clean capital - european business and technology...

Clean Capital Guide on FinancinG opportunities For

eu cleantech sMes and research

septeMber 2013

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Clean Capital: Guide on Financing Opportunities for EU Cleantech SMEs and Research

Table of Contents Acronyms/Abbreviations .................................................................................................................................................. 5 Foreword ................................................................................................................................................................................... 8 About this Report ................................................................................................................................................................. 9 Executive Summary .......................................................................................................................................................... 10 SMEs in profile .................................................................................................................................................................... 14

European SMEs – The backbone of the EU economy ....................................................................................... 14 EU SMEs, cleantech eco-innovation and emerging economies ................................................................... 15 SMEs in India ..................................................................................................................................................................... 16

The India cleantech landscape and opportunities for EU cleantech ....................................................... 18 The enabling environment for EU cleantech and SMEs ................................................................................. 23

EU Initiatives to promote cleantech ......................................................................................................................... 23 European SME policy ..................................................................................................................................................... 24 One-stop shops ............................................................................................................................................................... 25

Access to finance for EU SMEs .................................................................................................................................... 26 On-going EU support programmes for SMEs...................................................................................................... 26 Upcoming EU Support Programmes for SMEs .................................................................................................... 35 Support from individual EU member countries and respective institutions/agencies ........................ 36 Other EU sources of finance and/or support systems ...................................................................................... 41 Non-EU sources of finance and/or support systems ........................................................................................ 43

Funding for research ........................................................................................................................................................ 44 Current research funding in the EU – the FP7 ..................................................................................................... 44 Upcoming research funding in the EU – the Horizon 2020 ........................................................................... 52 EU – India Research Collaboration ........................................................................................................................... 55

The Way Forward for EU SMEs ................................................................................................................................... 60 Appendix 1: EU Country Snapshots of Eco-innovation.................................................................................. 61

Austria .................................................................................................................................................................................. 61 Belgium ............................................................................................................................................................................... 62 Bulgaria ............................................................................................................................................................................... 63 Cyprus .................................................................................................................................................................................. 64 Czech Republic ................................................................................................................................................................. 65 Denmark ............................................................................................................................................................................. 66

Estonia ................................................................................................................................................................................. 67 Finland ................................................................................................................................................................................. 68 France................................................................................................................................................................................... 69 Germany.............................................................................................................................................................................. 70 Greece .................................................................................................................................................................................. 71 Hungary............................................................................................................................................................................... 72 Ireland .................................................................................................................................................................................. 73 Italy ....................................................................................................................................................................................... 74 Latvia .................................................................................................................................................................................... 75 Lithuania ............................................................................................................................................................................. 76 Luxembourg ...................................................................................................................................................................... 77 Malta .................................................................................................................................................................................... 78 Netherlands ....................................................................................................................................................................... 79 Poland .................................................................................................................................................................................. 80 Portugal ............................................................................................................................................................................... 81 Romania .............................................................................................................................................................................. 82 Slovakia ............................................................................................................................................................................... 83 Slovenia ............................................................................................................................................................................... 84 Spain ..................................................................................................................................................................................... 85 Sweden ................................................................................................................................................................................ 86 United Kingdom............................................................................................................................................................... 87

Appendix 2: Additional Information Sources ..................................................................................................... 88 India- EU Cooperation ................................................................................................................................................... 88 Indian S&T System.......................................................................................................................................................... 88

Estonia ................................................................................................................................................................................. 67 Finland ................................................................................................................................................................................. 68 France................................................................................................................................................................................... 69 Germany.............................................................................................................................................................................. 70 Greece .................................................................................................................................................................................. 71 Hungary............................................................................................................................................................................... 72 Ireland .................................................................................................................................................................................. 73 Italy ....................................................................................................................................................................................... 74 Latvia .................................................................................................................................................................................... 75 Lithuania ............................................................................................................................................................................. 76 Luxembourg ...................................................................................................................................................................... 77 Malta .................................................................................................................................................................................... 78 Netherlands ....................................................................................................................................................................... 79 Poland .................................................................................................................................................................................. 80 Portugal ............................................................................................................................................................................... 81 Romania .............................................................................................................................................................................. 82 Slovakia ............................................................................................................................................................................... 83 Slovenia ............................................................................................................................................................................... 84 Spain ..................................................................................................................................................................................... 85 Sweden ................................................................................................................................................................................ 86 United Kingdom............................................................................................................................................................... 87

