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SMEs in FP6

Sharing in Europes future

EUROPEAN COMMISSION

Directorate-General for Research2006 EUR 21350

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Introduction 5

SMEs in Integrated Projects 6

View from the Commission

SMEs in life sciences and industrial technology research 9

SMEs in Networks of Excellence 10

SMEs in Specific Targeted Research Projects 12

View from the Commission

SMEs in aeronautics, energy and environmental research 15

Specific Support Actions 16

Horizontal research activities 18

Marie Curie 21

Assistance and further information 22

The new definition of an SME 23

Contents

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EU Framework Programmes for research offerSMEs a fast track towards the knowledge economyby expanding their international networks andtheir ability to respond effectively to marketdevelopments and increasing global competition.Enterprise per se but especially SMEs must becomemore flexible in the manner in which they respondto paradigm shifts in technology and demand.They must be able to innovate constantly in orderto remain competitive.

SMEs and EU policy objectives

SMEs represent more than 99% of Europes 25million private businesses, ranging from specialisthigh-technology companies to conventional firmsin traditional sectors. They account for two-thirdsof the EUs GDP and two-thirds of its employment,generating half of all its new jobs. Among themare the nimble, innovative and entrepreneurialfirms that have the greatest potential for rapidgrowth and knowledge transfer between sectorsand regions.

SMEs are therefore primary targets of, andessential partners in the EUs current strategyfor knowledge creation and growth as outlinedin the Lisbon agenda. A central component ofthis strategy is the Sixth Research FrameworkProgramme (FP6), and the many opportunitiesit offers SMEs are presented herein.

This brochure explains how SMEs can becomeinvolved in research initiatives, describes thededicated assistance available to help them doso, and provides examples of the variety of waysin which SMEs and their trade associations arealready benefiting from their participation.

Specific measures to address

specific needs

Research-intensive SMEs play a vital role inFP6, as they have done in earlier programmes.Energetic and specialised, they supply keyscientific and technological inputs to manyprojects. The involvement of market-orientedtechnology-based SMEs is also crucial as suchfirms tend to have shorter lead times thanlarger companies with regard to new product

development, and are also more likely toadapt innovative technologies to prevailingand potential needs. Nevertheless even low- tomedium-technology SMEs need access to newknowledge if they are to grow and prosperas new technologies will help them achieve acompetitive edge.

FP6 aims to fund SMEs to the tune of around2.3 billion throughout its four-year lifespan.At least 15% of the budget across its seventhematic priorities, adding up to about 1.865billion, are foreseen to be assigned to SMEs.In addition, about 470 million is allocated to

horizontal research activities for SMEs and SMEassociations. Nevertheless, many small firmsbe they high tech or not often find it hard todedicate management resources to participationin research projects. Consequently, theCommission has put in place a range of specialmeasures to further assist them.

FP6 commenced at the end of 2002, but callswill continue to be launched until early 2006,with ongoing opportunities for new partners tojoin the various projects along the way.

The message to SMEs is simple get involved!

IntroductionSMEs natural partners for international

collaboration and research

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SMEs in Integrated ProjectsOpening the door to international

competitiveness

Integrated Projects (IPs) are heavyweights of FP6,designed to strengthen European competitivenessand address a range of societal and environmentalchallenges. Tackling complex research goals, theyhave budgets counted in millions of euro and canlast up to five years. Project consortia includeorganisations of many different kinds, drawnfrom many countries, sectors and disciplines,collaborating in multiple and interlocking strandsof research.

When FP6s new funding instruments wereunveiled, there was some concern that research-intensive SMEs might find it more difficult toparticipate in large and often complex IPs thanin the smaller, usually simpler collaborativeresearch projects of previous FrameworkProgrammes.

However, three years on, it is clear that IPsencourage SME participation through a rangeof actions whether as suppliers of specialistscientific or technological know-how, asinnovators, or as medium- to low-tech end-users.

In certain thematic priorities, SMEs even leadsome of the IP consortia.

Large-scale research

open to smaller players

IPs bring together the critical mass of activitiesand resources needed to achieve ambitiousbut clearly defined scientific and technologicalobjectives on a pan-European scale. They do thisby integrating fundamental and applied research,technological development and demonstration.

IPs also manage the dissemination, transfer and

development of their results, acting as a sourceof innovation and technology transfer. Thisinvolves analysis, assessment and exploitationof technologies including training for researchand business personnel, and information andcommunication activities for the wider public.

In their project proposals, IP consortia areexpected to demonstrate how they plan toinvolve SMEs for example, take-up measuresaimed at promoting early application of state-of-the-art technologies developed in the project.

This brochure presents case studies of IPs inthe fields of aeronautics, nanotechnology, lifesciences and food safety, covering a range ofactivities including technology demonstratorsand prototypes, product testing, pre-marketinganalysis and training. In each scenario, SMEpartners have contributed to these activities andbenefited from their active involvement.

Unique benefits,

unique contributions

Despite their size and complexity, the manybenefits offered by IPs continue to attract largenumbers of SMEs. Some are research-led SMEswanting to leverage their own technologicalknowledge; others are more market-led SMEsin traditional sectors seeking new ways to buildcompetitiveness. The different reasons for SMEparticipation include:

l privileged access to leading-edge scientificand technological expertise;

l the chance to work alongside large high-techfirms engaged in cutting-edge research;

l exposure to pan-European networks of

research and business contactsl first-hand opportunities to test concrete

research results in prototype, test-case andpre-market scenarios; and

l involvement in the diffusion of results to themarket place and the public.

SMEs are also important contributors to IPs. Insome cases, research-led SMEs bring proprietarytechnical know-how to an IP that is critical to itssuccess. Others have particular market positionsthat allow them to channel results to potentialusers by exploiting geographical or sectoral

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networks. And, while universities and researchinstitutions focus on scientific objectives, SMEsare natural channels for the evaluation of newproducts and services while their market-oriented expertise is often critical for thedevelopment and testing of prototypes and pilotservices.

