Study on Non FP Participation

8/13/2019 Study on Non FP Participation

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Digital Agenda forEurope

Study on Non FP Participationby Innovative SME

Reasons and Steps Forward

Final report A study prepared for the European Commission

DG Communications Networks, Content & Technology


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ISBN 978-92-79-29724-3

doi:10.2759/10339

2013


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Study on non FP Participation by Innovative SMEs Reasons and Steps Forward

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Table of Contents

Table of Contents ............................................................................................. 3 Table of Figures ............................................................................................... 5 List of Abbreviations ......................................................................................... 6 Acknowledgments ............................................................................................ 6 1. Executive Summary ................................................................................. 7 2. Introduction ......................................................................................... 11 3. Methodology ......................................................................................... 13

3.1 Online Questionnaires ......................................................................... 13

3.2 Interviews ......................................................................................... 15 3.3 Data analysis ..................................................................................... 16

3.3.1 Quantitative analysis of the questionnaires ...................................... 16 3.3.1.1 Methodology ............................................................................. 16 3.3.1.2 How to Interpret the Data .......................................................... 17 3.3.1.3 Data Interpretation: An Example ................................................. 18 3.3.2 Qualitative analysis of the interviews ............................................... 19

4. Innovative ICT SMEs: Profile and characteristics ........................................ 20

4.1 Questionnaire sample ......................................................................... 20 4.1.1 General descriptive statistics of the sample ...................................... 20 4.1.2 Descriptive statistics of SMEs in the sample ..................................... 20

4.2 Analysis of FP7 Experience of SMEs in the sample ................................... 22 4.2.1 Profile of SMEs with Different Experience in FP7 ................................ 23 4.2.2 Innovation .................................................................................. 25

4.3 Interview sample................................................................................ 26 5. Findings ............................................................................................... 28

5.1 SMEs want more quality information ..................................................... 28 5.1.1 Summary .................................................................................... 28 5.1.2 Introduction ................................................................................ 28 5.1.3 Awareness of FP7 from the questionnaires ....................................... 29 5.1.4 Awareness of FP7 from the interviews ............................................. 32 5.1.5 Proposed solutions ....................................................................... 33 5.1.6 Conclusions ................................................................................. 33

5.2 Fit the rhythm of SMEs ........................................................................ 34 5.2.1 Summary .................................................................................... 34 5.2.2 Introduction ................................................................................ 35


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5.2.3 The time dimension of EU projects from the questionnaires ................ 35 5.2.4 The time dimension of EU projects from the interviews ...................... 37 5.2.5 Proposed solutions ....................................................................... 38 5.2.6 Conclusions ................................................................................. 39

5.3 Making life simpler for SMEs ................................................................ 40 5.3.1 Summary .................................................................................... 40 5.3.2 Introduction ................................................................................ 40 5.3.3 Need for simplicity from the questionnaires ...................................... 40 5.3.4 Comments on the Need for Simplicity from the Interviews .................. 43 5.3.5 Proposed solutions ....................................................................... 45 5.3.6 Conclusions ................................................................................. 46

5.4 Flexibility Fosters Creativity and Innovation ........................................... 48 5.4.1 Summary .................................................................................... 48 5.4.2 Introduction ................................................................................ 48 5.4.3 Bottom Up Vs Top Down Approach .................................................. 48 5.4.4 Free from Restrictions ................................................................... 50 5.4.5 Size and Scope of the Project ......................................................... 52 5.4.6 Proposed Solutions ....................................................................... 53 5.4.7 Conclusions ................................................................................. 54

5.5 Getting Closer to the Market and Private Investors .................................. 55 5.5.1 Summary .................................................................................... 55 5.5.2 Getting Closer to the Market .......................................................... 55 5.5.3 Getting Closer to Private Investors .................................................. 56 5.5.4 Conclusions ................................................................................. 57

5.6 Attracting New Participants .................................................................. 59 5.6.1 Summary .................................................................................... 59 5.6.2 Challenges for New Participants ...................................................... 59

5.6.3 Going It Alone ............................................................................. 60 5.6.4 Bureaucracy and Funding Levels ..................................................... 61 5.6.5 Info, Info, Everywhere .................................................................. 62 5.6.6 Perceived Past Participant Bias ....................................................... 62 5.6.7 Solutions ..................................................................................... 63 Bureaucracy ............................................................................................. 63 Getting Support ........................................................................................ 63 5.6.8 Conclusion .................................................................................. 64

6 Views of Horizon 2020 ............................................................................... 66 6.1 Summary .......................................................................................... 66


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6.2 Introduction ...................................................................................... 66 6.3 Image and general view ...................................................................... 67 6.4 Phase 1 ............................................................................................ 67 6.5 Phase 2 ............................................................................................ 69 6.6 Phase 3 ............................................................................................ 69 6.7 Gap analysis ...................................................................................... 70

7 Conclusions and recommendations .............................................................. 74

Table of Figures

Figure 1: Survey flow diagram ......................................................................... 14 Figure 2: an example for data interpretation - barriers ......................................... 18 Figure 3: an example for data interpretation - differences between groups ............. 18 Figure 4: position of survey respondents within their organisations ........................ 20 Figure 5: type of organisations in the questionnaire sample .................................. 20 Figure 6: SME sizes in the sample and across macro regions ................................ 21 Figure 7: SMEs by reported turnover ................................................................. 21 Figure 8: Level of Experience in FP7 Research Projects ........................................ 23 Figure 9: interviewed companies by macro regions .............................................. 26 Figure 10: Type and size of interviewed companies ............................................. 27 Figure 11: FP7 experience of the interviewed companies ...................................... 27 Figure 12: FP7 awareness level among Innovative ICT-SMEs with no FP7 experience 29 Figure 13: average scores and significance levels of awareness-related barriers ...... 29 Figure 14: differences between groups for awareness of calls for proposals ............. 30 Figure 15: differences between groups for preceding documents ........................... 30 Figure 16: differences between groups for awareness of support agencies .............. 31 Figure 17: Awareness - main barriers and proposed solutions ............................... 34 Figure 18: average scores and significance levels of examined barriers .................. 35 Figure 19: differences across groups for projects over 1 year's duration ................. 36 Figure 20: differences across groups for Projects of 3 years duration ..................... 37

Figure 21: time dimension - main barriers and proposed solutions ......................... 39

Figure 22: average score and significance levels for barriers examined .................. 41 Figure 23: differences between groups for Understanding calls for proposals ........... 42 Figure 24: differences between groups for Proposal preparation ............................ 42 Figure 25: differences between groups for Reporting capacity ............................... 43 Figure 26: Need for simplicity - main barriers and proposed solutions .................... 47 Figure 27: Average score and significance levels for Consortium-related barriers ..... 51 Figure 28: creativity and innovation - barriers and solutions ................................. 54 Figure 29: Getting closer to the market - main barriers and proposed solutions ....... 58 Figure 30: minimum percentage of funding by FP7 experience .............................. 61

Figure 31: First time participants - main barriers and proposed solutions ................ 65 Figure 32: strategic positioning of the SME instrument in Horizon 2020 .................. 67


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List of Abbreviations

AC Associated countryANOVA Analysis of varianceCP Collaborative projectCSA Coordinating and support actionEC European CommissionEEN Enterprise Europe NetworkEU European UnionFP7 7th Framework programmeGVA Gross value addedICT Information and communication technologiesIP Integrated projectIPR Intellectual proprietary rightsMS Member state

NACE

Nomenclature Gnrale des Activits conomiques dans lesCommunauts Europennes (French, EU classification systemfor economic activities)

NCP National contact pointSME Small to medium enterpriseSTREP Specific targeted research project

Acknowledgments

As the authors of this report we would like to thank the companies and associationsacross Europe and the associated countries that took part in the online survey and theindividual interviews and shared their views and opinions with us.We would like to make a special mention of persons within CRIC, IVSZ and Theia whocontributed on different occasions to the success of this study: Theo Stamatiadis forproviding legal advice; Patricia Masip for contract management; gnes Juhsz, ClareRodriguez, Marc Vila and Isabel Vinagre for supporting the data analysis; Anne LaureAslanian, Eva Romagosa and Christiane Haberl for French and German translations;and finally, Gbor Vicze and Narcs Clavell for attending the final workshop of thestudy as panel experts.


