortia include organisations of many different kinds, drawn from many countries, sectors and disciplines, collaborating in multiple and interlocking strands of research. development of their results, acting as a source of innovation and technology transfer. This involves analysis, assessment and exploitation of technologies including training for research and business personnel, and information and communication activities for the wider public. In their project proposals, IP consortia are expected to demonstrate how they plan to involve SMEs – for example, take-up measures aimed at promoting early application of stateof-the-art technologies developed in the project. This brochure presents case studies of IPs in the ﬁelds of aeronautics, nanotechnology, life sciences and food safety, covering a range of activities including technology demonstrators and prototypes, product testing, pre-marketing analysis and training. In each scenario, SME partners have contributed to these activities and beneﬁted from their active involvement.
When FP6’s ‘new funding instruments’ were unveiled, there was some concern that researchintensive SMEs might ﬁnd it more difﬁcult to participate in large and often complex IPs than in the smaller, usually simpler collaborative research projects of previous Framework Programmes. However, three years on, it is clear that IPs encourage SME participation through a range of actions – whether as suppliers of specialist scientiﬁc or technological know-how, as innovators, or as medium- to low-tech end-users. In certain thematic priorities, SMEs even lead some of the IP consortia.
Unique beneﬁts, unique contributions
Despite their size and complexity, the many beneﬁts offered by IPs continue to attract large numbers of SMEs. Some are research-led SMEs wanting to leverage their own technological knowledge; others are more market-led SMEs in traditional sectors seeking new ways to build competitiveness. The different reasons for SME participation include: l privileged access to leading-edge scientiﬁc and technological expertise; l the chance to work alongside large high-tech ﬁrms engaged in cutting-edge research; l exposure to pan-European networks of research and business contacts l ﬁrst-hand opportunities to test concrete research results in prototype, test-case and pre-market scenarios; and l involvement in the diffusion of results to the market place and the public. SMEs are also important contributors to IPs. In some cases, research-led SMEs bring proprietary technical know-how to an IP that is critical to its success. Others have particular market positions that allow them to channel results to potential users by exploiting geographical or sectoral
Large-scale research – open to smaller players
IPs bring together the critical mass of activities and resources needed to achieve ambitious but clearly deﬁned scientiﬁc and technological objectives on a pan-European scale. They do this by integrating fundamental and applied research, technological development and demonstration. IPs also manage the dissemination, transfer and
Avalon – bridging gaps in the innovation chain
In the ﬁeld of industrial technologies, FP6 is pioneering a particular type of IP that targets strong SME participation – Integrated Projects for SMEs (IP-SMEs). They differ from standard IPs in that an IPSME is led by an SME and at least half the partners are also SMEs. In this way the R&D capacity of research organisations can be linked to the intimate market know-how of SMEs in speciﬁc SME-intensive manufacturing sectors and supply chains. The Avalon IP-SME brings together 29 European partners – 20 SMEs, four public research institutes and ﬁve large companies – mostly from the textile sector. The four-year project was launched in March 2005 with a €12.4 million budget, including €7.4 million of EU funding. Avalon aims to develop new hybrid textiles that incorporate shapememory alloys. These will have a wide variety of applications such as advanced protective clothing and smart textiles for applications in the medical, aerospace and automotive sectors.
networks. And, while universities and research institutions focus on scientiﬁc objectives, SMEs are natural channels for the evaluation of new products and services – while their marketoriented expertise is often critical for the development and testing of prototypes and pilot services.
Fashionable knowledge transfer
With Europe’s traditional textile sector under threat from global competition, advanced materials can offer a strategic response through new knowledgebased textiles with diverse applications. “As in other sectors, there is a big gap between basic research and the industrial needs of SMEs in the textile industry,” says Allessandra Monero, Avalon technical coordinator at SME D’Appolonia S.p.A., Italy. D’Appolonia specialises in identifying new technologies and then working with their developers on production modelling and simulation technologies, which the company then transfers to small manufacturers. Monero continues, “IP-SME projects are a good way to bring these two sides of the equation together, which explains Avalon’s high number of SME partners and their keen interest in the possibilities for technology transfer.” http://www.avalon-eu.org/
How to get involved
An SME or a group of SMEs may also initiate an IP proposal. In this case, they must ﬁrst identify a relevant research theme in the work programme of one of FP6’s seven thematic priorities, for which a call for proposals is still open or remains to be published. They must then recruit partners to form a consortium capable of carrying out the project. More often, an SME will join an existing consortium. Partners are frequently identiﬁed through existing scientiﬁc and commercial networks, but the Commission operates an online ‘partner search’ service to help consortia ﬁnd new partners – and potential partners to ﬁnd suitable consortia. Direct assistance with all aspects of making a proposal – including dedicated help for SMEs – is available from National Contact Points (NCPs) in Member States and Associated States. The steps include: l acquiring full documentation from the callspeciﬁc page on the CORDIS FP6 service l preparing and submitting the proposal before the deadline, using the Commission’s secure, web-based Electronic Proposal Submission System (EPSS)
INTEGRATED PROJECT CASE STUDY
INTEGRATED PROJECT CASE STUDY
Bringing a high-tech start-up to life