How to get involved

An SME or a group of SMEs may also initiate anIP proposal. In this case, they must first identify a

relevant research theme in the work programmeof one of FP6s seven thematic priorities, forwhich a call for proposals is still open or remainsto be published. They must then recruit partnersto form a consortium capable of carrying outthe project.

More often, an SME will join an existingconsortium. Partners are frequently identifiedthrough existing scientific and commercialnetworks, but the Commission operates an on-line partner search service to help consortiafind new partners and potential partners tofind suitable consortia.

Direct assistance with all aspects of making aproposal including dedicated help for SMEs is available from National Contact Points (NCPs)in Member States and Associated States.

The steps include:

l acquiring full documentation from the call-specific page on the CORDIS FP6 service

l preparing and submitting the proposal beforethe deadline, using the Commissions secure,web-based Electronic Proposal SubmissionSystem (EPSS)

Avalon bridging gaps

in the innovation chain

In the field of industrial technologies, FP6 ispioneering a particular type of IP that targets strong

SME participation Integrated Projects for SMEs(IP-SMEs). They differ from standard IPs in that an IP-SME is led by an SME and at least half the partnersare also SMEs. In this way the R&D capacity ofresearch organisations can be linked to the intimatemarket know-how of SMEs in specific SME-intensivemanufacturing sectors and supply chains.

The Avalon IP-SME brings together 29 Europeanpartners 20 SMEs, four public research institutesand five large companies mostly from the textilesector. The four-year project was launched in March2005 with a 12.4 million budget, including

7.4 million of EU funding. Avalon aims todevelop new hybrid textiles that incorporate shape-memory alloys. These will have a wide variety ofapplications such as advanced protective clothingand smart textiles for applications in the medical,aerospace and automotive sectors.

Fashionable knowledge transfer

With Europes traditional textile sector under threatfrom global competition, advanced materials canoffer a strategic response through new knowledge-based textiles with diverse applications. As in

other sectors, there is a big gap between basicresearch and the industrial needs of SMEs in thetextile industry, says Allessandra Monero, Avalontechnical coordinator at SME DAppolonia S.p.A.,Italy. DAppolonia specialises in identifyingnew technologies and then working with theirdevelopers on production modelling and simulationtechnologies, which the company then transfers tosmall manufacturers. Monero continues, IP-SMEprojects are a good way to bring these two sidesof the equation together, which explains Avalonshigh number of SME partners and their keen interestin the possibilities for technology transfer.

http://www.avalon-eu.org/

INTEGRATEDPROJECT

CASESTUDY

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l proposals are evaluated primarily on theirrelevance to the objectives of the work

programme with regard to potential impacts,scientific excellence, the quality of theirconsortia, and their capacity to achieve theobjectives. Contract negotiations for successfulproposals address all issues including thebudget as well as technical, financial andlegal aspects. Once everything is in order, theconsortium agreement can be concluded. Oftenin this step the most significant issues relate tothe management of intellectual property rights.SMEs will usually retain rights both to their ownexisting intellectual property and to any newknowledge generated throughout the course

of the project. In addition, SMEs may also begranted privileged access to certain intellectualproperty belonging to other partners.

l the Commission will forward a contract to thecoordinator. This is usually signed eight to12 months after the call deadline, and workcan begin immediately.

Joining a running Integrated

Project

Integrated Projects are free to recruit additionalpartners on the basis of open calls, using eithertheir original budgets or top-up funding from theCommission. This flexibility allows the originalconsortium to pick the most suitable partners ata time when the tasks to be carried out havebeen better defined, and enables new SMEpartners to benefit from a minimum contributionof time and resources for administration.

Bringing a high-tech

start-up to life

PACE will establish the technical and organisationalbasis for the creation of programmable artificial

cells nano-scale chemical systems with thepotential to revolutionise large sections ofinformation and production technology. NormanPackard of Protolife, an Italian start-up whose initialbusiness is closely linked to the project, describesthe goal as being to create the conditions in whichlife can emerge. In the same way, he says, theconsortium has been designed to allow interactionsbetween partners to evolve spontaneously.

Project coordinator Professor John McCaskill says thatthere is a natural synergy between the 14 researchgroups involved and their two industrial partners.

Protolife needs close links to the research communityto reach its commercial goals, and at the same timeprovides a platform for advanced scientific work bysteering it towards useful, functional systems. Bothsides benefit from the overlap between the projectsobjectives and the SMEs business strategy.

Protolife will undertake the industrial scale-up of procedures for identifying the chemicalcomponents of the artificial cells, and developintellectual property related to their implementationand exploitation. To fulfil our role in the project,and to take full advantage of the opportunity itoffers us, we will have to raise significant amounts

of venture capital, Packard explains. Ouraccess to the know-how of our university partners and, as the company grows, to their qualifiedstaff should help us to find investors.

McCaskill is aware that, as an EU-funded project,PACE has some unusual features. But he givesmuch of the credit to FP6 itself. We are intenselyaware of the need to go beyond traditionalinstitutional and disciplinary boundaries, if we areto make new breakthrough technologies work,he explains. As researchers we warmly welcomethe considerable flexibility that Integrated Projects

offer for new forms of collaboration betweencompanies and research institutions.

http://134.147.93.66/Data/PACE/Public

INTEGRATEDPROJECT

CASESTUDY

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Not just for large institutional

players

The first thematic priority of FP6 targetsresearch into food quality and safety, lifesciences, genomics and biotechnology. Thesedisciplines often demand intense research atthe microbial, genetic or molecular level, withhigh-tech tools, substantial budgets and longtime-scales that surpass the capabilities andobjectives of many SMEs. Unsurprisingly, it

has been a challenge for EU scientific officersto persuade Europes smaller research playersto commit to these ambitious projects. But theEuropean Commissions experience in tailoringFP6 calls for proposals to meet the needs ofsmall, research-led companies has facilitatedgreater SME involvement and learning asthere is now a rising tide of SME participationin large projects. Attracting and persuadingSMEs to join large-scale or long-term efforts,such as IPs and NoEs in life sciences or foodsafety research, has not been easy, especiallyat the outset of FP6, admits Paolo Battaglia,

a planning and programming officer at theCommissions Research Directorate-General.

