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Action “Establishing services enhancing the innovation management capacity of SME's in the Enterprise Europe Network”

Periodic Reporting for period 1 - EEN INNO (Action “Establishing services enhancing the innovation management capacity of SME's in the Enterprise Europe Network”)

Reporting period: 2014-07-01 to 2014-12-31

"The action of this Project Proposal aimed at stimulating innovation in SMEs by capacity building and had the objective to:
1. Identify the capacity to receive the innovation support service in 10 innovating SMEs and 5 beneficiaries of the SME instrument;
2. Fill knowledge gaps in SMEs in the area of innovation;
3. Bring knowledge of innovation processes and change processes;
4. Build the capacity of SMEs to manage the innovation activity in-house; and
5. Build capacity of SME’s to use the wide range of innovation support services provided by EEN and especially SME instrument within COSME which will help them grow

The project envisaged that 15 companies wold be provided with the 7-day service packages out of which 10 companies would be in the innovating SMEs client group while 5 would belong to the group of beneficiaries of the SME instrument. Target group of the SMEs with significant innovation activities and a high potential for internationalization have been fully served according to the action's objective in this part. Actually, the service has been provided to the sample of 11 SMEs although it has been envisaged 10 SMEs in the project proposal, since 11 SMEs fulfilled the selection criteria, based on the diagnostic audit. Before the start of diagnostic audit on eleven companies, pre-selection has been done and 30 SMEs which stand for the innovative companies according to their track records in previous EU funded projects in enhancing inattentiveness and competitiveness in Serbia have been considered. Eleven companies met the selection criteria and have been selected for the diagnostic audit according to the INNOVATE diagnostic tool which has been applied . INNOVATE diagnostic tool complied with the CEN/TS 16555-1 standard, recommended in the work programme. Action plan has been done and implemented for this high performed eleven SMEs which came out of the needs/gaps analysis, which was in compliance with the Working program. Coaching sessions and the development/matching of the innovation projects with the available CfP has been conducted in the last three months, in the course of the project's duration.
Eleven innovating SMEs (with significant innovation activities) received the professional coaching from the best national experts in the innovation management in Serbia. Also, whole process was supported by the competent EEN staff of seven partners with the huge range of expertise and experience in work with the innovative companies. Managers of WP2 ""Mihajlo Pupin Institute"" and University of Novi Sad combined two coaching techniques: group coaching session and tailor-made coaching approach, according to the business features of the each SMEs, who took part in the Action.

Concerning the WP1 – KAM Service, situation which can be considered as ’’force majeure’’ occurred: there was no successful application for SME instrument from Serbia, disabling leader of WP1 from offering full extension of afore mentioned service. The WP itself was broken down onto 6 tasks: Task T1.1: Internal capacity building, Task T1.2: First contact with and research of the SME, Task T1.3: Lead coach selection, Task T1.4: Support for SMEs’ performance, Task T1.5: Case closure and Task T1.6: Integration and follow up(s). Due to the unforeseen situation, the circumstances compelled leader of WP1 (UBg) to shift the attention and focus towards tasks T.1.1 partially T1.2 alternate T1.4 and T.15. This was encompassed through building-up of internal capacity, pro-active identification of high potential clients, mapping their needs and gaps, increase of the capability of client SMEs for performing in EU funding arena and transferring their attention towards other funding sources and receive feedback, which was done with 5 SME clients.
Although there was no favorable circumstances for full KAM Service extension towards clients, this situation is clear-cut case of ‘’lesson learned’’, presenting the need for further increase of internal capacities of SMEs for performance in EU funding arena, revealing room for improvements, leading to up-scaling of standard EEN services in pointed direction.
Action encompassed two working packages.