PACE will establish the technical and organisational basis for the creation of programmable artiﬁcial cells – nano-scale chemical systems with the potential to revolutionise large sections of information and production technology. Norman Packard of Protolife, an Italian start-up whose initial business is closely linked to the project, describes the goal as being to create the conditions in which life can emerge. “In the same way,” he says, “the consortium has been designed to allow interactions between partners to evolve spontaneously.” Project coordinator Professor John McCaskill says that there is a natural synergy between the 14 research groups involved and their two industrial partners. “Protolife needs close links to the research community to reach its commercial goals, and at the same time provides a platform for advanced scientiﬁc work by steering it towards useful, functional systems. Both sides beneﬁt from the overlap between the project’s objectives and the SME’s business strategy.” Protolife will undertake the industrial scaleup of procedures for identifying the chemical components of the artiﬁcial cells, and develop intellectual property related to their implementation and exploitation. “To fulﬁl our role in the project, and to take full advantage of the opportunity it offers us, we will have to raise signiﬁcant amounts of venture capital,” Packard explains. “Our access to the know-how of our university partners – and, as the company grows, to their qualiﬁed staff – should help us to ﬁnd investors.” McCaskill is aware that, as an EU-funded project, PACE has some unusual features. But he gives much of the credit to FP6 itself. “We are intensely aware of the need to go beyond traditional institutional and disciplinary boundaries, if we are to make new breakthrough technologies work,” he explains. “As researchers we warmly welcome the considerable ﬂexibility that Integrated Projects offer for new forms of collaboration between companies and research institutions.” http://188.8.131.52/Data/PACE/Public l proposals are evaluated primarily on their relevance to the objectives of the work programme with regard to potential impacts, scientiﬁc excellence, the quality of their consortia, and their capacity to achieve the objectives. Contract negotiations for successful proposals address all issues including the budget as well as technical, ﬁnancial and legal aspects. Once everything is in order, the consortium agreement can be concluded. Often in this step the most signiﬁcant issues relate to the management of intellectual property rights. SMEs will usually retain rights both to their own existing intellectual property and to any new knowledge generated throughout the course of the project. In addition, SMEs may also be granted privileged access to certain intellectual property belonging to other partners. l the Commission will forward a contract to the coordinator. This is usually signed eight to 12 months after the call deadline, and work can begin immediately.
Joining a running Integrated Project
Integrated Projects are free to recruit additional partners on the basis of open calls, using either their original budgets or ‘top-up’ funding from the Commission. This ﬂexibility allows the original consortium to pick the most suitable partners at a time when the tasks to be carried out have been better deﬁned, and enables new SME partners to beneﬁt from a minimum contribution of time and resources for administration.
View from the Commission
SMEs in life sciences and industrial technology research
Not just for large institutional players
The ﬁrst thematic priority of FP6 targets research into food quality and safety, life sciences, genomics and biotechnology. These disciplines often demand intense research at the microbial, genetic or molecular level, with high-tech tools, substantial budgets and long time-scales that surpass the capabilities and objectives of many SMEs. Unsurprisingly, it has been a challenge for EU scientiﬁc ofﬁcers to persuade Europe’s smaller research players to commit to these ambitious projects. But the European Commission’s experience in tailoring FP6 calls for proposals to meet the needs of small, research-led companies has facilitated greater SME involvement and learning – as there is now a rising tide of SME participation in large projects. “Attracting and persuading SMEs to join large-scale or long-term efforts, such as IPs and NoEs in life sciences or food safety research, has not been easy, especially at the outset of FP6,” admits Paolo Battaglia, a planning and programming ofﬁcer at the Commission’s Research Directorate-General. “We quickly realised that we had to change the way we presented projects to small players by making our calls more SME-friendly.” Battaglia continues, “The challenge is not to simply hand out money to SMEs for a project they don’t really need, but to help them join an R&D project that offers them direct beneﬁts, even if the project is dominated by much larger partners.” This SME-friendly approach is producing results. More SMEs are responding to calls, with total funding requested by SMEs for food safety proposals rising from €16 million in 2003 to €21 million in 2004. In addition, SME participation in STREPs and Coordinated Action projects is increasing. “We expect this to rise even more by the end of 2005,” says Battaglia.
A favourite with SMEs
FP6’s ambitious thematic priority 3 covers nanotechnologies, intelligent materials and new production processes – known as NMP. Europe’s research-led SMEs have aggressively carved out leading roles in NMP projects – often coordinating much larger companies and organisations. “One of our main aims is to get nanotechnologies and smart materials integrated into new production processes and devices as widely as possible,” says John Hubert Cleuren of the European Commission’s Research DG. “And when something concerns production technologies, leading to commercialisation, you really catch the attention of SMEs.” So far, Cleuren’s unit has held three calls for NMP proposals which produced mixed results at ﬁrst. “With our ﬁrst two calls, we took a bottom-up approach based on a generic description of NMP industries and technologies. This made things a bit chaotic; we had too many proposals from SMEs that didn’t really ﬁt the calls’ requirements,” he recalls. “There was a huge over-subscription regarding each call’s budget.” However, the quality of SME proposals began improving in the second call and then leapt upwards in the third call. “We had changed our approach from bottom-up towards creating more distinct and narrowly-deﬁned topics,” observes Cleuren. “This had the immediate effect of reducing the quantity of unsuitable proposals while boosting quality. The third call has collected 87 SME proposals requesting some €500 million and has proved much more effective than earlier calls because the proposals are better targeted to the call’s objectives.”
SMEs in Networks of Excellence
Plugging into knowledge and experience
SMEs seeking technological leverage can reap the rewards of cutting-edge research and ﬁnd new business opportunities through participating in Europe-wide, research networks that link researchers from R&D organisations and hightech companies across Europe. Such networks offer many opportunities for coordinating scientiﬁc and technological beneﬁts, from the joint use of infrastructure and research tools to technology transfer and exchanges of personnel.
