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European Industrial and RI Interaction and Support Study

Final Report Summary - EIRIISS (European industrial and RI interaction and support study)

Executive summary:

Research infrastructure (RI)s are vital components of the European Research Area (ERA). The construction and operation of RIs are funded by the European Member States and consequently they need to see a return on their investment. This return will be seen primarily through advances in scientific knowledge and training of highly skilled people, but it must also be achieved through an increase in benefit realised from European Union (EU) industrial engagement with RI facilities.

The European Industry and Research Infrastructure Interaction Support Study (EIRIISS) has focused on ways to maximise the impact to research and industry from the opportunities presented by the instrumentation development activity at European RIs. It has examined the mechanisms and activities used by the Commission and individual European Member States to support interactions between RIs and industry. From this study we have identified a number of measures that would make more effective use of the Commission's support for European industry to work with RIs to develop instrumentation and to maximise the benefit to be derived from these interactions.

EIRIISS used a combination of literature review, survey, interviews and case studies to probe the need for support and to review the current mechanisms across Europe for industry to benefit from RI instrumentation development. This has enabled us to determine the changes and activities that would have greatest positive impact for RIs and industry. The study revealed there are a variety of means by which the potential for EU wide gain from RI instrumentation development could be achieved and that support should not be restricted to direct Research and development (R&D) funding.

A follow-up study on the ERID-WATCH conclusions (published 2009) showed the funding landscape is broadly similar to that seen in the original study. Given the changes in the global economy since the first study this is an indication of the stability of the RI instrumentation market. However the study also reported that the interaction of industry with RIs had not improved since the ERID-WATCH report and there are still a number of unmet technology needs within Europe.

The survey of European policies, national strategies and sector networks revealed the variation between countries of industrial engagement activity. There were examples of good practice but awareness of industry able to serve the RI instrumentation market was patchy and few countries reported systematic support for the connection of industry with the RIs.

Case studies and the survey of industry highlighted three main areas where support is needed.

The first of these is the visibility of the opportunities for interactions between industry and RIs. The relationship between RIs and industry is often longstanding which is valued by both parties, providing benefits additional to any specific contract or collaboration project. Conversely it is often difficult to establish new RI / company relationships and companies may miss opportunities to engage with RIs. An actively managed opportunities portal giving wide visibility of calls, tenders, future needs and technology transfer opportunities would enable new companies to identify opportunities, increasing the competition for partners and could also be used to promote RI services. Roadmapping of the technology needs across RIs would enable industry to prepare for medium to long term opportunities. Roadmaps would need to be technology specific.

Secondly, funding support for collaborations should be provided in a way that reflects the types of industry likely to engage with RIs and to motivate RIs to engage with industry. The financial mechanisms study concluded that grant funding is attractive to potential RI collaborator companies while tax credits are not, as the majority of small high tech companies attracted to R&D work are often not in profit. Collaborative R&D between RIs and industry could be encouraged via EU level funding to RIs and industry to support prototyping or the move from R&D to production phases through open calls. RIs could be encouraged to work with industry at an early stage of instrumentation development by including an industrial funding component to grants.

Thirdly, support could be provided for best practice in procurement and knowledge transfer. The networking of procurement professionals could encourage harmonisation of good practice across the RI sector enabling industry to interact more easily with RIs. Finally requiring an inclusion of knowledge and technology transfer (KT) costs as a part of any I3 network or instrumentation development project would ensure that sufficient resource is put towards this activity.

Project context and objectives:

RIs are vital components of the ERA. The construction and operation of RIs are funded by the European Member States and consequently EMSs need to see a return on their investment. This return will be seen primarily through advances in scientific knowledge and training of highly skilled people, but it must also be achieved through an increase in benefit realised from EU industrial engagement in the development of RI facilities. The aim of EIRIISS was to undertake a thorough analysis of the challenges for industry of engaging with the RI scientific instrumentation sector and to provide evidence to support proposed actions to address this in future Framework Programme (FP)s.

The 'Horizon 2020' programme is under development and within this the issue of industrial capacity for RI instrumentation will be addressed. Work is needed to determine the detail of this future programme and this project aimed to support the programme by providing recommendations on the scale and types of support needed to most effectively enable European industry to benefit from innovation in the ERA.

EIRIISS aimed to determine the scale of support appropriate in terms of effort / level of personnel required for activities such as networks and road mapping and the nature of the current bottlenecks in the industrial implementation process in order to identify the stages of RI development that would benefit most from an EU activity to support and maximise industrial interaction. It also aimed to review the support activities and financial mechanisms currently in use in order to determine which would be the most appropriate means of support to offer industry and RIs.

To establish the potential value to Europe for support of the instrumentation sector the current size and potential for the market needed to be quantified. The ERID-WATCH study of 2007-8 determined the size of the RI Instrumentation market in Europe estimating it to be 4 billion. This figure was used as a basis for an estimation of current market size. A resurvey of a subset of the organisations interviewed for the ERID-WATCH survey was used to establish whether the market situation had changed in the intervening years.

ERID-WATCH also analysed best practices in the RI market place and made a number of recommendations aimed at improving RI interaction with industry. The resurvey of ERID-WATCH organisations reviewed progress made from 2008 looking into the take up of recommendations and the review their efficacy.