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1. Executive Summary

The Europe 2020 strategy recognises low investment in R&D and innovation andinsufficient use of Information and Communication Technologies (ICT) as 2 structuralweaknesses in European competitiveness. It is for this reason that the Digital Agendafor Europe and the Innovation Union were created with the aim of boosting research,development and deployment of ICT.Within this it is a lso recognised the vital role that SMEs play in Europes economy andinnovation sectors. This growing recognition has seen the levels of SMEs in Europeanfunded research projects rise considerably over consecutive Framework Programmes.However, participation amongst highly innovative ICT SMEs has remained low. Inorder for Europe to benefit from the research potential of these organisations, it isvital that Horizon 2020 remedies this situation to ensure the most innovative ICTSMEs, who have the greatest potential to grow through R&D, receive support for their

R&D activitiesThis report focuses on non-participating highly innovative SMEs in the ICT sector withthe aim to clarify the reasons for not participating in European research programs andto suggest ways forward for the new ICT-FP8/Horizon 2020 to remedy the situation.This was done by launching an online questionnaire completed by 829 entities, ofwhich over 600 were innovative ICT SMEs, and carrying out in-depth interviews with47 of these. In the questionnaire SMEs were asked to state their level of experience inFP7 and to consider whether or not they agreed with statements considering fundingconditions, rules of participation, consortium formation, IPR issues, bureaucracy andawareness. Their answers to the statements were then analysed against their level ofFP7 experience to define the areas that separate participants from non-participants.

During the interviews Innovative ICT-SMEs were asked to express the issues theyhave faced when considering European research funding, with a particular focus onthe issues raised that had stopped SMEs from successfully applying. The SMEs werethen asked to suggest ways to solve these issues. They were also given a briefexplanation of the proposed plans for Horizon 2020 and asked to comment on theseproposals.From these investigations 6 key messages have been developed. These key messageshave then been compared to the solutions put forward for Horizon 2020.SMEs Want More Quality Information

There is strong evidence from the questionnaires that awareness plays a key role in anSME s ability to take part in European research projects. The statements concerningawareness showed the largest differences between those SMEs with strong experienceof FP7 and those with none. It is clear that awareness of European projects is aprerequisite to taking part.During the interviews it became clear that awareness is also strongly linked withperception. Many SMEs have a low level of awareness of support services and yetstrong negative perceptions of the levels of bureaucracy and complexity of FP7. Someof these perceptions could be negated if levels of awareness were higher.Additionally it was extremely clear that it is not more information that is needed, butbetter quality, concise, easy to access information. This includes the documents andwebsites that are published by the Commission as well as asking for better supportinginformation from NCPs.What is key to the success of Horizon 2020 is to improve the image of Europeanresearch projects and to increase awareness, particularly amongst those who have not


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participated, both of the scheme and the support available to improve success. In thisrespect it was suggested that the Commission should use the channels that will targetinnovative SMEs rather than traditional channels which target research and academia.

Fit the Rhythm of SMEsSMEs in the ICT sector are dynamic, agile organisations that quickly adapt anddevelop new technologies as products or as part of their business model. The timingsof calls for proposals, evaluation, time-to-project and the length of projects areconsidered out of step with the rhythm of innovative ICT SMEs. Innovative ICT SMEsshow preference for projects that are shorter, with several call deadlines a year, fasterevaluation processes and shorter time-to-project.Making Life Simpler for SMEs

Evidence from the survey suggests that bureaucracy surrounding participation inEuropean research projects, in particular proposal preparation and EU accountingarrangements, were considered a large barrier by all SMEs, with the ability to preparea proposal a key indicator as to the SMEs participation in FP7.During the interviews these barriers become clearer as SMEs cited an "unmanageabledocumentation hurdle" when referring to the overall configuration of FP7 proceduresand bureaucracy. SMEs comment that proposal preparation is a resource intensiveprocess and those that have never applied to FP7 consider that it is very difficult oreven impossible to dedicate resources for proposal preparation. SMEs asked forsimpler application procedures more similar to those used in accelerators andincubators - to reduce their costs of monitoring and applying to calls for proposals.Companies would also like to receive support in writing proposals and completingreporting requirements. On several occasions companies encouraged the considerationof associations, incubators or consultants as the suppliers of such tailored support.

Flexibility Fosters Creativity and InnovationSMEs demonstrated in the questionnaire their preference to work on topics set bythemselves and this was further confirmed during the interview stage, where manySMEs suggested that a bottom-up approach to research funding would increase theirincentives to consider applying, by reducing costs for monitoring calls and making theprojects more relevant to their business.However, both in the questionnaire and the interviews, SMEs also demonstrated thatthey also need flexibility in terms of project consortiums and the size and scope of theproject. Many of the interviewed SMEs considered consortia as vital aspects ofEuropean projects, but felt that prescriptive requirements meant that the consortiawere built to fit the requirements of the Call rather than the needs of the project. This

is extremely off putting to many SMEs, and reduces the innovative nature of thosewho apply.ICT-SMEs asked for restrictions to be removed and for the calls for proposals tobecome more flexible, so that size, scope and the consortium are appropriate for theproject, rather than the project being defined by the external restrictions. Combinedwith more bottom up calls, this would encourage the most creative and innovativesolutions, that could also have the greatest impact.Getting Closer to the Market and Private Investors

One of the key rationales for including SMEs in research projects is the drive theybring to deliver innovation to the market. Yet it is perceived that this research tomarket component is at times over looked by European research projects or does notreceive enough importance, both in evaluation proposals and during project execution.Innovative ICT-SMEs would like to see more emphasis played on evaluating and


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supporting the market potential of the innovation. They would also like to see privateinvestors brought closer to the research projects as well as supporting commercialdissemination during the projects.

Attracting New ParticipantsThere is a significant amount of learning and networking that has to be undertaken bySMEs to manage to successfully take part in a research proposal. This creates aperceived unplanned bias to those organisations that have taken part in the past orthat are supported by those that have. This perceived bias, by reducing the number ofnew entrants, reduces innovation and the marketing instincts by creatingorganisations that are dependent on Commission funding rather than delivering to themarket.In order to overcome this, innovative ICT SMEs suggest that the Commission shouldconsider ways to reduce the challenges for new participants, including simplerapplications, increasing funding, better information and significant support, all for

SMEs that have not been previously funded. By piloting these schemes theCommission could find a way to redress these imbalances and truly open Horizon 2020to the entire spectrum of innovative ICT SMEs.Views of ICT SMEs on Horizon 2020

The key messages above mostly focus on SMEs impression that EU-funded researchin its current configuration does not fully consider their preferences, capacities andneeds. However, when presented with some of the main known features of theplanned support that will be offered to SMEs under Horizon 2020, it seems that manyaspects are in line with what innovative ICT-SMEs would like to see in a fundingprogramme.Despite the fact that the vast majority of SMEs were not aware of Horizon 2020 priorto their engagement with the study, broadly their perceptions of the overall frameworkwere positive. SMEs were particularly positive about the shorter, simpler and moreflexible application processes and the opportunity to carry out a preliminary feasibilitystudy prior to committing resources to a research project. Removing the restrictionsregarding the eligibility of consortia and allowing for a more bottom-up approach wereespecially welcomed by companies. Finally, innovative ICT-SMEs were pleased to seethe importance placed on improving the routes to market but offered a certain level ofconcern about the ability of the proposals to really achieve these goals.While many of the proposed changes do address SMEs issues, there are still someinnovative solutions proposed by SMEs that have not been considered, particularlyaround preferential applications for new participants and how to involve investors.SMEs also have some caveats about certain proposed changes that should be carefullyconsidered. Of special interest are some of the SMEs concerns regarding phase 3which at the time of writing this report was still being defined: SMEs believe phase 3should take place in parallel to phase 2 projects, rather than following the terminationof projects. Additionally, SMEs had certain preferences regarding the range of servicesto be offered and who should offer them in practice.Conclusion

The study undertook a considerable effort to allow innovative ICT SMEs to have theirsay on what they need from a research funding programme. The majority of thecomments and the feedback acknowledged the position of the Commission as a bodyusing tax payers money to fund several different types of research organisation andefforts to bring SMEs into the research arena were applauded. However, past fundingprogrammes have not been SME-friendly and this was clearly stated by SMEs.