We quickly realised that we had to changethe way we presented projects to small playersby making our calls more SME-friendly.Battaglia continues, The challenge is not tosimply hand out money to SMEs for a projectthey dont really need, but to help them joinan R&D project that offers them direct benefits,even if the project is dominated by muchlarger partners. This SME-friendly approach isproducing results. More SMEs are respondingto calls, with total funding requested by

SMEs for food safety proposals rising from16 million in 2003 to 21 million in 2004.In addition, SME participation in STREPs andCoordinated Action projects is increasing.We expect this to rise even more by the endof 2005, says Battaglia.

A favourite with SMEs

FP6s ambitious thematic priority 3 coversnanotechnologies, intelligent materials andnew production processes known as NMP.Europes research-led SMEs have aggressivelycarved out leading roles in NMP projects often coordinating much larger companies andorganisations. One of our main aims is to getnanotechnologies and smart materials integratedinto new production processes and devices aswidely as possible, says John Hubert Cleuren

of the European Commissions Research DG.And when something concerns productiontechnologies, leading to commercialisation,

you really catch the attention of SMEs.

So far, Cleurens unit has held three calls forNMP proposals which produced mixed resultsat first. With our first two calls, we took abottom-up approach based on a genericdescription of NMP industries and technologies.This made things a bit chaotic; we had toomany proposals from SMEs that didnt reallyfit the calls requirements, he recalls. There

was a huge over-subscription regarding eachcalls budget.

However, the quality of SME proposals beganimproving in the second call and then leaptupwards in the third call. We had changedour approach from bottom-up towards creatingmore distinct and narrowly-defined topics,observes Cleuren. This had the immediateeffect of reducing the quantity of unsuitableproposals while boosting quality. The third callhas collected 87 SME proposals requestingsome 500 million and has proved much moreeffective than earlier calls because the proposals

are better targeted to the calls objectives.

View from the CommissionSMEs in life sciences and industrial technology

research

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SMEs in Networks of ExcellencePlugging into knowledge and experience

SMEs seeking technological leverage can reapthe rewards of cutting-edge research and findnew business opportunities through participatingin Europe-wide, research networks that linkresearchers from R&D organisations and high-tech companies across Europe. Such networksoffer many opportunities for coordinating scientificand technological benefits, from the joint use ofinfrastructure and research tools to technologytransfer and exchanges of personnel.

Strengthening scientific and technologicalexcellence on a particular research topic isprecisely the objective of the FP6 instrumentNetworks of Excellence (NoE). By crossingnational borders, a NoE helps eliminate thefragmentation of effort and resources that oftenhampers specialised research in Europe.

It was hoped that Europes research-led SMEswould be enthusiastic about these knowledgenetworks and the leverage they can offer. ButEU officials admit it is a challenge to persuadeSMEs to join up. The main reason is one of time

horizons; NoEs are long-term undertakings,while many SMEs have needs and objectivesthat are much shorter term.

However, SMEs should not ignore Networks ofExcellence. They offer strategic advantages toall participants by providing access to the latestresearch results in their sector and by openingdoors to potential business contacts. Indeed,because it is a virtual construct, the entry coststo a NoE are low, while the opportunities itoffers research-intensive SMEs to network andgenerate future business are rich, as the NUGO

project shows (see box on page 11).

What do NoEs do?

NoEs are not funded to conduct research anyresearch carried out within a NoE is financedby other sources, such as national or privatefunds. NoEs are funded by the EU to facilitate

research in a defined area related to any ofFP6s seven thematic priorities by creating anetwork infrastructure for that research effortto take place. A NoE may involve hundreds ofresearchers or just a few. What counts is thata critical mass in a given research field takesshape. For this to happen, sustained EU supportis necessary up to seven years, although five

years is more common.

Participants can be research groups such asuniversities, technology institutes and nationalorganisations, or SMEs and larger enterprises.

To be eligible for FP6 support, NoEs must havea minimum of three institutions from at leastthree countries. Membership is also open toorganisations from EU candidate countries andthird countries with which the EU has signedbilateral science and technology co-operationagreements.

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How does a NoE function?

The functioning of a NoE is defined in its jointprogramme of activities (JPA), which is theagreed blueprint for achieving the networksobjectives. A JPA has three elements:

l a set of integrating activities to guide howparticipants conduct work on their agreedresearch topic;

l a programme of jointly executed research;and

l activities for spreading excellence, such asjoint training programmes for researchers.

What do these mean in detail? Integratingactivities cover, for instance, common researchtools and platforms, the joint use of researchfacilities, personnel exchanges and the jointcreation and use of communication networksand databases. Importantly so for SMEs is thejoint management of knowledge and intellectualproperty generated by a NoEs researchgoals. Jointly executed research could meanthe development of new research tools or the

generation of new research knowledge, avoidingduplication while helping validation, which is thenmade available to all NoE participants. Finally,the concept of spreading excellence centres onjoint programmes for training researchers andother key staff. This is an important element forovercoming border-related R&D fragmentation,and Europes research-intensive SMEs have theirrole to play here.

So for those SMEs willing to take a longer-termperspective, Networks of Excellence can offertruly strategic advantages. Joining a NoE willbring rewards to small research players with the

skill and perseverance to participate to the full.

NUGO a partnership

of niche players

Persuading SMEs to join a Network of Excellenceis not easy, as FP6 project officers at the European

Commission readily admit. By definition, NoEshave a long-term mission to establish researchchannels across Europe. In most cases, this is toolong for an SMEs needs which are more shortterm, but there are exceptions, as the FP6 NoENUGO shows. With EU funding of 17.4 million,NUGO is creating a virtual community ofEuropean scientists and institutes engaged innutrigenomic research the study of how foodand human genes interact and the toxicologicalimplications.

