Including SME Instrument Phase 1

SME Participation in

Horizon 2020

DG Research and Innovation, Unit B.3SMEs, Financial Instruments and State Aid

@ NCP TrainingOctober 7, 2014

20 % budgetary target in

LEITs (IL) & SC*

'Innovation in SMEs' (IL)

*= ~ EUR 9 billion of direct SME support. over the period 2014-2020

Horizon 2020 for SMEs

MSCA (ES)

'Access to Risk Finance'

(IL)

Horizon 2020 Global View –SME participation in the 3 Pillars

(excl. 'Innovation in SMEs' & 'Access to Risk Finance')

An Encouraging Start

An Encouraging Start!• 9 months into Horizon implementation. SMEs represent…

• 1/4 of applicants (24.82%)

• 1/5 of beneficiaries (19.55%)

• 1/6 of budget allocation (16.18%)

• What about the target (set by Council and EP) to allocate 20% of the budget for Societal Challenges and LEITs to SMEs?

• For Societal Challenges. we are at close to 12% (11.98%)

• For LEITs. we are at about 21.4% (21.46%)

• For both together we are currently at 18.12%

• This while the full impact of SME instrument funding has not kicked in yet (no phase 2 yet)

• On the basis of an extrapolation taking into account the full impact of SME instrument phase 2, it can be assumed that the target will be exceeded by 2-3% for 2014-2015

SMEs in Excellent Science: A Mixed Bag

• Two sections out of four with high relevance for SME participation:1. Future and Emerging Technologies (FETs)2. Marie-Skłodowska-Curie Actions (MSCA)

• For FETs: suboptimal results, given relative attractiveness of the topics for SMEs (esp. start-ups):

• 7.4% of all applicants are SMEs• 4.2% of all beneficiaries are SMEs• 5.4% of the budget goes to SMEs • 12.09% of SME applicants are successful (vs. 20.96% of all applicants)

• For MSCA: first information confirms that SMEs have found their way to this scheme:

• 11.76% of applicants are SMEs • 13.77% of beneficiaries are SMEs (// close to 15 % in FP7)

• 10.31% of the budget goes to SMEs (// close to 11% in FP7)

• 19.27% of SME applicants are successful (vs. 16.45% of all applicants)

SMEs in Excellent Science – applicants and budget *

  SME applicants in the selection Requested EU financial contribution to SME applicants in

selection

Priority Area Eligible ProposalsRetained

ProposalsSuccess

Rates

Eligible Proposals (in million EUR)

Retained Proposals (in million

EUR)

Success Rates

European Research Council

2 0 0.00% 0.21   0.00%

FETs 91 11 12.09% 344.13 1.91 5.55%

MSCA 1308 252 19.27% 317.87 48.16 15.15%Research

infrastructures0 0        

 Total: Excellent Science

1401 263 19% 352.5 50.07 14%

* As available in CORDA on 25/9/2014

SMEs in LEITs: Clear Chemistry

• Most interest (in absolute terms) for:1. Information and Communication Technologies (ICT) [4198 SME

applicants = 29.84% of total]2. Advanced Manufacturing and Processing (AMP) – [1336 SME

applicants = 30.72% of total]3. Nanotechnologies. Advanced Materials and Production (NMP) [692

SME applicants = 44.85% of total]4. Space (SP) [639 SME applicants = 25.58% of total]5. Biotechnology (Biotech) [74 SME applicants = 100% of total*]

• Overall, reassuring figures for all LEITs:• 30.65% of all applicants are SMEs• 25.29% of all beneficiaries are SMEs• About 1/9 of SME applicants are successful (vs. 13.38% of all

applicants)• 234.2 million EUR of the 1.092 billion EUR (21.46%) allocated so

far went to SMEs

* Only SME instrument (phase 1)

SMEs in LEITs – applicants and budget figures*

  SME applicants in the selection Requested EU financial contribution to SME

applicants in selection

% of budget

allocated to SMEs

Priority AreaEligible

ProposalsRetained

ProposalsSuccess

Rates

Eligible Proposals (in million EUR)

Retained Proposals (in million

EUR)

