Geografia d'Europa

Giovanna Anselmi, ENEA

Issue: Difficulties of access to publicly funded RTD Programmes are a common problem shared by SMEs in most European Countries. Common solutions are perhaps not yet available, but analysing the typology of research objectives can help and support policy formulation.

Relevance: Studying difficulties of access to publicly funded RTD Programmes is a way of defining a new access procedure and assessing research objectives.

Introduction

This article sets out to analyse the main factors relevant to the dissemination of information about the conditions of access to publicly funded RTD Programmes and the particular problems affecting SMEs wishing to participate. In particular, potential applicants need to know about the research objectives, application procedures, the type and permitted uses of funding, etc. Clearly, broad participation would also be encouraged by greater awareness of the benefits for SMEs of participating in such programmes; and this information could be put on a more objective footing by improving the means of evaluating the impact of research results.

Box 1: Diffusion of information
 

The optimal diffusion of up-do-date and appropriate information may depend on a number of factors:  Widespread diffusion and use of ICT: putting information online can make it easier to connect people while at the same time decreasing the costs of information dissemination and providing more flexible support. Efficient service-provider networks: the right contacts for additional information, clarity of official documents, checking the quality and eligibility of proposals, are all factors which influence the success rate of submitted proposals. Financial contributions promoting access: EU measures without national contributions are not able to promote a significant improvement in SMEs’ access performance, the participation costs remain high, particularly in terms of the availability of management time, the risk of not being selected and the limited resources available to perform R&D activities. High educational level: staff working in various organizations, ministries, research centres, companies and on the management of SMEs, need to improve their efficiency through adequate professional training and retraining in order to be able to access and to analyse contents of publicly funded RTD Programmes, to connect them to companies’ funding needs and to forecast production strategies.

The benefits for SMEs

The importance of SMEs in the context of the "triple challenge of more growth, greater competitiveness and more jobs" in EU Countries has risen rapidly over the last ten years: the 15.8 million SMEs employing less than 250 people represent 99.8% of all EU’s enterprises and account for 66% of total employment and 65% of the Union’s business turnover.
 
 

 During the last five years, SMEs have created more than 80% of new jobs. Some of them work as subcontractors helping larger firms to be more competitive, others are increasingly making important contributions to innovation in rapidly evolving sectors such as multimedia, software development, and environmental technologies. Publicly Funded RTD Programmes in the EU, permitting research costs to be shared between participants, create opportunities for SMEs to improve their technological base and internationalize their business network.

By taking part in RTD Framework Programmes SMEs can participate in a number of types of research-related activities:

Exploratory Awards: in which they receive funding of up to 75% from the EU for preparing research proposals;

involvement in Collaborative Research Projects with large companies, universities, and research institutions in the EU, for which they can benefit from Commission funding of 50% of the costs;

Cooperative Research (CRAFT) Projects, grouping together SMEs with similar technical problems and similar shortages of resources for research, thus enabling them to engage in RTD Programme proposals.

 
The Final Report on the Fourth Framework Programme suggested several corrective measures, many of which have been incorporated in the Fifth Framework Programme.

Impact on company’s organization: costs and benefits

Classifying the negative impact as costs and the positive impact as benefits, a number of consequences of participation in RTD Programmes emerge for company organization.

Costs:

Delays between the time of submission of a proposal and its approval: This implies an investment of both time and money. The overall delay is about 12 months: 5 or 6 months for the preparation of a proposal, plus about 5 months for EC evaluation, plus about 4 1/2 months for contract negotiations. Thus the outlay for the preparatory steps (about 24-28kEURO per proposal) can be considerable. This is not covered by EU funding even in the case of the Exploratory Awards. Clearly, if the proposal is rejected, all the time and money spent on it are lost. Moreover, to submit the rejected proposals to a different EU programme entails an additional investment as the requirements for each are different.

Large number of rejected proposals and low approval rate: Companies presenting proposals prepare several proposals for different themes, so as to have a higher chance of being selected for at least one.

Management time: The management time required is a burden, particularly for SMEs.

