The European SME Instrument Catalysing European Innovation Bucharest
The European SME Instrument Catalysing European Innovation- -Bucharest, 6 th of June 2017 -
Why participate? ü Quality label: Rank among the best European SMEs ü Visibility at a European and global level ü Investment without equity ü Additional services: business coaching + commercialisation support ü Reduce risk and facilitate access to finance
Who are we looking for ? Ø Single company support Ø Highly innovative idea – disruptive – close to market (TRL 6) Ø Knowledge of the market and of competitors Ø Convincing commercialisation plan Ø Clear ambition to grow at EU/global level
Disruptive Innovation What do we mean by Horizon 2020 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 4 by displacing earlier technologies and alliances.
Disruptive Innovation Sustaining Innovation versus Disruptive Innovation Sustaining Innovation • Focus on profitable/high end customers • Based on continuous product improvement • Incumbents almost always prevail By Clayton M. Christensen The Innovator's solution 5
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 conditions are in place By Clayton M. Christensen The Innovator's solution 6
How to DETECT DISRUPTION? The LITMUS Test 3 SETS OF QUESTIONS: 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 7
Distinguishing characteristics …of Sustaining vs. Low-end & New markets Disruption Dimension Sustaining Innovations Low-end disruptions Targeted performance Results in performance Technology yields products that are good Results in lower performance in of the product improvement in attributes enough along the traditional metrics of “traditional” attributes, but or service� most valued by the performance at the low end of the improved performance in new industry’s mainstream market. attributes � typically simplicity customers. � These New Market Disruptions and convenience. improvements may be incremental or breakthrough in character. Targeted customers The most attractive (i. e. , Targets over-served customers in the low Targets non- consumption: or market application profitable) customers in the end of the mainstream market. customers who historically mainstream markets who are lacked the money or skill to buy willing to pay for improved and use the product. performance. Impact on the required Improves or maintains profit Utilizes a new operating and / or financial Business model must make business model margins by exploiting the approach � a different combination of money at lower price per unit (processes and cost existing processes and cost lower gross profit margins and higher sold, and at unit production structure) structure, and making better asset utilization that can earn attractive volumes that initially will be use of current competitive returns at the discount prices required to small emerging market. � Gross advantages. win business at the low end of the market. margin dollars per unit sold will 8 be significantly lower.
Evaluation The profile and competences of evaluators is highly important Commercialisation potential and economic impact Market Opportunity Company's growth potential company’s potential achieving the envisaged results Excellence in innovation Technical solution possible and better than existing ones Plus: EU added value
Rationale “Valley of death”: Persistent problem of access to funding for innovative projects SME Instrument designed to help fill a financing gap for business innovators SME Instrument
Tailored to innovative SME needs: Smart money = Funding + business support
2% budget 10% success 30 -50% success 10% budget 88% budget
Funded projects by topic 2014/2016 (until September)
Funded SMEs in numbers Turnover Phase 2 MORE THAN € 5 M 18% Staff LESS THAN € 100 k 29% € 1 M TO € 5 M 21% € 100 k TO € 1 M 32% Years trading MORE THAN 50 EMPLOYE ES 10% 11 TO 50 EMPLOYE ES 28% UP TO 3 YEARS 26% MORE THAN 11 YEARS 32% UP TO 5 EMPLOYE ES 43% 6 TO 10 EMPLOYE ES 19% 4 TO 10 YEARS 42% Diversity of supported companies Have in common their high potential for innovation and avid ambitions to grow