The need to support interaction between RIs and industry and to maximise the impact to research and industry from the opportunity presented by the instrumentation development activity at European RIs is recognised and there is some activity at national and European level in this area. In order to gain a clear view of the nature and range of support across Europe a review of current EU policies, national strategies and sector networks and other mechanisms and activities used by the Commission and individual European Member States was carried out. From this study we aimed to build a view of the current state of support and to identify both common activities which support industrial engagement, and issues that weaken the relationship between industry and RIs across multiple sectors.

The financial mechanisms used to support industry and industry interactions with RIs for instrumentation development were also to be analysed as a part of EIRIISS. Primarily work would be done to assess the gaps in financial support which hamper innovation and commercialisation in the instrumentation sector and sectors where firms might act as suppliers to RIs. The RIs interact with various types of company for instrumentation development which have different funding needs that needed to be assessed separately. EIRIISS aimed to explore the needs for the range of firms including micro firms, newly created spin-offs and larger technology firms. The discrete types of funding for firms on which EIRIISS would focus were development funding, R&D funding and financing for commercialisation.

In addition the major policy instruments available in EU Member States for supporting both R&D and commercialisation were to be reviewed. These are R&D tax credits, R&D grants, soft loans, networking, business advice plus European level instruments and mechanisms including EU support for Small and medium-sized enterprise (SME)s, the European Investment Bank (EIB) and risk sharing finance facilities.

The role of procurement is crucial in developing interaction between RIs and industry and in order to explore this role EIRIISS planned to examine the barriers and opportunities which current procurement regimes at RIs pose for instrumentation companies.

In order to look at the interactions in greater depth we proposed to conduct a number of case studies of RI instrumentation development projects. These studies looked at the current means of assessing RI requirements, networking between RIs and industry, access for industry to RI planning stage, interaction with industry at preliminary stages of technology development, involvement of industry in the R&D phase of instrumentation development and the industrialisation of instrumentation supply. EIRIISS gathered evidence from RIs and industrial organisations to identify the specific issues within this interaction environment that would most profit from EU intervention.

The cases selected were drawn from the European Strategy Forum on Research Infrastructures (ESFRI) roadmap and were restricted to the areas of physics and analytical sciences to fit with the timescale and resource of the project but the conclusions are expected to be applicable to other scientific areas. The cases selected and their unique characteristics are listed below:

- CERN: A mature RI with already proven transfer of technologies into external markets.
- ELI 'Novel technology', RI based in New Member States.
- SKA: A global project with a high requirement for innovation with defined industry interaction process and applicable to other sectors.
- FEL: A range of projects some planned and some under construction where innovation is required and which will have technological benefits in more than one ESFRI area.

EIRIISS also aimed to look into the current means of assessing RI requirements, networking between RIs and industry, access for industry to the RI planning stage, interaction with industry at preliminary stages of technology development, involvement of industry in the R&D phase of instrumentation development and the industrialisation of instrumentation supply.

The study also aimed to identify areas where the EU does not currently have the capability to meet its own needs and the needs of the global market place.

The resultant work aimed to:

- Define the potential for industrial engagement and identify the scope of the need, in order to demonstrate the value of the market to industry.
- Capture examples of industrial / academic disconnect that prevent optimisation of industrial capacity.
- Identify examples of good practice that enable industrial engagement.
- Provide case studies that illustrate the potential for and the issues for industrial interaction.
- Look for commonalities between diverse RI structures both geographically and across disciplines.
- Map the existing networks.
- Identify areas that require increased industrial capacity.
- Identify the most appropriate actions and financial tools to support European innovation.

From this we aimed to put forward in this report recommendations as to the scope, size and best means of support for increase of industrial capacity to benefit from technological innovation.

The specific objectives of this project are to:

- Evaluate current national and European policy including national strategies and sector networks designed to support industrial engagement: To be carried out in Work package (WP3) using a subcontractor with expertise in this area.

- Review, through direct interviews, the efficacy of industrial engagement and exploitation mechanisms including KT to commercialise instrumentation development at RIs: Industrial case studies were to be agreed in consultation with the advisory committee and conducted throughout the project with preliminary findings reported to the Commission at the EU RIs and Industry workshop on 20 October 2011.

- Evaluate the efficacy of finance mechanisms for the support of industrial engagement: The survey to be conducted by subcontractors specialising in financial analysis and overseen by the STFC.

- Communicate the findings in workshops with the physics community, RIs, academic institutions and industry and report recommendations to the Commission.

1. Promote an outline of the project to the roadmap preparatory phase project: Coordinators at the EU ESFRI meeting 15 June 2011 in Brussels at the Royal Academy of Belgium.
2. Report preliminary findings to the Commission at the EU RIs and industry workshop on 20 October 2011.
3. Hold an EIRIISS midterm workshop at the Institute of Physics, London with an invited attendance of researchers, industrialists, RI managers and government representatives from across Europe.
4. Give a project update to the Euro-RI net at the workshop on 11 October 2011.
5. Submit a preliminary findings report to the Commission in December 2011.
6. Present a summary to the ERF workshop on the socio-economic relevance of RIs 31 May - 1 June 2012.
7. Submit this final report giving recommendations to the Commission in the summer of 2012.

