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SME Innovation: From research Innovation to commercialisation – the bridge to Horizon 2020 <br/><br/>Organizing the European SME Conference under the Irish Presidency of the EU 2013

Final Report Summary - EUROSME2013 (SME Innovation: From research Innovation to commercialisation – the bridge to Horizon 2020 Organizing the European SME Conference under the Irish Presidency of the EU 2013)

Executive Summary:
The EUROSME//2013 conference, held on 11-12 June 2013 in Dublin as part of the Irish Presidency of the European Union, brought together entrepreneurs, policymakers, SME support organisations from the private and the public sector, and other intermediary bodies in order to identify how to best to promote innovation as a means to facilitate growth and jobs for SMEs, and how to improve the EU eco-system for innovative enterprises.

To address the conference objectives, a diverse panel of invited speakers supported by working groups comprising the assembled delegates set out to answer key questions relating to the innovation agenda for SMES in Europe across three broad themes: (i) SMEs and innovation in the 21st century; (ii) SMEs in a networked world; and (iii) supporting SMEs in their ambitions to grow.

The conference confirmed that it is essential that SMEs engage in strategies such as open innovation and progress their ability to leverage value and bring to market outcomes derived from innovation networks. To facilitate this transition, the following recommendations are proposed:

(i) SMEs and innovation in the 21st century
There is a need to increase visibility of successful innovation practices in SMEs. This includes supporting forums where successful entrepreneurs discuss their experience with other entrepreneurs. There is also potential to disseminate best practice in relation to SME innovation on web-based platforms.
Developing an innovation culture requires SMEs to tolerate and learn from failure. Initiatives that promote experimentation and constructive reflection on innovation failure are recommended.
Education is a critical vehicle for developing entrepreneurial and international perspectives among young people. Educational programmes should be structured from early childhood through to university, and include opportunities for graduates to be placed in international enterprises.
With new business models and electronic distributional channels facilitating SMEs to be ‘born global’ or capable of internationalising more quickly, there is a need for governments to link enterprise development interventions to support innovation and internalisation.

(ii) SMEs in a networked world
Open innovation is different for SMEs than it is for large enterprises. For this reason it is necessary that EU and national interventions to promote SME participation in networked innovation activities recognise the specific context and requirements of SMEs and provide tailored support programmes.
Partnering for innovation is a learned activity. Actions that involve SMEs experimenting with partnering and developing a partnership culture are recommended.
Governments and their agencies should develop initiatives to make available publicly owned technologies to SMEs for knowledge transfer. This should include the development of open innovation trading platforms to showcase technologies and support simplified trading arrangements.
Programmes to support talent mobility between SMEs and universities, including short term scientific mobility, are recommended to increase awareness of potential research resources available to SMEs and enhance absorption capacity.
Research and innovation instruments for SMEs should be sufficiently agile to provide SMEs with access to research networks at the point of requirement. Initiatives to assist SMEs become more aware of the potential for research in universities for their business are also recommended.
To develop their understanding of the potential of innovation networks for their enterprise business models, entrepreneurs are likely to be receptive to the experiences of other entrepreneurs. Initiatives that support peer-to-peer innovation learning networks for entrepreneurs are recommended.

(iii) Supporting SMEs in their ambitions to grow
Recognising the pivotal role of the entrepreneur/SME owner in setting out the growth trajectory of the enterprise, human resource development interventions to enhance SME leadership are recommended. Such initiatives should include structured mentoring programmes and prioritise business development objectives relating to innovation and internationalisation.
The ability to sell innovative products and services is identified as a critical skill deficit in SMEs. Human resource development interventions to develop sales competencies in SMEs are recommended. Universities should also incorporate sales-related learning outcomes in business and technology programme curricula.
The potential of public procurement to create stable markets for innovative products and services from SMEs should be explored. Public procurement processes need to be reviewed to remove impediments for new enterprises and SMEs competing effectively for public tenders.
Expanding SME participation in European Union and national research programmes (e.g. Horizon 2020) requires minimising bureaucratic barriers to involvement and deployment of agile instruments to facilitate the rapidly evolving requirements of SMEs.
Horizon 2020 offers important potential for advancing SME participation in innovation networks. The mechanisms for SME participation in Horizon 2020 should prioritise the developmental requirements of SMEs over the administrative requirements of research project participation.