Success Rates

ICT 4198 429 10.22% 1188.27 130.54 10.99% 19.48%NMP 692 58 8.38% 164.38 22.11 13.45% 30.86%

Biotech 74 3 4.05% 3.7 0.15 4.05% 100%AMP 1336 165 12.35% 476.26 58.19 12.22% 25.58%

Space 639 111 17.37% 149.69 23.23 15.52% 19.47%Advanced Materials

0 0

 Total: LEITs 6941 766 11.04% 1982.3 234.23 11.82% 21.46%

* As available in CORDA on 25/9/2014

SMEs in SC: More Highs than Lows

• Most interest (in absolute terms) for:1. Health, Demographic Change and Wellbeing [1163 SME applicants = 22.1% of

total] – SC1 2. Secure, Clean and Efficient Energy [959 SME applicants = 30.92% of total] – SC3 3. Climate Action, Environment, Resource Efficiency and Raw Materials [665 SME

applicants = 31.49% of total] – SC5 4. Smart, Green and Integrated Transport [342 SME applicants = 48.24% of total] –

SC4 5. Inclusive, Innovative and Reflective Societies [226 SME applicants = 16.78% of

total] – SC6 6. Food Security, Sustainable Agriculture and Forestry, Marine, Maritime and Inland

Water Research [190 SME applicants = 100% of total*] – SC27. Secure Societies [47 SME applicants = 100% of total*] – SC7

1. Overall. OK. yet budget going to SMEs should be increased (what will happen in any case with SME instrument phase 2):

1. 28.04% of all applicants are SMEs2. 19.57% of all beneficiaries are SMEs3. About 1/10 of SME applicants are successful (vs. 14% of all applicants)4. 71.4 million EUR of the 595.7 million EUR (11.98%) allocated so far went to

SMEs

* Only SME Instrument (Phase 1)

SMEs in SC - applicants and budget*

  SME applicants in the selection Requested EU financial contribution to SME

applicants in selection

% of budget

allocated to SMEs

Priority AreaEligible

ProposalsRetained

ProposalsSuccess

Rates

Eligible Proposals (in million EUR)

Retained Proposals (in million

EUR)

Success Rates

SC1 1163 116 9.97% 371.22 29.7 8.00% 12.17%

SC2 173 10 5.78% 8.65 0.5 5.78% 100%

SC3 959 63 6.57% 231.69 15.32 6.61% 8.33%

SC4 342 40 11.7% 31.37 3.88 12.36% 16.61%

SC5 665 85 12.78% 137.03 16.88 12.32% 14.87%

SC6 226 24 10.62% 56.60 4.83 8.54% 16.03%

SC7 47 6 12.77% 2.05 0.3 14.63% 100%

 Total: SC 3575 344 9.6% 838.61 71.42 9% 11.98%

* As available in CORDA on 25/9/2014

20 % budgetary target in

LEITs (IL) & SC*

'Innovation in SMEs' (IL)

*= ~ EUR 9 billion of direct SME support, over the period 2014-2020

Horizon 2020 for SMEs = Integrated & Complimentary Support

MSCA (ES)

'Access to Risk Finance'

(IL)

Implementation

• Implemented centrally by one agency (EASME)

• Continuously open call with around 4 cut-off dates per year

2014 2015

Phase 1

18/06/2014

24/09/2014

17/12/2014

Phase 2

09/10/2014

17/12/2014

 

Phase 1

18/03/2015

17/06/2015

17/09/2015

16/12/2015

Phase 2

18/03/2015

17/06/2015

17/09/2015

16/12/2015

10% budget

88% budget

2% budget

1st Cut-off date 18 June 2014:2662 proposals

• 2503 single company applications. 119 consortia with 2 SMEs. 34 with 3 SMEs. 6 with 4 SMEs

• Italy was the country with the highest number of proposals submitted (436), closely followed by Spain (420), UK (232) and Germany (188), France (167) and Hungary (166)

• The Open Disruptive Innovation (ODI) topic attracted by far the highest number of applications with 885. followed by low carbon energy systems (372). nanotechnologies (305) and eco-innovation/raw materials (241)

2nd Cut-off date 24 September 2014:1944 proposals

• The ranking by country remains the same as in June. with Italy in the lead in terms of number of applications (351). followed by Spain (283), United Kingdom (149), Germany (128), France (93) and Hungary (91)

• Open Disruptive Innovation (ODI) attracted again the biggest number of proposals (608), also followed by low carbon energy systems (268), nanotechnologies (234) and eco-innovation/raw materials (199)

• No further information yet on applicants

SME Instrument – Phase 1 - Submission

only countries with submissions are shown

Number of proposals submitted by topic for the 2 cut-off dates:

• Out of the 2602 eligible applications received, 317 (12%) were evaluated above threshold.

