Marco Malacarne, EASME Giornata Nazionale, Roma 19 Ottobre 2017

Horizon 2020 SME Instrument and the EIC Pilot

SME Instrument :

Key takeaways – 2017

Successful implementation (very competitive)

€697 million in private equity investments (rising fast)

Significant leverage effect on private funding

18 new exits: 12 acquisitions - 6 IPOS

2690 companies in our portfolio 608 in Phase 2

€ 1.1billion committed € 990 million in grants over € 500 k

4-7% success rate

SME Instrument in numbers

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ES IT UK DE FR NL SE DK IL FI IE PT NO PL AT HU SI EE BE IS EL LT TR CZ LV SK BG RS CY HR RO CH LU MT UA AI FO

Private equity investments €697 M

€ 2 M € 43 M

€ 141 M

€ 273 M

€ 445 M

€ 697 M

1/1/2015 7/1/2015 1/1/2016 7/1/2016 1/1/2017 7/1/2017

Invested in 119 SMEI companies

Source:

Total private funding attracted

€1 bn Private equity, debt, exits*

against 694 Mio€ paid via SMEI grants

each €1 SMEI funding matched with €1,4

of private investment

* Only disclosed deals, the full amount is potentially much higher

Exits

With 18 exits in total (12

acquisitions and 6 IPOs)

SMEI is the second best

performing accelerator in Europe

and this only after 3,5 years of

existence

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Top-15 accelerators in EU and Europe in terms of total exits

SME Instrument companies by industry

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25% Healthcare, cleantech and energy remain the

top industry sectors

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Private equity investments by revenue model

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Follow us on

@H2020SME

http://ec.europa.eu/easme/sme

EUROPEAN INOVATION COUNCIL Pilot Stocktake of progress to date

Commissioner's political priority

OPEN INNOVATION

"Europe does not yet have a world class scheme to support

the very best innovations in the way the European Research Council is the global reference for supporting excellent science. So I would like us to take stock of the various schemes to support innovation and SMEs under Horizon 2020, to look at best practice internationally, and to design a new European Innovation Council. This is not for tomorrow, but I believe we should discuss it as a major element under the mid-term review of Horizon 2020."

Commissioner Moedas 22.06.2015

EXTERNAL CONSULTATION

• Call for ideas

• Contacts on national&EU level

• Constructive workshops national innovation agencies, Taftie Network, etc.

Broad support: • Member States' support in PC • EP • National Innovation Agencies • Experts (e.g. RISE Report, 'Cabezon' Report)

EIC: Bottom-up innovation programme to scale up breakthrough and market creating innovations

1. Establish a Group of Innovation Advisors – to provide a user perspective on EU innovation support and advise Commission on reforms

2. Revise Horizon 2020 work programme (2018-20) with simple presentation of instruments targeting market creating innovations

3. Make SME instrument fully bottom up with continuously open call

4. Strengthen evaluation criteria to focus on market creating innovations, with potential to scale, and higher risk profiles

5. Revise and accelerate evaluation process with face to face interviews with teams and faster results (5 weeks rather than 5 months)

6. Provide access to mentors for project teams, targeted to their specific needs

7. Test out new scale-up instruments, e.g. reimbursable grants, blending grants and financial instruments, etc.

8. Gather real time data and intelligence, tracking performance of projects and feeding into policy

9. Work in partnership with existing initiatives - EIT, EIB Group, Eureka, VC and business angel communities – for sharing data & intelligence

10. Improve Horizon 2020 website/ participant portal – with dedicated space for innovators with advice on funding opportunities

Action Plan (July 2016)

1. Establish a Group of Innovation Advisors to provide a user perspective on EU innovation support

and advise Commission on reforms

• 15 people (469 applications) with good track-record in starting and scaling up

innovative businesses and/or investing in innovative ventures

• Mandated to give advice on:

a) The design and implementation of an EIC pilot for the years 2018-20

(submission forms, interviews, monitoring, blending)

b) Future design and delivery of EU funding and other support for market creating innovation under FP9 • 8 meetings in 2 years Subgroups will provide reports with

recommendations for FP9 on: - Problem & vision statement

- Selection & funding (views on blending, crowdfunding) - Ecosystems

- User interface(+feedback on communication in the pilot)

