It’s a small world – Making EU initiatives SME friendly

Small is beautiful in the world of innovation. But while technology start-ups may be fleet of foot, it can be difficult for them to find time to look up from the task in hand and go prospecting for the support and finance needed to grow.

Yet Europe’s legions of SMEs now find themselves at the nodes of open innovation networks, responsible for teasing new research and technologies out of universities and developing them to the point where they are of interest to large corporations.

This is very much the case in the pharmaceutical industry. “Business models are changing and new forms of collaboration increasingly rely on spin-offs,” Richard Bergström, Director General of the European Federation of Pharmaceutical Industry Associations told the Science|Business European Entrepreneurship Summit on 21 February. “My members are putting a lot of effort into trying to work out how to help small companies to grow so they can buy them,” Bergström said.

In recognition of the role start-ups play in the engine room of innovation, the European Commission is working to deliver policies that are SME-friendly. For example, helping SMEs make connections is a key activity of the European Institute of Innovation and Technology (EIT), noted Willem Jonker, CEO of ICT Labs, which is one of three Knowledge and Innovation Communities (KICs) set up by the EIT to underpin its work in promoting innovation across Europe. “We are focussing on SMEs that want to grow, assisting them with growth strategies and connecting them to markets they can’t easily access,” Jonker said.

The three KICs are co-located in different centres across Europe, making it simple for SMEs to engage. “Rather than them coming to us, we come to them,” said Jonker.

The European Investment Fund is (EIF) another initiative tailored for SMEs, aiming to simplify access to capital. “Over the past ten years we have developed into the backbone of European venture capital, investing €6 billion in 350 funds, and also providing loan guarantees,” said Jacques Darcy, Head of Division, Technology Transfer at the EIF.

Similarly, the European Enterprise Network, funded by the European Commission, offers a range of services across Europe for SMEs, through chambers of commerce, business incubators and banks, noted Georgios Lemonidis, Deputy Head of the Unit of Financing, Innovation and SMEs at the Directorate General for Enterprise and Industry at the European Commission.

While chambers of commerce can provide local knowledge about legal requirements to SMEs based anywhere in the EU, incubators are able to handle technical questions. “A typical query comes from SMEs with new products, looking for advice on commercialisation – how to get a CE marking for example. The network handles thousands of questions of this kind every week,” Lemonidis said.

There are plans in hand to expand the type of information available through the European Enterprise Network, to include for example, mentoring and help with business plans. Other schemes are in development to assist SMEs and to back up Horizon 2020, the European Commission’s €80 billion R&D programme, which will run from 2014 – 2020.

Rouget Henschel, partner at the law firm Foley and Lardner LLP suggested the EU could learn from some of the US government schemes for supporting SMEs. “For example, the government in the US has taken a more intensive approach in terms of customer service. Agencies are told to treat people as customers and there is a visible effort to simplify communications,” he said.

Meanwhile in Europe, “It’s really difficult to piece together how things work, from the Commission to national and onto local bodies,” said Henschel.