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Future plans for Horizon 2020 seem broadly in line with what SMEs are looking for.Nevertheless, within the aggregated opinions lie interesting ideas and opportunities forthe Commission to take note and potential fine tune the proposals for Horizon 2020 toensure that it delivers the disruptive, market focused innovation that will stimulateEuropean competitiveness and growth for the next generation, in line with Europesgrowth strategy for the next d ecade: Europe 2020 .


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2. Introduction

Small and Medium Enterprises are vital players in the European economy, comprising99% of all enterprises 1. In the ICT sector in particular 99.6% of 682,000 companiesare SMEs, of which most are micro companies (89% of total companies in the sector) 2.However, the importance of SMEs to the economy does not only stem from their largenumbers, but also from their indisputable potential as sources of innovation and -consequently - growth, with 85% of new jobs created by SMEs 3 In the progress from FP5 to FP6, and later from FP6 to FP7, the European Commissionhas implemented changes in the rules of participation and the funding schemes inorder to welcome SMEs into the European research community and facilitate theirparticipation. A target of 15% of EU contribution dedicated to the support of SMEs wasestablished under FP6 and FP7 and the SME funding rate was raised to 75%, in orderto further encourage the participation of SMEs in projects under these FrameworkProgrammes 4.While an increase in SME participation has been observed between FP5 and FP6, thetotal budget contribution to SMEs decreased from 13.2% of total FP5 budget, to12.4% of FP6 budget, thus missing the 15% target 5.In FP7, however, according to the 9 th progress report on SME participation in FP7, upto September 2012 the 15% target established for EU contribution for SMEs has beenachieved. Within the Cooperation programme SME funding has reached a level of16.3%, with 18.5% of participating entities classified as SMEs. Achieving the 15%target has been particularly attributed to the implementation of a series of specificmeasures directly targeting SMEs.When looking at the ICT thematic priority, the current participation level of SMEs is inline with the one observed in the Cooperation programme in general: 18.1% of theparticipating entities in FP7-ICT are SMEs who receive 15.2% of the total EU budget.With less than 1 year to the launch of Horizon 2020, planned for January 2014, theopinions of innovative ICT-SMEs regarding the conditions offered by FP7 and the onesplanned for Horizon 2020 are highly important towards shaping adequate specificmeasures that will truly attract innovative companies into future projects. Continuingthe positive trend of SME involvement and their increasing importance as the drivingforce of innovation within the European research community is highly dependent onthe ability of the European Research Authorities to understand the needs andproblems of such companies and to offer the adequate solutions.This report presents the results of a study on innovative ICT-SMEs using an onlinequestionnaire as well as face-to-face and remote interviews. The study's objective wasto try and understand why some innovative ICT SMEs choose not to participate in EU-funded collaborative research projects.

1 The new SME definition, user guide and model declaration. Enterprise and industrypublications, European Commission, 2003.2 Wintjes, R., Dunnewijk, T., Sectoral Innovation Systems in Europe: The Case of the ICTSector. Publisher: Europe Innova, Innovation Watch Systematic. Published: May 2008 3 Economist Intelligence Unit (2013), Scaling SMEs, Building a Flexible Platform for Growth 4 "Decision no 1982/2006/EC of the European Parliament and of the Council of 18 December2006 concerning the Seventh Framework Programme of the European Community for Research,Technological Development and Demonstration activities (2007-2013)" Annex1,I. Cooperation5 Impact assessment of the participation of SMEs in the themes of FP5 and FP6, 2009.European Commission, EUR 24448 EN.


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Specifically, the study was concerned with the following issues: Analyse the reasons why some innovative ICT-SMEs in Europe do not take part

in FP7 Map the preferences, needs and wishes of ICT-SMEs in the context ofcollaborative research Compare the solutions brought forward by ICT-SMEs to the instruments

planned for Horizon 2020The following sections present the study methodology (Section 3), the descriptivestatistics of the questionnaire and interview samples (Section 4), the key findings,highlighting important problems and solutions (Section 5), a comparative analysis ofthe findings and Horizon 2020 (Section 6) and, finally, conclusions and summary(Section 7).This technical report of this study is accompanied by several annexes containing moredetailed information about the study methodology and results.


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3. Methodology

The methodology of the Study builds on the findings of previous studies and projects.In this sense, the methodology of the study was designed bearing in mind workperformed by the project MAPEER SME 6 as well as by previous studies such as

Innovative ICT SMEs in Europe 7, Research intensive high -tech SMEs and Interimevaluation of the ICT research in the 7th Framework Programme. From theseprevious research efforts, the study adapted the structure of questionnaires, collecteddata and pools of previously identified barriers and reasons for non-participation, aswell as motivations for participation and research interests.Based on a desktop research of previous work in the field, an online questionnaire wasdesigned a nd made available in English, French and German via SurveyMonkey. Theresults obtained through the survey were analysed and some of the respondents havebeen invited to attend individual interviews in order to further explore their reasons

for non-participation as well as to discuss potential solutions on how to eliminate thesebarriers or facilitate their participation and finally to discuss the proposed new SMEspecific instrument of Horizon 2020.Based on the quantitative analysis of the surveys and the qualitative analysis of theinterviews, the contractors identified key messages which summarise the problemsand barriers to participation, as well as key solutions.Finally, a comparative analysis was made to detect any gaps between the researchinterests and support needs of innovative ICT-SME, as well as their proposed solutionsto current problems and barriers, and the proposed tools for Horizon 2020.

3.1 Online Questionnaires

The online questionnaire targeted innovative ICT-SMEs as its primary target groupwith membership type bodies (associations, networks, clusters, etc), universities,public bodies and large enterprises as its secondary target group. The onlinequestionnaire was designed to be adaptable to the type of the organisation as well asto key issues such as FP7 experience and awareness and IPR ownership.As presented in Figure 1 respondents were channelled through the questionnairebased on their answers. The questions in the different modes were designed toproduce comparable data for the different groups.The online questionnaire was comprised of three sections:

1. Organisation Demographics : country, sector, company size, type oforganisation, etc

2. FP7 experience and non-participation reasons : participation/non-participation modes, interest in FP7, barriers to participation/ reasons for non-participation

3. Organisation Innovation (innovation audit): innovation culture, tools,innovation outcomes

6 http://mapeer-sme.eu/7 IDC & UNU-MERIT (2007), Innovative ICT SMEs in Euope (EU25), Final Study Report, D. 5. 3.Contract Nr 30-CE0067591/00-41 DGINFSO-C2, Strategy for ICT Research and Development,2007, available from IDC EMEA, October 2007
http://mapeer-sme.eu/http://mapeer-sme.eu/


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Figure 1: Survey flow diagram

The online questionnaire was piloted prior to its launch by members of CRIC, IVSZ andTheia, to ensure no technical problems were present and that the questions wereclear. In addition, in the initial days following the launch of the survey, the answerswere monitored to ensure the questions were correctly understood by the participantsand that they were providing the adequate data.The survey was made available on SurveyMonkey in 3 languages:

English: http://www.surveymonkey.com/s/smenonparticipationsurvey German: http://www.surveymonkey.com/s/smenonparticipationsurvey_de French: http://www.surveymonkey.com/s/smenonparticipationsurvey_fr

The following channels were used to distribute the invitations to the onlinequestionnaires:

Membership type bodies: ICT associations, clusters, technology platforms,other groups with ICT SME members, Enterprise Europe Network offices incontact with innovative SMEs and the ICT sector group of the EEN.