Geographical coverage
0 4 1 12 3 3 1 Anguilla Virgin Islands Faroe Islands Albania Montenegro Bosnia and Herzegovina Moldova 1, 000 Malta 1, 500 Luxembourg FYROM 8 14 3 Iceland Funded Ukraine 2, 500 Serbia Cyprus Lithuania 4 Latvia 1 30 6 Croatia Czech Republic Estonia 46 95 28 71 31 46 4 67 11 49 65 15 51 38 42 25 34 8 Romania Applied Slovakia Austria Belgium Ireland Norway Israel Greece Denmark Portugal Turkey Sweden Bulgaria Finland Slovenia Netherlands Hungary 316351 230 122 France Poland Germany United Kingdom Spain 500 Italy 3, 000 SMEs per country (Phase 1 – All topics) 2014 -2016 (until September) Submitted = 13252 Received Funding = 1836 2, 000 ES = 351/1966 IT = 316/2576 UK = 230/1176 DE = 122 / 785 1
d Ki Ita ng ly do m S G pa er in m a N Fr ny et a he nc rla e Sw nd s ed en Is r Fi ael nl H an un d D ga en ry m a G rk re e Po ce l Sl an ov d e Ir nia el Be an lg d iu Au m s Bu tri lg a Po ari rt a u N ga or l w Es ay to n Tu ia Cz r k ec Slo ey h va Re k p ia Ro ubl m ic an La ia t Cr via oa t Se ia rb Cy ia p Ic rus e Li lan th d ua ni Lu a xe Ma m lta bo U urg kr a FY ine R Fa M OM o ro ld e ov Is a la n Al ds ba An ni gu a ill a te ni U 900 100 0 SMEs per country (Phase 2 – All topics) 2014 -2016 (until September) 800 Applied 61 66 49 35 27 22 15 24 16 21 5 7 12 19 2 8 Funded 5 11 7 5 Submitted = 5422 Received Funding = 529 700 600 500 400 ES = 100/663 UK = 66 /670 IT = 61/822 DE = 49/438 300 200 100 2 2 1 1 1 1
ODI Award criteria Excellence (1): • • Impact (weight of 1. 5): Quality of the implementation (1): Eligibility conditions: Clarity and • The expected impacts listed in the pertinence of the work programme under the relevant • Coherence and objectives; topic; effectiveness of the approach for the work • Credibility of the One for-profit SME or a consortium of for-profit SMEs • Enhancing innovation capacity and plan, including appropriateness of the allocation of tasks and • • Soundness of the • Strengthening the competitiveness Established in EU Member States or associated countries resources; concept, including and growth of companies by developing proposed approach; integration of new knowledge; trans-disciplinary innovations meeting the needs of • Complementarity of the European and global markets and, participants within the • considerations; where No concurrent submission or implementation with another relevant; where relevant, by delivering such consortium (when Phase 1 or Phase 2 project innovations to the markets; relevant); • Extent that the • Appropriateness of the proposed work is • Any other environmental and socially management structures beyond the state of important impacts (not already covered and procedures, including Planned the art, and time-to-grant: above); risk and innovation • demonstrates 3 months (Phase 1) – 6 months (Phase 2) • Effectiveness of the proposed management. innovation potential measures to exploit and disseminate (e. g. ground-breaking the project results, (including objectives, novel management of IPR), to communicate concepts and 21 on the project, and to manage research approaches, new data where relevant.
Evaluation criterion: IMPACT • Convincing description that there will be a market for the innovation. • Targeted users are well described. • Good understanding of market conditions, growth rate, competitive solutions and key stakeholders, or includes a plan for achieving this. • Realistic description how the innovation has the potential to boost the growth of the applying company. • Demonstration of alignment with the overall company strategy; commercial and management experience; requirements for commercial exploitation. • Initial commercialisation plan is outlined and explains how it will be further developed • Clear European dimension • Realistic description of status and strategy of knowledge 22 protection.