Appendix 2: Additional Information Sources ..................................................................................................... 88 India- EU Cooperation ................................................................................................................................................... 88 Indian S&T System.......................................................................................................................................................... 88

Acronyms/Abbreviations Acronym/Abbreviation Full Form

AAI Aquaculture Authority of India

AICTE All India Council for Technical Education

BAS Business Advisory Services

BEET Biotech, Energy, Environment and Transport

BIPV Building Integrated Photovoltaic

BSI Botanical Survey of India

C-WET Centre for Wind Energy Technology

CAES Compressed Air Energy Storage

CAGR Compounded Annual Growth Rate

CAS Collision Avoidance System

CCS Carbon Capture and Sequestration

CIF Climate Investment Funds

CIP Competitiveness and Innovation Framework Programme

COSME Programme for the Competitiveness of enterprises and SMEs

CRO Contract Research Organisation

CSIR Council of Scientific & Industrial Research

CSP Concentrating Solar Power

CTF Clean Technology Fund

DA Distribution Automation

DARE Department of Agricultural Research and Education

DBT Department for Biotechnology

DeitY Department of Electronics & Information Technology

DOD Department of Ocean Development

DST Department of science and Technology

EBRD European bank for Reconstruction and Development

EBTC European Business and Technology Centre

EC European Commission

EcoAP Eco-innovation Action Plan

EIB European Investment Bank

EIF European Investment Fund

EIP Entrepreneurship and Innovation Programme

EIT European Institute of Innovation and Technology

EMPF European Progress Microfinance Facility

ENPI European Neighbourhood Policy Instrument

EPC Engineering, Procurement, Construction

ERC European Research Council

CLEAN CApITAL: GUIDE ON FINANCING OppORTUNITIES FOR EU CLEANTECH SMES AND RESEARCH

promoting European Clean Technologies in India & Tackling Climate Change

5

Acronym/Abbreviation Full Form

ERDF European Regional Development Fund

ESF European Social Fund

ETAP Environmental Technologies Action Plan

ETP European Technology Platforms

ETS Emissions Trading Scheme

EU European Union

EV Electric Vehicle

FACTS Flexible AC Transmission System

FDI Foreign Direct Investment

FET Future and Emerging Technologies

FP7 EU’s Seventh Framework Programme for Research and Technological Development

GDP Gross Domestic Product

GEF Global Environment Facility

GIF High Growth and Innovative SME Facility

GIP Green Initiative for Power Generation

GoI Government of India

GVA Gross Value Added

HTM High-Tech Manufacturing

HVDC High Voltage DC Transmission

IAPP Industry-Academia Partnerships and Pathways

ICAR Indian Council of Agricultural Research

ICMR Indian Council of Medical Research

ICT Information and Communication Technologies

IEE Intelligent Energy Europe Programme

IFC International Finance Corporation

IPA Instrument of Pre-Accession Assistance

IPR Intellectual Property Rights

IREDA Indian Renewable Energy Development Agency

ITS Intelligent Transportation Systems

JASMINE Joint Action to Support Micro-finance Institutions in Europe

JEREMIE Joint European Resources for Micro and Medium Enterprises

JNNSM Jawaharlal Nehru National Solar Mission

JTI Joint Technology Initiatives

JV Joint Venture

KIS Knowledge-Intensive Services

MCIT Ministry of Communications and Information Technology

MFPI Ministry of Food Processing Industries


EUROpEAN BUSINESS AND TECHNOLOGY CENTRE

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ERDF European Regional Development Fund