• The budget available for this cut-off would allow to fund 169 companies (Phase 1 project). Based on the positively evaluated applications per topic 155 projects could be funded (6%).

• 49% of applications above threshold will be funded every second "good" proposal is funded.

• 105 out of 155 (68%) of the SMEs reportedly are newcomers to Framework Programmes.

• Countries with highest success rate are: Ireland (20%), Austria (15%), UK (11%), Israel (10%) and Spain (9%)

• Company statistics:• 58% of funded SMEs have between 6 to 50 employees, 30% of SMEs

micro-companies with up to 5 employees, and 11% have more than 50 employees.

• 25% of funded SMEs are consolidated companies with more than 11 trading years, 39% with 4 to 10 years, and 36% with up to 36%.

• 36% of funded SMEs have a turnover higher than €1M, 35% between €100K-€1M, 28% less than €100K.

SME Instrument – Phase 1 – Evaluation / Funding after First Cut-Off Date

The 5 highest "country success rates" are:

Ireland: 20%Austria: 15%United Kingdom: 11%Israel: 10%Spain: 9%

Analysis of received and selected proposals per topic – 1st Cut-off

TopicProposalsevaluated

Max. project fundable

Proposalsabove

% positively evaluated

"Success rate" %above threshold

and funded

ICT 37: Open Disruptive Innovation Scheme 

886 30 107 12% 28%

NMP 25: Accelerating the uptake of nanotechnologies, advanced materials or advanced manufacturing and processing technologies by SMEs 

310 15+2 29 9% 59%

BIOTECH 5: SME boosting biotechnology-based industrial processes driving competitiveness and sustainability 74 3 8 11% 38%

LEIT Space-SME  61 4 4 7% 100%

PHC12 :Clinical research for the validation of biomarkers and/or diagnostic medical devices

208 44(20%)

24 12% 100%

Fairly high number of proposals above threshold

High number of ineligible or wrongly submitted proposals: 66

Fewer than possible projects positively evaluated

Analysis of received and selected proposals per topic – 1st Cut-off

TopicProposalsevaluated

Max. project fundable

Proposals above

% positively evaluated

"Success rate" %above threshold

SFS8: Resource-efficient eco-innovative food production and processing

 BG12: Blue Growth 

125  

48

7  

3

29

6

23%

12%

24%

50%

SIE 1: Stimulating the innovation potential of SMEs for a low carbon and efficient energy system  

374  

22+1 46 12% 50%

IT.1: Small business innovation research for Transport 227 24+2 26 12% 100%

SC-5-20: Boosting the potential of small businesses for eco-innovation and a sustainable supply of raw materials 

248 11+1 32 13% 38%

DRS17-Protection of urban soft targets and urban critical

infrastructures 41 6 6 15% 100%

Many proposals above threshold

• Too much project focussed, not enough business opportunity oriented

• Description of company not convincing (why would this company succeed and not the competitor?!)

• No information on competing solutions

• Innovation content too low; product exists already on the market (just incremental improvement)

• Just ideas, no proof of existing commercialisation concept (TRL far too low)

• Just trying one's luck

First analysis of reasons for unsuccessful phase 1 proposals:

• Submission process not yet optimal (85% of the submitted proposals arrived within the last 48h prior to the cut-off date).

• Presentation of the call at proposal submission level is not yet optimal (70 proposals had to be transferred from one topic to another upon request by the applicants, with the majority of the cases due to misinterpretation of the applicant).

• Level of feedback from evaluation to applicants will be improved, yet speed (short time-to-grant) will remain the most important preoccupation.

• Pool of evaluators will be broadened from current 521 to about 1000 (more business, financial profiles!)

Lessons learned and aspects for improvement:

Research and Innovation

Research and Innovation

Your reaction, feedback based on your contacts with stakeholders?

Are there any specific issues that need to be better explained/clarified to potential proposers? Questions?