Evaluation criterion: EXCELLENCE • Innovation aims at exploring new market opportunities addressing EU/global challenges • Realistic description of the current stage of development; added value of innovation; understanding of competing solutions. • Good comparison with known commercial solutions or includes plans for achieving this information. • Approach and activities to be developed are consistent with the expected impact of the project. • Expected performances of the innovation are convincing and have a relevant commercial potential; potentially better than alternatives. • Good understanding of both risks and opportunities related to a successful market introduction of the innovation, both from a technical, commercial point of view. 23
Evaluation criterion: IMPLEMENTATION • The proposal demonstrates that the project has the relevant resources (personal, facilities, networks, etc. ) to develop its activities in the most suitable conditions. • If relevant, describes in a realistic way how key stakeholders / partners / subcontractors could be involved. • The proposal includes a realistic time frame and a comprehensive description of work. • The team has relevant technical/scientific knowledge/management experience, including a good understanding of the relevant market aspects for the particular innovation. If relevant the proposal includes a plan to acquire missing competences. 24
How do we evaluate? Eligibility • Profit-SMEs • <250 employees • <€ 50 million turnover/ balance sheet <€ 43 million • SME based in EU MS or H 2020 Associated Countries • Award criteria: • IMPACT • EXCELLENCE • QUALITY • Threshold • • Phase 1 : per individual criteria is 4. Overall is 13 Phase 2 : per individual criteria is 3 (expect for "Impact" which is 4). Overall is 12
Some tips for evaluation Impact Excellence ü Market: targeted users; competitors; market share ü Commercialisation plan; ü Use of resources/Intellectual property; ü European dimension; ü Economic growth and jobs. ü Added value, disuptive; ü Why it is viable and better than existing solutions; ü Understand the risks Implementation ü Show commercial competence ü credibility of your team and of your work plan ü realistic time frame
• No grant negotiation phase! − You evaluate each proposal as submitted not on its potential if certain changes were to be made − Maintain a very high quality standard. Any proposal which does not meet this should not receive abovethreshold scores − If you identify shortcomings (other than minor ones and obvious clerical errors), you must reflect those in a lower score for the relevant criterion − You should explain the shortcomings, but do not make recommendations − Proposals with significant shortcomings should not receive above-threshold scores − Any proposal with scores above thresholds and for which there is sufficient budget will be selected as submitted HORIZON 2020 27
Overview of the Evaluation Process for the SME Instrument Evaluators Receipt of proposals Allocation of proposals to evaluators Individual evaluation Remote evaluation Individual Evaluation Reports Panel Review (if appropriate) Eligibility check Panel report Final ranked list Standardised Evaluation Summary Report Panel ranked list HORIZON 2020 28 Finalisation
Interpretation of the scores 0 The proposal fails to address the criterion or cannot be assessed due to missing or incomplete information. 1 Poor. The criterion is inadequately addressed, or there are serious inherent weaknesses. 2 Fair. The proposal broadly addresses the criterion, but there are significant weaknesses. 3 Good. The proposal addresses the criterion well, but a number of shortcomings are present. 4 Very Good. The proposal addresses the criterion very well, but a small number of shortcomings are present. 5 Excellent. The proposal successfully addresses all relevant aspects of the criterion. Any shortcomings are minor. HORIZON 2020 29
Thresholds For proposals to be eligible for funding, they need to achieve minimum scores: In Phase 1: the threshold for each individual criteria is 4 out of 5. the overall threshold, applying to the sum of the three individual scores, is 13 out of 15. In Phase 2: the threshold for individual criteria is 3 out of 5, except for "Impact" where it is 4 out of 5. the overall threshold, applying to the sum of the three individual scores, is 12 out of 15. The criterion "Impact" is given a weight of 1. 5 to determine the ranking HORIZON 2020 30
SMEs Instrument Lessons learned • Unsuccessful Proposals: • • • Too much focus on technology rather than business opportunity Not enough USP (Unique Selling Proposition) Missing Market Analysis to assess competition Innovation dimension too low, rather incremental improvement Mainly ideas, with little effort on commercialisation concept Just trying ones luck • Recommendations from Evaluators • Focus should be on the business creation not (only) on technical and/ or scientific aspects. • Cutt the bla-bla, fluffy stuff short and be business like • Provide evidence, figures, (about market, who will pay, b 2 b, b 2 c), demonstrate how you will get the business. • Think about obstacles and what is your plan to overcome this. • Who are your competitors and why you are better than them