ESF European Social Fund

ETAP Environmental Technologies Action Plan

ETP European Technology Platforms

ETS Emissions Trading Scheme

EU European Union

EV Electric Vehicle

FACTS Flexible AC Transmission System

FDI Foreign Direct Investment

FET Future and Emerging Technologies

FP7 EU’s Seventh Framework Programme for Research and Technological Development

GDP Gross Domestic Product

GEF Global Environment Facility

GIF High Growth and Innovative SME Facility

GIP Green Initiative for Power Generation

GoI Government of India

GVA Gross Value Added

HTM High-Tech Manufacturing

HVDC High Voltage DC Transmission

IAPP Industry-Academia Partnerships and Pathways

ICAR Indian Council of Agricultural Research

ICMR Indian Council of Medical Research

ICT Information and Communication Technologies

IEE Intelligent Energy Europe Programme

IFC International Finance Corporation

IPA Instrument of Pre-Accession Assistance

IPR Intellectual Property Rights

IREDA Indian Renewable Energy Development Agency

ITS Intelligent Transportation Systems

JASMINE Joint Action to Support Micro-finance Institutions in Europe

JEREMIE Joint European Resources for Micro and Medium Enterprises

JNNSM Jawaharlal Nehru National Solar Mission

JTI Joint Technology Initiatives

JV Joint Venture

KIS Knowledge-Intensive Services

MCIT Ministry of Communications and Information Technology

MFPI Ministry of Food Processing Industries


MHRD Ministry of Human Resource Development

MNRE Ministry of New and Renewable Energy

MoAC Ministry of Agriculture and Cooperation

MoEF Ministry of Environment and Forests

MoHFW Ministry of Health and Family Welfare

MST Ministry of Science & Technology

NBA National Biodiversity Authority

NIF Neighbourhood Investment Facility

NMEEE National Mission for Enhanced Energy Efficiency

NPP Networking Pilot Programme

NRP National Recycling Program

PHES Pumped Hydro Energy Storage

PMU Phase Measurement Unit

PST Phase Shifting Transformer

PV Photovoltaic

R&D Research and Development

SBA Small Business Act for Europe

SET Strategic Energy Technologies

SFIC Strategic Forum for International S&T Cooperation

SME Small and Medium Enterprises

TAM Turn Around Management

UGC University Grants Commission

UNIDO United Nations Industrial Development Organisation

VC Venture Capital

VSC Voltage Source Converters

ZSI Zoological Survey of India



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Foreword The European Business and Technology Centre (EBTC) promotes EU clean technologies in India by enhancing existing networks, initiatives, partners, and institutions both in Europe and India. As clean technology is still in a nascent stage of development in India, the need for “Clean Capital” to stroke the clean technology sectors is even more important. This report addresses this and EBTC hopes that this also provides a pathway for European entrepreneurs to fund internationalisation of their business in India.



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Foreword The European Business and Technology Centre (EBTC) promotes EU clean technologies in India by enhancing existing networks, initiatives, partners, and institutions both in Europe and India. As clean technology is still in a nascent stage of development in India, the need for “Clean Capital” to stroke the clean technology sectors is even more important. This report addresses this and EBTC hopes that this also provides a pathway for European entrepreneurs to fund internationalisation of their business in India.

About this Report The objective of this report is to inform the small and medium enterprises and entrepreneurs in the European Union (EU) about the funding landscape that obtains on the continent. This report analyses both member states and EU funds for clean technologies in particular and research and innovation in general.

The research reported herein was performed under the European Business and Technology Centre (EBTC) Workplan 2011 and 2012. This report was prepared for EBTC by its partners Finpro and IVL Swedish Environmental Research Institute.

Mr. Monish Verma, Sector Specialist - Environment, EBTC was the primary editor of this report and would like to acknowledge Mr Sunder Subramanian, InCircle support for finalising the report.