Among NUGOs 22 partner organisations and

scientists scattered across nine countries is theDutch software firm, Topshare InternationalBV. Despite its small size Topshare recentlyexpanded its staff of five employees to eight thecompany plays an important role in the businessoperations and integration of the project as wellas the creator and manager of NUGOs intranet,which allows participants to post and exchangeresearch results in a secure environment withinthe network community.

Realising the benefits

The paperwork was a bit of a hassle, butmanageable. Theres an EU helpdesk here in ourhome town and they were very helpful, saysMartin Renkema, Topshares President. Topsharespartners in NUGO also helped ease its entry intothe project, with flexible funding arrangements.Were the only partner that doesnt get its moneyin advance. So I arranged with one of NUGOsuniversity participants to provide an advance tous. That was a big incentive for us, he recalls.But the main benefit for Topshare is commercial.Our involvement as NUGOs software developerhas expanded our customer base due to NUGOs

network of contacts. And we get feedback fromthe intranets 1 200 users who tell us immediately,which parts of the software are good or bad. Thatis of immense value for a small software companybecause we can hone our skills and products,says Renkema.

http://www.nugo.org/

NETWORKO

FEXCELLENCE

CASESTUDY

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SMEs in Specific TargetedResearch Projects

STREPs SMEs favoured instrumentIf there was a poll among Europes SMEs asking fortheir favourite Framework Programme instrument,the answer would probably be STREPs. With anemphasis on clearly defined, focused targets andshared-cost arrangements, Specific TargetedResearch Projects are very attractive to SMEs andare a popular way for them to engage in EU-funded research.

A STREP functions as a smaller version of anIntegrated Project (IP), with a few key differences.The great majority of STREPs are focused onone research objective, in contrast to the multi-objective and more inter disciplinary approachof IPs. This narrower scope makes it easier forSMEs, with their limited resources, to managetheir participation in a STREP project. Further,a STREPs budget, though sometimes large, isusually smaller than an IPs, and its duration is

typically three years whereas an IP may be upto seven years.

Indeed, the lower budget of STREPs is anotherreason it appeals to SMEs, explains PhilippeSchild, programme officer for new andrenewable energy sources at the EuropeanCommissions Research Directorate-General. Inmany cases it is easier to get SMEs to climb onboard a STREP than an IP because its budget islower, so the contribution required from eachparticipant is proportionally lower and thusmore manageable for the smaller players.

How do they work?

Lasting between 18 to 36 months, STREPs areobjective-driven, limited in scope and time, andusually less multidisciplinary than IPs. While theircritical mass of expertise and capabilities canbe much smaller than that of an IP, what countsis that the necessary critical mass is present toachieve the projects goal.

This goal can be a research and technologicaldevelopment (RTD) activity, a demonstration or

innovation activity, or a combination of these.

For example, RTD activities must be well definedwith precisely focused objectives and measurableoutcomes, while innovation-related activitiescentre on the protection or dissemination ofknowledge, socio-economic studies and effortsto support the exploitation of these results.Demonstration activities, on the other hand,involve proving the viability of new technologieswith potential economic advantages but whichcannot be directly commercialised.

Who is the target audience?While any legal entity can join a STREP, themost typical participants are research-orientedenterprises of all sizes, research institutes anduniversities. As already mentioned, manyparticipants are SMEs.

Accumulated experience within FrameworkProgrammes shows that the optimum size ofa STREP is between six and 15 participants.A STREPs size also depends on its research

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STREPCASESTUDY

OpTag acquiring

new technologies and

business opportunities

Increasing air passenger traffic and the arrival ofsuper-jumbo-sized aircraft pose great challenges

for the security and logistics of moving peoplequickly on and off aircraft. Tagging and trackinglost or suspicious luggage and passengers is anincreasingly urgent need at Europes airports.

The OpTag STREP aims to address this need withnew surveillance systems based on cheap chip-and-battery technologies that can be integratedinto paper airline tickets for long-distance trackingof passengers throughout an airport. A 36-monthproject, OpTags total budget is 2 212 971,including the EUs contribution of 1 647 928.

OpTags SME the 40-employee Innovision

Research & Technology plc, based in the UK plays a pivotal role as project coordinatorand is responsible for developing the systemscrucial chip technology. Innovision got into theproject because of its previous experience. Wehad gained a lot of technical expertise workingwith toy manufacturers in producing cheap chipsthat are effective over short distances, says BobLloyd, Innovisions coordinator for OpTag. Thechallenge with airport surveillance is to developtagging or tracking devices that work overlonger distances, and OpTag offers us a goldenopportunity to get into this field of technology.

His company also has its eye on another ofOpTags research goals: advanced batteries. Totrack a ticket-holder over long distances you needa power source embedded in the ticket a flatbattery and this is something were keen to learnabout because its range of applications would bevast, says Lloyd. As a team, all the participantsare working together very well and we at Innovisionexpect to see concrete results to show to each otherin the coming months. And thats exciting.

http://www-research.ge.ucl.ac.uk/Optag/

area and thus the thematic priority area it fallsunder. Smaller-sized STREPs are not unknown,particularly for FP6s thematic priority 7,which concerns citizens and governance ina knowledge-based society. Other groupsthat have participated in STREPs includeorganisations that possess specific competencesin the management, dissemination and transferof knowledge, and potential users and otherstakeholders with an interest in the projectsresearch objectives.

How is it managed and funded?

Most STREPs receive between 0.8 million to3 million of EU funding; the actual averageamount varies according to the differentcharacteristics of the thematic priority areas.Overall, on average, a STREP receives about1.9 million in funding. This funding comes inthe form of a grant to the budget, which createsa ceiling for the EUs contribution to each STREP.With regard to project oversight, one special

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Bio-Pro attracting SMEs

to a project

The FP6-funded Bio-Pro project has a green goal:to develop new burner technologies for low-gradebio-fuels as a source of clean energy for bio-refineryactivities. This is the kind of targeted research thatrequires large-scale laboratories and test facilities.