Strengthening scientiﬁc and technological excellence on a particular research topic is precisely the objective of the FP6 instrument ‘Networks of Excellence’ (NoE). By crossing national borders, a NoE helps eliminate the fragmentation of effort and resources that often hampers specialised research in Europe. It was hoped that Europe’s research-led SMEs would be enthusiastic about these knowledge networks and the leverage they can offer. But EU ofﬁcials admit it is a challenge to persuade SMEs to join up. The main reason is one of time horizons; NoEs are long-term undertakings, while many SMEs have needs and objectives that are much shorter term. However, SMEs should not ignore Networks of Excellence. They offer strategic advantages to all participants by providing access to the latest research results in their sector and by opening doors to potential business contacts. Indeed, because it is a virtual construct, the entry costs to a NoE are low, while the opportunities it offers research-intensive SMEs to network and generate future business are rich, as the NUGO project shows (see box on page 11).
What do NoEs do?
NoEs are not funded to conduct research – any research carried out within a NoE is ﬁnanced by other sources, such as national or private funds. NoEs are funded by the EU to facilitate research in a deﬁned area – related to any of FP6’s seven thematic priorities – by creating a network infrastructure for that research effort to take place. A NoE may involve hundreds of researchers or just a few. What counts is that a critical mass in a given research ﬁeld takes shape. For this to happen, sustained EU support is necessary – up to seven years, although ﬁve years is more common. Participants can be research groups such as universities, technology institutes and national organisations, or SMEs and larger enterprises. To be eligible for FP6 support, NoEs must have a minimum of three institutions from at least three countries. Membership is also open to organisations from EU candidate countries and third countries with which the EU has signed bilateral science and technology co-operation agreements.
NUGO – a partnership of niche players
Persuading SMEs to join a Network of Excellence is not easy, as FP6 project ofﬁcers at the European Commission readily admit. By deﬁnition, NoEs have a long-term mission to establish research channels across Europe. In most cases, this is too long for an SME’s needs which are more short term, but there are exceptions, as the FP6 NoE NUGO shows. With EU funding of €17.4 million, NUGO is creating a virtual community of European scientists and institutes engaged in nutrigenomic research – the study of how food and human genes interact and the toxicological implications. Among NUGO’s 22 partner organisations and scientists scattered across nine countries is the Dutch software ﬁrm, Topshare International BV. Despite its small size – Topshare recently expanded its staff of ﬁve employees to eight – the company plays an important role in the business operations and integration of the project as well as the creator and manager of NUGO’s intranet, which allows participants to post and exchange research results in a secure environment within the network community.
How does a NoE function?
The functioning of a NoE is deﬁned in its joint programme of activities (JPA), which is the agreed blueprint for achieving the network’s objectives. A JPA has three elements: l a set of integrating activities to guide how participants conduct work on their agreed research topic; l a programme of jointly executed research; and l activities for spreading excellence, such as joint training programmes for researchers. What do these mean in detail? ‘Integrating activities’ cover, for instance, common research tools and platforms, the joint use of research facilities, personnel exchanges and the joint creation and use of communication networks and databases. Importantly so for SMEs is the joint management of knowledge and intellectual property generated by a NoE’s research goals. ‘Jointly executed research’ could mean the development of new research tools or the generation of new research knowledge, avoiding duplication while helping validation, which is then made available to all NoE participants. Finally, the concept of ‘spreading excellence’ centres on joint programmes for training researchers and other key staff. This is an important element for overcoming border-related R&D fragmentation, and Europe’s research-intensive SMEs have their role to play here. So for those SMEs willing to take a longer-term perspective, Networks of Excellence can offer truly strategic advantages. Joining a NoE will bring rewards to small research players with the skill and perseverance to participate to the full.
Realising the beneﬁts
“The paperwork was a bit of a hassle, but manageable. There’s an EU helpdesk here in our home town and they were very helpful,” says Martin Renkema, Topshare’s President. Topshare’s partners in NUGO also helped ease its entry into the project, with ﬂexible funding arrangements. “We’re the only partner that doesn’t get its money in advance. So I arranged with one of NUGO’s university participants to provide an advance to us. That was a big incentive for us,” he recalls. But the main beneﬁt for Topshare is commercial. “Our involvement as NUGO’s software developer has expanded our customer base due to NUGO’s network of contacts. And we get feedback from the intranet’s 1 200 users who tell us immediately, which parts of the software are good or bad. That is of immense value for a small software company because we can hone our skills and products,” says Renkema. http://www.nugo.org/
NETWORK OF EXCELLENCE CASE STUDY
SMEs in Speciﬁc Targeted Research Projects
STREPs – SMEs’ favoured instrument
If there was a poll among Europe’s SMEs asking for their favourite Framework Programme instrument, the answer would probably be STREPs. With an emphasis on clearly deﬁned, focused targets and shared-cost arrangements, Speciﬁc Targeted Research Projects are very attractive to SMEs and are a popular way for them to engage in EUfunded research.
How do they work?