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Executive Summary The twenty three million small and medium sized enterprises (SMEs) – defined as companies with fewer than 250 employees and which are independent from larger companies -- are the lifeblood of Europe’s economy, accounting for over 98% of businesses. They have provided two thirds of the total private employment and around 80% of new jobs created over the past five years. For 2012 it is estimated that SMEs accounted for 67 per cent of total employment and 58 per cent of gross value added (GVA) in the EU. With more than 87 million persons employed, SMEs continue to be the backbone of the EU economy. Firms active in “hi-tech” and knowledge intensive industry have shown a particular strong performance in terms of productivity and employment as well as GVA growth. There are almost 46,000 SMEs in high-tech manufacturing (HTM) and more than 4,3 million SMEs offering knowledge-intensive services (KIS) in the EU.

Europe is a global leader in eco-innovation and cleantech, and the diffusion of eco-innovation, with European companies representing the largest share of the global eco-industry market. The world’s ‘green market’ is estimated at €0.6 to €1.0 trillion per year. Over one third of this market belongs to the EU and many European SMEs have discovered business opportunities in eco-industries. Europe has significant expertise in cleantech spanning many verticals/industry segments. European national governments are also increasingly recognising the large potential for internationalisation activities in the fields of cleantech and eco-industries. This is also supported by EU policy initiatives such as the Small Business Act for Europe (SBA), the European Commission’s Entrepreneurship 2020 Action Plan, the Multi-Annual Financial Framework 2014-2020, and the Eco-innovation Action Plan (EcoAP), which also focuses on “promoting responsible investments in and use of environmental technologies in developing countries and countries in economic transition”. These initiatives are further supported by specific mechanisms to support SMEs, including one-stop-shops for multiple services such as the EU Small Business Portal and the Enterprise Europe Network.

This places European business, especially cleantech SMEs in a strong strategic position to help build green markets overseas, especially in emerging markets. In order to achieve these objectives, the EU promotes various support measures and initiatives, such as funding for international research projects, launching industry/sector internationalisation plans and promoting SMEs abroad via the organisation of special events in target markets, where European eco-firms can present their products and services.

The growing markets of the emerging economies such as India are experiencing an increasing demand for energy and material resources that creates the need for more efficient and sustainable technological and organisational solutions. At the same time, there is a persistent demand for more traditional eco-industry services, such as pollution control, water supply and treatment, waste handling and the rehabilitation of contaminated sites. The particularly rich experience and knowledge of European eco-innovators and eco-industries have a lot to offer to the emerging markets such as India.

As in Europe, the SME sector in India is considered to be the backbone of economy contributing to 45% of the industrial output, 40% of India’s exports, employing 60 million people, creating 1.3 million jobs every year and producing more than 8000 quality products for the Indian and international markets. Despite the strong growth rate at present, a huge potential among Indian SMEs is still untapped. India, one of the world’s fastest growing economies, presents lucrative opportunities for companies that offer products and services in the clean technologies industries. India is seeking to diversify its energy sources, become more energy efficient and also reduce carbon emissions in the context of sustained economic expansion. With the rapid growth of the Indian economy, the demand for clean technologies in the country is rising. For instance, the development of renewable energy



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Executive Summary The twenty three million small and medium sized enterprises (SMEs) – defined as companies with fewer than 250 employees and which are independent from larger companies -- are the lifeblood of Europe’s economy, accounting for over 98% of businesses. They have provided two thirds of the total private employment and around 80% of new jobs created over the past five years. For 2012 it is estimated that SMEs accounted for 67 per cent of total employment and 58 per cent of gross value added (GVA) in the EU. With more than 87 million persons employed, SMEs continue to be the backbone of the EU economy. Firms active in “hi-tech” and knowledge intensive industry have shown a particular strong performance in terms of productivity and employment as well as GVA growth. There are almost 46,000 SMEs in high-tech manufacturing (HTM) and more than 4,3 million SMEs offering knowledge-intensive services (KIS) in the EU.