WP1, dealind with KAM Service, which was broken down into 6 tasks, for all of which UBg was the leader and implementer
Task T1.1: Internal capacity building-Objective of this task was to acquaint all of personal engaged by partner 4 (UBG) with the method of INNOVATE methodology utilization. This was done in November, leading to building-up of partner’s knowledge and further experience in the area of innovation audit, and introduction of standardized tool for identification of gaps/needs.
Task T1.2: First contact with and research of the SME-Since there was no successful application of Serbian SMEs for SME instrument, UBg had to modify the implementation of the task, through identification of high potential clients to become players in the EU financing arena, and conduct full and in-depth research of the SME, done by utilization of the INNOVATE tool, presenting “status map” of the particular SME, clearly identifying gaps and needs, potentially enabling identification of the profile of the coach needed.
Task T1.3: Lead coach selection-Since there were no Serbian beneficiaries of SME instrument, at the time of project implementation, this disabled the necessity and possibility of suitable coach selection. Hence, there were no favorable circumstances for implementation of this task.
Task T1.4: Support for SMEs’ performance-Since there was no successful participation of SMEs in SME Instrument, even in the first round/phase, thus leading to the absence of “label of excellence”, and, subsequently, of the second round/phase of SME instrument, UBg was compelled to focus on alternative approach, which was envisaged in the project proposal, and reserved for the case that particular SME, beneficiary of SME Instrument, in the first phase, does not qualify for phase 2, with a small addendum. Envisaged approach encompassed support in performance for financial instruments, other than H2020, which can be national (including, but not limited to Innovation fund or resources of the Ministry for education, science and technological development), bilateral, or international, meaning:
- identification of appropriate funding source/strategic partner
- identification of particular and suitable call for proposals
- partnering
presenting “more ordinary” services of the EEN, which was done with 5 HP clients. Addendum consists of the following: since there was no SME in the first round of SME Instrument, SMEs were encouraged to apply for that funding opportunity, at a later stage, as well. Absence of the Serbian SMEs in the first round of SME Instrument demonstrated the necessity to upgrade their capability in the areas of:
- Financial sources
- Excellence in project proposal creation
- Stakeholder management
- Partnering,
which was done through sets of presentations on afore mentioned topics.
Task T1.5: Case closure-Since the client SMEs are not only HP clients, but long term associates and clients, hence, there are good personal and institutional connections with them, closure, done in cooperation with these clients, and with ease, presents only the closure of this particular project-oriented chapter.

Task T1.6: Integration and follow up(s)-Feedback from the clients, along with the follow-up of each client involved and supported within this scheme presented not only a constitutive part of the task, but the essence of the cooperation with these clients.

Main results:

1. Acquired experience in INNOVATE methodology, personal of partner 4 (UBg)
2. Knowledge of HP SMEs shortcomings
3. Upgraded potential of HP clients in the areas of funding possibilities and overall project management cycle, structure and methodology
4. Two-way communication and feedback-loop, with clients, regularity

WP2 “Enhancing SME innovation management capacity” for innovating SME independently from a specific project involved six tasks (T2.1-T2.6).
Task T2.1 was recruitment of the 10 innovating companies with the top innovation performance which will be involved in the action plan implementation. This task started with the analysis of the available database of the SMEs which has been assessed according to the INNOVATE methodology. INNOVATE methodology is approved by Ministry of economy and partner 1 (NARD) as the valuable tool to assess the enterprise innovation management system, which came out as output of the EU funded project Improved SME Competitiveness and Innovation. 554 Serbian SMEs in total have been assessed and the Report on their innovation performance has been available in partner’s 1 (NARD) database. Partner 1 (NARD) has been nationally authorized body to disseminate this assessment tool in public, available at their web site ( WP managers identified more than ten envisaged SMEs, which met the selection criteria. So, eleven SMEs with the best innovation performances has been selected by the seven members Jury consisting of the experts from EEN consortiums, representing each of the seven partners in EEN Serbia. Final selection has be done by partner 2 (MPI) and partner 3 (UNS). Partners involved in this task were: partner 1 (NARD), partner 3 (UNS), partner 5 (UNI), partner 6 (SIEPA) and partner 7 (CCIS). Task lead was partner 2 (MPI).
Task T2.2 was analysis of the enterprise innovation system in selected 11 companies.
The methodology applied in the analysis was in compliance with the recommended standard CEN/TS 16555. The methodology combined standard techniques like SWOT, PESTEL analysis as well as the Tools for Strategic Analysis and the “road map”. SWOT helped to detect the strengths and weaknesses of the company, together with the potential threats and opportunities, PESTEL technique was used to analyze the external (macro) environment in which a company has been operating, while “Road map” has been a tool for the analysis, which indicated a long-term strategic goals of the company (whether they are harder or easier to achieve). After the “road map”, the assessment task ended with the creation of action plan. Actually, the action plan turned a roadmap to the specific plan of action. It contained a clear specification of project tasks and their time schedule, where the responsible persons and deadlines are clearly defined. As a result, 11 SMEs received Innovation Management Diagnostic upon INNOVATE methodology.
Involved partner was partner 3 (UNS) while the task eader was partner 2 (MPI)

Task T2.3 was Action plan creation.
Action plan was structured in three day coaching session which covered following topics: 1. How innovation is perceived: inventor and customers (novelty definition of the invention, type of innovations, customer view, IPR protection); 2. Opening market for the innovation (market research of the target customers, competition research); 3. Financing innovative business (variable/fixed costs, cash flow, and ways to finance innovative business). For two more coaching days, each company have had one-to-one coaching sessions with the experts.
Involved partner was partner 2 (MPI) while the task leader was partner 3 (UNS).
Task T2.4 Action plan implementation combined group and one-to-one coaching session. Group coaching has been delivered in three days coaching session in relevant topics for development of IPs for 11 SMEs. . During those three days, innovative companies were trained and coached in defining/conducting key aspects of innovation project proposal. One-to-one coaching sessions has been delivered in two days with the each SME. During one-to-one coaching, company received answers on specific issues concerning IP composing (with the emphasis on market and novelty definition).