Lasting between 18 to 36 months, STREPs are objective-driven, limited in scope and time, and usually less multidisciplinary than IPs. While their critical mass of expertise and capabilities can be much smaller than that of an IP, what counts is that the necessary critical mass is present to achieve the project’s goal. This goal can be a research and technological development (RTD) activity, a demonstration or innovation activity, or a combination of these. For example, RTD activities must be well deﬁned with precisely focused objectives and measurable outcomes, while innovation-related activities centre on the protection or dissemination of knowledge, socio-economic studies and efforts to support the exploitation of these results. Demonstration activities, on the other hand, involve proving the viability of new technologies with potential economic advantages – but which cannot be directly commercialised.
Who is the target audience?
A STREP functions as a smaller version of an Integrated Project (IP), with a few key differences. The great majority of STREPs are focused on one research objective, in contrast to the multiobjective and more inter disciplinary approach of IPs. This narrower scope makes it easier for SMEs, with their limited resources, to manage their participation in a STREP project. Further, a STREP’s budget, though sometimes large, is usually smaller than an IP’s, and its duration is typically three years whereas an IP may be up to seven years. Indeed, the lower budget of STREPs is another reason it appeals to SMEs, explains Philippe Schild, programme ofﬁcer for new and renewable energy sources at the European Commission’s Research Directorate-General. “In many cases it is easier to get SMEs to climb on board a STREP than an IP because its budget is lower, so the contribution required from each participant is proportionally lower and thus more manageable for the smaller players.” While any legal entity can join a STREP, the most typical participants are research-oriented enterprises of all sizes, research institutes and universities. As already mentioned, many participants are SMEs. Accumulated experience within Framework Programmes shows that the optimum size of a STREP is between six and 15 participants. A STREP’s size also depends on its research
OpTag – acquiring new technologies and business opportunities
area and thus the thematic priority area it falls under. Smaller-sized STREPs are not unknown, particularly for FP6’s thematic priority 7, which concerns citizens and governance in a knowledge-based society. Other groups that have participated in STREPs include organisations that possess speciﬁc competences in the management, dissemination and transfer of knowledge, and potential users and other stakeholders with an interest in the project’s research objectives.
Increasing air passenger trafﬁc and the arrival of super-jumbo-sized aircraft pose great challenges for the security and logistics of moving people quickly on and off aircraft. Tagging and tracking lost or suspicious luggage and passengers is an increasingly urgent need at Europe’s airports. The OpTag STREP aims to address this need with new surveillance systems based on cheap chipand-battery technologies that can be integrated into paper airline tickets for long-distance tracking of passengers throughout an airport. A 36-month project, OpTag’s total budget is €2 212 971, including the EU’s contribution of €1 647 928. OpTag’s SME – the 40-employee Innovision Research & Technology plc, based in the UK – plays a pivotal role as project coordinator and is responsible for developing the system’s crucial chip technology. Innovision got into the project because of its previous experience. “We had gained a lot of technical expertise working with toy manufacturers in producing cheap chips that are effective over short distances,” says Bob Lloyd, Innovision’s coordinator for OpTag. “The challenge with airport surveillance is to develop ‘tagging’ or tracking devices that work over longer distances, and OpTag offers us a golden opportunity to get into this ﬁeld of technology.” His company also has its eye on another of OpTag’s research goals: advanced batteries. “To track a ticket-holder over long distances you need a power source embedded in the ticket – a ﬂat battery – and this is something we’re keen to learn about because its range of applications would be vast,” says Lloyd. “As a team, all the participants are working together very well and we at Innovision expect to see concrete results to show to each other in the coming months. And that’s exciting.” http://www-research.ge.ucl.ac.uk/ Optag/
How is it managed and funded?
Most STREPs receive between €0.8 million to €3 million of EU funding; the actual average amount varies according to the different characteristics of the thematic priority areas. Overall, on average, a STREP receives about €1.9 million in funding. This funding comes in the form of a ‘grant to the budget’, which creates a ceiling for the EU’s contribution to each STREP. With regard to project oversight, one special
STREP CASE STUDY
STREP CASE STUDY
Bio-Pro – attracting SMEs to a project
requirement for STREPs is that they have, from the outset, an agreed detailed work plan for the whole duration of their contract. This plan can be modiﬁed, but only with the agreement of the Commission. Any changes to the plan should not affect the STREP’s overall objectives and principal deliverables. The same rules apply to changing the number of participants in a STREP. The consortium must get the Commission’s approval to either replace a participant who has withdrawn from the project or to increase the number of participants above the originally agreed ﬁgure.