The one year project has been led by, and day-to-day administration and management carried out by STFC with some work subcontracted out to relevant organisations within the member states that have the specific expertise to carry out small studies on particular scientific or industrial sectors. STFC leads on three of the four case studies looking at non STFC instrumentation development projects. Part of the CERN case study is carried out by STFC together with a subcontractor with experience of the CERN procurement process, having recently left the post of Head of Procurement, for the Diamond Light Source, synchrotron located near Oxford, United Kingdom. The SKA case study is carried out by Mr Nigel Rix who has extensive knowledge of the Square Kilometre Array having undertaken outreach and knowledge transfer activity between the project and industry for the previous 3 years. Decisions are taken in consultation with an advisory committee consisting of representatives from member states hosting RIs, funding agencies, representatives from new member states, industry, RI and ESFRI project managers.

The committee provided input on the focus for specific studies and provide comments on the study reports and midterm and final recommendations to the Commission.

Project results:

Introduction

The aim of this study was to undertake a thorough analysis of the challenges for industry of engaging with the RI scientific instrumentation sector and to propose actions to address this in future FPs. EIRIISS is an EU wide study which has drawn evidence from a range of actors in the RI, industry, finance and policy sectors and as a consequence we put forward a number of recommendations for policy and funding actions that will maximise the benefit from industrial interaction with RIs.

In order to do this we devised a work programme with the study carried out in three connected WPs: Current Activities, Industrial Engagement and Financial Mechanisms.

Current activities were analysed through three tasks. The first of these was a Europe wide survey at government and funder level, providing an overview of the national strategies and sector networks currently used by member states to support industry's interaction with RIs. Secondly, a follow up of the ERID-WATCH study of 2007-8, which put forward a number of recommendations to improve the RI industrial relationship, was carried out looking specifically at the funding levels for instrumentation development, the market opportunity in this sector and behaviour of RIs when working with industry. Finally the relationship between RIs and industry engaged with them on specific instrumentation projects was probed in more depth through case studies. The case studies were carried out on the research instrumentation projects of CERN, ELI, SKA and FEL.

Industrial engagement was studied in part through the industry experience of the specific instrumentation development projects of the case studies and also in a separate WP where a survey was conducted of a wider range of industry currently or previously engaged with RIs.

The financial mechanisms available to support instrumentation R&D were analysed with reference to the types of industry likely to require support to engage with RIs.

Individual study results

1. European policies, national strategies and sector networks

Three tasks within task 2.1 of WP2 were undertaken, the objective being to give a top level overview of relevant EU policies, national strategies and sector networks for the development of a possible future EU action on scientific instrumentation. The focus of the study was to gain a better understanding of the area of physics-based RIs and the associated industrial sectors which supply them.

1.1 Current EU policies

The current EU policies for European RIs and the scientific instrumentation activities that fall within them are those included in the remit of the ESFRI. The current main European policy is contained in the ESFRI strategy report and roadmap 2010. This document covers both the strategy and roadmap aspects of the initiatives. The Strategy Report and Roadmap is viewed as a vital policy document and paves the way for the planning, implementation and upgrading of RIs for the coming decades. This strategy process is further underpinned by five Thematic working groups (TWG) covering different scientific domains. These groups take on a monitoring and advisory role to ESFRI. As stated in the strategy report, the Engineering and physical sciences TWG believes that ESFRI should also encourage new forms of partnerships with industry to accelerate technological developments. Further policies fall under, regional issues working group, siting issues working group, e-infrastructures reflections group, and the distributed facilities group.

1.2 National strategies

Current industrial capabilities and strategies across the ESFRI membership countries (including associated states) have been investigated and mapped. There are numerous differences between countries in terms of the levels of information supplied, as well as individual capabilities.

Some smaller countries, such as Latvia and Slovakia are currently undergoing extensive reforms in funding and policy for science and technology areas. At the other end of the spectrum, the more industrially developed countries such as Germany and Sweden have implemented national roadmaps. The general pattern for most countries is to have a few main entities, such as national institutes to fund basic research and other bodies funding the major technology areas. The majority of the ESFRI member countries surveyed were able to give examples of projects supported for physics and analytical sciences RI and instrumentation for RI development. Only two counties were involved in only one or none.

Again, there were large variations in responses to the question about main instrumentation companies in the country. This varied from none, one or two, up to many. Nearly all the ESFRI member countries surveyed were able to give information on spin-in and spin-out activities. Ireland cited The Enterprise Europe Network, which is an information source on internationally available new technologies.

Overall, adoption of the ESFRI roadmap is increasing amongst Member States, but all countries should develop national roadmaps in order to strengthen the framework for funding and participation. As Physics RIs can be split across a number of different national institutes, without the assistance of a roadmap or a central (government) portal, it can be difficult to gain an understanding of the national set up. The national roadmaps that are available are helpful in giving top level information, but would benefit the reader by having more extensive links to other relevant sites. For instance, where a country has one or more physics based RI, a reference to HepTech the high energy physics technology transfer network would be helpful. As this site's primary aim is to bring together EU institutions to provide academics with easy access to this scientific community, it would be beneficial for physics based RIs to promote themselves via links to the site.

As some of the roadmaps were published several years ago it would also be helpful if these documents were regularly updated, perhaps every 2-3 years.

Some countries do appear to be striving to achieve greater transparency and accessibility in these areas. As a newer and smaller member, Slovakia is working hard to establish frameworks and networks across a number of areas. It is about to publish an Action Plan for the fulfilment of the long-term intention of the state and scientific policy, which is being finalised at present and is very active in the NMR and EMC fields.