Project Context and Objectives:
This two day conference will seek to promote innovation as a means to facilitate growth and jobs for SMEs.

The two-day conference, EURO-SME 2013, will be organised in Dublin, Ireland during Ireland’s Presidency of the European Union in 2013. The EURO-SME 2013 will focus on SME aspects (primarily Innovation, Growth and Jobs) relevant to the final stages of the Horizon 2020 design and legislative process and will be positioned primarily as an implementation focussed activity in the context of Europe 2020 and the Cohesion Policy 2014-2020.

The conference will consider and make reference to the role of the SME in:

- The Europe of 2020, and its’ envisaged smarter, more sustainable and more inclusive economy, where research and innovation are at its very core;
- The Innovation Union, as one of the flagship initiatives supporting the implementation of the EU2020 strategy. It comprises the whole innovation chain from ideas to market and it places particular emphasis on innovation and support measures for SMEs:
o Enhancing the competitiveness of SMEs;
o Promoting employment and supporting labour mobility; and
o Strengthening research, technological development and innovation.
- Economic growth and job creation [with the current SME contribution to employment growth at 84% and over 9 million jobs created in the SME-sector between 2002 and 2008].

EURO-SME 2013 will focus particularly on the support mechanisms which will promote innovation by SMEs as a means to sustain and expand the growth of SMEs in Europe. This support structure will encompass all aspects of innovation from concept proof to full commercialisation. The conference will seek to expand the understanding of SMEs needs and focus on the benefits of a business support structure rather than a Research project driven support structure. As we move towards Horizon 2020 and related SME support mechanisms it is timely to review progress on activities such as the testing of prototypes, scale-up studies, performance verification and implementation of new technological and non-technological solutions as well as market studies and business plans.
Horizon 2020 will be considered with particular focus on continuity of initiatives and actions already undertaken under the FP7, CIP and Entrepreneurship and Innovation Programme (EIP), such as the Enterprise Europe Network, building on results and lessons learnt.

The conference will aim at giving an appropriate follow up to previous SME conferences including that organised in La Hulpe during the Belgian Presidency (BE2010-Conference_SME).
The conference will address the Innovation Union context of the 'Capacities' work programme, especially that of the Research for the Benefit of SMEs programme, with emphasis on research and innovation as key drivers of competitiveness, jobs, sustainable growth and social progress. It will provide the opportunity for policymakers, enterprises, enterprise development agencies, researchers, and end-users (SMEs, industry, etc) to participate and thus to ensure synergies with local, regional or national policies.

Particular attention will be paid to the inclusion of the EU-15 with a focus also on the Convergence and Outermost regions' RTD players, in keeping with the need to enhance their competitiveness and research linkages to become more active players in the European Research Area.

While maintaining continuity with previous SME Conference themes, the following themes have been prioritised for the EURO-SME 2013 Conference Dublin, Ireland:

a) SMEs and Horizon 2020

b) Vision of Innovation for SMEs in the 21st Century

c) Open Innovation for SMEs

Discussion topics will cover the practicalities of how to plan for, receive and use support from different EU Funds. It will include consideration of harmonisation of funding rules and financial instruments and explanation of emerging simplifications through rules on unit costs, lump sums and flat rates applicable in other Union policies.

The guiding principles in relation to the format of the conference seeks to

1. Utilise innovative approaches to presentation – the use of technology to enhance the presentation style and content. Technology usage to enhance participation by the audience.
2. Reduced length of presentation of speakers – the programme and webpage will have all the information needed on speakers.
3. Minimum PowerPoint presentations – the speakers will be selected who have a recognised pedigree in motivational approaches to presentation.
4. No reports will be presented – you will get access to reports before the conference. On stage we will focus on discussion and dilemmas.
5. No parallel sessions – you will get access to all the wisdom of the conference through World Café Sessions facilitated by discussion leaders
6. No quotations – participants should contribute with their own thinking, own ideas and original thoughts.
7. No one is allowed to be bored – too many conferences over a 2 day period run out of steam. This conference will be invigorating.
8. Lots of breaks – attendees will get the best opportunities to make contacts, dating and networking

Project Results:
The EURO-SME 2013 Conference will contribute significantly to the co-ordination of SME related policymaking and learning by:

- Bringing together all major SME stakeholders, providing them with a forum to share experiences and debate new approaches;
- Providing information packages clearly defining processes and supports, thus assisting standardisation of approach (and higher quality approaches) by different SMEs and related actors;
- Raising awareness on the role of SMEs and potentially influencing their resourcing by government.

