| Cambridge academic calls for EU to switch 800m euros a year of R&D funding into small companies |
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22/10/2009 15:12 (29 Day 19:19 minutes ago) | |||||
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The FINANCIAL -- "THE EU should emulate the successful US Small Business Innovation Research Programme and switch 800 million euros a year of its Framework R&D budget into procurement based funding for innovation in small companies," said David Connell, an innovation policy specialist at the Centre for Business Research, hosted at Cambridge University's Judge Business School, at a European Commission Policy Workshop in Brussels on 21 October.
The EU currently spends over 7 billion euros a year on its Seventh Framework Programme to fund R&D in member states, most of it via international, multi-partner projects aimed at precompetitive research. However, participation by small firms, usually recognised as the key engine for innovation in any advanced economy, remains very low.
"Entrepreneurs, venture capitalists and innovation policy specialists across Europe look with envy at the very different US approach which uses 100% funded procurement contracts rather than grants to fund industry," commented Connell. "The flagship US Small Business Innovation Research (SBIR) Programme is worth well over $2billion a year and by focusing on what Federal agencies need as customers or specifiers, acts as a lead customer for new technologies."
Both the UK and Dutch governments are trying to introduce something similar, but neither has committed new funding and despite some very successful competitions, the overall take-up across government departments has been disappointing.
"The kinds of collaborative R&D projects the EC mainly backs at present are ill-suited to small firms" argued Connell. "Switching 800 million euros a year out of the budget and using it to co-fund US style SBIR competitions in member states could catalyse the creation of 2 billion euros in funding to match the US programme."
He added that if, as in the US, the EC was also to finance "showcase" events where award winners could present the technology they have developed for lead customers to other potential buyers, partners and investors, it would help them accelerate sales growth across the European market. "This is likely to be a much better way of building a single market than through encouraging artificial precompetitive collaborative R&D projects," he argued.
Malcolm Harbour MEP, a long term champion of innovative procurement in the European Parliament and author of a report on pre-commercial procurement, commented that: "This is exactly the sort of policy we need to look at if we are going to get the most out of the Commission's spending on R&D. Small companies often have the innovative ideas but lack the resources to see them through. This initiative could provide exactly the incentives small businesses need to deliver innovative projects and solutions."
A report for EU Heads of State on "Creating an Innovative Europe" by ex-Finnish Prime Minister Esko Aho two-and-a-half years ago placed great emphasis on the role of lead customers and government procurement. But apart from some clarification of EU procurement regulations, there has been little change in terms of EU policy. "A major change in policy approach, backed by some serious money is now required to make progress," Connell concluded.
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