Perhaps the best example of best practice of a country with easily identifiable national funding policies, strategies and sector networks, is Germany. Although its national roadmap is not yet published, Germany boasts an excellent tool, in the shape of a portal. The Federal 'Research and innovation' funding advisory service is the central point of contact for any questions concerning research and innovation funding. The Centre informs potential applicants about the federal research structure, funding programmes and the persons to contact as well as about current funding priorities and initiatives. From this one central point, it is possible to gain a picture of government funding, current calls, technology transfer and activities associated with SMEs and EU and international cooperation. The creation of such portals, providing quick and easy access to information, could hold the key to better coordination across the EU member states, which in addition to national roadmaps, will help in facilitating prioritisation of funding for future projects.

Regional networks and clusters, include initiatives for spin-in and spin-out and also ones for specific technology areas. OpticsValley for instance, is an optics, electronics and software cluster in the Paris Region of France.

1.3 Sector networks

A review of sector networks was undertaken to give a top level mapping of European RI industrial engagement in the area of sector networks in instrumentation which interact with RIs.

Some countries are involved in networks which at first glance, do not appear to be instrumentation orientated, but that after further investigation are shown to be relevant. For instance, some networks are geared towards specific sectors such as nuclear, like the INFN in Italy (Nazionale de Fiscia Nucleare), which incorporates various instrumentation technologies and applications. In Germany, the AMA Association for Sensor Technology was also found to be relevant.

The secondary research undertaken to investigate sector networks, identified a number of Pan-European strategies and instrumentation networks. ESAs PRODEX programme and the SKA telescope project were found to have many members across Europe.

There is no one network across Europe which adequately covers the physics instrumentation area. HepTech covers the high energy physics area, ERA-NET ERA instruments focuses on life science RI and the UK instrumentation area is served within the knowledge transfer networks on the connect platform. The disparate nature of sector networks between countries, complicated by the fact that physics based instrumentation cuts across a number of industries, means that engagement between RIs and industry via this route is likely to be limited. As discussed above, a European portal for physics based instrumentation networks, or possibly one which was linked to funding and other strategies, could help to facilitate European RI industrial engagement by mapping all relevant entities and links to further information and therefore increasing interaction and cooperation.

2. ERID-WATCH follow-up study

The ERID-WATCH study of 2007-8 analysed best practices in the RI market place and made a number of recommendations such as RIs should involve industry as early as possible in existing and future RI projects. Full details can be found in the final report (see http://cordis.europa.eu/documents/documentlibrary/125670151EN6.pdf online for further details). A follow-up to ERID-WATCH, was carried out to re-assess the ERID-Watch conclusions with a view to gaining an understanding of the current efficacy of industrial engagement and exploitation mechanisms including KT to commercialise instrumentation development at RIs.

This study re-contacted some 10 % of the originally interviewed ERID-WATCH organisations. These had totalled some 257, being made up of operating RIs, ESFRI projects, companies (RI suppliers, R&D collaborators or users), and institutional representatives (RI funders) in 17 Member States. Therefore, 18 companies have been re-interviewed (12 large and 6 SMEs), 3 funding institutions and 5 RIs. The main conclusions drawn from this study are shown below.

Market size

Investment into RIs has increased

The total annual budgets at European RIs reported in the ERID-Watch report in 2008 was stated as being in the region of 8-9 billion. Almost 50 % of this was said to be spent on Instrumentation. Within FP7 at least 1.85 billion was earmarked for RIs between 2007 and 2013. The budgets are not constant every year, because some countries do not allocate their budgets annually, however the funding agencies interviewed reported investments into RIs have increased, with commitment to and participation in ESFRI being a big driver. These increases appear to be mostly within national and European RIs.

The size of the RI instrumentation market will increase in line with RI investment

In ERID-WATCH, an estimate of the 2006 total annual Instrumentation procurement supported by the annual budgets at all European RIs was said to be approximately 4 billion. This was expected to grow in the short to medium term. There still appear to be significant supply opportunities for industry at existing and future RIs, at a national, European and global level. We saw no evidence to contradict the working estimate of 50 % of the total funding spent on instrumentation.

Annual budgets are holding steady despite the financial downturn

Of the sample of RIs interviewed, only one had seen a significant increase in the annual budget, with the rest seeing budgets generally remain static. Given the changes in the financial landscape in the years following the ERID-WATCH study this can be regarded as an encouraging indication in the continued Europe wide commitment to RIs and the instrumentation sector.

Planning and visibility is improving

The creation of national roadmaps for RIs is underway, with some 16 countries having published these documents. National roadmaps provide a framework for setting funding priorities and encouraging participation in international projects and partnerships. The debate between disciplines involved in establishing priorities will also enhance cohesion, enable more effective prioritisation of funding, encourage inclusiveness across the community and provide legitimacy for the outcomes.

Industry is still keen to engage with RIs

The opportunities for industry to supply to the current and future ESFRI facilities and to new national RIs appear to still be there. Industry interviews indicate that industry still views RIs as a viable market.

Nearly all the industry respondents stated that supply contracts with RIs have helped in marketing towards new customers.

About half of companies involved in collaborative R&D contracts declared that other market segments have benefited from technologies first developed for RIs.

70 % of companies supplying RIs, claimed that they were important for the development of their own R&D and potential technology transfer opportunities.

There is significant potential for instrumentation development work. The RIs interviewed reported are a number of unmet technology needs and key technology areas which currently lack suppliers.

