Periodic Reporting for period 1 - SmartFi (Smart methods to improve the performance of financial instruments for SMEs)
Reporting period: 2019-10-01 to 2021-03-31
The SmartFI project aims to use the experience, the tools, the capacity and the partners’ knowledge, in order to address a common innovation support challenge namely to improve the efficiency and minimize the risk of financial instruments (FIs) for innovation for SMEs through the integration of designing thinking skills and processes into the design and management of the financial instruments in order to become user friendly.
The project created a full guide that will help funding agencies/innovation agencies and managing authorities to improve the performance using design thinking. The toolbox/guide, entitled “Design Option Paper” provides methods and tools that shall assist innovation agencies/ funding agencies to:
- Minimize investment risks of the financial instruments by developing a method that can be used during the investment decision phase of all the financial products;
- Create user-friendly financial instruments;
- Understand what are the needs of their target groups (SMEs);
- Map SMEs journey when participating in a Financial Instrument;
- Identify the level of SMEs satisfaction per type and stage of a financial instrument;
- Find the gaps/ issues and improve the process/ structure of the Financial Instruments;
- Learn to test the new financial instrument before the full launch in the market.
The project created a full guide that will help funding agencies/innovation agencies and managing authorities to improve the performance using design thinking. The toolbox/guide, entitled “Design Option Paper” provides methods and tools that shall assist innovation agencies/ funding agencies to:
- Minimize investment risks of the financial instruments by developing a method that can be used during the investment decision phase of all the financial products;
- Create user-friendly financial instruments;
- Understand what are the needs of their target groups (SMEs);
- Map SMEs journey when participating in a Financial Instrument;
- Identify the level of SMEs satisfaction per type and stage of a financial instrument;
- Find the gaps/ issues and improve the process/ structure of the Financial Instruments;
- Learn to test the new financial instrument before the full launch in the market.
The “Smart methods to improve the performance of financial instruments for SMEs”– SmartFI project aims to help the partners overcome a common challenge: to increase the satisfaction of the SMEs participating in financial instruments and the number of the participating SMEs.
For this reason, the project used the experience and the skills of three partners (Business and Cultural Development Centre – KEPA from Greece, Regional Development Agency in Bielsko-Biala – ARSSA from Poland, National Innovation Agency – ANI from Portugal) to identify how User Centered design tools and process can be used by innovation agencies, in order to design and provide user friendly financial instruments to SMEs.
During the 18-months implementation of the project (from October 2019 to March 2021), the partners followed a combination of Twinning+ Methodology and Design Thinking Methodology. More specifically, 2 peer learning workshops were organised, 9 good practices/case studies were assessed and a process of improving an existing or designing a new financial instrument that is use-friendly was developed and tested in all 3 partner regions, addressing a specific selected challenge related to financial instruments.
The result of this whole effort is documented in the Design Option Paper (DOP), which serves as a “guide” or a “handbook” to other organizations that design and/ or implement financial instruments for SMEs.
The project’s results and the DOP were presented at the online final event that was held on 09.03.2021.
For this reason, the project used the experience and the skills of three partners (Business and Cultural Development Centre – KEPA from Greece, Regional Development Agency in Bielsko-Biala – ARSSA from Poland, National Innovation Agency – ANI from Portugal) to identify how User Centered design tools and process can be used by innovation agencies, in order to design and provide user friendly financial instruments to SMEs.
During the 18-months implementation of the project (from October 2019 to March 2021), the partners followed a combination of Twinning+ Methodology and Design Thinking Methodology. More specifically, 2 peer learning workshops were organised, 9 good practices/case studies were assessed and a process of improving an existing or designing a new financial instrument that is use-friendly was developed and tested in all 3 partner regions, addressing a specific selected challenge related to financial instruments.
The result of this whole effort is documented in the Design Option Paper (DOP), which serves as a “guide” or a “handbook” to other organizations that design and/ or implement financial instruments for SMEs.
The project’s results and the DOP were presented at the online final event that was held on 09.03.2021.
Financial instruments have long been important economic development policy measures in many countries. The European Commission has increasingly emphasized the role that financial instruments can play in the delivery of SMEs support. The governance of financial instruments is very much context-driven; nevertheless, in all cases, managing authorities and innovation agencies are involved in the design, managing and implementation of the financial instruments.
Recognizing that Financial Instruments are public services for SMEs (designed and offered by Innovation and Funding Agencies), design approaches can help the Innovation Agencies offer better and user-friendlier financial instruments and increase the impact of the funds as well as the satisfaction of the SMEs. In this respect, the purpose of the SmartFI project was to promote the sharing of good practices for the construction of better financial instruments from the users’ perspective.
SmartFI project attempted to interlink the effectiveness of a financial instrument with the actual needs of the final user. Under this perspective, a certain process was developed, based on Design Thinking methodology, and tested in real challenges. Through the implementation of the Pilot Actions in all 3 partner regions, interesting key insights in relation to the effectiveness of designing and managing financial instruments, as well as to their significant role in the development of the SMEs were derived, which are summarized below:
- Lack of collected and organised information regarding the available FIs, especially for start-ups.
- Public authorities need to understand the needs of the start-ups.
- Immature local ecosystems with no interaction due to stakeholders’ introversion.
- High level of bureaucracy makes the design of friendly Financial Instruments difficult and also discourages SMEs in going after a FI.
- Networking and interaction between investors, entrepreneurs and other stakeholders is really important.
- Boosting entrepreneurial culture at every level of education is needed to better prepare people with different educational and professional backgrounds to the use of financial instruments.
- Networking the active and potential business angels in the region is seen as a way to improve private co-financing in publicly supported financial instruments for start-ups.
Recognizing that Financial Instruments are public services for SMEs (designed and offered by Innovation and Funding Agencies), design approaches can help the Innovation Agencies offer better and user-friendlier financial instruments and increase the impact of the funds as well as the satisfaction of the SMEs. In this respect, the purpose of the SmartFI project was to promote the sharing of good practices for the construction of better financial instruments from the users’ perspective.
SmartFI project attempted to interlink the effectiveness of a financial instrument with the actual needs of the final user. Under this perspective, a certain process was developed, based on Design Thinking methodology, and tested in real challenges. Through the implementation of the Pilot Actions in all 3 partner regions, interesting key insights in relation to the effectiveness of designing and managing financial instruments, as well as to their significant role in the development of the SMEs were derived, which are summarized below:
- Lack of collected and organised information regarding the available FIs, especially for start-ups.
- Public authorities need to understand the needs of the start-ups.
- Immature local ecosystems with no interaction due to stakeholders’ introversion.
- High level of bureaucracy makes the design of friendly Financial Instruments difficult and also discourages SMEs in going after a FI.
- Networking and interaction between investors, entrepreneurs and other stakeholders is really important.
- Boosting entrepreneurial culture at every level of education is needed to better prepare people with different educational and professional backgrounds to the use of financial instruments.
- Networking the active and potential business angels in the region is seen as a way to improve private co-financing in publicly supported financial instruments for start-ups.