The FP6-funded Bio-Pro project has a green goal: to develop new burner technologies for low-grade bio-fuels as a source of clean energy for bio-reﬁnery activities. This is the kind of targeted research that requires large-scale laboratories and test facilities. Not surprisingly, Bio-Pro’s consortium is dominated by universities and technical institutes, which share the project’s total cost of €3 629 814, including 60% EU funding. Yet there are two SMEs – from Sweden and Germany – that are partners in the project. But bringing them into the project took time, patience and a helping hand with regard to the paperwork. Roland Berger, head of Stuttgart University’s Decentralised Energy Conversion Department and Bio-Pro’s project manager explains: “If you want to involve SMEs in such a project, you have to guide them through the application forms. They may need your help in some areas, such as showing them how to check and track their costs according to EU requirements.” Having gained some experience in previous Framework projects, Bio-Pro’s two small players “...were already accustomed to EU procedures, so they knew what was coming”, says Berger. “But if you have a new SME, then there’s deﬁnitely a learning curve. As coordinator, you have to spend the time and effort to work with them. It has its rewards, though. I’ve been involved in other EU projects and my experience is that SMEs always appreciate and capitalise on the technical beneﬁts they get from their involvement in a project.” In this case, the two SMEs will beneﬁt during the project’s third phase when Bio-Pro’s two prototype burners move out of the lab and on to an industrial site for real-time operation and testing. “This is when the technology-transfer and intellectual property rights beneﬁts come into play. At that point, I expect our SMEs to strike off on their own with commercialisation of the technology in mind,” says Berger. http://www.eu-projects.de/bio-pro/
View from the Commission
SMEs in aeronautics, energy and environmental research
Desirable but difﬁcult
Industry consolidation in the aeronautics sector over the last ten years means there is now only one large aircraft manufacturer in Europe, Airbus Industries. To remain competitive, it has been exerting cost pressures all along its supply line, which means that economies of scale favour large players in this sector. This poses entry problems for SMEs in many aeronautics research activities, particularly within Integrated Projects (IPs), as Jean-Pierre Lentz, a planning ofﬁcer at the Commission’s Research DG, explains. “If you are talking about SMEs and aeronautics, you are talking about upstream sub-suppliers...a long way up the supply chain from Airbus,” says Lentz. “This presents a problem for us regarding IPs, whose whole rationale is to bring big and smaller players together. Also, SMEs bring much less input to a project than the large aeronautics suppliers and systems integrators, so you might need ten or 15 of them within a single project to reach the 15% participation level for SMEs we want to see in our projects overall.” But he also emphasises the importance to SMEs being involved in aeronautics R&D. “An IP functions as a kind of pre-competitive test case and thus prepares SMEs to enter the market in the future through gaining experience and exposure to the technology by working with the prime suppliers and even Airbus itself,” he observes. To get around the entry problem, the Commission puts friendly pressure on industry groups, such as the Aerospace and Defence Industries Association, to include SMEs in FP6 project proposals. “This has helped,” says Lentz. “Although overall FP6 aeronautics spending on SMEs probably won’t reach the 15% level, the trend is improving. Based on FP5 experience, I ﬁgured would reach only 8% for FP6, but we’re already at 9% and a little ahead of expectations in a sector that is difﬁcult but desirable for SMEs.”
Packed with SMEs
In contrast, FP6 projects in energy and environmental research attract many SMEs for two reasons: historically, small research-led players are prevalent in both sectors and, just as important, they’ve been quicker to exploit the results of EU-funded research than larger institutes and companies in the market place. “There are many SMEs interested in the energy ﬁeld, though it depends on which sub-sector you’re talking about,” says Philippe Schild, programme ofﬁcer for new and renewable energy sources at the European Commission’s Research DG. “Our renewable energies projects, such as biomass and wind research, are packed with SMEs who got into the sector early on. Ironically, we’re now seeing many of them leave the ‘SME’ sector because they’re getting really big. But that’s exactly the sort of success story we want our Framework budgets to produce!” Reaching FP6’s 15% target for SME participation in energy and environmental research has been a trial-and-error experience for EU project planners, explains Per BackeHansen, a Norwegian national expert who reviews FP6 environmental technologies at DG Research. “It’s taken us a while to get the right proportion of funding for FP6’s newer instruments versus the older ones. Our experience in the environmental sector clearly shows that SMEs prefer the speciﬁc research objectives of a STREP to the new instruments such as IPs and NoEs; the latter often seem too big or too long-term for small players.” Whereas Backe-Hansen’s unit allocated 80% of their budget for new instruments during the ﬁrst two calls for proposals, this was scaled back to 65% for the third call. “This made it a lot easier to attract SMEs, and we expect similar positive results for the fourth call,” he says.
Speciﬁc Support Actions
Reinforcing project outcomes
Whether large or small in scope, EU research projects are not stand-alone efforts. To maximise their success and positive impact on Europe’s research outcomes, complementary measures are often needed. This is where FP6’s Speciﬁc Support Actions (SSAs) play a role. Some of these SSAs are implemented at the level of the thematic priorities for targeted encouragement of SME participation. The ETI measures take a broader and sectorial approach. tasks, including liaison with the Commission; co-ordinating knowledge-management and other innovation-related activities; and obtaining audit certiﬁcates by each of the participants.
SSAs are not carried out by SME partners themselves. Instead, they are run by intermediary groups with good access to dissemination routes, such as SME National Contact Points, industrial federations, networks or associations of research performers, professional associations, chambers of commerce and so on. Their responsibility is to encourage a more innovation-friendly environment throughout the EU, stimulate innovation itself and help create innovative technology-based businesses. Intermediaries do this by: l encouraging transnational co-operation between SMEs; l boosting economic and technological intelligence; l bringing sectoral or technological players together dynamically via networks; l creating or consolidating information services; and l analysing and evaluating innovation in EU research projects. The collective effect of all of the above is to create bridges between SMEs, researchers, entrepreneurs – and investors.