Improvements are still needed

Suppliers believe that their interactions with RIs could be improved, particularly in the areas of contract documentation, preparatory phases and procurement practices in general. There was no evidence in this study to show that these areas had improved at all.

3. Case studies

The case studies were carried out on a range of RIs chosen to reflect the instrumentation development projects for RIs working in the area of physics RIs and physics based analytical facilities. They have been chosen to reflect projects at different stages of maturity with CERN included as an example of a mature organisation with a history of instrumentation development projects.

The selected projects were:

- CERN: A mature RI with already proven transfer of technologies into external markets.
- ELI: Novel technology, RI based in new member states.
- SKA: A global project with a high requirement for innovation. Defined industry interaction process and applicable to other sectors.
- FEL: A range of projects some planned and some under construction innovation required. Will have technological benefits in more than one ESFRI area.

4. Broad industry study

The industry currently engaged with the instrumentation development projects analysed in the four case studies provided a specific view of the industry experience with particular RIs. In order to gain an understanding of the drivers for engagement, a Europe wide a survey was carried out on industry identified as having currently or previously engaged with a European RI to identify the issues concerned with a) supply b) development c) use d) transfer of technology to other products.

A pan-European contact list of companies currently and previously engaged with RIs was compiled containing 222 individual companies from 14 different European countries. All companies were requested to take part in the survey it was not possible to establish meaningful contact with 36 of these but 42 companies drawn from this list returned the questionnaire and were surveyed. Of the 143 that did not complete and return the questionnaire a significant number were identified or identified themselves as unlikely to be suppliers of RIs. Quite a few refused, a number stating that it was not a company policy to take part in surveys. Another group although initially expressing positive views ultimately failed to send a response.

Most companies surveyed were existing suppliers that provided equipment and services in the form of major variations on standard products. Real collaborative development interactions and licence agreements between RIs and Industry appeared to be rather infrequent. It was also noted that while industry saw a significant risk in engaging in projects with industry, commercial requirements of the agreements were often too demanding in terms of liability and payment conditions. The absence of financial support led to difficult situations in cases where companies had to make considerable up-front investment and contract completion took a long time, sometimes years. There was often a significant technical risk and it was well known that some contracts are actually loss-making. Industry was very supportive of a collaborative R&D fund.

The companies had long term relationships with RIs. On average this was 22 years with the majority having a relationship of over 10 years.

Of companies that supply RIs the business was extremely important and on average 44 % of their turnover came from RI business.

The majority of companies had direct lines of communication with RIs they supplied and did not employ agents or representatives. It seemed evident that a close relationship with RIs was a very important parameter in carrying out contracts and in establishing commercial interactions in the first place. Being a known RI supplier was seen to be critical to obtaining further RI contracts. However, while this can be a valuable one-to-one relationship, it does not guarantee access to the wider RI market. Suppliers reported on-going relationships and contacts with RIs reinforced by informal networking at conferences, trade exhibitions, was a common route for receiving information about forthcoming projects.

The use of RI facilities by industry is another important means of developing and maintaining long term relationships. Users of RIs for testing, calibration (six of the respondents) generally found the experience beneficial in that the facilities were not available in their factories and not easily found elsewhere. High quality assistance and advice was on hand and results were good. However they reported costs were quite high and similar services could sometimes be found at RIs outside Europe more cheaply. Funding to improve this situation would evidently be welcome.

Working with RIs was seen to be beneficial, generating improvements to their capabilities through an on-going KT process, providing opportunities to find more business and generally being good publicity. Mostly, the main benefit following supply to or collaboration with an RI was found to be an advance in the level of technology that was subsequently offered and employed with another customer. Companies also felt that association with RIs gave them added prestige and helped support a high-tech image of themselves and their products. The current situation could be described as a symbiosis between industry and RIs which works but is in need of improvement.

Major difficulties identified included lack of information of RI development opportunities, the fact that involvement not usually possible early in the design phase, and use of the open tender procedure which demanded a lot of effort and did not give the best opportunity for interaction. It was suggested that tenders need to be more visible to companies who do not already have a relationship with an RI. A central portal could be established for all RI tenders at Official Journal of the European Union (OJEU) level and possibly below. All RIs should be required to register for tenders.

Another significant problem was the heavy documentation and over-demanding commercial conditions that were different for each RI which could be off-putting.

Most suppliers had experience of at least one type of Tender procedure and many had encountered all the different options. There was a consistent dislike of the open procedure where a full tender was required at a single stage and there was often little contact or discussion possible. Companies preferred a multistage model which gave more opportunity for earlier involvement and did not require a huge resource demanding effort to submit all technical and commercial information up front. Open tenders were felt to be unreasonable in that they operated largely for the convenience of RIs.

The study showed there is large demand for procurement practices to be improved to take into account the limited resources of companies. Industry would like to see simpler tender documentation. There was some support for common documentation though this may not be practical. One possible action could be to carry out a study to determine if a practical, short-form tender protocol and document package could be established that could be used in all RI tenders (e.g. 2 stage tender procedure).

In general companies would prefer to be involved earlier in tenders so that they could contribute and benefit more from the interaction. For example one industry commented â?œprefer design and build so as to get added input to design process to help manufacturability it was also seen as a means of enabling a cost-effective use of materials and resources and gives an opportunity to adapt the specification in order to obtain best cost performance ratio. However it should be noted that this Industry preference would probably have an impact on current tender practice for many RIs. It is likely to increase workload and reduce the time available for technical specification completion. A study could be carried out to investigate if earlier involvement can be achieved without undue disruption to RIs.

