July 2015

ICT Innovation: SMEs Make Best Use of EU Research Funding

Based on the European Commission's in-house science service report, Small and medium enterprises (SMEs) are champions of EU research programmes: they deliver 41% of the high potential innovations generated in ICT-related EU-funded research and innovation projects, despite accounting for a mere 14% of the total funding. However, greater focus on technology than on business strategies is one of the main bottlenecks when it comes to getting these innovations to the market.

These are some of the findings of the Innovation Radar survey which analysed information and communication technology (ICT) research and innovation projects funded by two European research programmes: the Seventh Framework Programme (FP7) and Competitiveness and Innovation Framework Programme (CIP). The survey was conducted by the JRC.


Other findings include:

Germany, Spain and the UK host the highest number of organisations identified as key innovators (17%, 12.3% and 12% respectively) and are trailed by Italy (10.9%) and France (9.6%). As for cities, Barcelona tops the list by hosting 19 innovative organisations (universities, innovative SMEs, startups), followed by London and Paris with 17 each, and Milan with 16.

However, reaching the market is not a smooth process for innovators: a quarter of already mature innovations are not being exploited yet. Among these, half were assessed as being innovations with high market potential. One of the main barriers to market commercialisation is that the projects' focus on technology aspects too often is at the expense of developing a market strategy. Of those innovations planned for commercialisation only 30% have or will produce a market study while a business plan is on the agenda for only 27% of the projects. That is why the European Commission is already improving links between innovators in EU-funded research projects and services that help such innovators prepare to "reach the market".

Nearly 70% of the innovations surveyed are to be brought to market within two years. Currently, 10% of all innovations are already being exploited, either on the market or internally by a partner organisation.


Background

The Innovation Radar report analysed 279 projects (10.6% of all projects funded by these EU programmes) in an exercise conducted from May 2014 to January 2015 to identify the high potential innovations and the key innovators behind them. These projects produced 517 innovations, mostly related to data processing or software development; whereas hardware development involved only a few projects. SMEs feature prominently in delivering high potential innovations, and are important vehicles for co-creating and commercialising innovative technologies.

This report was prepared in the context of a multiannual research project jointly developed by the JRC’s Institute for Prospective Technological Studies and the European Commission’s Directorate-General for Communications Networks, Content & Technology. The project's objectives include better understanding of innovation in the ICT sector and of ICT-enabled innovation for the economy. It aims to provide evidence-based support to the policies, instruments and measurement needs of the Commission for enhancing ICT innovation in Europe, in the context of the Digital Single Market for Europe and Horizon 2020.


The Joint Research Centre (JRC) is the European Commission's in-house science service which employs scientists to carry out research in order to provide independent scientific advice and support to EU policy.