Direct mailing lists focused on innovative ICT SMEs that have either taken part

in previous studies (specifically MAPEER and the Study on High-tech SMEs) or
http://www.surveymonkey.com/s/smenonparticipationsurveyhttp://www.surveymonkey.com/s/smenonparticipationsurveyhttp://www.surveymonkey.com/s/smenonparticipationsurveyhttp://www.surveymonkey.com/s/smenonparticipationsurvey_dehttp://www.surveymonkey.com/s/smenonparticipationsurvey_dehttp://www.surveymonkey.com/s/smenonparticipationsurvey_dehttp://www.surveymonkey.com/s/smenonparticipationsurvey_frhttp://www.surveymonkey.com/s/smenonparticipationsurvey_frhttp://www.surveymonkey.com/s/smenonparticipationsurvey_frhttp://www.surveymonkey.com/s/smenonparticipationsurvey_frhttp://www.surveymonkey.com/s/smenonparticipationsurvey_dehttp://www.surveymonkey.com/s/smenonparticipationsurvey


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were listed on commercial databases with some indication for innovation(number of listed patents, for example).

Social media channels: usage of channels such as Twitter, Facebook, and

LinkedIn. News items were posted on the contractors websites as well as onwebsites such as Ideal-IST. Study website: a website was established to provide potential participants

information regarding the study and easy access to the online questionnaires inthe different languages.

The collection of responses started in June 2012 and the respondents database wereclosely monitored to control the representation of countries, macro regions (EU-15,EU-12 and Associated countries), SMEs sizes (micro-small-medium) and types of SMEs(spin off, start up, merger, other). Several focused actions were undertaken to ensurethat the sample accurately reflects the population.

3.2 InterviewsWhereas the online questionnaire provided mostly quantitative information from alarge population of SMEs, the purpose of the interviews was to collect data of aqualitative nature that would allow a better understanding of the ensemble of reasonsand barriers for participation in FP projects. The interviews also served for starting adialogue with SMEs regarding solutions and ways forward as well as discussing thenew planned SME instrument for Horizon 2020.Companies who had taken part in the online questionnaires were invited to participatein individual interviews based on the following factors:

Agreement to be invited to the interviews, as indicated by the companies in theonline survey

Preference to non participating SMEs with the highest innovation scores, basedon their answers to the online survey Having made comments regarding barriers and problems not examined in the

surveyDue to the geographic spread of the sample most interviews took place by phone orSkype; however, when possible, the contractors met in person with the interviewees.This was the case for a number of interviews taking place in Barcelona and Budapest,as well as for 10 companies that the research team met during the ICT Proposers Dayin Warsaw.The following describe the general settings for the interviews:

Duration: The total duration of an interview varied between 30 minutes and 1hour depending on the progress of discussion.

Participants: In principle, only one interviewer and one interviewee wereforeseen to participate in each interview; however, this changed depending onthe circumstances. For example, a compan ys CEO may participate in aninterview together with the CTO of the company. The interviewee was usually asenior management member of an SME with experience and aware of thecompanys intentions regarding R&D projects and EU research programmeparticipation.

Number of interviews: 47 interviews were conducted either in person orthrough Skype/phone


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Language: in principle, interviews were held in English. In a number of specialcases, the interviews were held in Hebrew, Hungarian and Spanish. Interviewsummaries have been prepared only in English.

3.3 Data analysis

3.3.1 Quantitative analysis of the questionnaires

3.3.1.1 MethodologyThe data gathered broadly fitted into three categories: organisation demographics,organisation innovation and the organisations analysis of t he barriers to participationin FP7. Data was gathered in such a way that can examine relationships betweenthese variables and determine the strengths and significance of any patterns thatoccur.All data collected was exported in an excel format from the SurveyMonkey platform.Using Microsoft Excel the data was manually cleaned and prepared for analysis bySPSS. The following guidelines for data cleaning were applied:

Spam entries were deleted Other answer fields containing comments were revised and, if needed, the

answer was adjusted accordingly. For example, when asked to select thecountry, some respondents failed to find their country in the drop-down menuand added the country name manual ly under Other. While cleaning the data,such entries were adjusted and the right category was selected.

Text comments from the German and French questionnaires were translatedinto English

The different language questionnaires were merged into one database, whichalso aligned the responses of different types of organisations under theappropriate variable.

As the sample was large and close to available population data, the sample was notweighted in any way.Several variables were re-coded to form new variables. For example:- positive and negative statements were used in the barrier analysis to stop selectionbias. These statements were adjusted so that all barriers were measured from 1 to 5,with 1 signifying a barrier and 5 not a barrier.- the innovation audit was scored and companies given a score based on the

statements that they answered. This ranged from 1 to 5, with 1 signifying highlyinnovative while 5 signified a very low level of innovation.- an index measuring a company's experience in FP7 was generated from answers to 3questions. This ranged from 1 to 7, with 1 signifying no knowledge of FP7 while 7indicates that the respondent SME has taken part in both Capacities and Cooperationprojects.The following analysis methods were used for the survey:

analysis of descriptive statistics analysis of relationships and differences between FP7 experience and

demographic data and barriers to participation

In the analysis of relationships and differences, different statistical tests were used,where appropriate, to analyse whether a variable had a significant relationship with


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the FP7 index variable. These tests included Chi Squared tests, Spearman's correlationcoefficient, Kruskal Wallis tests and ANOVAs.Where the variables fulfilled the assumptions and the tests were significant at the 5%level (i.e. the probability that there is not a significant relationship was less than 5%,or p


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3.3.1.3 Data Interpretation: An Example

Figure 2: an example for data interpretation - barriers

Here we have two statements that have been scored by the respondents. The firststatement, asked SMEs to agree or disagree that they are only interested in projectsthat focus on their core business. The second asked to consider whether calls forproposals list relevant topics for the SMEs. Before looking in depth into the results, thecolours of the two columns in Figure 2 already indicate that on average, the firststatement (coloured in red) is perceived as a barrier while the second statement is notperceived on average as a barrier (green).As a total average of all SMEs, most SMEs strongly agreed that they only will considerthose projects that directly focus on their main business activity. This is considered abarrier as it means the calls must fit their business activities if they are to beattractive to SMEs. As the significance level of this statement is above 0.05 this meansthat there is evidence to suggest that any difference between the groups of FP7experience is merely due to random chance, rather than because they have differentviews. We therefore cannot interpret anything from the different average group scores- even though they may appear large.On the other hand, the statement concerning the relevance of the calls scores above3, meaning that this is not considered a barrier when looking at all SMEs. However, asthe level of significance is less than 0.05, this means that there is a significantdifference between the groups with different levelos of experience of FP7 and that weshould base our analysis on the different groups rather than at the overall SME level.In the case of looking into the differences between groups as in Figure 3, the colourscheme does not necessarily indicate the existence of a barrier, but the order of thedifference experience groups from the highest score (shown in green) to the lowest(shown in red).

Figure 3: an example for data interpretation - differences between groups

When looking at the separate groups we can clearly see that there is a relationshipbetween increasing levels of FP7 experience and the belief that calls are relevant. This

Sig. 0.114

Sig. 0.022

1,5

2,0

2,5

3,0

3,54,0

Only projects focused on BusinessInterest Calls are Relevant

3,243,34

3,443,65

3,88

3,44

2,50

3,00

3,50

4,00

Generallyfamiliar

Appliedunsuccessfully

Capacitiesprojects

Cooperationprojects

Capacities &Cooperation

projects Average


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suggests, unsurprisingly, that relevant calls are a key aspect of whether anorganisation takes part in FP7.These two examples demonstrate that SMEs are consistent in their views about thefact that they are only interested in research projects that focus on their businessinterest. However, those SMEs who find the calls relevant for their business interestare significantly more likely to enter European research projects.