Not surprisingly, Bio-Pros consortium is dominatedby universities and technical institutes, which sharethe projects total cost of 3 629 814, including60% EU funding. Yet there are two SMEs fromSweden and Germany that are partners in theproject. But bringing them into the project tooktime, patience and a helping hand with regard tothe paperwork.

Roland Berger, head of Stuttgart UniversitysDecentralised Energy Conversion Departmentand Bio-Pros project manager explains: If youwant to involve SMEs in such a project, you have

to guide them through the application forms.They may need your help in some areas, such asshowing them how to check and track their costsaccording to EU requirements. Having gainedsome experience in previous Framework projects,Bio-Pros two small players ...were alreadyaccustomed to EU procedures, so they knew whatwas coming, says Berger. But if you have a newSME, then theres definitely a learning curve. Ascoordinator, you have to spend the time and effortto work with them. It has its rewards, though.Ive been involved in other EU projects and myexperience is that SMEs always appreciate and

capitalise on the technical benefits they get fromtheir involvement in a project.

In this case, the two SMEs will benefit during theprojects third phase when Bio-Pros two prototypeburners move out of the lab and on to an industrialsite for real-time operation and testing. This iswhen the technology-transfer and intellectualproperty rights benefits come into play. At thatpoint, I expect our SMEs to strike off on theirown with commercialisation of the technology inmind, says Berger.

http://www.eu-projects.de/bio-pro/

STREPCASESTUDY

requirement for STREPs is that they have, fromthe outset, an agreed detailed work plan for the

whole duration of their contract. This plan canbe modified, but only with the agreement of theCommission. Any changes to the plan shouldnot affect the STREPs overall objectives andprincipal deliverables. The same rules apply tochanging the number of participants in a STREP.The consortium must get the Commissionsapproval to either replace a participant whohas withdrawn from the project or to increasethe number of participants above the originallyagreed figure.

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Desirable but difficult

Industry consolidation in the aeronautics sectorover the last ten years means there is now onlyone large aircraft manufacturer in Europe,Airbus Industries. To remain competitive, ithas been exerting cost pressures all alongits supply line, which means that economiesof scale favour large players in this sector.This poses entry problems for SMEs in manyaeronautics research activities, particularlywithin Integrated Projects (IPs), as Jean-Pierre

Lentz, a planning officer at the CommissionsResearch DG, explains. If you are talkingabout SMEs and aeronautics, you are talkingabout upstream sub-suppliers...a long way upthe supply chain from Airbus, says Lentz. Thispresents a problem for us regarding IPs, whosewhole rationale is to bring big and smallerplayers together. Also, SMEs bring much lessinput to a project than the large aeronauticssuppliers and systems integrators, so you mightneed ten or 15 of them within a single projectto reach the 15% participation level for SMEswe want to see in our projects overall.

But he also emphasises the importance to SMEsbeing involved in aeronautics R&D. An IPfunctions as a kind of pre-competitive test caseand thus prepares SMEs to enter the marketin the future through gaining experience andexposure to the technology by working withthe prime suppliers and even Airbus itself, heobserves. To get around the entry problem, theCommission puts friendly pressure on industrygroups, such as the Aerospace and DefenceIndustries Association, to include SMEs inFP6 project proposals. This has helped,

says Lentz. Although overall FP6 aeronauticsspending on SMEs probably wont reach the15% level, the trend is improving. Based onFP5 experience, I figured would reach only8% for FP6, but were already at 9% and alittle ahead of expectations in a sector that isdifficult but desirable for SMEs.

Packed with SMEs

In contrast, FP6 projects in energy andenvironmental research attract many SMEs fortwo reasons: historically, small research-ledplayers are prevalent in both sectors and, justas important, theyve been quicker to exploit theresults of EU-funded research than larger institutesand companies in the market place. Thereare many SMEs interested in the energy field,though it depends on which sub-sector youretalking about, says Philippe Schild, programme

officer for new and renewable energy sourcesat the European Commissions Research DG.Our renewable energies projects, such as bio-mass and wind research, are packed with SMEswho got into the sector early on. Ironically,were now seeing many of them leave the SMEsector because theyre getting really big. Butthats exactly the sort of success story we wantour Framework budgets to produce!

Reaching FP6s 15% target for SMEparticipation in energy and environmentalresearch has been a trial-and-error experience

for EU project planners, explains Per Backe-Hansen, a Norwegian national expert whoreviews FP6 environmental technologies atDG Research. Its taken us a while to getthe right proportion of funding for FP6snewer instruments versus the older ones. Ourexperience in the environmental sector clearlyshows that SMEs prefer the specific researchobjectives of a STREP to the new instrumentssuch as IPs and NoEs; the latter often seemtoo big or too long-term for small players.Whereas Backe-Hansens unit allocated 80% oftheir budget for new instruments during the first

two calls for proposals, this was scaled back to65% for the third call. This made it a lot easierto attract SMEs, and we expect similar positiveresults for the fourth call, he says.

View from the CommissionSMEs in aeronautics, energy and environmental

research

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Specific Support ActionsReinforcing project outcomes

Whether large or small in scope, EU researchprojects are not stand-alone efforts. To maximisetheir success and positive impact on Europesresearch outcomes, complementary measuresare often needed. This is where FP6s SpecificSupport Actions (SSAs) play a role. Some of theseSSAs are implemented at the level of the thematicpriorities for targeted encouragement of SMEparticipation. The ETI measures take a broaderand sectorial approach.

SSAs do not fund research and technologicaldevelopment activities. They are auxiliaryelements, designed to capitalise on projectresearch results and help stakeholders extractmaximum advantage from them. A budget of35 million is available from FP6 for SSAs, whichfocus on lending support to a specific researchtheme or industrial sector. SSAs usually last fromseveral months up to three years, although, ifneeded, they can be longer. Funding usuallyamounts to several hundred thousand euros andmore is available in exceptional cases.

