Open Innovation Ecosystems for Horizon 2020 - New Approach Helsinki/Espoo, April 2013 Bror Salmelin Advisor to the DG, Innovation Systems European Commission bror.salmelin@ec.europa.eu

European Commission Vice President The digital economy is growing at seven times the rate of the rest of the economy, but this potential is currently held back by a patchy pan-European policy framework. 2013 will be the busiest year yet for the Digital Agenda. My top priorities are to increase broadband investment and to maximise the digital sector's contribution to Europe's recovery. European Commission Vice President Neelie Kroes (18/12/2012)

Does ICT matter ? GROWTH ICT investment →50% productivity growth Internet has contributed to 21% of GDP growth across the G20 from 2005 to 2010 Digitalized SMEs produce 10% more, grow and export twice and create twice the jobs ordinary ones do "Endorsing the cloud" could add 0,1-0,4% of GDP growth to the EU. ICT = 6% of EU GDP ICT investment →50% productivity growth Internet usage X2 every 2-3 years, Wireless connected devices: doubling from 25 to 50BL, 2015-20 Mobile data traffic: x12-14, 2012-18 4million ICT workers, grow 3% p.a. even in crisis But we lack 700.000 people!

Very fast internet supply and demand Broadband drives competiveness European Commission, 2011 A 10% increase in the broadband penetration rate results in 1 to 1.5% increase in annual GDP per-capita. Faster broadband = higher GDP growth. (Czernich et al. - University of Munich, 2009)

Sustainability Sustainable innovation is full of disruptions! Sustainable innovation is about (value) choices! Sustainable innovation is beyond (political) buzzwords Sustainable innovation is holistic!

Diversity means breakthrough probability High low Low high Value of innovation Breakthrough average insignificant Alignment of team members’ disciplines

New entrepreneurship -> new skills, attitude, talent! Connectivity!

Policies Open innovation processes and environments (e.g. Living Labs) Technology enablers (ICT, KET) Societal innovation -> Business model innovation a weak point in Europe

Maslow 2.0 for organisations

Schwarz’ Universal Values

Innovation? Make things happen! Science based linear innovation is NOT mainstream anymore! User-centric innovation Open innovation Systemic innovation Experimental mash-up Leadership with courage -> new management skills

Innovation as parallel activities Research Prototyping Pilot roll-out Markets Knowledge Production Each activity collects knowledge about product/market fit

Innovation moving out of the Lab Centralized inward looking innovation Closed Innovation Externally focused, collaborative innovation Open Innovation Ecosystem centric, cross-organizational innovation Innovation Networks Definition and characteristics of networked innovation, examples per page or at the end of trends Science and Engineering skills and external funding mechanisms are abundant Innovations are valuable mostly as components on standard platforms used by many players. Knowledge is shared with business partners Sources: Chesbrough 2003, Forrester 2004, von Hippel 2005

The European Perspective 28/03/2017 The European Perspective Europe 2020 “smart, sustainable and inclusive growth” Digital Agenda for Europe Innovation Union Towards a European Digital Single Market Regional/Cohesion Policy Contributing to Smart growth Smart Cities and Regions Future Internet for citizen-centric innovation Other instruments: Structural Funds, National funding, Financial Instruments Common strategic Framework for Research and Innovation HORIZON 2020 CIP/ICT-PSP Pilots in specific domains across borders FP7/ FP8 ICT theme: FI PPP, EIPs, JTIs EIT / KICs : bridging education research innovation Other policies: industrial policy for the globalisation era, youth on the move, Agenda for new skills and jobs, resource efficient Europe, the green digital charter… 16

Essential drivers connectivity open interaction “organic” (OrganiCsations..) NON-controllable, only catalyzing possible

Innovation Activities (examples) H2020 Instrument/scheme Pilots (prototyping, pilot lines, demonstration, testing) Research and Innovation grant Pre-commercial procurement PCP Public procurement of innovation PPI Result based award Recognition, Inducement prizes Targetting SME SME instrument (also for individual SMEs) Non prescriptive calls; open, light and fast Open Distruptive Innovation scheme (using lumps sums and R&I grants) Road-map based, critical mass Contractual PPP (using all instruments), JTI Targetting societal challenge European Innovation Partnership (using all instruments)+Smart specialization Clustering, bridge to accelerators, incubators Coordination and Support action

ODI scheme using complementary H2020 Instruments Phase 1: Technical market feasibility and prototyping R&I grant lump sum x 3-9 months Phase 2: Validation & piloting of scalable solutions R&I grant covering eligible costs x 12-18 m Support measures Succesful projects reaching end of Phase 2 = EU Disruptive Innovation Label/Prizes Exposure on dedicated platforms (e.g. crowd-funding and V.C. seeds) Ph.1 EU Disruptive Innovation Label Ph. 2 On-line assessment EU Disruptive Idea Label & Exposure on EU Dedicated Platforms & events etc.

? SME instrument IDEA continued support throughout the project MARKET Phase 1: Concept & Feasibility Assessment Phase 2: Demonstration Market Replication R&D Phase 3: 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

Hierarchy of Prize schemes for ICT in H2020

PCP and PPI complementary PCP to steer the development of solutions towards concrete public sector needs, whilst comparing/validating alternative solution approaches from various vendors PPI to act as launching customer / early adopter / first buyer of innovative commercial end-solutions newly arriving on the market Public Procurement of Innovative Solutions (PPI) R&D / Pre-commercial Procurement (PCP) Phase 0 Curiosity Driven Research Phase 1 Solution design Phase 2 Prototype development Phase 3 Original development of limited volume of first test products / services Phase 4 Deployment of commercial end-products Diffusion of newly developed products / services Supplier A Supplier B Supplier B Supplier B Supplier(s) A,B,C,D and/or X Supplier C Supplier C Group of European procurers Pool public demand and specify needs Manage procurement process Share risks and benefits together and with suppliers Cost shared, IPR shared, knowledge shared Compatible with procurement directives and state aid Exception to procurement directives Legally defined as procurement of ‘R&D Services’ Possibility to restrict to ‘European wide offers’ Possibility to apply at European and Member States level Need for incentive to support the framework Supplier D Supplier D Supplier D Two possibilities in H2020 (for PCP/PPI) & CEF (for PPI) EC can co-finance PCPs/PPIs carried out by grant beneficiaries EC or EU agencies can carry out PCPs/PPIs on their own behalf or jointly with Member States

Integrating R and I

Grand Coalition

Important considerations Cost of NOT doing something? How to make innovation space fluid? How to move from control to encouragement? Rules of the game clear, ex post control Rules to share and build value Experimentation mentality (fail fast in small things, not in the big one)

More information www.ec.europa.eu/research/horizon2020 http://ec.europa.eu/digital-agenda https://ec.europa.eu/digital-agenda/en/grand-coalition-digital-jobs-0 http://ec.europa.eu/digital-agenda/en/open-innovation bror.salmelin@ec.europa.eu