3.3.2 Qualitative analysis of the interviewsThe Framework analysis approach was used to analyse qualitative data from theinterviews and undertake analysis systematically. Framework analysis is specificallyuseful in terms of revealing tendencies within a sample of interviews while alsoidentifying unique and even contradicting views 8.In agreement with the literature and in order to manage data efficiently, a reiterativecoding process was established that would lead to robust results. The final coding mapconsisted of 3 coding levels: categories, themes and subthemes. For each code, ashort description of the adequate content matching the code was made, for example:

PropPrepPos: Positive comments regarding the process of proposal preparation or: Evalduration: Comments regarding the duration of proposal evaluations. Coding the interviews was done by assigning to each sentence or paragraph in theinterview summary adequate categories, themes and subthemes from the coding map.During the coding process some adaptations were made to the coding map torepresent codes that were not contemplated on before. At some cases, following groupdiscussion, codes were merged so as to ensure no duplications.Finally, all interview data was coded and assigned IDs so that at any time items couldbe tracked back to the original interview summary. A total of 47 interview summarieswere coded in this manner and later analysed.After completing the coding process, text under the different categories was examinedto detect trends, common opinions and singular opinions. The third coding level(subthemes) was used to refer to specific aspects. The main traits of companiesmaking the different statements and opinions were checked in order to see if anycorrelations exist between properties such as company size and type, history of FPparticipation, and more, and between the opinions expressed.Summaries of all categories and themes were written and where relevant quotes ofinterviewees were inserted.

8 Lacey, A., Luff, D. Trent Focus for Research and Development in Primary Health Care: AnIntroduction to Qualitative Analysis. Trent Focus, 2001.


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4. Innovative ICT SMEs: Profile and characteristics

4.1 Questionnaire sampleA total of 829 questionnaires have been completed by enterprises, networks andinstitutions from all over Europe. Below is an overview of the main characteristics ofthe sample.

4.1.1 General descriptive statistics of the sample

Geographic distribution of the sample

The study was focused on 3 macro regions: 1) EU15 (old EU member states), 2) EU12 (New EUmember states), and 3) Associated countries toFP7. Table 1 presents the number of

questionnaires obtained from each of the macro-regions.Respondents

Approximately 71% of respondents define themselves as senior executives, while 25%of respondents are middle management (Figure 4) . Less than 4% of responses werefilled out by junior employees, thus giving us confidence that the surveys areaccurately completed to represent the views of companies.

Figure 4: position of survey respondents within their organisations

Types of organisation

76.1% of the survey respondents are SMEs and Membership type bodies were thesecond largest group with 8.0% of the sample.

Figure 5: type of organisations in the questionnaire sample

4.1.2 Descriptive statistics of SMEs in the sample

SMEs by number of employees

70,8%

25,3%

3,9%

Senior Executive

Middle Management

Entry Level

76,1%

5,2%

8,0%

4,9%5,8%

SME Large CompanyMembership Type Body Public BodyUniversity

Macro region Number ofquestionnaires

EU 15 550EU 12 171Associated

countries103

Table 1: number of questionnaire permacro region


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The majority (56.8%) of SMEs in the sample are micro companies, with less than 10employees. Small companies represent 27.2% of the sample whereas medium-sizedcompanies represent 16.0%. The general trend of SME group sizes is also evidentwithin macro regions as presented Figure 6; however, micro companies do notrepresent the majority of respondents in the EU12 region.

Figure 6: SME sizes in the sample and across macro regions

SMEs by turnover

The group of SMEs reporting an annual turnover last year of 100,000 to 1Mrepresent the largest group in the sample (39.7%) while the second largest group(26.1%) was those who rep orted an annual turnover of less than 100,000. The redcumulative line shows that the sample, where 79.3% of enterprises have an annualturnover lower than 2M, follows a similar turnover pattern of that of the EU SMEs 9.Additionally, almost 98% have repo rted a turnover of less than 10M, which reinforcesthe argument that the sample is representative at European level.

Figure 7: SMEs by reported turnover

Age of the organisation

The oldest company in the sample dates back from 1890, while the newest wasfounded in 2012. Data shows that the vast majority (91.8%) of enterprises have beenestablished within the last 25 years. This is understandable, as companies tend togrow or die; those companies that were founded over 50 years ago and are stilloperating are unlikely to be micro companies.

9 EU SMEs in 2012: at the crossroads Annual report on small and medium-sizedenterprises in the EU, 2011/12

0,0%

20,0%

40,0%

60,0%

80,0%

EU15 EU12 Associated

countries

Micro

Small

Medium Micro57%

Small27%

Medium16%

0

10

20

30

40

50

60

70

80

90100

0

20406080

100120140160180200220

less than 100,000

100,000 - 1M

1M - 2M 2M - 5M 5M - 10M 10M - 20M

over 20M

Frequency

Cumulative %


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Recent and predicted growth of SMEs

In recent years, SMEs have retained their position as the backbone of the Europeaneconomy. For 2012, it is estimated that SMEs accounted for 67 per cent of totalemployment and 58 per cent of gross value added (GVA )9. With regards to growth 58.95% of all SMEs have reported that their turnover hasgrown over the last three years, while for 21.79% of them it has shrunk. When askedfor expected growth for the next three years, respondents were overwhelminglypositive: 80.32% of them expect to have positive growth, with 49.90% of the totalexpecting this growth to be more than 10%. Only 10.93% believe they will experiencea decrease in turnover.As mentioned before, a high percentage of the respondents hold high positions withinthe SMEs. Therefore the answers of this question may be biased in the way thatpeople are estimating their own future performance, tending to predict higherperformance than it turns out. Despite this fact, we believe that this trend is a good

indication of how the turnover will evolve in the near future, and clearly highlights theimportance that SMEs will continue to play for the European Union.Distribution of ICT-SMEs by main economic activity

SME respondents were asked to identify the code(s) corresponding to their mainbusiness activity. Table 2 presents the frequencies for each NACE code within the SMEsample. It is highly significant that NACE 62 (Computer and related services)represents more than 50% of sample SMEs main economic activities. The rest of theNACE codes are equally represented among the sample, with the second highest beingNACE 61 (Telecommunication services) with almost 13% of the cases.

Economic activity NACE code PercentageManufacture of office machinery and computers 26.20 5.35%Manufacture of insulated wire and cable 26.30 0.76%Manufacture of radio, television and communicationequipment and apparatus

26.4 4.43%

Manufacture of medical, precision and optical instruments,watches and clocks

26.52,26.6 & 26.7

6.27%

Wholesale of machinery, equipment and supplies 46.5 3.21%Telecommunication services 61 12.84%Computer and related services 62 50.46%Research and experimental development on naturalsciences and engineering

72.1 2.14%

Renting of office machinery, including computers 77.33 1.38%Other N/A 13.15%

Table 2: frequencies of NACE codes on the SME samples

4.2 Analysis of FP7 Experience of SMEs in the sampleThe aim of this study is to understand better the reasons why certain innovative ICTSMEs have not taken part in European Research Projects. A key aspect of that is tounderstand if there are any variables, such as turnover, age, patents or number ofemployees that help to explain an organisations level of participation in FP7 researchprojects.In order to do this, we had to identify different levels of participation. This wasdetermined by dividing the SMEs into the following 7 groups listed in the table below.During the survey, each respondent was asked to identify which category applied totheir organisation.


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Figure 8: Level of Experience in FP7 Research ProjectsAll of the groups are relatively evenly represented, aside from the 4% who haveparticipated in both Capacities and Cooperation projects. Overall 70% of therespondents had not participated in FP7 research projects, even though 15% hadunsuccessfully applied. 20% said they had no knowledge of the program.

4.2.1 Profile of SMEs with Different Experience in FP7Using this classification of SMEs by their FP7 experience we can assess if there arerelationships between demographic variables such as size, location, age andinnovation variables such as patents and the innovation index. The detailedexplanation of these tests is contained in the appendix, while a summary of the resultsare presented here.

Demographic DataTests were carried out against a range of demographic variables and the SMEsexperience in FP7. Of these, number of employees, turnover, and growth were notfound to have any significant relationship with FP7 experience.

Variable Effect Significant Variable Chi Squared Significant

Year Small yes Turnover 9.641 no

Staff none no TurnGrowthPast 9.558 no

Variable Chi Squared Significant Variable Chi Squared Significant

KnowRegFunding 92.507 yes TurnGrowthFut 6.308 no

MacroGrouping1 31.543 yes Foundation 22.628 yes

MacroGrouping2 11,660 no

Table 3 Demographics and FP7 Experience

This means the average number of staff in the sample is just under 25 for all groupsof FP7 experience. Turnover is also consistent across all groups with the average firmearning between 2 and 5 million Euros, with past growth in the region of 0 to 5%.Future growth however was predicted to be, on average, between 5 to 10%.