Lessons learned Tips from evaluators § How your business will be disruptive not only in your local market but in europe and preferably at world scale. § There should be a "soul" in the application, show ambition. § Show why the market needs or will buy your solution. § Mind the language. Better start accesible and get more technical towards the end if needed. Understand who will evaluate it. § You have short time to convince 1. 5 -2 h, be succinct and convincing. Think about the elevator pitch. § § Get someone else to read it or even better several of them. Look at the sub-criteria and see if you have covered all of them. Describe your company, not only CVs. What awards if any. Describe and demonstrate your progres. es to date, what products you have developed till now, what you have achieved so far. § Be serious about it. Document yourself, learn, perseverate. HORIZON 2020 32
SMEs Instrument Lessons learned SME Instrument Evaluator Tips Jordi Cusido Roura Advice from successful Proposals Soma Analytics
How to apply: R&I participant portal
Work-Programme 2016 -2017
Dates to remember in 2017 Deadlines for all themes Phase 1 15/02/2017 03/05/2017 06/09/2017 08/11/2017 Phase 2 18/01/2017 06/04/2017 01/06/2017 18/10/2017
EIC Pilot
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SME instrument: what's new • Fully bottom-up, no predefined topics, so innovative projects that cut across sectors/technologies become eligible for support • Larger pool of evaluators with relevant technological/scientific expertise as well as financial/commercial backgrounds grouped according to their thematic expertise • Evaluation criteria phase 2 revised to better target the scaling up of SMEs with the greatest potential for breakthrough, market-creating innovation (business capacity, international growth ambition) • Interviews in second step phase 2 • Coaching for SMEs (available across SMEi, FTI and FET-open) expanded to include finance issues • Mentoring introduced • Single budget line, maintaining budgetary contributions from Societal challenge and LEIT 39 • Monitoring of thematic coverage, remedial action if needed
SME instrument phase 2: evaluation criteria • Impact (50%): demand? Users? Market? Scale up? Commercial strategy? International? • Excellence (25%): high risk and potential? Steps to market? Beyond state-of-the-art? Feasibility? • Implementation (25%): team? Resources? Implementation plan and time frame? • Additional emphasis: 'Its high degree of novelty comes with a high chance of either success or failure'. • Interview step will concentrate on commercial strategy, feasibility, quality of the team 40
SME instrument phase 2: interviews for the best of the best Two-step evaluation 1. Remote evaluation: - 4 evaluators per proposal - threshold 13 points overall (4 per criterion) 2. Interviews for 2 x budget - 30 mins - Panel of experts - To assess quality and ambition of the team - Decide on to be funded/not funded Expected TTG remains 27 weeks 41
Showcase: growing fast INPHOTECH SP ZOO Polish company among Deloitte 2015 FAST 500 for EMEA thanks to an annual growth of 250%! Also received INNOVATICA 2016 award by President of Polish Chamber of Commerce The grant helps the company to develop an optical device for better understanding and curing of cancer thanks to early detection and diagnosis
Showcase: developing strategic partnerships Ultrahaptics Limited Feeling without touching Company founded in 2013 in Bristol (UK) A unique technology enabling users to receive tactile feedback without needing to wear or touch anything. The technology uses ultrasound to project sensations through the air and directly onto the user. Users can ‘feel’ touch-less buttons get feedback for mid-air gestures or interact with virtual objects. Touch-free haptic feedback solution integrated into a new concept car being exhibited by Bosch at CES 2017
Showcase Holoxica Ltd Company specialised in holographic 3 D visualisation. The company introduced the first ever holographic 3 D digital Human Anatomy Atlas prototype. It will provide to neurosurgeons and clinicians insight to identify, diagnose and treat a wide range of neurological conditions.
Fast Track to Innovation (FTI Pilot) What is it?
Main policy drivers behind the scheme • Reduce time from idea to market ('last push') • Increase participation of industry, first-time applicants, SMEs • Stimulate private sector investment in R&I
Restrictive legal framework* • Innovation actions • Three to five partners for participating consortia • Call for proposals with annually three cut-off dates • Six months time-to-grant (TTG) • EU contribution (grant) not higher than € 3 million * EU Regulation 1290/2013, H 2020 Rules for Participation, article 54.
Distribution per type of partners
Geographic spread of beneficiaries 70 60 50 40 51 30 40 30 27 20 24 10 11 0 26 6 13 UK DE ES 13 NL 10 IT 14 5 FR 1 BE 10 8 SE 1 EL 4 3 SI 6 1 AT 2 5 IE Red = partners Blue = coordinators Geographic distribution so far (first five cut-off dates) 4 2 TR 4 3 1 PT CZ 1 2 IL 2 1 FI 2 2 2 1 NO DK SK 2 PL 2 1 1 RO HU UA CY HR
THANK YOU FOR YOUR ATTENTION Showcase of SME Instrument beneficiaries http: //ec. europa. eu/easme/en/sme-instrument/showcase @H 2020 SME_OTF
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