SSAs do not fund research and technological development activities. They are auxiliary elements, designed to capitalise on project research results and help stakeholders extract maximum advantage from them. A budget of €35 million is available from FP6 for SSAs, which focus on lending support to a speciﬁc research theme or industrial sector. SSAs usually last from several months up to three years, although, if needed, they can be longer. Funding usually amounts to several hundred thousand euros and more is available in exceptional cases. Speciﬁc Support Actions cover two kinds of activities: support functions and consortium management activities. The former comprises activities such as organising conferences and seminars; carrying out studies, benchmarking and mapping exercises; monitoring activities; disseminating data; developing research and innovation strategies; and overseeing information and communication campaigns. In the latter, a consortium-management SSA would focus on coordination of a project’s technical activities; handling legal, ﬁnancial and administrative
Woodism – encouraging research in forestry industries
Europe’s forest products industry employs more than 3 million workers scattered across very diverse types of SME and a broad geographical area. But the sector’s success is hindered by the fragmentation of information on new technologies and services that would improve the competitive edge of individual SMEs and the sector as a whole in a global market. The Woodism project is a consortium of 17 consultancies, research institutes and technology transfer specialists from 12 EU countries that is addressing this fragmentation. With a budget of €1 461 397, including an EU contribution of 72%, this 36-month Economic and Technological Intelligence (ETI) project is linking forest-product SMEs to each other and to their relevant research community, as well as with other FP6-funded research projects. Throughout Europe, many SMEs in forest-based industries face similar problems – cutting costs, improving products and meeting obligatory environmental standards – but limited channels for co-operation and communication often leaves them searching for their own solutions to these problems. By creating functional groupings of SMEs, Woodism will promote cheaper and more efﬁcient production, development and distribution of wood and ﬁbre products. Linking SMEs directly with researchers, it will improve knowledge transfer – on products, processes, services and markets – and store feedback in databases accessible to all. This should lead to a dramatic improvement in the development, exchange and assimilation of process and business innovations. The project is also offering a number of services to support these goals, including technology audits to identify SME needs and solutions; developing overviews of FP6 projects relevant to forestbased industries; match-making SMEs to research projects; disseminating information across the sector; and training SME personnel to participate in FP6 projects. Moreover, the Woodism project team believes that improved innovation within the wood-based industry will lead to increased wood use in the construction, energy and other key sectors. http://www.tts.ﬁ/woodism/index.html
Forests and fashion
A popular way to implement a speciﬁc support action is via an Economic and Technological Intelligence (ETI) project. First introduced in 1999 in the EU’s Fifth Framework Programme, a typical ETI receives between €200 000 and €2 million of funding. An ETI project promotes the creation of groups or ‘clusters’ of SMEs with similar innovation needs as well as encouraging trans-regional co-operation between small research players and stimulating networks of industrial incubators in order to strengthen a sector’s competitiveness. A typical example of how this works in practice is the Woodism project (see case study), which acts to boost the technical capability and competitiveness of Europe’s forest products industry. ETI actions support many research activities across the thematic areas, from high-tech hardware to more abstract ﬁelds such as molecular biology, and a wide range of industrial sectors. For instance, the ETI project, Fashion Net, is boosting co-operation among Europe’s many SMEs in the world of fashion – a sector employing some 3 million people – to help them address the ﬁerce global competition that comes from increasing free trade in textiles. One of Fashion Net’s primary objectives is to promote transnational activities via a network of intermediaries and clusters of SMEs. ETIs have a proven record of contributing positively to the research base of European SMEs. Hundreds of ETIs supported research and technological development projects in FP5, and expectations are that FP6’s Speciﬁc Support Actions will easily match, if not surpass, this achievement.
SPECIFIC SUPPORT ACTION CASE STUDY
Horizontal research activities
Speciﬁc measures for SMEs
What does FP6 offer an SME with a good research idea but no research facilities? Or an SME that wants to leverage its innovation potential by working with other SMEs and research organisations. Few small entrepreneurs have the time to investigate these possibilities. related work in any science and technology topic intended to improve or develop new products, processes and services. The range of research topics is needs driven. For example, participants in the 24-month FP6 Co-operative Research project known as SafeVend came up with a seemingly obvious but bright idea to redesign automated fruit-juice vending machines. The goals: to prevent tampering with product quality, to improve hygiene and to reduce energy consumption. Given that Europe has 10 million of these machines, SaveVend participants estimate they can generate a market worth €976 million and create 6 500 new jobs.
But there are readily available opportunities for such activities in FP6 via its Speciﬁc Projects for SMEs instrument. This offers two speciﬁc schemes devoted exclusively to the needs of SMEs – Co-operative Research and Collective Research.
A Co-operative Research project supports SMEs that can innovate but which have no research facilities of their own. It brings together these smaller players from different countries with a speciﬁc research objective or need and then assigns a large part of the work required to R&D performers. A good example is the DriveSafe project (see case study). R&D performers could be universities, research centres or technological institutes. They do not control the results they produce, ownership and intellectual property rights of the research remains exclusively with the SMEs which contract out the work. FP6 places a strong emphasis on this kind of SME support and has set aside about €320 million to ﬁnance Co-operative Research activities. Typical Co-operative projects last from one to two years and cost between €0.5 and €2 million each. Two kinds of activities are eligible for FP6 funding. One involves research and innovation-
The other activities that are supported concern consortium management. This covers all the coordination costs related to a project: managerial, contractual, legal, ﬁnancial and administrative. Consortia of SMEs in a Co-operative Research project must meet certain conditions. Their consortium must include at least two research performers and at least three independent SMEs established in two EU Member States (or countries associated with FP6). In order for an SME to participate in the Cooperative and Collective Research schemes, it must conform to the SME deﬁnition described later in this brochure. However, research centres, research institutes, contract research organisations or consultancy ﬁrms will not be considered eligible SMEs for the purpose of these schemes. Other enterprises and end-users can join in the project but must contribute their
Drivesafe – driving SMEs forward
At ﬁrst sight, there appears to be little in common between driving a car and surﬁng the web. But in both cases, monitoring the eye movements of someone behind the wheel or in front of the computer screen provides invaluable information about his or her performance. Eye-tracking devices (ETDs) collect valuable information about drivers, pilots and website users. The FP6 Co-operative Research project, Drivesafe, is a diverse consortium of large and small participants which are collaborating to develop, test, manufacture and market a highly functional ETD that is easy to use and applicable to different ﬁelds of interest and difﬁcult operating environments. A 24-month project, Drivesafe’s total cost is €1 879 720 of which EU funding provides €973 908. SMEs are intimately involved in the Drivesafe project. Helped by research performer INRIA of France, the small German ﬁrm, Kayser Threde, is responsible for the hardware of Drivesafe’s new 3-D device; the software for analysing the results is being developed by another German SME, Media Score, while the French SME, One-too, will handle manufacturing and production issues. The breadth of application of this device presents signiﬁcant opportunities to these and other SMEs involved in Drivesafe’s development and testing. Aside from working with large European hightech players, such as Siemens and Airbus, the project provides them with access to new sectors, opening up business opportunities that would otherwise be difﬁcult to break into. While the ultimate beneﬁciaries of this project are EU citizens who drive cars, travel in planes or use the internet to book tickets or trips, Europe’s multimedia industry will also beneﬁt by using Drivesafe’s technology to analyse the effectiveness and usefulness of websites. http://www.drivesafe.eu.com/index.php
own costs and play no dominant role in the project. They must also be independent from any of the other participants.