Investment in time and money: Preparing several proposals means not only more time and more money, but potentially also losing the opportunity of opening other lines of activity: in particular when the proposals are rejected.

Benefits:

Ownership of new products or rights to process innovations: research costs are shared with the EC and partners so allow a reasonable return on the outlay.

Improving the technological base: acquired knowledge is employed to improve all areas of production, with the added benefit that research costs are shared with the EC and partners.

ISO and EU (CEN/CENELEC) Standardization of processes and products: this often emerges in this context for both innovative industrial processes and products and is essential if Companies are to remain competitive in the enlarged European market.

Better understanding of market strategies: participation in Exploratory Awards rather than in Collaborative or Cooperative Research Projects can improve knowledge of supplier’s and competitor’s strategies as well of the end-user’s needs. This attracts venture capital with which to implement solutions of common technical problems and to allow better exploitation of the products.

Market enlargement through internationalization of the business network: A large proportion of companies’ production can often benefit from contacts abroad, and intensive exchanges of goods and services are often one outcome of participation in RTD Programmes.

Enhancement of company image: Projects selected by the EC often find it easier to obtain finance. Also, the fact that the firm is mentioned in the Companies profile gives it publicity,and opens up possible connections with other companies, nationally and internationally.

It is very hard to compare costs and benefits, and to evaluate the importance for companies, and SMEs in particular, of participating in an EU RTD Programme: a study addressing this issue needs to be carried out to clarify the real efficacy and the efficiency of RTD Programmes. More specifically: "…. (for the) parameter in the R&D investment function (that) reflects the adjustment cost related to the introduction of an innovation in an organization… (the) higher the adjustment cost is, the lower the investment in R&D: that explains the company’s internal opposition to investing in research" (Varsakelis, 1999). In addition, the impact evaluation of RTD Programmes must pay attention to the Countries’ economic context.
 
 

Empirical data from various sources, furthermore, give reason to suppose that benefits largely outweigh costs and so create an incentive for participation: According to the 1998 Final Report, the SME Coordination Unit1 reported that 64% of SMEs participating in the 4th Framework Programme were newcomers, and 96% of the all participants in Collaborative and Cooperative RTD stated they would be keen to repeat their involvement. This means, on the one hand, that there is considerable interest in information from partners or from successful experiences of companies in other European countries, and also that research objectives were met.

Protecting innovative results

In the EU’s Fourth Framework Programme only 1/3 of consortia including SMEs legally protected their research results, and only a slight majority of SMEs signed a Consortium Agreement, in all cases only after signing the contract with the EC. It seems SMEs underestimate the importance of addressing the legal and intellectual property issue, but for proposals submitted under the TSME, the legal assistance service was something for which they were more than willing to pay. As a matter of fact the protection of research results is a very important element, but is not yet sufficiently linked to the activities of RTD Programmes. Certain changes may be appropriate to improve National and European Patent Procedures. The shortcomings of the current system include:

European Patent costs (both national and European) are three or four times higher than those of US or Japanese equivalents;

A European Patent is not yet a Community Patent, there being no single patent automatically applicable throughout the Community;

Lack harmonization of protection at Community level. (As a step in this direction the recent proposed Directive aimed to harmonizing Member State’s laws on utility models should be mentioned. This covers their automatic use, for example, in connection with RTD Programmes, and could offer efficient protection of technical inventions, especially those with a short lifetime or involving only a small inventive step);

The long time from application to granting of a patent;

The high rate of counterfeiting and piracy in the Single Market.

All these points of weakness in the patent system contribute to keeping companies’ estimates of legal protection in RTD Programmes low and thus keeping their interest in innovation low too. Building up a connection between the two (RTD Programmes and Patent Systems) could contribute to improving the economic impact of RTD Programmes.

Conclusions

It might be beneficial to improve the use of EU RTD Funds and to open up access to a larger number of SMEs. To achieve this, a mix of national and EU strategic measures could be proposed:

Measures by National Governments

National Governments could promote access through a variety of measures:

Enhancement of the education level of the working population, placing emphasis on building ICT skills: for example, including a free PC for home use and training for the employee’s family in the renewal of national work contracts;

Tax breaks for Companies adopting up-to-date ICT (this may be more important for SMEs);

Grants and/or loans, at low interest rates, for SMEs participating in Publicly Funded RTD Programmes for Exploratory Awards;

Employment policies encouraging involvement of young researchers by means of tax breaks, in particular for SMEs;

Innovation strategies to increase household use of ICT:

            - lower telephone and Internet access charges.