Companies agreed that a technology roadmap to highlight the future technology needs of industry-oriented RIs would be useful and should be technology and sector specific. The Commission should set up such a Roadmap with appropriate focus, funding and resource.

5. Financial mechanisms study

The primary aim of this study was to assess the gaps in financial support related to firms which hamper innovation and commercialisation in the instrumentation sector and sectors where firms might act as suppliers to RIs.

In order to achieve this aim the different funding needs of the various types of firm which engage with instrumentation development at physics-based RIs were analysed. A literature review was carried out on the financing and support of high technology firms, including private and public sources.

There is a reasonably strong evidence base to suggest that industry involvement in RIs requires public intervention, despite the fact that it can bring commercial benefits to firms. Financial mechanisms are important because these kinds of high-tech firms often take many years (even more than 10 years) to become profitable and they rely on different sources of finance to develop their products and markets. The discrete types of funding for firms on which this study focuses are development funding, R&D funding and financing for commercialisation. Different types of firm have different funding needs and the range of firms including micro firms, newly created spin-offs and larger technology firms were explored. The major findings were:

Conventional loans from banks and investments from traditional VC sources can be difficult to obtain due to the risky nature of the technology and the uncertainty of the RI market (for example delays in political decisions to build new RIs).
- R&D tax credits will benefit only firms in profit and many newer and smaller firms may take many years to become profitable.
- Soft loans can be of interest but still add to overall debt which may be rather high.
- Grants for R&D can be of interest, but firms will also benefit greatly from grants which allow later stage developments in their technology.
- Grants should be placed directly with industry and not through universities.
- Contracts can be very attractive, but not for one-off and highly specified pieces of equipment which will not allow the firms to open up new markets.

A small number of R&D funding schemes were identified and reviewed for this study. Most relevant is the industry for science scheme run by the Spanish Ministry of Science and Innovation. The programme was allocated a €10M budget intended to help companies undertake R&D prioritising projects. Funding was delivered through grants of between 50 - 75 % of the project costs.

The response was very enthusiastic in particle physics, fusion, astronomy, biotechnology. Overall, 80 million were asked applied for 57 projects were approved with a total budget of 15 million, of which the Centre for the Development of Industrial Technology (CDTI) granted 10 million. The projects included R&D, design, demonstrators and prototypes. It should also be noted that this type of scheme also requires significant administration. The new scheme uses a large department of 50-60 people following the projects, meeting the companies and reviewing the projects regularly. One problem that CDTI reports is that it is rather difficult to find expert monitors. These factors should be taken into consideration in the set up any future schemes.

While loans are not considered a popular option a new scheme was launched in late 2011 by EIB and managed by the EI fund. The SME Risk Sharing Instrument (RSI) this will offer banks a guarantee on part of their new loans and leases to innovative SMEs, allowing the banks to lend more and at more attractive rates. The European Commission (EC) and the EIB are providing up to 2 billion for the period 2007-2013 (up to 1 billion each).

The RSI aims to encourage banks to provide loans and leases of between 25 000 and 7.5 million to SMEs and smaller mid-sized firms undertaking research, development or innovation, with loan periods of from two to seven years, and with the risk finance covering investments in assets (tangible or intangible) and / or working capital. A review of this scheme will be of great interest to policy makers.

Article 185 European level instrument was also reviewed as this provides a mechanism for European wide programmes to be undertaken jointly by several Member States and requires financial integration to do so. Two alternative means of funding were explored; the virtual common pot whereby countries pay for their own participants and the real common pot whereby a centrally administered call budget is set up. The virtual common pot funding mode was selected after a consultation with CREST, which demonstrated that the virtual common pot mode is preferred by national research administrators, over the real common pot mode.

The Eurostars programme is a European joint programme dedicated to R&D performing SMEs. It is co-funded, based on Article 185 of the Lisbon Treaty, by the European Communities and the 33 EUREKA member countries, and thus allows a central submission and synchronised national funding for the above countries. 25% of the overall funding is contributed by the EC and 75 % is earmarked in the R&D support budget of the participating states. The aim of the Eurostars programme is to help these SMEs to lead international and collaborative research and innovation projects by easing access to support and funding.

An interim evaluation of Eurostars was carried out in 2010. Overall the evaluation finds that Eurostars has performed well and evaluators recommend that the programme be extended beyond 2013 and the budget extended by the EC. Evaluators claim that the programme appears to address real needs of R&D performing SMEs and point out that it has attracted a high number of applications, with the number of qualified projects exceeding original budget allocations.

The evaluation, overall finds that the â?œvirtual common pot appears to be a reasonably good solution for joint programmes under Article 185 and that most participating countries are happy with the arrangement. The evaluators however observed a few drawbacks to the model, such as the earmarked budget having been exhausted in some countries, projects being vetoed without explanation and some countries complained about delays caused by other members. The evaluation however finds that the virtual common pot is however not hindering the success of Eurostars as long as sufficient increase in earmarked resources is guaranteed by the participating countries. The panel of experts recommends that Eurostars should continue to be funded by means of the virtual common pot rule but that it should experiment by allocating 10 % of the earmarked budget to a real common pot to fund highly ranked projects that risk not being funded due to country level complications.