FP6’s second SME-speciﬁc scheme is Collective Research with an FP6 budget of about €150 million. This also involves assigning research to R&D performers. However, in this case the beneﬁts to SMEs are more indirect and the participants involved in a Collective Research project are different. The R&D performers carry out work for industrial associations and groupings in order to improve the overall competitiveness of large communities of SMEs and SME-intensive sectors. These projects are larger and run longer than Co-operative Research projects. Compared to the latter, Collective Research projects run from two to three years and cost between €2 million and €5 million each. The Smart Foundry project is a typical example (see case study). As Europe-wide initiatives, these projects aim to: l reinforce the technological basis of sectors; l develop technological tools such as diagnostic methods and safety equipment; l ﬁnd solutions to common challenges such as fulﬁlling environmental performance criteria, meeting regulatory requirements, achieving workplace safety standards; and l carry out pre-normative research to help set European norms and standards.
CO-OPERATIVE RESEARCH CASE
COLLECTIVE RESEARCH CASE STUDY
Smart Foundry – collective response to a common need
Europe’s foundry industry is dominated by SMEs that supply the automotive, aerospace, white goods and other sectors. Yet it is among the least research and development-oriented industries. To stay competitive, it needs efﬁcient tooling and improved techniques for the design and manufacturing of cast components. The FP6 Collective Research project Smart Foundry aims to help this sector by improving the overall competitiveness of European SME foundries and toolmakers. The goal of this 30-month project is to develop and implement e-technology solutions to support design and manufacturing via new decision-support software and other computeraided management tools. Smart Foundry will pool knowledge, processes and machinery to give businesses access to cutting-edge IT system solutions. This will help consolidate and enhance individual SMEs expertise and their competitive edge. Budgeted at €2 144 766 with a 67% contribution from FP6, the project is collecting and processing information held by SMEs across Europe, regarding the design, planning and manufacturing of cast components, including knowledge on new materials, processes and equipment. This integrated approach involves four research institutions and several industrial associations from Germany, the UK, Spain and France. The link to industry comes via a core group of ten ‘pioneer’ SMEs from the four different countries. Smart Foundry will create a valuable resource for the whole industry by allowing companies to increase the quality of their design decisions and thus the quality of products. The tools will support faster decisions and reduce the lead times required for new tooling and production runs. This increased ﬂexibility and responsiveness will enable SMEs to maintain and increase their competitiveness both now and in the future. http://www.smartfoundry.org/ Collective Research activities cover research and innovation-related work, consortiummanagement tasks and training activities – particularly the training of SME managers and technical staff regarding the new knowledge generated by the project. Do SMEs inﬂuence the kind of research conducted by the R&D performers? Yes. Each Collective Research project includes a ‘core group’ of SMEs which participate in all aspects of the project, from its deﬁnition of the research programme to the dissemination of ﬁnal results. While the project’s intellectual property rights belong exclusively to the ‘contracting’ industrial association or grouping, the core SMEs and the R&D performers are able to exploit the results.
What does FP6 offer an SME and how does it help it to gain know-how by exchanging scientiﬁc and technical personnel with organisations in other countries? There is a scheme that operates horizontally across Europe for the beneﬁt of SMEs: the Marie Curie Transfer-of-Knowledge fellowships.
Transfer-of-Knowledge fellowship aids a smaller company
High-proﬁle, high-tech research projects are not always the best way to spread knowledge across Europe. Sometimes the more effective approach is at the micro-level via one-to-one exchanges of scientiﬁc personnel. This is the rationale behind the EU’s Marie Curie Actions which support research networks, grants and fellowships. Unsurprisingly, those SMEs that have discovered how fruitful these exchanges can tend to turn to the funds again and again. One good example is DakoCytomation (Dako), a medium-sized company in Glostrup, Denmark, that produces antibodies and equipment for the medical diagnostic industry. Dako has held three Marie Curie ‘Transfer of Knowledge’ (TOK) host fellowships, with its most recent request being accepted in July 2005. “I had experience with Marie Curie scholarships at my previous workplaces so I knew exactly what they could bring to Dako,” says Niels Foged, director of the company’s R&D pathology department. “It took some doing to persuade upper management to see the opportunities, but they now fully support the idea because they’ve seen the beneﬁts.” Dako posted two of its personnel to the university hospitals of Glasgow and Oxford in the UK, in exchange for hosting two university researchers at Dako’s laboratories. The exchanges last two years during which the participants’ salaries and overhead costs are fully supported by Marie Curie. There are clear beneﬁts for Dako, as Foged explains. “Dako is heavily oriented towards product development and not clinical research. The TOK fellowships give our guys the chance to carry out R&D and to observe the application of our products in a hospital environment, where it’s normally very difﬁcult for Dako as a supplier to get access. These are immeasurable advantages and worth every bit of the administrative hoops we jump through to get the scholarships.”