Patent strategies:

            - lower patent fees for SMEs;

            - low cost loans for SMEs designation fee and to market launch of the product.

            - harmonization and direct connection of National Patent Systems with the Community Patent System.

Access promotion measures

A number of measures could be envisaged as ways of promoting access:

Automatic patent for EU Publicly funded RTD Programmes which produce innovative products and industrial processes, with a waiver of the patent fee;

EU Publicly funded RTD Programmes for promoting SMEs (without own research resources) involvement of young researchers through grants for Exploratory Awards;

Modification of the heavy procedures concerning management of the Projects.

Consolidating of a Single Entry Point for Proposals with systems able to evaluate their eligibility, to classify them by Programme Priorities or/and to send them to the appropriate Programmes;

Quickly define new features for a Community Patent and measures to facilitate its adoption.

Keywords
research impact; S. & M. firms; publicly-funded RTD Programmes, objective evaluation

Note
1. Final Report – 23 June 1998. European Commission DGXII, SME Coordination Unit.

Acknowledgements
The author would like to thank the reviewers, Giorgio Di Pietro, N. Varsakelis, G. Fayl, Dorian Karatzas, and Ugo Mocci, for direct and indirect encouragement and suggestions, and her colleagues Nando Scaduto and Luciano Maruotti for their help.

References

• Bondonio, D., La valutazione d’impatto dei Programmi di incentivo allo sviluppo economico, Economia Pubblica n°6. Franco Angeli, Milan. Italy, 1998.
• Bruzzo, A., Verza, A., Le politiche Strutturali e di coesione economica e sociale dell’Unione Europea. Padua, CEDAM, Italy.
• Bianchi, P., Partenariato Euromediterraneo e Sviluppo delle PMI: Verso una crescita condivisa attraverso la complementarietà. Sviluppo delle PMI, Workshop, Milan 4-6 June 1998.
• Di Pietro, G., and Gomez y Paloma, S., Piccole e Medie Imprese e modelli industriali nello spazio euromediterraneo. IV° Rapporto sul Mediterraneo a cura di B. Amoroso, Federico Caffe’ Centre, Universita’ di Roskilde. Ed. Lavoro, Rome, Italy, 1998.
• European Commission DGXII, SME Coordination Unit, SME Participation in the 4th European Union Framework Programme for Research and Technological Development - Final Report, 23 June 1998.
• Special Sectoral Report - Industrial Property - Brussels, October 1998, EU. D.G.
• Varsakelis, N. C., The impact of Patent Protection, Economy Openness and National Culture on R&D Investment: A Cross-Country Empirical Investigation. (EC-RDG-TEKES), co-sponsored by the Evaluation Unit of DG Research and Presented at the Helsinki Socio-Economic Impact Evaluation Workshop 26-27 November 1999.

About the author

Dr. Giovanna Anselmi graduated in Political and Social Sciences at the Catholic University of Milan in 1970. Until 1983 she carried out research into Economic Planning and Social Politics at ISPE (Italian Economic Planning Studies Agency). In 1983 she joined ENEA, the Italian Agency for Energy, Environment and New Technologies, where she is on the Staff of the Central Studies Directorate. Her Professional Interests concern the Impacts and Changes in Economic, Social and Cultural Scenarios of IC Technologies; Technology Assessment and Sustainable Growth Studies.
Dr. Giovanna Anselmi, Central Study Directorate of ENEA (Italian Agency for Energy, Environment and New Technologies). Rome, Italy
Tel.: 39 63 627 27 85, fax: 39 63 627 27 85, e-mail:ganselmi@sede.enea.it

Fuente:
http://www.jrc.es/iptsreport/vol44/english/REG1E446.htm

Última actualització: 13 de Junio de 2002