The conclusions of the EURO-SME 2013 Conference will form the basis of a Dublin Declaration. This will be used as formal input to the Competitiveness Council meeting under Ireland’s Presidency of the EU and it will be circulated to lead European SME representative organisations and communities.

Potential Impact:

Requirements of an innovative SME
Taking account of these trends, the conference delegates identified that the constantly innovative SME must have competencies and traits that support opportunity identification and collaborative engagements. They must offer a clear value proposition and a strategy for delivery in the context of a global business environment. They must have the ability to develop clear strategies and business model for the delivery of this value proposition, and critically they must also be agile and be able to sell directly to customers. Innovation should be the responsibility of everyone in the organisation and the organisation culture should be open to experimentation and tolerant of failure.Achieving a partnership culture
Central to the success of such business models is the ability of the SME to develop a partnership culture. The conference noted that the starting point to any partnership culture is a sense of purpose and that a successful collaboration will be based on the mutual or complementary self-interests of the parties involved. In the case of SMEs, this self-interest is normally associated with the self-interest of the entrepreneur. To be able to define their purpose from the partnership entrepreneurs must know their business and in particular their weaknesses, and then be able to locate partners to support them. It was observed that the development of such a culture starts at a personal level – between the principal individuals involved. From these personal relationships networks evolve. It was observed however that it is time for SMEs to get on with the process of partnering for innovation and that the time for appraising it as a strategy has passed.

Open innovation is different for SMEs
The conference noted that while research suggests that open innovation is dominated by large enterprises, the number of collaborations per employee is in fact many times higher in SMEs than in large enterprises. However, it was also observed that open innovation is different for small enterprises than it is for large enterprises and this has implications for policies relating to supporting SMEs engage in open innovation strategies.

With a large enterprise the starting point for any consideration of open innovation is the enterprise innovation strategy. However for open innovation in the SME, the starting point for consideration is the enterprise growth strategy and strategic objectives as these encapsulate the SME innovation strategy. While open innovation can be part of the large enterprise innovation strategy, however it dominates the growth strategy of the SME. This distinction has a number of important implications for supporting SMEs implement open innovation strategies and may also be the root cause of the failure of many European and national initiatives to encourage open innovation in SMEs.

Creating a platform for open innovation – role of government
Related to increasing awareness for the potential of open innovation is a recommendation to support initiatives that bring together potential open innovation partners at forums where they can network and share information on each other’s requirements and offerings. This is an area where EU and national government supports can have particular impact and the conference offers a number of recommendations. First, governments and their agents (e.g. military, public research centres, healthcare providers, etc.) own technologies that have potential commercial application. These should be showcased to SMEs and arrangements for open innovation agreements developed. Second, programmes operated by the EU and national governments have the potential to establish operating rules for open innovation trading and remove complex and bureaucratic barriers created by issues such as intellectual property arrangements. Third, initiatives to promote the transfer of talent and knowledge between universities and industry are recommended.

Developing the SME innovation ecosystem
The conference noted that the decision to locate in a particular ecosystem was often a conscious decision of the entrepreneur. The key ingredients of high performing innovation ecosystem were identified as (i) access to capital; (ii) access to talent; and (iii) access to a significant market. A clear logic and set of rules for the ecosystem were also identified as important. It is also important that SMEs understand how to value their potential and their role in the context of this ecosystem.

The conference also observed that SMEs are bounded by the resources and do not always realise that there is potential from partnering externally to either acquire or ‘borrow’ knowledge. Where they do identify a requirement for external knowledge it is often at the point that this knowledge is required immediately. The instruments to support this need are not always available as it is likely that more SMEs will require small and agile projects that can be delivered to them in short term horizons, rather than the opportunities to them through Framework Programme research initiatives. National interventions such as Enterprise Ireland’s Innovation Vouchers were recommended.

List of Websites:

Sean Burke, National Delegate, Research for the Benefit of SMEs, Framework programme 7,
Enterprise Ireland,
4500 WestPark, Shannon, County Clare
Republic of Ireland
Phone : 00353 61 777048
Mobile: 00353 87 9534606