The research and the mid-term workshop have confirmed that financial mechanisms need to work with indirect measures, in order to be most effective. These may include network building and cluster policies, which aim to promote collaboration and sharing between high technology small firms. Cluster policies, building of science parks and incubators has been used in the past to support R&D however evidence suggests that management collaboration between co-located firms is limited as much of the work that small high technology firms undertake is highly confidential, competitive and wholly internalised.

Networks have been shown to benefit small high tech firms. For example the UK electronics, sensors and, photonics knowledge transfer network provides information on innovation and contract opportunities, organises dissemination workshops, brokers supply chain partnerships, and supports members in their quest for innovation finance. The network has held a 'Meet the buyer event' in 2006, 2008 and 2010, in which opportunity for organisations to meet the right people at research facilities is provided. Very strong outcomes from the events in 2006 and 2008 are reported, which include millions of pounds of orders received by participants.

The workshop and broad industry study both identified technology roadmapping as a potentially useful activity that would enable industry to prepare for future instrumentation development tenders. In addition a participant in the workshop break out group noted that having such roadmaps would allow companies to find technologies and match them with other disconnected roadmaps from other domains and thus add to the weight of argument for the value in developing some new product as it would have applications in multiple domains. This study looked into the feasibility of producing technology roadmaps and identified key requirements for success.

A well-structured framework for a technology roadmap should seek to address the key questions: 'Where do we want to go'? Where are we now? and 'How can we get there'? (Phaal and Muller 2009:39). They furthermore outline in detail what steps need to be taken to design a fit for purpose roadmap, which includes pulling together an initial process team whose role is to liaise with other stakeholders as appropriate, for example management, experts or steering group. The role of the process group would be to understand the strategic context, in terms of focus, scope and aims, together with identifying which perspectives are critical for understanding the system dynamics, defining goals, exploring strategic options and implementing change. It is likely that in the case of new RIs and for existing RIs, which are planning for future upgrades, much of this work has already been carried out in preparation for creating the future agenda for the infrastructure.

The timeframes that should be represented on a roadmap depend on the rate of change to which the business or system is subject. In many cases a timeframe of 10 years is appropriate. The roadmap can then be divided into stages, which indicate different time horizons e.g. short-term, medium and long-term.

Technology roadmapping would not be suitable at a high level such as ESFRI (entire European list), due to complexity and uncertainty which comes with overseeing many different RIs at different developmental stages and with different needs. Mid-level roadmaps, in addition to more specific level roadmaps could be created by each individual RI or a group of RIs within a common field, for the purpose of allowing firms, many of which have their own internal roadmap, to quickly see whether their direction fits with that of the RIs in question. The process requires experts to contribute their time and roadmapping experts to facilitate the process. It requires validation to ensure it does not lead to narrowing down thinking.

There are various options that could be employed with respect of technology road mapping approach. These options relate to the levels at which roadmapping would be used. To implement a roadmapping exercise at European level would be much too complex and thus meaningless due to the vast heterogeneity of RIs within the ESFRI network. Moreover, ESFRI is set up with specific mandate to coordinate European RI from a science point of view and might be problematic to try to add additional mandates with respect to industry engagement. At a political level it might be incongruent with ESFRI's overall mission. The roadmapping would also be too removed from each RI to allow for flexibility and responsiveness to change if conducted at an ESFRI level. However, undertaking roadmapping exercises at each individual RI or within a small network of similar RIs would both be a simple undertaking that could prove to be highly beneficial to improving RI and industry relations. The EC could consider roadmapping projects within its existing portfolio.

We would recommend that to improve RI and industry relations that there would be a variety of different mechanisms available. A few of these were analysed that have proved to work well such the scheme in the industry for science scheme in Spain. It is important to note that one size does not fit all due to the different needs of both industry and RIs. It important that the EC take this into consideration when adding any new tools to the mix. These can be in the form of small R&D programme for industry, networking events, technology roadmapping exercises and procurement. That there is a variety of mechanisms is a key for success in improving relations and allowing industry greater access to RIs. Specialised schemes offering financial support to industry can sit alongside other existing schemes such as Eurostars and EIB risk-sharing, in order to target the right kinds of firms.

6. Workshop breakout group input

The midterm workshop provided an opportunity for the wider community to comment on the work completed in the first half of the project and to put forward recommendations for EU action. Many of the conclusions drawn from the case studies were reflected in comments from the mid-term workshop breakout sessions. The group focused on RI engagement included representatives from XFEL, Soleil and Elettra. A number of measures were proposed which could be introduced in the RI programme by the EC to support better industry. These include:

An EC supported central portal

It is envisaged this would be where RIs can inform industry about open calls, technology transfer opportunities and the future needs for collaborative R&D and instrumentation supply. Here the companies could search for opportunities by type of RI, technology sector or market opportunities and get an overview of the longer-termed planning of new facilities, major facility upgrades, new instrumentation needs and TT opportunities in the different RI sectors. Information could be provided through updated roadmaps and information supplied by the RIs. They might further obtain information about relevant procurement procedures and legal issues including European, national and regional funding opportunities through the portal. This information is difficult to obtain at the moment and represents a real problem for SMEs. It could be the responsibility of each RI through completing forms to keep their information up to date but extra resource may be needed to ensure this is done.