Europe is a global leader in eco-innovation and cleantech, and the diffusion of eco-innovation, with European companies representing the largest share of the global eco-industry market. The world’s ‘green market’ is estimated at €0.6 to €1.0 trillion per year. Over one third of this market belongs to the EU and many European SMEs have discovered business opportunities in eco-industries. Europe has significant expertise in cleantech spanning many verticals/industry segments. European national governments are also increasingly recognising the large potential for internationalisation activities in the fields of cleantech and eco-industries. This is also supported by EU policy initiatives such as the Small Business Act for Europe (SBA), the European Commission’s Entrepreneurship 2020 Action Plan, the Multi-Annual Financial Framework 2014-2020, and the Eco-innovation Action Plan (EcoAP), which also focuses on “promoting responsible investments in and use of environmental technologies in developing countries and countries in economic transition”. These initiatives are further supported by specific mechanisms to support SMEs, including one-stop-shops for multiple services such as the EU Small Business Portal and the Enterprise Europe Network.

This places European business, especially cleantech SMEs in a strong strategic position to help build green markets overseas, especially in emerging markets. In order to achieve these objectives, the EU promotes various support measures and initiatives, such as funding for international research projects, launching industry/sector internationalisation plans and promoting SMEs abroad via the organisation of special events in target markets, where European eco-firms can present their products and services.

The growing markets of the emerging economies such as India are experiencing an increasing demand for energy and material resources that creates the need for more efficient and sustainable technological and organisational solutions. At the same time, there is a persistent demand for more traditional eco-industry services, such as pollution control, water supply and treatment, waste handling and the rehabilitation of contaminated sites. The particularly rich experience and knowledge of European eco-innovators and eco-industries have a lot to offer to the emerging markets such as India.

As in Europe, the SME sector in India is considered to be the backbone of economy contributing to 45% of the industrial output, 40% of India’s exports, employing 60 million people, creating 1.3 million jobs every year and producing more than 8000 quality products for the Indian and international markets. Despite the strong growth rate at present, a huge potential among Indian SMEs is still untapped. India, one of the world’s fastest growing economies, presents lucrative opportunities for companies that offer products and services in the clean technologies industries. India is seeking to diversify its energy sources, become more energy efficient and also reduce carbon emissions in the context of sustained economic expansion. With the rapid growth of the Indian economy, the demand for clean technologies in the country is rising. For instance, the development of renewable energy

resources and deployment of environment technologies has become a high priority for the Government of India.

The growth rate in biotech, energy, environment and transport (BEET) sectors is much higher than India's gross domestic product (GDP) growth rate. This offers huge opportunities in light of government policies and incentives for all the BEET sectors. Further, encouragingly, the number of private equity investments committed to clean technologies has increased. India’s clean technology investments, have reached €7.65 billion in 2011, some 52 percent higher than the €5.1 billion invested in 2010. This was the highest growth figure of any significant economy in the world; and there is plenty of room for further expansion.

A range of support programmes that enable access to finance for EU SMEs are in existence. This is available in different forms such as grants, loans and, in some cases, guarantees. Broadly, assistance is available under four categories: (a) Thematic funding opportunities; (b) Structural funds such as the European Regional Development Fund (ERDF) and European Social Fund (ESF); (c) Financial instruments (typically only available indirectly, via national financial intermediaries); and (d) support for internationalisation. Thematic funding is available for sectors such as environment, energy and transport under the LIFE + programme. It also covers the programmes such as Competitiveness and Innovation Framework Programme (CIP), Marco Polo II (2007-2013), Education and Training, including Integrated Action Programme in Lifelong Learning, and the Erasmus programme for Young Entrepreneurs. Structural Funds are designed to help reduce disparities in the development of regions, and to promote economic and social cohesion within the European Union. Structural Funds include the 2007-2013 strategy and resources of cohesion policy and are grouped into three priority objectives, with a total allocation of € 347.41 billion.

The new Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) will run from 2014 to 2020, with a planned budget of €2.3 billion (current prices), and has the objective of facilitating access to finance for SMEs, creating an environment favourable to business creation and growth, encouraging an entrepreneurial culture in Europe, increasing the sustainable competitiveness of EU companies, and helping small businesses operate outside their home countries and improving their access to markets. COSME is expected to start on 1 January 2014.

