Horizon 2020 gives an opportunity for innovative SMEs for market up-take of their solutions. Yet the successful participation is not an easy job in particular for EU13.
As currently the largest Framework Programme with a budget of approx. 80 billion Euros offered by the European Union, Horizon 2020 focusing on research and innovation gives its priority to Small and Medium Sized Enterprises. SMEs provide the most jobs in the EU, ensuring the economic growth and innovation, what was as well recently proved by the economic crises.
The priorities are not only purely a declaration but are set as quantitative goals. 15% of the two main Horizon 2020 pillars i.e. Industrial Leadership and Societal Challenges should reach SMEs directly. A portfolio for the entities is as well open under Access for Risk Finance programme offering financial and debt instruments. Additionally, the first criterion for differentiation during the evaluation of the project proposals relates to the seize of the budget dedicated to SMEs in the project. But without a doubt the SME Instrument should be called a star of the Framework Programme.
For the first time, the instrument gives a possibility for highly innovative single SMEs to apply for grants up to 2.5 million Euros jointly with world-class business coaching and business acceleration services. The budget of the intervention designed at 3 billion Euros for 7,500 companies up to 2020, allowed within initial three years the support of 2,500 SMEs (out of 31,000 applicants) from 36 countries. The top success rate states for Iceland (20%), Austria (13%), Denmark (13%), Ireland (13%) and Sweden (12%), whereas the most applicants come from Spain, Italy, United Kingdom and Germany1.
Statistics for countries from EU13 ranked within the latest (2017) European Innovation Scoreboard as modest and moderate innovators reflect potential, however the region is still lagging behind the top 10 beneficiaries. Both in terms of success rate (the highest for Estonia at 9%) and number of beneficiaries (64 for Poland)2.
Barriers for Polish (and EU13) SMEs in Horizon 2020
The results of SME Instrument and Horizon 2020 (only 5% of the granted Horizon 2020 budget went to EU13 beneficiaries) prove the discrepancies between innovators towards EU. Main barriers for the region, Poland in particular, may be related to the innovation level of SMEs itself but as well to many other issues, such as significant funding available under EFSI dedicated to support of entrepreneurship and competitiveness being in selected cases a competition for FPs. Other barriers such as IP, weak visibility and internationalisation should be also mentioned. Structural challenges related to legal provisions cannot be forgotten. On the other hand, financial rules (without new regulation related to remuneration) are perceived as rather adopted to advanced partners. But a phenomenon of so called “closed clubs” presenting cumulative advantages and participation in Horizon 2020 of large, well-reputed advanced institution seems to have the greatest effect of the FP’s results3.
Newcomers, higher education entities from EU13 and SMEs in particular in regard to collaboration projects based on international consortia, with weak or lacking well-developed network do not stand the competition with advanced partners, and are more likely to fail. Additionally, successful participation is a matter of a learning process to which well-established partners with a history in Framework Programmes were exposed to for a significant period of time. Yet, the familiarity with administrative aspects, collaboration rules or lack of skilled resources shall be considered as a barrier in the application process.
Using synergies with EFSI
As the SME Instrument fully meets the market demand, which is proved by low success rates, the European Commission decided to grant above threshold proposals with the Seal of Excellence (SoE) certificate. Its holders should have an opportunity to apply either for national/ regional funding in a fast track procedure or go for private investments. As a reply to the EC initiative, Poland decided to implement the possibilities for financing polish companies with SoE from EFSI schemes. By September 2017, 26 companies (out of 59 Seal of Excellence certificate holders) received the funding for their innovative projects. Applicants with the results above threshold from Phase 1 were more willing to apply for the funding, whereas the most Phase 3 SoE holders decide to continue their efforts under Horizon 2020. This is related to EFSI financial regime with limited possibilities to support commercialisation activities, and above all EFSI undergoes simply the regime of state aid rules.
Whereas the implementation of the Seal of Excellence scheme might at a glance weaken a countries’ position in Horizon 2020 (re-submitted proposals are more likely for success), its real impact relies in strengthening the regional innovative eco-systems ensuring the market up-take of break-through innovation. Here however, the most crucial role is to be played by regions and regional operational programmes which are in a position of giving priorities to project implementing FPs results. Additionally, the portfolio of instruments should support the capacity building and international networking process.
European Union continues its efforts in supporting SMEs, the new part of Horizon 2020 i.e. European Innovation Council with a focus on innovation, highlights the significant role of SMEs in strengthening the EU competitiveness advantage. Furthermore, the discussion on the EU13 (Widening) participation in the Framework Programme is accelerating trying to define main obstacles and design the most appropriate measures to avoid negative effects. The way of the EU13 applicants towards Horizon 2020 still remains a bumpy ride, nevertheless due to reasonable and tailored activities implemented at various levels (EU, country/ region and entity itself) it will not be for sure a dead end.
Katarzyna Walczyk-Matuszyk – Deputy Director in the National Contact Point for Research Programmes of the EU. Katarzyna is a member of the Programme Committee for SMEs and Access 2 Risk Finance and Strategic Committee at the European Commission. On a daily basis Katarzyna supports innovative SMEs, start-ups and large companies, Centres of Excellence and research institutions in obtaining funds for the development of innovation projects. Her fields of specialization are innovation, cooperation industry-academia, synergies between EU financial sources and international cooperation. She has a long-lasting experience in management and implementation of the European projects financed under Framework Programmes (7th Framework Programme, Horizon 2020), Structural Funds and Norway Funds. She holds a post of the Coordinator of the NCP_WIDE.NET project (financed under Horizon 2020).