Year Prior to this survey, wereyou familiar with regional

or national fundingprogrammes available to

your organisation?

Location

18%

19%

18%

15%

10%

16%

4% No experience

Aware it exists

Generally familiar

Applied unsuccessfully

Capacities projects

Cooperation projects

Capacities & Cooperationprojects


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Year Yes No EU 15 EU 12 AssociatedCountries

No experience 2001,44 50,0% 50,0% 46,4% 32,1% 21,4%Aware it exists 2001,05 72,1% 27,9% 57,5% 27,6% 14,9%

Generally familiar 2002,16 90,0% 10,0% 57,5% 23,8% 18,8%Appliedunsuccessfully 2002,19 95,7% 4,3% 74,3% 21,4% 4,3%

Capacitiesprojects 1995,31 95,6% 4,4% 73,3% 20,0% 6,7%

Cooperationprojects 1999,71 94,4% 5,6% 79,2% 13,9% 6,9%

Capacities &Cooperationprojects

1997,89 100,0% 0,0% 66,7% 27,8% 5,6%

Average 2000,29 81,40% 18,60% 64,50% 22,80% 12,70%Table 4 FP7 Experience Levels and Significant Demographic Variables

"Year", "Location", "Foundation" and "Regional Funding" all have significant

relationships with FP7 experience.We can see that generally, the older an organisation gets, the greater its experience ofFP7 research programs. The test provides statistical evidence that those organisationsthat take part in Capacities projects are more likely to be older than thoseorganisations that have some knowledge of FP7 and those that are undertaking effortsto enter into FP7 research projects."Knowledge of regional funding" also has a significant relationship with the level of FP7experience with SMEs with a greater knowledge of regional funding more likely tohave a greater experience of FP7. However, this only seems relevant up to those thatare familiar with FP7 but have not applied. 96% of those that have unsuccessfullyapplied are familiar with national or regional funding, which is the same average for allorganisations that have taken part in FP7 projects.This relationship might be due to the fact that SMEs who have better contacts andinformation are more likely to know about all research grants, at national, regionaland European level. Alternatively it could mean that those organisations who are notinterested in regional and national projects are also not interested in FP7, howeverthis is unlikely as 76% of SMEs who have not been funded by FP7 are aware ofnational and regional alternatives. Nevertheless, what we can see is that knowledge ofnational and regional funding is an important first step in applying to FP7, if not for agenerating a successful proposal.Additionally, "location" has an influence on the average level of SMEs experience. Inparticular, SMEs from the Associated Countries are significantly underrepresented inFP7 projects and in those proposals that do not obtain funding. EU12 countries inproposals and successful projects are appropriately represented while EU15 countriesare over represented in successful projects and unsuccessful proposals.

Not Applied Applied Research spin-off (university or research organisation) 29% 71%Corporate spin-off (spin-out) 52% 48%Start-up 61% 39%Merger 38% 63%Private Company 54% 46%Total 55% 45%

Table 5 Founding against Level of FP7 Applications


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Finally, we have also found that how an SME is formed has a significant relationshipwith its level of FP7 experience 10.The results laid out in the table above demonstrate that independent start-ups (39%)are the least likely organisation to apply to FP7 research projects while research spinoffs (71%) are almost twice as likely to have applied.In summary, SMEs that were founded before 1995, as a spin off from a university,based in the EU15, and with knowledge of regional and national research funding arestatistically significantly more likely to have participated in an EU research project.Other demographic variables, such as number of employees, turnover and growth donot change significantly with level of FP7 experience.

4.2.2 Innovation

Tests were carried out against a range of innovation variables to see if the shared arelationship with FP7 experience. The % of staff members who work in R&D, thenumbers of trademarks or licenses granted and patents that have been held for threeyears do not have any significant relationship with level of FP7 experience.On average, 55% of the staff work in R&D, while each organisation has licensed at

least two pieces of IPR and has registered one trademark.

Patents, the innovation index and % of PhDs however all have a statistically significantrelationship with FP7 experience.

10 Due to the low numbers of SMEs that listed as mergers or a private company we have tocombine the levels of FP7 participation. The cut off point was placed between thoseorganisations that are familiar with FP7 but have not applied and those that are familiar withFP7 and have applied unsuccessfully

Variable Effect Significant Variable Effect Significant

Trademarks Small no Licensed Small noPatents3years Small no %R&D Small no

Patents Small yes %PhD Small yesEUPatents Medium yes InnovationScore Small yes

Table 6: FP7 experience against innovations variables

Registered trademarksPatents filedin the last 3

years?Licensed Trademarks % of staff in R&D

Average 1,38 ,96 2,12 ,55

Table 7 Average For Innovation Variables without Relationships with FP7 Experience

Number of

Patents

Number ofpatents from

EuropeanCommission

funding

% PhDAverage innovationscore (1= very to 5

= not)

No experience ,91 ,00 ,12 2,51 Aware it exists 1,30 ,00 ,17 2,40Generally familiar 1,13 ,00 ,20 2,35

Applied unsuccessfully ,93 ,06 ,21 2,23Capacities projects 1,35 ,05 ,17 2,28Cooperation projects 2,93 ,34 ,26 2,10Capacities & Cooperationprojects 1,25 ,14 ,10 2,18

Average 1,51 ,08 ,18 2,32


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Looking at the innovation index, we can see that those SMEs who have only taken partin Capacities projects score the lowest score (suggesting the highest innovation) andthis is significantly different from those with no knowledge of FP7.SMEs who have a greater level of experience of FP7 research projects have a higherpercentage of staff with PhDs, with organizations that have only taken part inCapacities projects tend to have the highest percentage of staff with PhDs at 26%,which is significantly higher than SMEs who have no knowledge of FP7.Furthermore we can see that generally companies who have taken part in FP7research projects have filed more patents, again with those SMEs that have taken partin Capacities projects scoring significantly higher than those who have no experienceor understanding of FP7.When looking at this data it suggests that the most innovative companies, in terms ofthe innovation index, % of PhDs and patents, are those that have only applied toCapacities projects. In contrast those with no experience of FP7 are also likely to havefewer patents and % of PhDs. They are also likely to have a higher (and therefore lessinnovative) innovation index.

4.3 Interview sampleA total of 47 companies took part in the interviews. As presented in Figure 9 there wasrepresentation of all 3 macro regions in the interviews.

Figure 9: interviewed companies by macro regions

Table 8 presents the representation per country. There is a representation of 23countries out of the 41 countries in the macro regions addressed by the study.

Country SMEsBelgium 1

Bulgaria 2Denmark 2Germany 3Estonia 1Ireland 2Spain 2France 1Italy 4Latvia 1Lithuania 1Hungary 4

Austria 3Portugal 1

Romania 1Sweden 1United Kingdom 6Norway 1Switzerland 1Turkey 2Greece 3Israel 3Malta 1Total 47

Table 8: companies interviewed per country

Type of company

62%23%

15%

EU-15

EU-12

AC


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In terms of type of company, Figure 10 presents the participating companies bycompany type (how the company was established) and by company size.

Figure 10: Type and size of interviewed companies

In terms of company size, 55% of the interviewed companies were micro companies,followed by small and medium, with 28% and 17%, respectively. Start-ups representthe highest percentage of interviewed companies with 68% of the total interviewedcompanies. Spin-offs, both originating in research institutes and corporations, are thesecond highest with 24% (12 companies).FP7 Participation Experience

Of the interviewed companies, 45% had no previous experience in FP7 projects orproposals. 53% have either submitted an unsuccessful proposal (28% of the total) ortook part in a project (25%).