- A centrally available TTO office funded by the EC to provide concrete support for the commercialisation of instrumentation at an EU level

Technology transfer offices (TTOs) at individual RIs with embedded, specialised TT officers, should receive general support from a TTO at the EC. This would be especially helpful during the construction stage where staff are usually highly overstretched with no extra resources available for technology transfer activities. Further the TTOs at RIs seldom possess all necessary expertise to cover all stages of interaction with industry e.g. collaborative R&D, licensing, patenting etc.

Funds made available at an EU level for RI collaborative R&D with industry (pre-procurement phase) particularly with SMEs

This should enable the development of state of the art prototype products, which are difficult to develop under strict procurement rules demanding delivery of new products without sometimes knowing the technological solution first.

The harmonisation of RIs public procurement methods or an information portal concerning the best practise in procurement involving a high degree of innovation

This would include a pre-procurement stage for development, where there is a need for high degree of innovation and the technological solution is not clear. There should be an investigation into the best practise in this area also learning from big companies where there is a need to develop new products with high level of innovation.

The industry break out group supported the development of technology roadmaps that reflect the needs of both industry and a number of RIs.

The funding of feasibility studies jointly undertaken by industry and RIs was also proposed.

Strong support was expressed for the formation of technology platforms with participation of individuals from both Industry and RIs to find common areas of interest. It was commented that this would provide a support scheme for RIs and Industry to jointly develop generic technologies that would be necessary for future scientific instrumentation but also possess potential for wider exploitation.

The financial mechanisms breakout group also strongly supported the idea of technology needs roadmapping. A technology roadmap has high potential to promote the interest and engagement of firms, through the actions of national and European innovation and technology promotion policies. It would enable national level networking activities to tap into knowledge about European-level developments.

IP protection was seen as a concern for firms, improvements in RI practice and information sharing on best practice would be helpful in this area. Networking to facilitate the uptake and matching of financial mechanisms to firms was also supported.

Financial aid was also seen to be required to incentivise technology transfer and it was suggested that EC could explicitly call for more attention to industry engagement in its calls for proposals for I3 networks.

7. Overall conclusions and recommendations

All elements of the study supported the view that Industry interaction with RIs is a valuable endeavour. The reassessment of the market showed that need for instrumentation development and the funding for the development for RIs has been maintained. The review of national activities shows that across Europe there is variable support and that support can be given in a variety of ways from the provision of information to direct funding for R&D. This view is reinforced by the findings from the financial mechanisms study which explored the various means of financial support and the practicalities of establishing technology roadmaps.

The support for industrial interaction with RIs needs to act at a variety of points in the interaction lifecycle and to support a range of industry types and sizes of company therefore a range of measures should be used.

Potential impact:

The purpose of this project is to provide evidence for recommendations to the Commission as to where to focus support to develop European capacity for instrumentation development and increase the gain to European industry and RIs. The potential impact is the improvement of the support for industry to work with RIs leading to an increased economic potential for high tech industry in Europe through Commission policy and funding.

The preparation of 'Horizon 2020' was already well underway with policy under review and consequently a need for recommendations to be communicated to the Commission quickly. We therefore reported regularly to the Commission on the project progress attending the 5th European RI workshop 'Exchange of experiences between preparatory phase projects for ESFRI roadmap preparatory phase projects coordinators' on 15 June 2011 to outline the project and the EU RIs and industry workshop on 20 October 2011 to report on the progress.

In addition to this we organised a workshop at the mid-term stage of the project to gain input from a range of actors in the European RI industry and policy fields on the initial findings drawn from our study on industrial engagement with RIs. This enabled us to ensure the European physics and analytical sciences community, industry and governmental representatives were engaged with the study.

A photograph and list of the attendees is attached. The workshop began with a presentation from the EIRIISS project outlining the study goals and methodology followed by a presentation on the European Metrology Research Programme an article 185 initiative and one example of EU support. The workshop was then split into three groups each of which focused on one aspect of potential EU intervention to support RI industry interaction. The purpose of the workshop breakout sessions was to consider the ways in which the Commission could structure future funding calls to develop the capacity of European industry to work with RIs in instrumentation development. The three groups looked at ways the EC could:

- support the European instrumentation industry;
- develop financial mechanisms available to support instrumentation development;
- support the RI visibility and access to industry.

Each group consisted of a mixture of representatives from the RIs, government and industry. The groups discussed the key challenges identified by the EIRIISS study (a summary of the interim findings was provided in advance to the attendees) and through their own experience and the key ways in which the Commission might contribute to addressing the challenges was discussed. The recommendations put forward in the break out summaries informed the line of enquiry for the second half of the project.

In order to promote the study to a wider audience a presentation was given on 11 October at the Euro RIs net final workshop. Finally, a summary of the project was presented on the first of June 2012 in Hamburg to the ERF workshop on the socio-economic relevance of RIs. Much interest was generated from this presentation and the work has been used at the Synchrotron Radiation Instrumentation conference as a discussion piece. WP reports will be made available on contributor's websites. This final report puts forward the recommendations to the Commission. This is the final report for the EIRIISS project which received funding under the European Commission (EC)'s Seventh Framework Programme (FP7). The aim of EIRIISS was to undertake a thorough analysis of the challenges for industry of engaging with the research infrastructure scientific instrumentation sector and to provide evidence to support proposed actions to address this in future FPs. The report covers an executive summary referring to the project context and goes on introducing its wider context and its main objectives in detail. It also argues on the activities undertaken and the related outcomes.

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