SME Participation in FP7.

Why should SMEs Participate?

• Not for the money
• Supply chain development and security
• Product development – access to new and different technologies
• Provide access to new business markets
• Raise profile
• Staff development & interest

Where SMEs can participate in FP7?

Cooperation Programme:

At least 15% of the cooperation budget is dedicated to SMEs. SME research needs and potential are taken into account in developing content of thematic areas, and topics of particular interest to SMEs will be further identified in work programmes. The EC reimbursement rate for SMEs in the main programme has been increase 75%.

Joint Technology Initiatives are proposed initially in Health and ICT and will encourage the involvement of SMEs, where appropriate.

People Programme:

There is now special emphasis on the involvement of enterprises, including SMEs, in Marie-Curie actions.

“Industry-academia pathways and partnerships”: dedicated scheme for knowledge sharing in partnerships between the public and private sector, including in particular SMEs.

“Ideas” programme:

Researchers from SMEs will also be eligible to participate in this programme: SMEs may compete on grounds of excellence. For further information please contact the UK NCP for the Ideas Programme by e-mail to erc-uk@bbsrc.ac.uk

Capacities programme

Research for the benefit of SMEs

This support aims at SMEs or SME associations in need of outsourcing research to research services providers (“RTD performers") such as universities, research centres or research performing SMEs. Other enterprises and end-users, which belong to the same value chains as the participating SMEs, can participate, if it is in the interest of the project.

There are 2 areas SMEs can participate:

Research for SMEs (Previously known as Cooperative Research)

Research for SME Associations (Previously known as Collective Research)

Research for SMEs

Support of small groups of innovative SMEs to solve common or complementary technological problems.

Relatively short term projects centred around the innovation needs of those SMEs outsourcing research to RTD performers

Demonstrate a clear exploitation potential for the SMEs concerned and at the same time promoting the effective dissemination and take-up of results.

Requirements

Research Topics

Research for SMEs is a bottom-up scheme: this means projects may address any research topic across the entire field of science and technology.

Participants

Research for SMEs projects require participants from the following two categories of participants:

1. SME participants:

At least three independent SME participants, established in three different Member States or Associated countries. SMEs must be direct beneficiaries of the scheme: they outsource part of their research need by investing in research activities carried out by the RTD performers. The grant will cover only part of this investment. They normally retain the full right of use and dissemination of any project results.

2. RTD performers:

At least two RTD performers independent from any other participant are required. RTD performers are legal entities able to carry out research and technological development activities for the benefit of SME participants. Examples of RTD performers are universities, research organisations and industrial companies, including research performing SMEs.

In addition, other enterprises and end-users may participate by making a particular contribution to the project and in solving specific problems or needs of the SME participants involved, though not in a dominant role. They must be independent from any other participant.

The size of the consortium should typically be between 5 and 10 participants. The overall budget of the project should typically be between € 0.5 to €1.5 Million and the duration of the project should normally be between 1 and 2 years.

Research for SME Associations:

• Support to SME associations to develop technical solutions to problems common to a large number of SMEs in specific industrial sectors or segments of the value chain
• For example, research needed to develop or conform to EU standards, and to meet regulatory requirements in areas such as health, safety and environmental protection
• Projects, with a duration of several years, must be driven by the SME associations.

Research Topics

Research for SME Associations is a bottom-up scheme: the projects may address any research topic across the entire field of science and technology. Projects must concentrate on the economic interest of the SME members of the SME AGs.

Participants

Research for SME Associations projects require participants from the following three categories of participants:

At least three independent SME association/groupings, established in three different Member States or Associated countries, or one European SME association/grouping established in a Member State or Associated country according to its national law and which is made up of a minimum of two independent legal entities, established in two different Member States or Associated countries.

At least two RTD performers independent from any other participant. RTD performers are legal entities able to carry out research and technological development activities for the benefit of the SME-AGs and in the interest of their SME members. Examples of RTD performers are universities, research organisations and industrial companies, including research performing SMEs.

In addition, other enterprises and end-users (including SMEs) may participate by making a particular contribution to the project and in solving specific problems or needs of the SME-AGs involved and the SMEs they represent, though not in a dominant role.

3. SME partners

A limited number of individual SMEs (2-5) must participate to ensure that the results of the project address SME needs and can be used by a large number of SMEs. Their activity may include validation, take-up, training and dissemination activities, but not on research activities.

Duration and Funding

The size of the consortium in FP7 should typically be between 10 and 15 participants; in addition, the SME end users group should be limited to 2 to 5 members necessary to achieve the objectives. The overall budget of the project should typically be between € 1.5 to € 4 Million and the duration of the project should normally be between 2 and 3 years.

Calls open in FP7

It is expected that the next call for Research for SME Associations will be published September 2008 with a deadline in December 2008.

What is an SME?

The Commission adopted a new definition of micro, small and medium-sized enterprises (SMEs) in Recommendation 2003/361/EC. However, in the Research for the benefit of SMEs, SMEs that are research centres, research institutes, contract research organisations or consultancy firms are not eligible as SME participants.

The staff thresholds used are:

• micro (0-10 employees)
• small (10 to 50 employees)
• medium-sized enterprises (50 to 250 employees)

Engaged in economic activity

• <250 employees
• Annual turnover = €50 Million or balance sheet total = €43 Million

Recommendations increased the financial ceilings to take account of inflation since the first SME definition in 1996. Though financial ceilings (i.e. turnover and/or balance sheet total) will significantly increase under the new SME definition, there are no significant increase in the number of SMEs covered by the definition. This is due to the fact that the number of persons employed in an enterprise (the 'staff headcount criterion') in order to qualify that enterprise as a micro, small or medium-sized enterprise is maintained.

The new definition introduces three different categories of enterprises. To begin with, any entity, regardless of its legal form, that is engaged in economic activities, including on an individual or family basis, has to be considered as an enterprise.

These enterprises include:

• Autonomous enterprises
• Partner enterprises
• Linked enterprises

The new rules should promote growth, entrepreneurship, investments and innovation, facilitate access to venture capital, cut administrative burdens and increase legal certainty and favour co-operation and clustering of independent enterprises.

For further information, the European Commission have published a SME User Guide explaining the new SME definition.

There is also a leaflet giving an overview of the New SME defintion published by the European Commission http://ec.europa.eu/research/sme-techweb/index_en.cfm

What is an SME Association?

SME associations/groupings are legal persons, composed mostly of and representing the interests of SMEs and/or physical persons having the same kind of activities. Examples of these are sectoral industrial associations, national or regional industrial associations and chambers of industry and commerce.