- Monitoring & KPIs

ECOSYSTEM 1: COACHING, MENTORING for all beneficiaries

2. Revise Horizon 2020 work programme (2018-20) with simple presentation of instruments targeting market creating

innovations

Test and co-create Demonstrate,

validate

Feasibility / Startup Development

Scale up Investment

SCOPE: 2.7 billion EUR 3,000 feasibility awards 1,000 projects

Innovative Idea Emerging tech, New business

models

FTI Fast Track to Innovation

FET-OPEN Future

Emerging Technologies

SME Instrument

Phase 1

SME Instrument

Phase 2 Soft blending

ECOSYSTEM 2: 6 EIC HORIZON PRIZES: 1. Innovative Batteries for eVehicles 2. Fuel from the Sun: Artificial Photosynthesis 3. Early Warning for Epidemics 4. Blockchains for Social Good 5. Low-Cost Space Launch 6. Affordable-HighTech for Humanitarian Aid

MA

RK

ET

CR

EA

TI

NG

To be published end October 2017

3. Make SME instrument fully bottom up with continuously open call

• No predefined topics

- Innovative projects that cut across sectors/technologies become eligible for support most likely break-throuhs and market creating

- Eligibility criteria of connection to societal challenges removed

• Monitoring of thematic coverage, remedial action if needed

• Single budget line

- maintaining budgetary contributions from Societal challenge and LEIT

• Continues with 4 cut-offs per year

first revamped cut-off in January 2018

4. Strengthen evaluation criteria to focus on market creating innovations, with potential to scale,

and higher risk profiles

• 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?

SME phase 2 evaluation criteria revised to better target the scaling up of SMEs with the greatest potential for breakthrough, market-creating innovation (business capacity, international growth ambition)

• Revised, pitch-like submission forms • Pool of evaluation experts being assembled by EASME (technological/scientific experts,

financial/commercial background)

• High degree of novelty comes with a high chance of either success or failure • Evaluate proposals also on quality of the team INTERVIEWS

• Seal of Exc maintained. Threshold increased 12>13 (probably less candidates)

5. Revise and accelerate evaluation process with face to face interviews with teams and faster results

Two-step evaluation

1. Remote evaluation: - 4 evaluators per proposal - threshold 13 points overall (4 per

criterion)

2. Interviews for 2 x budget - 30 min - Panel of experts - To assess quality and ambition of the

team - Decide on to be funded/not funded • !Expected TTG remains 5 months! • Evaluators with innovation, business

background • New guidelines for applicants • First interviews in February 2018

• Tailored coaching for all SMEs

available across SMEi, FTI and FET-open (~ 2500 SMEs)

use of Innovation Radar to identify their needs

expanded to include finance issues

• Follow-up mentoring introduced

• EASME provides 2-days trainings for coaches

SME Instrument, coaching methods, tips from predecessors

"get together" event for coaches to share good practices

6. Provide access to mentors for project teams, targeted to their specific needs

7. Test out new scale-up instruments e.g. reimbursable grants, blending grants and financial

instruments

• € 3-4 million ready in 2018

• Reconsideration of approach following:

• Recent discussions with many innovation agencies

• Emerging findings of the study report + new note on financial options to be ready in September 2017

• Potential re-introduction in the first update of WP in 2018 in a form of SOFT BLENDING

• increasing interface between beneficiaries and investors by increased

networking opportunities

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8. Gather real time data and intelligence tracking performance of projects and feeding into policy

• Additional information on monitoring indicators in

WP to measure the impact of the EIC Pilot. Main indicators:

• Results - identifying breakthrough, market-creating innovation

• Private investments, VC and loans attracted by the companies

• Effects on turnover and employment of the companies

• Sources:

• Regular reporting by projects (but no new administrative burden)

• Innovation Radar: Outside experts will assess projects' progress and results in all three schemes

• External databases: Orbis Europe, Dealroom

• Presentation:

• New Horizon 2020 Dashboard (open access end 2017)

9. Work in partnership with existing initiatives - EIT/KICs, ESIF, COSME EIB Group, Eureka/Eurostars,

VC and business angel communities – for sharing data & intelligence

• Commission acknowledges importance of interaction with other innovation actors. To be determined in context of FP9

preparations (e.g. in form of MoUs or similar)

• High-Level Group of Innovators to advise Commission on EIC's role in the innovation ecosystem

• Brand new EIC website:

ready by 27 October

• Showing cases of breakthrough,

market-creating innovation

• Wizard - an IT tool (questions and answers) to guide users to the best fitting instrument

• Participant portal:

• Clear navigation

• Eased access of innovators

• Intensive and targeted communication via social media, intermediaries and high-profile events

10. Improve Horizon 2020 website/ participant portal dedicated space for innovators with advice on funding opportunities

EIC Pilot will be launched

by Commissioner Moedas at Web Summit in Lisbon

7 November 2017