Methodological note

The 35 participants to the workshop worked in separate groups, one per each of the main issue identified: the need of an integrated ecosystem; the cultural differences between public and private actors; the lack of funding for innovation; the unfit modalities of funding innovation. They suggested specific actions that should be carried by European Commission and by stakeholders (themselves). For each issue, we present the key recommendations and some of the insight gained from the analysed cases.

1. Recommendations related to the integrated ecosystem

The discussion resulted in the need for creating a comprehensive and unified system at the European level, connecting all the actors, enhancing the access to expertise, strengthening networking and activating mutual learning. In practical terms, this could take the form of:sentence permalink

Supporting the networking facilitation activities at EU level (e.g. an on line platforms), acting as a central platform and gathering a critical mass of stakeholders. The network should include actors coming from different domains and representing different interests (Universities and schools, investors, mentors, policy makers, entrepreneurs), which will exchange experiences, network and learn from each other. There could be more than one network, but connectivity between the different initiatives should be maintained, by engaging with existing local initiatives, such as incubators, accelerators, mentoring programs, investors in each country. The connection with local programmes will facilitate the access to the initiatives and resources, which already exist at the local level and in your own business community.sentence permalink

Ensure long-term planning combined with open evaluation and acceptance of failure: ecosystems grow organically over time. 4/5 year is the minimum timespan needed to see results. Evaluation is necessary, but results can’t be expected before 4/5 years and key performance indicators should be designed at the strategic level. Failure should be “normal” at the project level, indeed a low rate of project failure could be seen not as a success but as a failure indicator of the programme, because it could reveal the lack of truly innovative projects. Funders should also be evaluated by the recipients, through a sort of “rateyourfunders.com” approach, where different criteria should be applied (speed of response, burocratic load, flexibility in the system, value added offered by the programme in terms of connection…).sentence permalink

Creating communication and awareness about successful ecosystem activities, by sharing successes and failures of ecosystem building. There’s a need to greater understanding across stakeholders on the importance of ecosystems and platforms, and how to successfully stimulate them. The communication should be aimed at supporting the awareness on opportunities, but it should be also contribute to the creation of an innovation/entrepreneurship culture, by presenting concrete guides to ecosystem-building.sentence permalink

Lead by example: avoid the situation where innovation policies, rather than overcoming it, replicate the fragmentation across silos, institutional level, business sector, geographical areas. While it is reasonable that the geographical focus should remain in the geographical competence of the organisation, openness to European and global players should be a deliberate focus.sentence permalink

Lessons learnt from case: The Penrose programme adopts a global approach, in partnership with Taiwanese organisations, and enables access to world-class services in the domain of 3d printing for multinational and SMEs alike.sentence permalink

2. Recommendations related to cultural problems for relationships between private / public actors

Foster the direct dialogue between public officials and entrepreneurs or SMEssentence permalink

Participants suggest that public administrations and governments should have more dialogue with entrepreneurs, companies, research organizations and stakeholders for the design and implementation of their policies. Governments and public administrations should contact not only intermediaries (chamber of commerce, industry representatives etc.) but they should establish direct contact with them especially when they are designing incentives and funding programs for innovation.sentence permalink

However, public officers should also be protected in order to establish this dialogue so that they cannot be accused later on to favour some actors. Most times public officers are worried about discussing with private organizations. In this sense, online open interaction has the advantage of being visible to all, thereby avoiding the risk of unbalanced information. Officials should be encouraged (with appropriate clear guidelines) to interact as much as possible openly online with stakeholders. Mutual respect should be ensured: public officers should not consider themselves superior, and neither entrepreneur.sentence permalink

Lesson learnt from case: Kublai project promoted constant online interaction between officials and potential beneficiaries as a new standard of communication.sentence permalink

Mobility programs for entrepreneurs and public officialssentence permalink

In order to better understand both mind-sets and promote a real dialogue between public officials and entrepreneurs, participants suggest to design a mobility programs in order to hire entrepreneurs in European Commission for a short period with clear goals and remuneration; and for officers at European Commission to go out, work for a company or set up their business and then come back to European Commission. Economic incentives for both, officers and entrepreneurs should be clear.sentence permalink

Lesson learnt from case: Corporacion Tecnologica de Andalusia is a public-private partnership fully managed by the private sector, in order to ensure trust and outreach capacity between SMEs.sentence permalink

3. Recommendations related to lack of funding for innovation

Mobilize multiple, public and private, funding sources (such as EIF, business angels…). The lack of early stage funding should be addressed with an integrated perspective across the different funding instruments. The European Investment Fund should establish dedicated funding for technology startups, which have unique needs as compared to traditional business sectors. Public funding should extend beyond research to business development and market uptake. On the business side, these activities includes also to attract international investors, to mobilise Business Angel Network, to foster strong local early-stage funds. Appropriate tax regulation for incentivizing risk capital should be defined.sentence permalink

Upscale crowdfunding: regulatory bottlenecks to crowdfunding should be removed, in order to grasp the opportunities to democratize investment and mobilize the resources of a large number of investors. Crowdfunding could help reducing the early-stage funding gap in Europe, but once again European legislation replicates the delays of the European investors – it was the US, which first legislated to simplify crowdfunding for business through the recent JOBS act.sentence permalink

Reserve funding for SMEs. Many stakeholders invited the EC to provide quotas for funding and procurement to SMEs, as well as easier rules for participation, such as joining a project only for one year.sentence permalink

Lesson learnt from case: Wim de Waele (iMinds) mentioned the UK seed enterprise investment scheme as one measure that can really have an impact and make a difference in the availability of risk funding.sentence permalink

4. Recommendations related to unfit modalities of funding for innovation

Provide value added services on top of funding. Funding, from both public and private funders, should be perceived as an intelligence tool to establish a profitable relationship with innovators. Funding should be perceived as the first step to greater collaboration. Government agencies should “by default” provide value added services on top of the funding, based on the huge amount of knowledge accumulated by managing funds. At EU level, it would be useful to have guidelines and cases of knowledge-intensive funding organizations, as well as the adoption of a similar approach in the context of Horizon 2020. Evidence should be made available about value added and hands-on management of funding schemes.sentence permalink

Clear time periods for call for proposals: not only the time for resolution of a call proposal is very long especially taking into account short term planning that companies are used to, but also it is not clear for SMEs when they are expected to start the project. There should be open evaluation and benchmarking tools for all research funders in Europe, as well as for private investors.sentence permalink

Enhance demand-side measures such as prizes and procurement: Inducement prizes are a modality of funding of innovation that proved to be successful to reach out and engaged to real innovators. A substantial part of research and innovation funding should be distributed as inducement prize. Procurement is also a largely unexploited tool with high potential, since it covers 16% of EU GDP. Innovative public procurement, in particular towards SMEs, could help reducing the early stage funding gap and help bridging the valley of death. Most importantly, grants, prizes and procurement should be used in an integrated way, covering different phases of the innovation cycle (multi-stage approach). For instance, often public procurement is used to purchase solutions, which emerged from inducement prizes.sentence permalink

Lessons learnt from case: the Security Challenge links inducement prizes with risk capital, grants and public procurement. Many finalists receive capital investment, as members of the jury are also VCs. The challenge itself is used alongside the more traditional grant system and covers about 1% of the budget.sentence permalink