Figure 11: FP7 experience of the interviewed companies

55%28%

17%

Micro

Small

Medium

15%

9%

68%

6% 2% ResearchSpin-off CorporateSpin-off Start-up

Merger

Other

2%

45%25%

28%

53%

Not sure

Never Applied

Applied andobtained fundingApplied but did notobtain funding


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5. Findings

5.1 SMEs want more quality information

5.1.1 SummaryWhen examining issues related to the availability and accessibility of informationrelated to FP7, results clearly show that ICT-SMEs as a whole do not possess goodawareness of FP7, nor to its specificities. Unsurprisingly, awareness is a key pre-requisite to project participation; when examining the differences between companieswith different FP7 experiences, it is seen that the less experience a company has, theless likely it is to know of calls for proposals, preceding documents, available supportfor proposal preparation and support to networking. FP7 knowledge and awarenessseems to be tightly associated with FP7 experience, thus implying that non-experienced SMEs are at a detrimental position in terms of information andawareness.From the interviews these so- called awa reness- related barriers become even cleareras many companies voice criticism of the complexity of information and its lack ofaccessibility; the language used in FP7 documents is found to be far from jargoncommonly used by SMEs in the ICT sector and the way information is structured isconsidered by SMEs to be over-complicated. In addition, a poor perception of FP7decreases the interest of innovative SMEs with little or no FP7 experience inparticipating in FP7. Innovative ICT-SMEs and particularly start-ups claim they do notform part of the target audience of the common communication channels theCommission uses to disseminate information about FP7. Consequently, thesecompanies seem to be excluded from FP7, either due to lack of information ormisinformation.

According to SMEs, it is not more information that is needed, but better quality,concise, easy to access information. This includes the documents and websites thatare published by the Commission as well as asking for better information from theNCPs. As will be also mentioned in the following subsections, SMEs would like for thelanguage used in EU documents to become clearer and more market-oriented, and theframework as a whole to become more accessible especially for first time participantswith no previous information or training.Finally, SMEs would like to see the Commission launching campaigns targetingcompanies outside of the traditional networks via local entrepreneurs communities,mainstream professional online networks and commercial events.Despite their growing numbers in ICT projects, the majority of innovative ICT-SMEs inEurope do not form part of the European research community. These companies tendto use different communication channels and, while forming part of entrepreneurcommunities, most of them seem to not cross paths with channels used by FP7.

5.1.2 IntroductionInnovative ICT-SMEs seem to show clear preference for fast processes, short responsetimes and short term commitments. When referring to EU-projects, the following areasare highlighted by SMEs:

Deadlines of calls for proposals Delay in the reimbursement of costs Time-to-project Project duration


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5.1.3 Awareness of FP7 from the questionnairesIn the questionnaires, companies were asked about their level of awareness of FP7. Ofthe companies that have no prior experience in FP7 projects or proposal submission,

71% had little or no knowledge of FP7 while only 29% claim to be generally familiarwith the details of FP7 (Figure 12) . This finding suggests that a main barrier toparticipation may be due to a lack of awareness. Companies cannot be expected totake part in FP7 if they do not know of it.

Figure 12: FP7 awareness level among Innovative ICT-SMEs with no FP7 experience

Companies were also asked to refer to a number of statements regarding theirawareness of FP7, calls and support mechanisms. The following statements wereexamined in this context:My organisation... Barrier name Barrier Groupis not aware of the calls for proposals Awareness to calls Awarenessuses preceding documents to undertake strategic

planning before the calls for proposals are published

Awareness to

precedingdocuments

Awareness

is aware of agencies that provide financial support forwriting project proposals

Awareness ofsupport agencies

Awareness

Is aware of support to networking through localagencies

Awareness tonetworking support

Consortiumformation

Figure 13 shows the average score for each barrier across all groups and the statisticalsignificance of the relationship between different levels of FP7 experience and thedifferent barriers examined.

Figure 13: average scores and significance levels of awareness-related barriers

Awareness of the calls for proposals

The level of awareness of the calls for proposals shows a strong relationship with FP7experience (p


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proposals is associated with project participation, while low awareness is associatedwith lesser or no experience in FP7. Similarly to FP7 awareness, this findingdemonstrates that in many cases, companies do not take part in FP7 simply becausethey are unaware of the calls for proposals.

Figure 14: differences between groups for awareness of calls for proposals

Awareness of preceding documents

Overall, it seems that ICT-SMEs do not have a good awareness of the precedingdocuments to the calls, scoring an average of 2.83. Moreover, a strong relationshipexists between the awareness and usage of preceding documents and FP7 experience(p


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While awareness of agencies that provide support to proposal preparation does notseem to be a barrier, with an average across groups of 3.29, there is a significantdifference between the groups (p


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In conclusion, if it is the aim of Horizon 2020 to attract the most innovative ICT SMEsto research projects then raising awareness of the scheme across all SMEs is key. Inthat respect it is essential that there is an equal awareness of EC programs regardlessof size, location or any indicator, including past experience in EC research projects.Unfortunately, the table above demonstrates that, despite the fact that none of theseare perceived as large barriers, there are significant and large differences in terms ofawareness of FP7 projects amongst different levels of experience of FP7. This providesevidence that awareness of is a key indicator of successful entry into FP7 projects.

5.1.4 Awareness of FP7 from the interviewsFrom the interview it became clear that in addition to the abundant lack of awarenessof FP7, there is also the issue of the image of FP7 . In most cases comments weremade indicating a negative or poor perception of the framework programme; this is anopinion shared by companies with or without experience in FP7, though the majorityof these companies have either taken part in projects or unsuccessfully submittedproposals. The latter indicates that these comments are likely to be based on first-hand experience, not only rumours.According to companies, FP7 and other programmes funded by the EuropeanCommission are perceived as complex, slow and highly bureaucratic . Somecompanies have noted the low rate of success as an important risk factor, making theprogramme as a whole less appealing . In some cases companies expressed theirconcern that some entities apply for European funding with the sole goal of obtainingaccess to funding, and that there were entities that exist solely of these funds.There were some encouraging views claiming that the fear of bureaucracy may not be

justified and that programme is also an important instrument for implementing EU

policies; however, despite these, the fact that companies with no FP7 experience andwith little or no awareness to FP7 have a negative perception of the frameworkprogramme is a concern as it seems to affect their decision to become involved andfind out more.Among the companies commenting on FP7 awareness , only 5% have never heard ofFP7 prior to the questionnaires. However, the remaining 95% had different awarenesslevels ranging from general awareness and lack of familiarity to having taken part inprojects. One respondent honestly explained what seems to be the truth for manycompanies:

I have heard about the framework programme but it never came into my mindthat it could be suitable for us.

However, it seems that awareness is not everything; some companies reported theyhave already tried to read about the programme or even took part in information daysor seminars in order to gain some knowledge, but despite this they did not feel readyto take part in proposals.When discussing the issue of consortium formation it became clear from the individualinterviews that many companies with good FP7 knowledge (for example, those withunsuccessful application experience), were unaware of the existence of supportservices for networking such as the ICT-NCPs, Ideal-IST, IPR-Helpdesk, and others.This shows that not only awareness to FP7 needs to improve, but also awareness tosupporting services at the national and European levels.When asked about the awareness for preceding documents even the minority ofcompanies that are aware of the existence of preceding documents claim they eitherdo not know where they could access them or they cannot dedicate time to analyse


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them. Similarly, regarding the publication of calls , some companies said thatmonitoring the publication of calls was too costly for them.In summary, awareness and image go hand-in-hand in this case, as a number ofcompanies with low awareness of FP7 had some beliefs regarding FP7 and theircompatibility with it, which turned out to be not correct during the discussions.

I do not know where to start from where to look for the calls for proposals,where to find websites of running projects, where partner searches are posted...

5.1.5 Proposed solutionsDuring the interviews SMEs were specifically asked to comment on how theCommission might improve its outreach to innovative ICT-SMEs and which channelsshould be used.It was suggested that communications strategies focused on ICT-SMEs , in theform of targeted marketing campaigns are created. Such campaigns should focus onthe preferred events, means of communication and the established networks ofinnovative ICT-SMEs:

make use of professional networking tools such as LinkedIn use local networking organisations (like Chambers of Commerce) to spread

information outside of the traditional networks of larger companies,associations and research institutions that are already participating in FP7

Take on an active approach in involving high tech companies . High-techsand entrepreneurs normally form local and regional communities and meetperiodically. In each region, there seem to be a number of opinion leaders thatorganize these meet-ups these opinion leaders are the ones to contact forspreading information to these innovation communities.

