Increasing the vitality of public-private partnerships for innovation
A consortium of EU partners has presented novel recommendations for a European market place that would systematically match publicly funded research projects with appropriate private investors. The EUROMAPLIVE initiative is a one year accompanying measure funded under the Fifth Framework Programme that focuses on the issue of how Europe can gain more economic value from its science and research. CORDIS News spoke to Giovanni De Duonni from Italy's Capitalia group (Banca di Roma) - one of six partners in the project - and to Maurizio Borghi of the European Commission's Research DG, who works on innovation financing in relation to the nanotechnology, materials and production processes thematic priority of the Sixth Framework Programme (FP6). The project's recommendations are based on a detailed analysis, as well as interviews with more than 130 innovation financing stakeholders across Europe - a very welcome approach from the Commission's point of view, according to Mr Borghi. 'With the world becoming an ever more complex place, it is important to gather together the views of all relevant actors when addressing complex issues; in this case: SMEs [small and medium sized enterprises], large corporations, financial institutions and public bodies,' he said. The EUROMAPLIVE project identifies a range of factors that prevent more public research based innovations from becoming market applications. These include the problem of innovation models that are 'technology pushed', rather than 'market driven', and the tendency of inventors to 'stay local' when looking for business opportunities. Other problems include a reluctance on the part of investors to take on the risks of technology based ventures, and a lack of awareness of the part of SMEs regarding the financial instruments that investors can offer. The project partners suggest a number of ways in which these problems can be reduced, the first of which would be to set up more public-private partnerships in the early phase of innovative projects. This means that both public and private partners could appraise the whole set of research and innovation risks together, leading to a culture of 'risk sharing' which could increase the interest of investors in technology-based ventures. A second recommendation is that public funding of research projects should be based on a two-step procedure. Step 1 would be the submission of a simple proposal that would be evaluated primarily on expected growth and the requirements of the market. The establishment of a European market place would allow for the matching of 'Step 1'-funded projects with appropriate investors, it is suggested. Step 2 would involve the submission of a complete business plan to the public authorities, including details of funding deals already entered into with other investors. If evaluated positively by the grant authorities, the project would receive a package of complementary public and private funds. In this context, Mr Borghi pointed out that the Commission is encouraging applicants for FP6 to include business plans in their project proposals. This is quite a change from the days when scientific relevance and good partnerships were the regarded as the main elements of a proposal: 'Some people underestimate the requirements of a good business plan, and evidence of good management [...]. In some cases, there may be a need for a change of mentality,' he said. Speaking for the EUROMAPLIVE project, Mr De Duonni said that their recommendations go against the perception that public-private partnerships distort the market. 'In the US, contrary to what we think, small businesses do receive a lot of support from state funds,' he said. 'So the challenge for Europe is to achieve a better coordination of public and private funds, and that is the relevance of this project.' Both men referred to the success of the of the EUROMAPLIVE concluding workshop in November, which was well attended and included presentations from a range of important stakeholders in innovation financing and public-private partnerships. It is hoped that this kind of engagement will increase understanding of the issues at stake, leading to a joint effort for increased investment in innovative ventures.
Countries
Italy