Group coaching taking three coaching days, was realized once in a week (one day per week in three weeks). Second two coaching days were realized twice in a month (two days in two weeks in one month). Action plan was implemented by the experts with support of EEN consortium member staff.
Involved partner was partner 2 (MPI) and the task leader was partner 3 (UNS).
In the last three months of the project’s duration task T2. 5 - coaching the companies in development IPs and T2.6 - Matching the IPs to the available call for proposals were realized in parallel.
T2.5 - coaching the companies in development IPs was conducted in two manners. First one was in the group work and second one was one-to-one with each SME in order to create relevant IP application.
Fourth day of one-to-one coaching was delivered within three weeks of coaching in relevant topics for IPs while the fifth coaching day was delivered in the course of project duration. . As a result, SMEs received Action plan which contained long-term and short-term objectives with recommendations for further actions.
Involved partner was partner 2 (MPI) while task leader was partner 3 (UNS)
Task T2.6 Matching the IPs to the available call for proposals within COSME, HORISON and national programs to support innovativeness of SMEs.
Partner 2 (MPI) identified five participants who were eligible to apply for the funds within the national programs to support innovativeness of SMEs. Expert provided to them all necessary assistance in preparation of the project proposals. Also, one company asked for the support in the preparation of the project proposal for the Call published within HORIZON 2020, as a partner. Partner 2 (MPI) also provided the support in some required aspects of the proposal, prepared by the company.

Partner 3 identified six participants who were eligible to apply for the funds within the national programs to support innovativeness of SMEs. Expert provided to them all necessary assistance in preparation of the project proposals. While five of those companies are member of Vojvodina ICT Cluster, they will also apply together on Call published within HORIZON 2020. One company asked for the support in preparation of the project proposal for FRACTALS as a partner.
Main results achieved so far are:
1) Analysis of the enterprise innovation management system in 11 companies completed
2) Action plan for 11 companies created and implemented
3) Coaching performed in 11 companies in development of IPs
4) 11 innovation project proposals drafted and matched
5) Two assistances in creation of the innovation project proposal within Horizon 2020 delivered
Expected final results do not differ much from ones set out in the project proposal, and are:
1. 11 innovating + 5 HP SMEs receieved innovation support service operationalize the service
2. Filled knowledge gaps in SMEs in the area of innovation;
3. Knowledge of innovation and change processes on the level of full operational existence;
4. Capacity of SMEs to manage the innovation activity in-house brought to a higher level; and
5. Build capacity of SME’s to use the wide range of innovation support services provided by EEN built up

There are three main pillars concernig the impact of the project implementation:
1. Innovation audit
2. Wider knowledge on EU fundindig arena and other funding sources, along with the rules for excellent performance in them
3. Economic factor

This project provided the opportunity for wider number of persons to be acquainted with innovation audit tool, and in the same time present an introduction of good practice for audits amongst the SMEs. This provides the opportunity for them to get accustom to that process, beginning without shock treatment, but as a steady growing necessity.

Absence of successful applications from Serbian SMEs for the SME Instrument demonstrated still existing gap in knowledge on how the EU funding arena (or other financing sources) works, what are the preconditions for ‘’label of excellence’’, as well as lack of capabilities for good project proposal creation. These questions were addressed through the series of coaching sessions devoted to internal capabilities raising. Taking into account that most of the key stakeholders and players know each other there is a very important, yet strong, tide of good news spreading amongst the potential participants and clients seeking services in the area at hand. This will act as an flywheel, leading to general knowledge and skills increase.

Increase of knowledge on available opportunities, how to position one-self and exploit them, will yield two things:
1) first, it will bring sort of standardization, harmonization and strive towards leveling of knowledge, which is one of the EU tendencies
2) and, second, it will enable more successful performance in EU funding arena, that being not only a good way of international networking , but a source of income generation, needed for further development with wider, pan-European contribution.
This will demonstrate, on wider scale the appeal of engagement, and being on equal terms with EU family, along with all of the implications that brings along.

Activities realized within the WP 2 have changed SMEs perception/focus on the elements which were important for the innovation projects. Innovating SMEs became aware on the key successful factors to make successful project proposals . SMEs learned about the focus in IP, elaboration of the most relevant issues in IP, prepartory actitivies which should be undertaken before writng the IP and also, they bacame aware on the knowledge gap they need to fullfil.
• Therefore, it is expected after this process (project) to have SMEs with better market approach and innovation management. Provided Action plan and coaching days were good ground for better understanding, achieving and growing of a business.