Specific Support Actions cover two kinds ofactivities: support functions and consortiummanagement activities. The former comprisesactivities such as organising conferences andseminars; carrying out studies, benchmarkingand mapping exercises; monitoring activities;disseminating data; developing research andinnovation strategies; and overseeing informationand communication campaigns. In the latter, aconsortium-management SSA would focus oncoordination of a projects technical activities;handling legal, financial and administrative

tasks, including liaison with the Commission;co-ordinating knowledge-management and otherinnovation-related activities; and obtaining auditcertificates by each of the participants.

Bridge-building activities

SSAs are not carried out by SME partnersthemselves. Instead, they are run by intermediarygroups with good access to dissemination routes,such as SME National Contact Points, industrial

federations, networks or associations of researchperformers, professional associations, chambersof commerce and so on. Their responsibilityis to encourage a more innovation-friendlyenvironment throughout the EU, stimulateinnovation itself and help create innovativetechnology-based businesses. Intermediaries dothis by:

l encouraging transnational co-operationbetween SMEs;

l boosting economic and technologicalintelligence;

l bringing sectoral or technological players

together dynamically via networks;l creating or consolidating information services;

andl analysing and evaluating innovation in EU

research projects.

The collective effect of all of the above is tocreate bridges between SMEs, researchers,entrepreneurs and investors.

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Woodism encouraging

research in forestry

industries

Europes forest products industry employs morethan 3 million workers scattered across verydiverse types of SME and a broad geographicalarea. But the sectors success is hindered by thefragmentation of information on new technologiesand services that would improve the competitiveedge of individual SMEs and the sector as a wholein a global market. The Woodism project is aconsortium of 17 consultancies, research institutesand technology transfer specialists from 12 EUcountries that is addressing this fragmentation.

With a budget of 1 461 397, including an EUcontribution of 72%, this 36-month Economic and

Technological Intelligence (ETI) project is linkingforest-product SMEs to each other and to theirrelevant research community, as well as withother FP6-funded research projects.

Throughout Europe, many SMEs in forest-basedindustries face similar problems cutting costs,improving products and meeting obligatoryenvironmental standards but limited channelsfor co-operation and communication often leavesthem searching for their own solutions to theseproblems. By creating functional groupings ofSMEs, Woodism will promote cheaper and more

efficient production, development and distributionof wood and fibre products. Linking SMEs directlywith researchers, it will improve knowledgetransfer on products, processes, services andmarkets and store feedback in databasesaccessible to all. This should lead to a dramaticimprovement in the development, exchange andassimilation of process and business innovations.

The project is also offering a number of services tosupport these goals, including technology auditsto identify SME needs and solutions; developingoverviews of FP6 projects relevant to forest-based industries; match-making SMEs to research

projects; disseminating information across thesector; and training SME personnel to participatein FP6 projects.

Moreover, the Woodism project team believesthat improved innovation within the wood-basedindustry will lead to increased wood use in theconstruction, energy and other key sectors.

http://www.tts.fi/woodism/index.html

SPEC

IFICSUPPORT

ACTIONCASESTUDY

Forests and fashion

A popular way to implement a specific supportaction is via an Economic and TechnologicalIntelligence (ETI) project. First introduced in1999 in the EUs Fifth Framework Programme,a typical ETI receives between 200 000 and2 million of funding. An ETI project promotesthe creation of groups or clusters of SMEs withsimilar innovation needs as well as encouragingtrans-regional co-operation between smallresearch players and stimulating networks of

industrial incubators in order to strengthen asectors competitiveness. A typical exampleof how this works in practice is the Woodismproject (see case study), which acts to boostthe technical capability and competitiveness ofEuropes forest products industry.

ETI actions support many research activitiesacross the thematic areas, from high-techhardware to more abstract fields such asmolecular biology, and a wide range ofindustrial sectors. For instance, the ETI project,Fashion Net, is boosting co-operation among

Europes many SMEs in the world of fashion asector employing some 3 million people tohelp them address the fierce global competitionthat comes from increasing free trade in textiles.One of Fashion Nets primary objectives is topromote transnational activities via a network ofintermediaries and clusters of SMEs. ETIs havea proven record of contributing positively to theresearch base of European SMEs. Hundredsof ETIs supported research and technologicaldevelopment projects in FP5, and expectationsare that FP6s Specific Support Actions willeasily match, if not surpass, this achievement.

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Horizontal research activitiesSpecific measures for SMEs

What does FP6 offer an SME with a goodresearch idea but no research facilities? Or anSME that wants to leverage its innovation potentialby working with other SMEs and researchorganisations. Few small entrepreneurs have thetime to investigate these possibilities.

But there are readily available opportunities forsuch activities in FP6 via its Specific Projectsfor SMEs instrument. This offers two specific

schemes devoted exclusively to the needs ofSMEs Co-operative Research and CollectiveResearch.

Co-operative Research

A Co-operative Research project supports SMEsthat can innovate but which have no researchfacilities of their own. It brings together thesesmaller players from different countries with aspecific research objective or need and thenassigns a large part of the work required to R&Dperformers. A good example is the DriveSafe

project (see case study). R&D performers couldbe universities, research centres or technologicalinstitutes. They do not control the results theyproduce, ownership and intellectual propertyrights of the research remains exclusively withthe SMEs which contract out the work. FP6places a strong emphasis on this kind of SMEsupport and has set aside about 320 million tofinance Co-operative Research activities. TypicalCo-operative projects last from one to two yearsand cost between 0.5 and 2 million each.

Two kinds of activities are eligible for FP6funding. One involves research and innovation-

related work in any science and technology topicintended to improve or develop new products,processes and services. The range of researchtopics is needs driven. For example, participantsin the 24-month FP6 Co-operative Researchproject known as SafeVend came up witha seemingly obvious but bright idea to redesignautomated fruit-juice vending machines. Thegoals: to prevent tampering with product quality,to improve hygiene and to reduce energyconsumption. Given that Europe has 10 million

of these machines, SaveVend participantsestimate they can generate a market worth976 million and create 6 500 new jobs.

