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

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

Policy Research and Innovation Research and Innovation Population Climate +50% by % by 2050 Food Energy Research and innovation – Crucial for solving societal challenges +70% by o by

Policy Research and Innovation Research and Innovation Share of world R&D expenditure,

Policy Research and Innovation Research and Innovation Share of total research expenditure financed by industry, 2010

Policy Research and Innovation Research and Innovation Number of triadic patent families, annual growth rates,

Policy Research and Innovation Research and Innovation 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

Policy Research and Innovation Research and Innovation 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

Policy Research and Innovation Research and Innovation 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 enough in research and innovation

Policy Research and Innovation 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 12/2010 They 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

Policy Research and Innovation Research and Innovation What is Horizon 2020? Commission proposal for a €80 billion research and innovation funding programme ( ) 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

Policy Research and Innovation Research and Innovation 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)

Policy Research and Innovation Research and Innovation Excellent science: €24,418 million Industrial leadership: €17,938 million Societal challenges: €31,748 billion Budget breakdown of Horizon 2020

Policy Research and Innovation Research and Innovation 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 SMEs Strongly focused on SMEs: Access to risk finance More SME-friendly than regular collaborative research: Joint Technology Initiatives Regular collaborative research Generous funding model * If inter-institutional discussions on this point do not evolve anymore

Policy Research and Innovation Research and Innovation 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

Policy Research and Innovation Research and Innovation New SME instrument: Strategic positioning R&D driven projects Market opportunity driven projects Horizon 2020 SME instrument Target: Business innovation motivated SMEs Horizon 2020 Eurostars Target: R&D intensive SME Horizon 2020 Collaborative Research Target: R&D topics

Policy Research and Innovation Research and Innovation ? IDEAcontinued support throughout the projectMARKET Concept & Feasibility Assessment Demonstration Market 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

Policy Research and Innovation Research and Innovation 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

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