Research and Innovation Research and Innovation Horizon 2020: An Opportunity for SMEs Wolfgang Burtscher Deputy Director-General DG Research & Innovation

Research and Innovation


Horizon 2020:An Opportunity for SMEs

Wolfgang BurtscherDeputy Director-GeneralDG Research & InnovationEuropean Commission

PolicyPolicy Research and Innovation


Research and innovation –The main engines of future growth and jobs



+

+

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Population

Climate

+50% by 2050

+100% by 2050

Food

Energy

Research and innovation – Crucial for solving societal challenges

+70% by 2050

+2o by 2050

3



Share of world R&D expenditure, 1995-2010



Share of total research expenditurefinanced by industry, 2010



Number of triadic patent families, annual growth rates, 2000-2010



• SMEs constitute the backbone of the European economy. In 2011/12:• SMEs accounted for 99.8% of all non-financial

enterprises (20.7 million firms)• SMEs accounted for 67.4% of total non-financial

employment (87.5 million persons) • SMEs accounted for 58.1% of non-financial gross value

added (€3.6 trillion)

• But Europe's SMEs are under pressure:• SMEs in the EU as a whole continue to struggle to

recover to pre-crisis levels of value added and employment

Europe needs a proactive SME policy



• In the EU, there are almost 46,000 SMEs in high-tech manufacturing (HTM) and more than 4.3 million SMEs offering knowledge-intensive services (KIS), together accounting for 21.1% of all SMEs.

• These include SMEs producing pharmaceutical products, electronics or legal and accounting services as well as scientific R&D and creative industries.

• => SMEs active in the so-called 'hi-tech' and knowledge-intensive industry show a particularly strong performance in terms of productivity and employment as well as gross value added growth

Research and innovation underpin SME competitiveness



• The EU has fewer young leading innovators ('yollies' = post-1975 start-ups in the R&D scoreboard) than the US

• Yollies = 20% of EU leading innovators (US: >50%)• Yollies = 7% of total EU leading firm R&D expenditure (US: 35%)

• And EU yollies are less R&D intensive than US yollies• R&D to sales ratio of 4.4 (US: 10.2)

• This is because the EU has fewer yollies in young, high R&D-intensity sectors (biotechnology, internet, etc)

Europe's SMEs do not invest enoughin research and innovation



SMEs under FP7

15% of the funding of the 'Cooperation' specific programme reserved for SMEs

SMEs now (2/2013) already account for 16.3% (=€3.4bn) of the funding of the 'Cooperation' specific programme

They accounted for 14% by 12/2010They accounted for >20% in 2011 and 2012 (even though the annual budgets increased rapidly)

By the end of FP7, total funding for SMEs will probably amount to about €6bn



What is Horizon 2020?

• Commission proposal for a €80 billion research and innovation funding programme (2014-2020)

• Core part of 'Europe 2020', 'Innovation Union' and 'European Research Area'

Responding to the economic crisis to invest in future jobs and growth

Addressing people's concerns about their livelihoods, safety and environment

Strengthening the EU's global position in research, innovation and technology



What is new?

• A single programme bringing together three separate programmes/initiatives*

• Coupling research to innovation – from research to retail, all forms of innovation

• Focus on societal challenges facing EU society, e.g. health, clean energy and transport

• Simplified access, for all companies, universities, institutes in all EU countries and beyond

• *FP7, innovation aspects of the Competitiveness and Innovation Framework Programme (CIP); EU contribution to the European Institute of Innovation and Technology (EIT)



• Excellent science: €24,418 million

• Industrial leadership: €17,938 million

• Societal challenges: €31,748 billion

Budget breakdown of Horizon 2020



What is in it for SMEs?

• 20%* of the combined (1) 'leadership in enabling and industrial technologies' (part of 'industrial leadership' pillar) + (2) 'societal challenges' pillar budgets reserved for SMEs

• Simplified access for all is of particular benefit for SMEs

• Instruments that are:Completely dedicated to SMEs:

New SME instrument; Eurostars 2; Innovation in SMEsStrongly focused on SMEs:

Access to risk financeMore SME-friendly than regular collaborative research:

Joint Technology InitiativesRegular collaborative research

• Generous funding model

• * If inter-institutional discussions on this point do not evolve anymore



• A single set of simple, coherent participation rules for all types of beneficiaries and activities consisting in particular of a single funding rate (maximum of 100% of the total eligible costs) and a flate rate for indirect eligible costs (20% of direct eligible costs)

• Broader acceptance of participants' accounting practices for direct costs

• Reduction of time-to-grant

• A new balance between trust and control (e.g. reduced number of audit certificates)

Simplification



New SME instrument: Strategic positioning

R&D driven

projects

Market opportunity

driven projects

Horizon 2020SME instrumentTarget: Business

innovation motivated SMEs

Horizon 2020Eurostars

Target: R&D intensive SME

Horizon 2020Collaborative

ResearchTarget: R&D

topics



?

IDEA continued support throughout the project MARKET

Concept & Feasibility

Assessment

DemonstrationMarket Replication

R&D Commercialisation

Idea to concept, risk assessment, technological &

commercial feasibility

Demonstration, prototyping, testing ,

market replication, scaling up, miniaturisation,

research

Quality label for successful projects,

access to risk finance, indirect

support

SME window EU financial facilities

Pre-commercial procurement

New SME instrument: Scope

Horizon 2020

Phase 1 Phase 2 Phase 3



• Targeted at all types of innovative SMEs showing a strong ambition to grow (and to develop and internationalise)

• Only SMEs allowed to apply for funding (single company support, but collaboration is certainly advisable)

• Competitive, EU dimension only the best ideas pass phase I

• Market-oriented, close-to-market activities: 70% funding

• 3-phased and coaching

• Entrance in both Phase 1 and 2

• Embedded in societal challenges and key enabling technologies

New SME instrument: Main features



Thank you for your attention!

Find out more:

www.ec.europa.eu/research/horizon2020

Documents

Research and Innovation Research and Innovation Horizon 2020: An Opportunity for SMEs Wolfgang Burtscher Deputy Director-General DG Research & Innovation