The other activities that are supported concernconsortium management. This covers allthe coordination costs related to a project:managerial, contractual, legal, financial andadministrative.

Consortia of SMEs in a Co-operative Researchproject must meet certain conditions. Theirconsortium must include at least two research

performers and at least three independentSMEs established in two EU Member States (orcountries associated with FP6).

In order for an SME to participate in the Co-operative and Collective Research schemes, itmust conform to the SME definition describedlater in this brochure. However, researchcentres, research institutes, contract researchorganisations or consultancy firms will not beconsidered eligible SMEs for the purpose ofthese schemes. Other enterprises and end-userscan join in the project but must contribute their

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own costs and play no dominant role in theproject. They must also be independent fromany of the other participants.

Collective Research

FP6s second SME-specific scheme is CollectiveResearch with an FP6 budget of about150 million. This also involves assigning

research to R&D performers. However, in thiscase the benefits to SMEs are more indirect andthe participants involved in a Collective Researchproject are different. The R&D performerscarry out work for industrial associations andgroupings in order to improve the overallcompetitiveness of large communities of SMEsand SME-intensive sectors.

These projects are larger and run longer thanCo-operative Research projects. Compared tothe latter, Collective Research projects run fromtwo to three years and cost between 2 million

and

5 million each. The Smart Foundry projectis a typical example (see case study).

As Europe-wide initiatives, these projects aim to:

l reinforce the technological basis of sectors;l develop technological tools such as diagnostic

methods and safety equipment;l find solutions to common challenges such as

fulfilling environmental performance criteria,meeting regulatory requirements, achievingworkplace safety standards; and

l carry out pre-normative research to help setEuropean norms and standards.

CO-OPERATIVE

RE

SEARCHCASE

Drivesafe

driving SMEs forward

At first sight, there appears to be little in commonbetween driving a car and surfing the web. But

in both cases, monitoring the eye movementsof someone behind the wheel or in front of thecomputer screen provides invaluable informationabout his or her performance.

Eye-tracking devices (ETDs) collect valuableinformation about drivers, pilots and websiteusers. The FP6 Co-operative Research project,Drivesafe, is a diverse consortium of large andsmall participants which are collaborating todevelop, test, manufacture and market a highlyfunctional ETD that is easy to use and applicableto different fields of interest and difficult operating

environments. A 24-month project, Drivesafestotal cost is 1 879 720 of which EU fundingprovides 973 908.

SMEs are intimately involved in the Drivesafeproject. Helped by research performer INRIA ofFrance, the small German firm, Kayser Threde, isresponsible for the hardware of Drivesafes new3-D device; the software for analysing the resultsis being developed by another German SME,Media Score, while the French SME, One-too,will handle manufacturing and production issues.The breadth of application of this device presentssignificant opportunities to these and other SMEs

involved in Drivesafes development and testing.Aside from working with large European high-tech players, such as Siemens and Airbus, theproject provides them with access to new sectors,opening up business opportunities that wouldotherwise be difficult to break into.

While the ultimate beneficiaries of this project areEU citizens who drive cars, travel in planes oruse the internet to book tickets or trips, Europesmultimedia industry will also benefit by usingDrivesafes technology to analyse the effectivenessand usefulness of websites.

http://www.drivesafe.eu.com/index.php

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Smart Foundry

collective response

to a common need

Europes foundry industry is dominated by SMEsthat supply the automotive, aerospace, whitegoods and other sectors. Yet it is among the leastresearch and development-oriented industries.To stay competitive, it needs efficient toolingand improved techniques for the design andmanufacturing of cast components.

The FP6 Collective Research project Smart Foundryaims to help this sector by improving the overallcompetitiveness of European SME foundries andtoolmakers. The goal of this 30-month project isto develop and implement e-technology solutionsto support design and manufacturing via new

decision-support software and other computer-aided management tools. Smart Foundry willpool knowledge, processes and machinery togive businesses access to cutting-edge IT systemsolutions. This will help consolidate and enhanceindividual SMEs expertise and their competitiveedge. Budgeted at 2 144 766 with a 67%contribution from FP6, the project is collecting andprocessing information held by SMEs across Europe,regarding the design, planning and manufacturingof cast components, including knowledge on newmaterials, processes and equipment.

This integrated approach involves four researchinstitutions and several industrial associations fromGermany, the UK, Spain and France. The link toindustry comes via a core group of ten pioneer SMEsfrom the four different countries. Smart Foundry willcreate a valuable resource for the whole industry byallowing companies to increase the quality of theirdesign decisions and thus the quality of products.The tools will support faster decisions and reduce thelead times required for new tooling and productionruns. This increased flexibility and responsivenesswill enable SMEs to maintain and increase theircompetitiveness both now and in the future.

http://www.smartfoundry.org/

COLLECTIVERESEARCH

CASESTUDY

Collective Research activities cover researchand innovation-related work, consortium-management tasks and training activities particularly the training of SME managers andtechnical staff regarding the new knowledgegenerated by the project.

Do SMEs influence the kind of researchconducted by the R&D performers? Yes. EachCollective Research project includes a coregroup of SMEs which participate in all aspectsof the project, from its definition of the researchprogramme to the dissemination of final results.While the projects intellectual property rights

belong exclusively to the contracting industrialassociation or grouping, the core SMEs and theR&D performers are able to exploit the results.

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Transfer-of-Knowledge

fellowship aids a smaller

company

High-profile, high-tech research projects are notalways the best way to spread knowledge acrossEurope. Sometimes the more effective approachis at the micro-level via one-to-one exchanges ofscientific personnel. This is the rationale behind the

EUs Marie Curie Actions which support researchnetworks, grants and fellowships. Unsurprisingly,those SMEs that have discovered how fruitfulthese exchanges can tend to turn to the fundsagain and again.

