CORDIS Archive

The commercialisation of first-class research and the development of the European Biotechnology Healthcare sector face major difficulties, in particular unmet financial needs and poor cooperation between sector actors.

The absence of appropriate early-stage risk capital severely impairs the formation of innovative start-up companies: Europe’s start-ups need new forms of early-stage co-financing. The lack of short term exit strategies that are able to provide an acceptable return on investment from biotechnology projects also impacts the ability of mature companies to seek additional investment. Experience suggests that European biotech is not enough collaboratively-minded when measured against key performance indicators. Efficient and dynamic regional and EU-wide networking between actors is imperative if this situation is to be improved.

This project will address both issues and contribute to enhancing access to finance through the formation of a network of professionals (from research to finance) sharing knowledge and best practice in order to provide models, toolkits and recommendations.

The TEEE-Inn project of the Innovation program has since 2002 developed a methodology and tools for coaching innovative start-ups. The project has demonstrated the benefits of using these in a concerted manner between incubators of five European regions. The Technology Transfer Accelerator project of the EIF assesses the feasibility of a new type of investment vehicle that focuses on financing the commercialisation of research results.

Today, the results of these two projects are regarded by key innovation and finance actors as a breakthrough that must be deployed in Europe to facilitate the accelerated access of innovative start-ups to early-stage venture capital.

EUCIST proposes to disseminate these results to European incubators in the ICT sector via the Gate 2 Growth and PAXIS networks.

The Lisbon European Council established that Europe’s future economic development would depend on its ability to create and grow high value, innovative and research-based sectors capable of competing with the best in the world; the energy sector is key in this policy development and environmental sustainability is one of the most priority areas. The Lisbon strategy also acknowledges the difficulty to facilitate access to finance for entrepreneurs. In order to face this challenge the EU Commission has established very ambitious objectives in its energy policy that will require a strong effort in energy innovation in the next few years.

The EU innovation policy and the full implementation of EU energy and sustainable development policies in the future, such as energy market liberalization, security of supply, achieving Kyoto objectives and more, require a coordinated effort by all stakeholders to facilitate the efficient access to financial services of the innovation agents. This objective will only be possible if a number of agents: Enterprises, scientific institutions focused on innovation, energy agencies, private and public financial institutions agree to merge their strategies to develop the new elements required.

The prevailing strategic objective of the FINANCE Space project is to encourage and facilitate linkages between European Space Sector funding sources and innovative enterprises through an extensive research & data collection and dissemination project. Although space systems are routinely used for telecommunications, broadcasting, weather forecasting, localisation and imagery, new space technology-based services take-off slowly. One reason is the slow privatization process of already existing space systems-based services. Some space applications are currently part of commercial businesses (eg. telecommunications, broadcasting), whereas others are part of public services (weather forecast and environmental or security-oriented surveillance systems). New space technologies provide potential for new business services. Whereas the markets for these new space technology-based services exist, the financing possibilities are limited. Besides the need for privatization of services the main obstacle is the lack of awareness with financers of Space-related innovations.

Setting the stage for business success in the potentially huge Space market requires forward-looking policies and investments that go beyond short-term commercial concerns. The FINANCE Space project will explore as many options as possible and will strive to make Europe a breeding ground for future technologies, products and services.

In the ICT sector in the USA, Japan, or Europe, innovative services are already in use based on large scale space-based investments: they involve earth observation, telecommunication, navigation, timing and positioning satellites.

In combination with the advent of powerful handheld terminals and the demand for ubiquitous services, it is expected that info-mobility applications will reveal new sources of business in the years ahead, using in particular the GMES, EGNOS and future GALILEO systems to position any feature or user anywhere in the world within a few metres accuracy. Hence, satellite based capabilities must be seen as new and unique opportunities for Europe to enhance economic development in the knowledge economy.

This growth potential has already been grasped by many small companies in Europe. Yet, the actual business growth rate for many European players appears below expectations when compared with the US experience following the launch of the GPS positioning system. Europe must therefore overcome intrinsic barriers to seize these new business opportunities faster and with more economic impacts.

Within the Action Plan 'Innovation in Europe' several initiatives, infrastructures and services have been established to assist Innovation for Enterprises, Business Planning and Access to finance. However, only a small percentage of innovative research' based ideas have been able to become funded and to transform into market products. The proposed project believes that break through innovation is an iterative process and it starts at the initial stage of the market - oriented (applied) research. Thus, business aspects, market trends and funding possibilities must be taken into account from time of birth of research idea, rather than when the prototype is already developed.

