Periodic Reporting for period 1 - SME-SEALING (A Peer learning based pilot scheme for using the H2020 Seal of Excellence at national level)
Reporting period: 2016-11-01 to 2017-03-31
The first instrument where the Seal of Excellence has been implanted is the H2020 SME instrument. This instrument aims to support highly innovative SMEs with international ambitions, determined to turn innovative business ideas into winners on their market. The instrument provides full-cycle business innovation support from the stage of business idea conception and planning (phase 1, lump sum grant of 50,000€) over business plan execution and demonstration in close to market conditions (phase 2, 0.5-2.5 M€ with a grant intensity of 70%) to commercialisation (phase 3 without funding).
In that context, this Seal of Excellence linked to the SME instrument proposers offers a clear added value to national and regional authorities as a reliable filter of promising companies with international ambition, meriting an European funding but unable to achieve it, but still worth to be supported.
Although this instrument has been selected because project proposals are mostly led by a single SME, its phased approach offers several slots of intervention and has a clear territorial impact, its closeness to market approach in phase 2, probably the highest within H2020, is a real challenge for national and regional authorities funding mechanisms.
For the phase 1, during 2015, a number of countries and regions have already been able to launch at national or regional level1 support mechanism for the Seal of Excellence phase 1 holders, mainly channelled through the “de minimis” regime2. In fact, within the knowledge already available in the Seal of Excellence Community of Practice3 set up by the Commission in November 2015, any region at European level would be able to implement a support mechanism to use the Seal of Excellence for the SME instrument phase 1.
For the phase 2, the expected Technology Readiness Level of TRL 6 at proposal stage confronts with the support provisions defined within the Framework for State aid for Research, Development and Innovation and its General Block Exemption Regulation (GBER)4 and therefore, calls from national and regional funders a creative approach to support these companies, worth to be tested from a collaborative perspective.
This is the rationale behind this proposal: To use the peer learning advanced methodology, proposed by the topic, together with the current tools from the lean start-up methodologies to develop and test different approaches to the valorisation of the Seal of Excellence for the SME instrument phase 2 within a small consortium of national innovation agencies (CDTI (ES), Enterprise Ireland (IE) and TEKES (FI) with a long tradition of collaboration among them, a strong know-how on the SME instrument and in charge of national programmes in support of SMEs through grants, loans and/or
This objective is formulated from the understanding that we, as innovation agencies, have to be able to provide an attractive value proposition to our clients; that in this case, are the holders of a SoE for SME instrument phase 2. In that respect, we aim to follow in this proposal a business logic methodology building and testing a Business Model Canvas (BMC) where the innovation agencies are the “business” and the holders of a SoE for ph2 are the “clients” and we need to reach a reasonable market-fit.
In order to build this BMC we are going to focus the twinning advance methodology in three peer to peer joint 2 days Workshops (WS) between the agencies, as with the following specific thematic focus:
1. Market knowledge and customer relationship: (WS1) Although there is available knowledge on the ph2 SoE holders at aggregated level coming from H2020, it has to be integrated with the current processes of customer relationship that national innovation agencies already use in their daily client interaction. This customer knowledge and relationship has a wider value if it is developed under a common framework of KPIs, that may combine knowledge from agencies’ staff from both the EU funding world as well as the national/regional funding world and that could be easily used by any innovation agency in Europe.
2. Value proposition on selected cases: (WS2) Although the grant intensity boundaries are an intrinsic limitation in defining the value proposition from public support, the ways in which they could be combined/interpreted/adapted/catalysed to private funds… to sector-specific needs are the key elements to be addressed in the second joint workshop of the project. Based on the agreed KPIs, each agency will work around 5 SoE ph2 holder proposals that will be discussed in detail to understand and compare how they fit within those KPIs and, moreover how different value propositions scenarios may work for each of them. As different countries may have different context, exploring the potential value of the SoE not as a funding label but as eligibility criterion for programme design will also be a topic for analysis.
3. Market fit: (WS3) Considering the set of cases analysed, the final workshop will propose at least 3 feasible funding approaches that can best define a coherent proposition for SoE ph2 holders. This workshop would draft the main deliverable of the project: the Design Option Paper built on the progression of the approaches defined in WS2.
This project follows a business logic approach for identifying and developing such routes, that is: First analyse our key implementation elements (done in WS1), second identify our SoE cohort needs under a relevant segmentation procedure (the objective of WS2) and finally test if our feasible value propositions according to such needs are really fulfilling our clients expectations or not.
Due to the nature of the SME instrument rationale we have to assume that the SME instrument offer will be always unbeatable from a number of perspectives (funding rate, advance payment, grant absolute sum), however, for some type of businesses, the SoE label offer still some intervention possibilities for national/regional agencies worth to be tested.