Can Eureka and the European Commission work together to help SMEs?
Eureka and the European Commission look set to increase cooperation to help small and medium-sized enterprises (SMEs), following discussions in Stuttgart, Germany, on 21 October at Eureka's High Level Group meeting. The event, aimed at fostering cooperation between industry throughout Europe, focused on how Eureka can best help SMEs. That the innovative capacities of SMEs are a central factor in the competitiveness of the industrial sector is becoming increasingly accepted in Europe. However, SMEs which want to expand into the international market are often faced with enormous barriers. Apart from being confronted with greater competition in the broader global arena, they often lack the necessary corporate size, financial power, managerial experience and competence in international innovation strategies to succeed, according to a position paper circulated by Eureka in advance of the Stuttgart meeting. This is where Eureka and the European Commission believe their cooperation could make a difference. But first they have to reach the SMEs themselves. Discussions at the Stuttgart meeting suggested this might be achieved through the media and improvements to Eureka's current Internet homepage. Speaking on behalf of Germany, the current Eureka chair, Mr Karsten Brenner elaborated: 'We have heard today that in spite of the Internet and modern times in which we live we have also to show more local presence....Eureka is not a network with local branches and that's why systems like Chambers of Commerce and Industry and Trade could be used to offer more of the traditional ways (of reaching SMEs)'. Another way to raise Eureka's visibility and impact could also be through collaboration with the European Commission's existing information networks for R&D: 'We have (also) discussed today the synchronisation and interlink between (the EU) RTD Framework Programme and Eureka, and we have noted very clearly no rivalry and two schemes that are different. We need joint strength to come up to certain challenges, be it in the environmental field or the production field, or the aeronautics field or wherever. But Eureka has the advantage that the things you have to tackle in Eureka are totally open. You define the project yourself. Eureka doesn't provide this money directly, but the label, we think, and the perspective for getting the label, helps to open national programmes, to open also the Eureka programme, and to get private capital.' Collaboration with the Commission must operate on two levels, says Klaus Koegler of the European Commission's Research Directorate-General. Firstly, at a political level since the European Union is itself one of Eureka's Members, and secondly, with the actual implementation of the programmes. The EU Framework Programme pays special attention to SMEs and in the past four years more than 14,500 small companies have participated. This sharp increase in participation is mainly due to the SME Specific Measures (Exploratory Awards and CRAFT) and the way in which they are implemented (open call, quick feedback, simplified application forms). Here, says Koegler, is where there is potentially large room for cooperation. Apart from sharing networks, such as the National Contact Points, another suggestion to emerge from the Stuttgart meeting was that the European Commission might channel project proposals that do not fit into the remit of its programmes towards Eureka, who might be able to help them make contact with other sources of funding. 'The event has certainly opened awareness on both sides', said Mr Koegler. 'The meeting with SMEs has provided a forum to learn of companies' direct comments to Eureka, on both its successes and shortcomings and it has opened lines of closer cooperation in the future so we don't duplicate efforts,' he said. Other areas where there is also strong potential for Eureka-European Commission collaboration include awareness campaigns and proposal workshops, he suggested. Despite the fact that Eureka cannot actually fund research projects, participants could not overlook this important part of the development of SMEs. Mr Brenner here emphasised the importance of the Eureka label as a mark of approval for R&D projects, which could act as a signifier to venture capitalists and to banks as well as state funding bodies, that an SME's proposal should be taken seriously. For this to become truly effective though, Eureka will need to raise its profile: 'Only when you have a high awareness of Eureka can you get a higher esteem of the Eureka label', he said. Another of the main themes to emerge from the meeting was Eureka's desire to facilitate cross-border collaboration between SMEs and industry, to help increase Europe's efficiency and competitiveness in the technological sector. Improving the services and attractiveness of European SMEs is a priority of the German chair, Mr Brenner explained. 'We want to bring about newer, larger strategic projects. Strategic projects could make a significant difference in microtechnology, for example, or help to bring the European railway network together to make it more efficient. (This is) an issue of real European dimension where you need not only cooperation between three or four SMEs, but also joint efforts of larger firms, smaller firms and scientific institutions,' he said. Eureka also wants to expand its activities to reach firms and research institutions now developing in the Central and Eastern European countries, another sector likely to benefit from future European Commission-Eureka collaboration. But what did the SMEs present at the meeting think of all these proposals? Their representatives urged Eureka to put its plans into action in the near future. They reinforced the importance of speed for getting involved in R&D projects and urged Eureka to improve its activities in this respect. 'Eureka can help SMEs by providing leverage helping large firms be customers to SMEs, or allowing small firms to conduct research as partners of large companies', said Mr Emmanuel Le Prince, representing the European Federation of High Tech SMEs. He also reiterated the opinion given by many SME representatives at the meeting, that funding is not so much a problem for European SMEs as access to the international market. Indeed, the SMEs pointed out that funding doesn't necessarily have to come from grants but could come from loans to companies on a risk-sharing basis. Their main concerns are therefore finding partners and receiving expertise and advice on conducting R&D in an international environment. This intensification of dialogue with industry is the response of Eureka's German chair to recommendations made by the Ministerial Conference held in Istanbul earlier this year. The chair of Eureka is held by member countries in turn, with Germany guiding activities from July 1999 to June 2000. The process of direct industrial involvement in steering Eureka will continue to be followed throughout the year with forthcoming meetings of the High-Level Group, focusing on the Central and Eastern European countries in Berlin in April 2000, and on strategic projects in Hanover in June 2000.