Gate2Start adopts a ground–breaking approach at the initial level of the applied research project, when the new idea exists only in the researchers’/entrepreneurs’ mind. Research Issues, Market Factors and Entrepreneurship skills are joined at the very start of the research process to lead to the formation of prototypes that have a sound business case. At the end of the research process the developed prototype is complemented by a full market analysis and a business plan, enabling, thus, full dissemination, market exploitation, as well as, easy financing of the innovative research results. Even if funding of the idea is expected only after the stage of proof of concept is completed, the investment readiness of the project is achieved.

Due to the highly fragmented structure of the industry, innovation activities often lack continuity, strategic direction, human and knowledge resources and, above all, funds. In this highly traditional business with average low margins and high mortality rate due to fierce competition from Far East, European banks are increasingly reluctant to provide textile SMEs with the needed liquidity partly because of a shift towards a more careful risk-policy.

Although private equity and venture capital activities have been experiencing a great development in Europe, they are notoriously underdeveloped in the textile-clothing sector. Furthermore the highly complex textile and clothing industry is characterised by several players along the value chain thus complicating the assessment of risk by investors. Another major issue concerns the need to tackle industrial creativity and intellectual property in a coordinated fashion to eliminate the rampant illegal copying of designs and brands.

In light of these challenges facing the industry, NET-FIN-TEX will address the need to “map” expertise in innovation financing across Europe as well as the financial instruments and schemes which cover all the stages and players along the complicated textile value chain.

Due to the size of the construction sector in Europe as well as the long life of the structures it produces, this sector serves as an impetus for strong, multifaceted, social and economic effects within the member States. In order for the EU to further achieve both economic growth and a high quality of living standards, the construction sector will need to address major technological and economic challenges.

It is generally admitted that the three greatest barriers to start-up creation and radical innovation are the lack of venture capital, an undeveloped entrepreneurial culture and lack of training in entrepreneurial skills. Other barriers to investment in specific construction companies include difficulties related to lack of time and the costs associated with properly evaluating new technology and its commercial potential. Given the economic importance of this sector, enhancing the effectiveness and proliferation of innovation is a major priority for Europe and is the primary focus of the Build-Nova consortium.

Through linking the financial aspects of innovation BUILD-NOVA sets the goal of becoming customer-driven, sustainable, competitive, responsible, knowledge-based, and ultimately, to become a vital contributor to the quality of life of European citizens.

In Europe, an average of 8.6% of GDP is spent on health. Of this figure, 6.4% goes to medical technology. Worldwide, it is accepted that this expenditure does deliver an exceptional return on investment. These gains depend on constant innovation, but increasing pressure on the cost of patient treatment and the cost of operating the healthcare system means that even significant break-throughs in treatment possibilities might face a poor commercial perspective, if the “willingness/ability to pay” from society or patients is not available.

“Part of the problem for the medical technology industry is not the capability of innovation itself, but the difficulty in bringing the fruits of that innovation to the patient and the economy”, comments Maurice Wagner, Director General of Eucomed.

Research will not be helped within Europe unless investors can be shown the likelihood of a timely return on their investments in R&D costs. The objectives of this proposal is to focus on how SMEs active in this sector can access funding from professional investors and through this funding achieve a sustainable growth pattern.

The European food and drink industry is extremely diversified in terms of supply and access to raw materials, products and processes, and has clearly differentiated sub-sectors. There are also significant differences between the North and South of Europe. In the Northern member States there are well developed linkages between raw material suppliers and processors. There is also a high level of innovation that is clearly adding value to the final products through improved packaging, quality, safety and functionality of ingredients, and optimization of the production processes.

In Southern Europe the situation is rather different. In fact, the sector is quite fragmented with a dominant presence of SMEs. The difference in capability to innovate amongst EU firms in the food sector is further accentuated if comparison is made between the former EU15 and the new member States. For this reasons, the ‘equity gap’ in Europe for Food SMEs innovation financing is still quite significant.

The ENFFI consortium will strive to address the ‘equity gap” between venture capitalist and innovative SMEs through developing and disseminating the use of standard tools and methodological approaches/procedures designed to alleviate the concern.