1. Venue: Vienna Nevenka Čučković, IRMO (EIZ team)
I3U “Commitment 7: Ensuring Stronger Involvement of SMEs in EU R&I Programmes“ I3U Project Meeting – September 2015
Venue: Vienna
Nevenka Čučković, IRMO (EIZ team)

2. Content
Commitment 7- Ensuring stronger Involvement of SMEs in future EU R&I Programmes:
The Commitment 7 map
The Literature Review
The Indicators and Sources to implement Direct Impact Assessment
Initial Thoughts on Inputs for CMIS model and for NEMESIS ?

3. Commitment 7 map

4. The Literature Review (Economic Rationalle)
Why is it important to ensure stronger involvement of SMEs in EU R&I Programmes?
The basic economic rationalle of the Commitment is to ensure integrated funding (EU suport scheme) for different innovation stages in SMEs to limit market failure in acess to finance for smaller enterprises. Empirical evidence on significant positive effects of on inovation performance of SMEs.
In 2013 across the EU there is 21.6 million SMEs (99% of total eneterprises);
SMEs employ 88.8 million people (2/3 of total employment);
SMEs have generated €3,666 trillion in value added (58% of total);
The great part of innovation conmercialisation is happening in fast growing SMEs.

5. The Literature Review
Theoretical background justifying stronger involvement of SMEs
Access to finance in all innovation stages is one of the crucial components of success of any innovation process and outcome (Hall and Lerner, 2009; Afcha, 2012) and public funding plays significant role (OECD, 2010, EC, 2011, Canepa and Stoneman, 2008);
The direct and indirect impact channels of progress in Commitment 7 which focuses on SMEs as agents (drivers) of change, would consequently have an impact on EU Innovation Systems by introducing changes on institutions, organisation, governance and access to finance (Rosenbusch, Brinkmann and Bausch, 2011; Radosevic and Kaderbkova, 2011).

6. The Literature Review: Continued
Theoretical and empirical background justifying stronger involvement of SMEs
De Prato et al. (2015) show that SMEs participating in FP7/CIP ICT projects deliver a substantial number of innovations (nearly two per project). Norman and Klofsten (2010);Barajas et al (2011) however point out that such participation has more indirect than direct impact on performance.
According to Hoffman (1998) the SMEs are likely: a) to involve product rather then process innovations; b) they generate both incremental and major breakthrough innovations; c) they are focused on producing products for niche markets rather then mass market and d) involve some form of external linkages.
Božić and Radas (2005) summarised innovation effects on SMEs pointing out to: increased market share; improved product quality; reduced material costs per unit; improved complience with legal regulations and standards.

7. The Indicators and Sources Examples for Direct Impact Assessment
The Indicators to implement Direct Impact Assessment:
Innovative Investments (Input)
Number of innovating SMEs by size and sectors and type of innovation;
Business enterprise R&D (BERD) by size and source of funds; firms size and sectors of performance (Eurostat)
Public funding share and venture capital investments in innovation (CIS)
Non R&D expenditure as percentage of total turnover (CIS and Innovation Union Scoreboard)
Workforce in SMEs by skill (number of PhD and M.A as a % of total employed).

8. The Indicators and Sources Examples for Direct Impact Assessment
The Indicators to implement Direct Impact Assessment:
Spillovers (Throughput)
Number of Innovative SMEs Collaborating with Others (Eurostat)
Knowledge transfer (patent applications) and number of Collaborations (Innovation Union Scoreboard and CIS);
Public-Private co-publications (CIS)
Firms collaborating on innovation with higher education or public research institute, by firm size (OECD Innovation Indicators);
External sources of knowledge for innovation by type (OECD Innovation Indicators).

9. The Indicators and Sources Examples for Direct Impact Assessment
The Indicators to implement Direct Impact Assessment:
Innovation Production (Output)
PCT Patent applications (Eurostat, OECD)
PCT Patent applications in societal challenges (Eurostat, OECD)
Community trademarks (Eurostat)
Community designs (Eurostat)
Development of new products (GEM)
The use of new technologies (GEM)

10. The Indicators and Sources Examples for Direct Impact Assessment
The Indicators to implement Direct Impact Assessment:
Innovation Performance (Outcome)
SMEs with product or process innovation (Eurostat)
SMEs with marketing or organisational innovation (Eurostat)
High-growth innovative enterprises (Eurostat)
Employment in high and medium-high technology manufacturing and knowledge intensive service sectors as a % of total employment (Eurostat)
Sales of new to market and new to firm innovations as a% of turnover (CIS)
Licence and patent revenues from abroad as a % of GDP (Eurostat)

11. Open points/Next steps
Any other considerations?
Overlapping of indicators among different Commitments
Questions and answers
Some data sources (OECD, CIS do not contain data for all the EU countries and years). Structural equation model?
Next steps: Data Collection Finalisation and Direct Impact Analysis

12. Thank you Nevenka Čučković, IRMO nena@irmo.hr
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