The Marie Curie Transfer of Knowledge (TOK) scheme also beneﬁts Europe’s SMEs. Intended for enterprises, research organisations and universities, these fellowships support strategic and durable partnerships between the academic and business worlds. Large ﬁrms, SMEs, universities, research institutes and international organisations are all eligible to apply. Proposals are welcome from all areas of scientiﬁc and technological research of interest to EU enterprise. There are no pre-deﬁned priority areas. The overall budget of a TOK project depends on the number of participants and the amount of recruitment or exchange that takes place. Past funding for TOK fellowship projects has varied between approximately €200 000 and €1 200 000. For a good example of the beneﬁts ﬂowing from a TOK fellowship exchange, see the case study.
MARIE CURIE TOK CASE STUDY
Assistance and further information
Plenty of information, plenty of help
There is no shortage of assistance available for SMEs that are considering participation in FP6, or have already embarked on a research project. Sometimes, the difﬁculty is to identify the most appropriate type of help in a particular situation. Set out below are the key on-line sources of information – through which speciﬁc, personal assistance can usually be accessed, too. l The CORDIS FP6 service includes a useful step-by-step guide for proposers and participants at http://www.cordis.lu/fp6/ stepbystep/home.html l The CORDIS FP6 call service at http://fp6.cordis.lu/fp6/calls.cfm offers an overview of all open calls for proposals. Would-be participants can register to receive e-mail notiﬁcations of new calls relevant to their area of interest. l A partner search service at http://fp6.cordis.lu/fp6/partners.cfm allows would-be participants to submit proﬁles of their own research interests and capabilities, and to search the proﬁles posted by others in order to identify suitable partners. l An introduction to the Electronic Proposal Submission System (EPSS) can be found at http://fp6.cordis.lu/fp6/subprop.cfm
l General information about FP6, its objectives, activities and results is available at http://www.europa.eu.int/ comm/research/fp6/ l For participants and would-be participants, comprehensive practical assistance and advice, including all the background documentation and forms required to prepare a project proposal, are provided by the CORDIS FP6 service at http://www.cordis.lu/fp6/
The new deﬁnition of an SME
The new European deﬁnition of an SME came into force on 1 January 2005 raising the ﬁnancial ceiling above which an SME is no longer classiﬁed as a small player. To qualify as an SME, a ﬁrm has to meet four requirements. It must: 1. be an organisation or enterprise engaged in economic activity; 2. have fewer than 250 employees; 3. have an annual turnover of €50 million or less, or have a balance sheet not exceeding €43 million; and 4. be autonomous in terms of managerial independence and the ownership of its equity. The last of these requirements – autonomy – entails several conditions. An SME is autonomous if: • it owns no shares in other enterprises and vice versa, or • it owns less than a 25% stake in other enterprises (and vice versa) as long as they are not linked to each other, or • it owns in total less than 25% of shares of linked enterprises (and vice versa). Other enterprises can each own between 25-50% of an SME’s shares, provided they are not linked to the SME. These shareholders are restricted to certain kinds of entities, namely: a) public investment corporations, venture capital companies or individual venture capitalists with stakes of less than €1.25 million;
l Enquiries related to particular priority thematic areas can be directed to the appropriate helpdesk. The e-mail addresses of all the helpdesks, together with the URLs of each priority area’s web pages, can be found at http://www.cordis.lu/fp6/ infodesks.htm l Local assistance, including a personal partner search service, is available from National Contact Points (NCPs) in each EU Member State and Associated State, for each of FP6’s priority thematic areas and other programmes. A searchable database of contact details is provided at http://www.cordis.lu/fp6/ncp.htm
Help speciﬁcally for SMEs
l SME TechWeb, a dedicated website for SME participants, is at http://sme.cordis.lu/ l There is also a special SME helpdesk. Enquiries can be posted at http://sme.cordis.lu/assistance/ sme_helpline.cfm or sent to email@example.com l SME National Contact Points (SME-NCPs) in each EU Member State and Associated State are tailored to the special requirements of SMEs. Contact details for each SME-NCP can be found at http://sme.cordis.lu/assistance/NCPs.cfm
b) universities and non-proﬁt research centres; c) institutional investors; and d) autonomous local authorities with annual budgets of less than €10 million and fewer than 5 000 inhabitants.
Full details of the EU deﬁnition can be found at: http://europa.eu.int/common/enterprise/ enterprise-policy/sme_definition/index_ en.htm This also includes a user guide with practical examples.
European Commission SMEs in FP6 – Sharing in Europe’s future Luxembourg: Ofﬁce for Ofﬁcial Publications of the European Communities 2006 – 23 pp. – 21.0 x 29.7 cm ISBN 92-894-9499-9