H ODI / SME instrument
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1 H ODI / SME instrument Brussels, 12 September 2014 Marina Manzoni Marina.Manzoni@ec.europa.eu DG CONNECT / Innovation
2 CONTENT HORIZON 2020 The concept of Innovation The SME instrument in H2020 ODI implemented through the SME instrument QAs
3 What is Horizon 2020 Over 70 billion funding for Research and Innovation Activities A core part of Europe 2020, Innovation Union & European Research Area: Responding to the economic crisis to invest in future jobs and growth Addressing people s concerns about their livelihoods, safety and environment Strengthening the EU s global position in research, innovation and technology
4 What's new A single programme bringing together three separate programmes/initiatives Coupling research to innovation from research to retail, all forms of innovation strong challenge-based approach, Less prescriptive topics, strong emphasis on expected impact Focus on societal challenges facing EU society, e.g. health, clean energy and transport Focus areas bring together different technologies, along entire innovation chain Cross-cutting issues mainstreamed (e.g. social sciences, gender, Simplified access, for all companies, universities, institutes in all EU countries and beyond The 7 th Research Framework Programme (FP7), innovation aspects of Competitiveness and Innovation Framework Programme (CIP), EU contribution to the European Institute of Innovation and Technology (EIT)
5 Three priorities Excellent science Industrial leadership Societal challenges
6 Priority 1. Excellent science Why: World class science is the foundation of tomorrow s technologies, jobs and wellbeing Europe needs to develop, attract and retain research talent Researchers need access to the best infrastructures
7 Priority 2. Industrial leadership Why: Strategic investments in key technologies (e.g. advanced manufacturing, micro-electronics) underpin innovation across existing and emerging sectors Europe needs to attract more private investment in research and innovation Europe needs more innovative small and medium-sized enterprises (SMEs) to create growth and jobs
8 Priority 3. Societal challenges Why: Concerns of citizens and society/eu policy objectives (climate, environment, energy, transport, etc) cannot be achieved without innovation Breakthrough solutions come from multi-disciplinary collaborations, including social sciences & humanities Promising solutions need to be tested, demonstrated and scaled up
9 Simplification: Rules for participation A single set of rules: Adapted for the whole research and innovation cycle Covering all research programmes and funding bodies Coherent with other new EU Programmes One project one funding rate Maximum of 100% of the total eligible costs (except for innovation actions, where a 70% maximum will apply for profit making entities) Indirect eligible costs: a flat rate of 25% of direct eligible costs
10 Strong participation by SMEs Integrated approach - around 20% of the total budget for societal challenges and LEITs to go to SMEs Simplification of particular benefit to SMEs (e.g. single entry point) A new SME instrument will be used across all societal challenges as well as for the LEITs A dedicated activity for research-intensive SMEs in 'Innovation in SMEs' 'Access to risk finance' will have a strong SME focus (debt and equity facility)
11 Innovation dimensions of Horizon 2020 Research and Innovation actions (100% funded) Innovation actions (70% funded) SME instrument Fast track to innovation Innovation procurement Inducement prizes Support to innovation partnerships Social innovation, service innovation Financial instruments: loans, guarantees, equity Support for innovation is mainstreamed
12 What do we mean by innovation? WHAT = The process of turning research outputs (new discovery, tool, application) into Commercial and/or Social Value From voice tele-transmission -> Telephony WHY = Objectives: Supporting and enabling the development and wider deployment of: Innovative Solutions, new Services, working methodologies, production/delivery/business models, new dynamics to support innovative ecosystems/communities/stakeholders alliances HOW = Different types of Innovation: Open Innovation, linear/non-linear innovation, incremental/radical in innovation, disruptive innovation, social innovation etc. For each of them H2020 provides dedicated instruments 12
13 Get more innovation out of H % 22 B Excellent science 7% 22% 16 B Industrial leadership Societal challenges 39% 27 B
14 SME support in H % budgetary target in LEITs & SC 'Innovation in SMEs'
15 Improve the framework conditions for entrepreneurs Reward risk taking & promote entrepreneurship Complete the digital single market in Europe Reduce red tape for SMEs and start-ups CULTURE Improve access to finance for SMEs Access to international markets Modernise labour markets ECOSYSTEM Upgrade digital skills SKILLS FINANCE
16 CONTENT H2020 The concept of Innovation The SME instrument in H2020 ODI implemented through the SME instrument QAs
17 ? SME instrument Phase 1: Concept & Feasibility Assessment Phase 2: Demonstration Market Replication R&D Procurement Phase 3: Commercialisation SME window EU financial facilities IDEA business coaching throughout the project MARKET