One good example is DakoCytomation (Dako),a medium-sized company in Glostrup, Denmark,that produces antibodies and equipment forthe medical diagnostic industry. Dako has heldthree Marie Curie Transfer of Knowledge (TOK)host fellowships, with its most recent requestbeing accepted in July 2005. I had experience

with Marie Curie scholarships at my previousworkplaces so I knew exactly what they couldbring to Dako, says Niels Foged, director of thecompanys R&D pathology department. It tooksome doing to persuade upper management tosee the opportunities, but they now fully supportthe idea because theyve seen the benefits.

Dako posted two of its personnel to the universityhospitals of Glasgow and Oxford in the UK, inexchange for hosting two university researchersat Dakos laboratories. The exchanges last two

years during which the participants salariesand overhead costs are fully supported by Marie

Curie. There are clear benefits for Dako, as Fogedexplains. Dako is heavily oriented towardsproduct development and not clinical research.The TOK fellowships give our guys the chance tocarry out R&D and to observe the application ofour products in a hospital environment, where itsnormally very difficult for Dako as a supplier toget access. These are immeasurable advantagesand worth every bit of the administrative hoopswe jump through to get the scholarships.

MARIECURIETOK

CASESTUDY

What does FP6 offer an SME and how does ithelp it to gain know-how by exchanging scientificand technical personnel with organisations inother countries? There is a scheme that operateshorizontally across Europe for the benefit ofSMEs: the Marie Curie Transfer-of-Knowledgefellowships.

The Marie Curie Transfer of Knowledge (TOK)scheme also benefits Europes SMEs. Intended

for enterprises, research organisations anduniversities, these fellowships support strategicand durable partnerships between the academicand business worlds.

Large firms, SMEs, universities, researchinstitutes and international organisations areall eligible to apply. Proposals are welcomefrom all areas of scientific and technologicalresearch of interest to EU enterprise. There areno pre-defined priority areas.

The overall budget of a TOK project dependson the number of participants and the amount

of recruitment or exchange that takes place.Past funding for TOK fellowship projects hasvaried between approximately 200 000 and1 200 000. For a good example of the benefitsflowing from a TOK fellowship exchange, seethe case study.

Marie CurieTransfer-of-Knowledge

fellowships

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Assistance and further informationPlenty of information, plenty of help

There is no shortage of assistance available forSMEs that are considering participation in FP6,or have already embarked on a research project.Sometimes, the difficulty is to identify the mostappropriate type of help in a particular situation.Set out below are the key on-line sources ofinformation through which specific, personalassistance can usually be accessed, too.

General help

lGeneral information about FP6,its objectives, activities and results isavailable at http://www.europa.eu.int/comm/research/fp6/

l For participants and would-be participants,comprehensive practical assistance andadvice, including all the backgrounddocumentation and forms required toprepare a project proposal, are providedby the CORDIS FP6 service athttp://www.cordis.lu/fp6/

l The CORDIS FP6 service includes a usefulstep-by-step guide for proposers andparticipants at http://www.cordis.lu/fp6/stepbystep/home.html

l The CORDIS FP6 call service athttp://fp6.cordis.lu/fp6/calls.cfm offersan overview of all open calls for proposals.Would-be participants can register to receivee-mail notifications of new calls relevant totheir area of interest.

l

A partner search service athttp://fp6.cordis.lu/fp6/partners.cfm allowswould-be participants to submit profiles oftheir own research interests and capabilities,and to search the profiles posted by othersin order to identify suitable partners.

l An introduction to the Electronic ProposalSubmission System (EPSS) can be foundat http://fp6.cordis.lu/fp6/subprop.cfm

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l Enquiries related to particular prioritythematic areas can be directed to theappropriate helpdesk. The e-mail addressesof all the helpdesks, together with the URLsof each priority areas web pages, canbe found at http://www.cordis.lu/fp6/infodesks.htm

l Local assistance, including a personalpartner search service, is available fromNational Contact Points (NCPs) ineach EU Member State and Associated

State, for each of FP6s priority thematicareas and other programmes. A searchabledatabase of contact details is providedat http://www.cordis.lu/fp6/ncp.htm

Help specifically for SMEs

lSME TechWeb, a dedicated website forSME participants, is at http://sme.cordis.lu/

l There is also a special SME helpdesk.Enquiries can be posted athttp://sme.cordis.lu/assistance/

sme_helpline.cfmor sent to research-sme@cec.eu.int

lSME National Contact Points(SME-NCPs) in each EU Member Stateand Associated State are tailored to thespecial requirements of SMEs. Contactdetails for each SME-NCP can be found athttp://sme.cordis.lu/assistance/NCPs.cfm

The new definition

of an SME

The new European definition of an SME cameinto force on 1 January 2005 raising the financial

ceiling above which an SME is no longer classifiedas a small player.

To qualify as an SME, a firm has to meet fourrequirements. It must:

1. be an organisation or enterprise engaged ineconomic activity;

2. have fewer than 250 employees;3. have an annual turnover of 50 million or

less, or have a balance sheet not exceeding43 million; and

4. be autonomous in terms of managerialindependence and the ownership of its equity.

The last of these requirements autonomy entailsseveral conditions. An SME is autonomous if:

it owns no shares in other enterprises and viceversa, or

it owns less than a 25% stake in other enterprises(and vice versa) as long as they are not linkedto each other, or

it owns in total less than 25% of shares of linkedenterprises (and vice versa).

Other enterprises can each own between 25-50%of an SMEs shares, provided they are not linked

to the SME. These shareholders are restricted tocertain kinds of entities, namely:

a) public investment corporations, venture capitalcompanies or individual venture capitalistswith stakes of less than 1.25 million;

b) universities and non-profit research centres;

c) institutional investors; and

d) autonomous local authorities with annualbudgets of less than 10 million and fewerthan 5 000 inhabitants.

Full details of the EU definition can be found at:

http://europa.eu.int/common/enterprise/enterprise-policy/sme_definition/index_en.htm

This also includes a user guide with practicalexamples.

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European Commission

SMEs in FP6 Sharing in Europes future

Luxembourg: Office for Official Publications of the European Communities

2006 23 pp. 21.0 x 29.7 cm

ISBN 92-894-9499-9