Appoint ambassadors for EU projects ICT-SMEs with project experiencethat could spread the word in their networks and provide vocal case studiesfor others to emulate.

Involve business angels and venture capitals , especially those investing inthe ICT sector

Attend commercial conferences focused on ICTAdditionally, some companies suggested the use of mass-communication channels,such as local radio and television, as general means of disseminating information andespecially in the context of improving the overall image of EU-funded research.

5.1.6 ConclusionsFrom the findings presented above it is evident that awareness is a major barrier toparticipation and that the image of FP7 is a concern. The main findings aresummarised in the table below:


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Figure 17: Awareness - main barriers and proposed solutions

5.2 Fit the rhythm of SMEs

5.2.1 SummarySMEs in the ICT sector are dynamic, agile organisations that quickly adapt anddevelop new technologies as products or as part of their business model. In general,they found the timings of calls, the length of time required for evaluations,negotiations and the length of European projects did not reflect the adaptable nature

of SMEs.From the survey it was seen that all SMEs, whether experienced in FP7 or not, foundthat having to potentially wait a year before a project would start was a barrier toentering European research projects. Those with less experience of FP7 were alsothose who find longer projects more difficult and less attractive. This suggests thatspecifying project length automatically excludes those SMEs who prefer to run shorterprojects.During the interviews it became clear that the timings associated with starting aproject - namely evaluation and negotiation - did not reflect the realities of working inthe ICT sector, where developments happen rapidly and delays can mean losingcompetitive advantage. Equally in this respect, longer projects were considered

potentially unnecessary and risky, particularly for smaller SMEs. Ideally, SMEs wouldlike the length of projects to reflect the project need rather than being set externally.During the interviews all SMEs expressed their interest in a scheme which had rollingdeadlines for calls for proposals, allowing SMEs the opportunity develop the projectwhen they have less work. In line with this they also requested that, if there is to beonly one annual deadline, it should be during the summer months when other work isreduced, rather than when work is at its peak.Overall, SMEs feel that the timings around submitting, starting and executing projectsare based on the Commission's requirements, rather than reflecting the reality for themajority of SME.


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5.2.2 IntroductionInnovative ICT-SMEs seem to show clear preference for fast processes, short responsetimes and short term commitments. When referring to EU-projects, the following areas

are highlighted by SMEs: Deadlines of calls for proposals Delay in the reimbursement of costs Time-to-project Project duration

5.2.3 The time dimension of EU projects from the questionnairesIn the questionnaires, companies were asked to refer to a number of statementsregarding the duration of various processes in EU projects. The following statementswere examined in this context:

My organisation... Barrier name Barrier Groupdoes not find any problem if costs are reimbursed atthe end of the year

End of yearreimbursement ofcosts

FundingConditions

has problems if there is a delay of over 6 monthsbetween the proposal submission and the projectstarting

Time-to-project FundingConditions

normally runs short projects (max 1 year) Projects of over 1years duration

Rules ofParticipation

is comfortable assuming the responsibility ofparticipating in a 3 year project

Projects of 3 yearsduration

Rules ofParticipation

Figure 18: average scores and significance levels of examined barriersFigure 18 shows the average score for each barrier across all groups and the statisticalsignificance of the relationship between different levels of FP7 experience and thedifferent barriers examined.End of year reimbursement of costs

With regards to end of year reimbursement of costs there were no significantdifferences between the different levels of FP7 experience and the average scoresuggests that on average delay in payments seems not to form a barrier. On the otherhand, an average score of 3.07 shows that, on average, companies are only just overthe indifference line (set at 3.00) indicating that they are not very comfortable withthe procedure of having costs reimbursed at the end of each year.

Sig. 0,442

Sig. 0,504Sig. 0,000

Sig. 0,000

2,0

2,5

3,0

3,5

4,0

4,5

End of yearreimbursement

costs Time-to-project

Projects of over1 yearsduration

Projects of 3years duration


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Time-to-project

Results show that the time gap between proposal submission and project kick-off (time -to- project) is perceived on average as a barrier for ICT SMEs. As therewere no significant differences between the different levels of FP7 experience, it seemsthat there is no relationship between time-to-project and the level of FP7 experience.This is, rather, a problem shared by all ICT-SMEs, regardless of their priorinvolvement in FP7.Project duration

Next, two statements regarding project duration were examined: the first was used toassess the degree to which projects with a duration of over 1 year may exclude somecompanies from applying, while the other was used to see whether or not projects of 3years duration will exclude companies from applying. In both cases, significantdifferences exist between groups of companies with different FP7 experience,suggesting that there is strong evidence of a relationship between the variable andFP7 participation.

Figure 19: differences across groups for projects over 1 year's duration

Projects of over 1 year duration: while the overall average suggests this may notbe a barrier to SMEs as a whole, looking at the average per group shows a differentpicture; running short projects is the variable that is considered the greatest barrier,with an average score of 2.62 for SMEs with no experience of FP7 against a score of3.68 for those organisations that have taken part in STREPs (Figure 19) . Thisdifference of 26.5% between averages suggests that the length of projects may act asa key indicator of the SMEs that take part in FP7 projects and those that do not.However, there may be several reasons why a company prefers shorter projects (age,

size, and specialty) which might influence this which are not explained here. What wecan see is that those organisations that are less focused on short projects are morelikely to have greater experience of FP7.

2,622,51

2,722,91

3,463,68

3,29

2,92

2,0

2,5

3,0

3,5

4,0No experience Aware it exists

Generallyfamiliar

Appliedunsuccessfully

Capacitiesprojects

Cooperationprojects

Capacities &Cooperation

projects Average


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Figure 20: differences across groups for Projects of 3 years du ration

Projects of 3 year duration: looking at participating in a 3 year project, we can seethat on average no group considers this to be a large barrier. However, we can alsosee that those SMEs that have participated in FP7 projects are more comfortableparticipating in 3 year projects, than SMEs with no previous participation experience inFP7. This difference in averages, reaching up to 19%, suggests that those companiesthat are more comfortable participating in a 3 year project are more likely to befinanced than those that are not.In conclusion, the evidence base suggests ICT SMEs generally hold a somewhatnegative view of the time dimension of EU projects. While in some cases there is amixed trend, it is clear that all SMEs as a whole are not comfortable with delays inpayments and they consider the time between project submission and project kick-offto represent a barrier. When it comes to the length of projects, there seem to besignificant differences between the opinions of FP7 participants and non-participantswhich suggest that longer projects may have been excluding some companies fromparticipating in FP7.

5.2.4 The time dimension of EU projects from the interviewsDespite not being studied in the questionnaires, the deadlines of calls forproposals and the time-to-submission were raised many times by SMEs during theinterviews. While one company claimed it did not find the timing of the deadlines orthe time between the publication of calls and the submission deadline to be a problem,several companies feel this time gap is not sufficient for gathering a consortium orgenerating a high-quality proposal. Specifically companies with limited resources mostly micro and small companies find it hard to adjust themselves to a yearly or asemi-yearly deadline; while they may have a good idea, should the deadline fallduring a busy time of the year, they will not be able to present a proposal. In cases,companies are working on a Research and Innovation idea, and then have to wait forthe adequate topic to be published. SMEs find there is no guarantee for the actualpublication of such topic and that they may have to wait for following years. Softwaredevelopment companies specifically noted in this context that the rapid rate ofdevelopment in their field makes it hard for companies to wait for topics to bepublished. Further, companies mentioned cases in which they decided not to submit aproposal due to lack of time.During the interviews, 25% of SMEs commented that they consider end of yearreimbursement of costs to be a real barrier. These organisations, all micro-companies, believe that the current reimbursement practices could hinder theireconomical viability and so they have so far avoided project participation. This

3,723,58

3,954,12 4,08

4,344,24

3,94

3,0

3,5

4,0

Documents

Study on Non FP Participation