18 Phase 3 = 2% budget Phase 1: Concept and feasibility assessment Input: Idea/Concept: "Business Plan 1" (~ 10 pages) 10% budget Activities: Feasibility of concept Risk assessment IP regime Partner search Design study Pilot application etc. 10% success 30-50% success Output: elaborated "Business plan 2" Lump sum: ~ 6 months Phase 2: R&D, demonstration, market replication Input: "Business plan 2" plus description of activities under Phase 2 (~ 30 pages) 88% budget Activities: Development, prototyping, testing, piloting, miniaturisation, scaling-up, market replication. Output: "investorready Business plan 3" 0,5-2,5 (5) M EC funding ~ 12 to 24 months Phase 3: Commercialisation Promote instrument as quality label for successful projects Facilitate access to private finance Support via networking, training, information, addressing i.a. IP management, knowledge sharing, dissemination SME window in the EU financial facilities (debt facility and equity facility) Possible connection to PPC (and PPI?) No direct funding
19 Main features Targeted at all types of innovative SMEs showing a strong ambition to develop, grow and internationalise Only SMEs will be allowed to apply for funding and support Single company support possible No obligation for applicants to sequentially cover all three phases; each phase open to all SMEs 70% funding (exceptions possible) 19
20 Disruptive Innovation Horizon 2020 What do we mean by Disruptive Innovation? Disruptive innovation encompasses any innovative concept, product and service that create new markets by applying new sets of rules, values and models which ultimately disrupt and/or overtake existing markets by displacing earlier technologies and alliances. 20
21 Disruptive Innovation The dual dimension of Disruption Disruptive Innovation Low-end disruption Focus on less profitable less technology demanding customers New-Market disruption Focus on non-consumers Create new-value networks Disruptors always prevail on condition that a number of factors are in place By Clayton M. Christensen The Innovator's solution 21
22 How to DETECT DISRUPTION? Check the level of Disruption 3 SETS OF QUESTIONS:The LITMUS Test 1 Does the idea have a disruptive potential? Is there a large population of people who historically could not benefit from/consume the service/product, either for budget or access reasons? Would customers need to go to an inconvenient/centralised location to access the service/product? 2 Does the idea have a low-end disruptive potential? Are there customers at the low-end of market willing to buy reasonably well performing but much cheaper products? Can we develop a Business Model allowing for attractive profits through discount prices? 3 Is the idea disruptive with respect to all incumbents? Would the idea/service/product be disruptive to some established companies but represent a sustaining improvement for others? (e.g. Internet retailers/dells/compaq ) By Clayton M. Christensen The Innovator's solution 22
23 Disruptive Innovation Examples A few examples of successful disruptive applications/solutions: Telephone Department stores McDonalds Digital photography Canon Photocopiers ebay/google Mobile phones /smart phones/ipad Skype 23
24 Open Disruptive Innovation - ICT LEIT Implementation: SME instrument Budget: Funding: Scope: 90M for (45 M per year) lump sum 50k phase1; 0.5 to 2.5 M phase2; 70% of eligible costs No restriction on ICT area, Focus on Disruptive ICT innovation Projects: 90 "Phase 1" projects in 2014 ~10-15 "Phase 2" projects in "Phase 1" projects in 2015 ~20-25 "Phase 2" projects in 2015
25 ODI in WP ICT 37 in WP LEIT ICT: Specific Challenge: To provide support to a large set of early stage high risk innovative SMEs in the ICT sector. Focus will be on SME proposing innovative ICT concepts, products and services applying new sets of rules, values and models which ultimately disrupt existing markets - Nurture promising innovative and disruptive ideas (-> Phase1) - Support prototyping/validation/demonstration in real world conditions (-> Phase2) - Help for wider deployment or market uptake (-> Phase3) Proposed projects should have a potential for disruptive innovation and fast market up-take in ICT In particular it will be interesting for entrepreneurs and young innovative companies that are looking for swift support to their innovative ideas The ODI objective will support the validation, fast prototyping and demonstration of disruptive innovation bearing a strong EU dimension
26 H2020 Participant Portal: search topics SME instrument
27 Implementation Eligibility conditions: One for-profit SME or a consortium of for-profit SMEs Established in EU Member States or associated countries No concurrent submission or implementation with another Phase 1 or Phase 2 project Planned time-to-grant: 3 months (Phase1) 6 months (Phase2) 27
28 Examples Q&As How to check if I am considered an SME? EU definition and on-line self-assessment tool Can other legal entities other than SMEs participate in the SMEs instrument? Not as a full partner (sub-contractor) In Phase 1: In case of two companies is the feasibility award grant limited to 50k or is it 100k? 50 k for consortium Is it possible for a start-up to apply? Yes however
29 More information H2020 Participant Portal: SME instrument in participant portal: s/h2020/ftags/sme_instrument.html#c,topics=flags/s/sme/1/1&+callde adline/desc H2020 on line manual (submission templates to come) : de.html ODI FAQs: Call for experts: ex.htm
30 ODI/SME Instrument THANK YOU Any Question?
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