In addition to the above sources, SMEs could also potentially find funding/financing from various agencies in individual EU member countries. The EU supports entrepreneurs and businesses with a wide range of EU programmes (2007-2013) providing loans, guarantees, venture capital and other equity financing. These financial instruments are managed by financial intermediaries such as banks, venture capital funds and other financial institutions. The decision to provide a loan, guarantee or venture capital/ equity financing will be made by the local financial institution. The exact financing conditions -the amount, duration, interest rates and fees- depends on the financial institution. Select examples of national level support for SMEs are provided for Finland, France, Germany, Spain, Sweden, and the UK.

Funding for cleantech ventures are also available from a range of non-EU sources from time to time. These could, indicatively include multilateral sources such as the World Bank and other group agencies such as the International Finance Corporation (IFC), UN agencies such as the United Nations Industrial Development Organisation (UNIDO), and other multilateral mechanisms such as the Global Environment Facility (GEF). The GEF-UNIDO for example jointly administer the Global Cleantech Programme for SMEs, and also recently (May 2013) launched the India Cleantech Programme; Bilateral sources such as USAID, which for example, recently (June 2013) committed $100-million investment in India’s clean energy sector; Specialised funds such as the Climate Investment Funds (CIF), which includes the $5.2 billion Clean Technology Fund (CTF) provides middle income countries with resources to explore options to scale up the demonstration, deployment, and transfer of low-carbon,



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clean technologies. Venture capital and private equity – a range of players are active in India in this segment. For example, The IFC, BP, India’s Technology Development Board, and the Indian Institute of Management have joined forces to create Infuse Ventures, an India-centric venture capital fund that will invest in cleantech and renewable energy start-ups. With an aim to raise $23 million, Infuse debuted in India in May 2013 with its first fund closing at $14 million.

A range of funding opportunities is also available for research initiatives. The FP7 - Seventh Framework Programme for Research and Technological Development - is the EU's main instrument for funding research in Europe during the years 2007-2013. FP7 was also designed to respond to Europe's employment needs, competitiveness and quality of life. FP7's budget amounted to ca. €50 billion for 2007-13. Under the cooperation programme, over 15% of the budget has been allocated to SMEs. Grants were available for projects with a EU dimension - e.g. involving partners from more than one EU country. Funding is available for SMEs performing or acquiring research. Post 2013, the Horizon 2020 programme will become the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe's global competitiveness. Running from 2014 to 2020 with an €80 billion budget, the EU’s new programme for research and innovation is part of the drive to create new growth and jobs in Europe. International cooperation will be an important crosscutting priority of Horizon 2020. In addition to Horizon 2020 being fully open to international participation, targeted actions with key partner countries and regions will focus on the EU’s strategic priorities.

In the era of rapid internationalization of science and technology, EU-India science and technology cooperation have considerably improved over a decade, through the EU-India Science and Technology Cooperation Agreement supported by regular revision and updating of joint S&T priorities. Science and technology represents a central element in the EU-India strategic partnership. Research cooperation started in the mid-80s, and the first science and technology cooperation agreement was signed in 2001 and extended in 2009. Since the agreement in 2001, India has become one of the major partners of the EU in the Framework Programmes for Research and Technological Development. Currently, over 225 Indian partners are involved in 150 projects in the FP7. These projects were funded with some € 337 million from the Framework Programme of which some € 30 million went directly to Indian partners. Key areas of cooperation with India include Health (57 projects), Environment (37), ICT (30) and Food, Agriculture and Fisheries, and Biotechnology (30). This is now supplemented by the New Indigo programme, an initiative of European and Indian S&T organisations involved in promoting research cooperation between Europe and India. The aim of New INDIGO project is to fill the gaps and allow the scientific community and institutions of India to access the European Research Area, and the Euro-Indian S&T cooperation to fully benefit from the new networking tools of FP7.

In addition to the above, in India, the central government plays a vital role in identifying research opportunities and funding them under different schemes and programmes. Indian government funding for research and development and innovation is provided and co-ordinated by a number of different organisations covering many sectors such as ICT, food and agriculture, space, biotechnology, energy, environment, transport, social science, material science. Besides, under various bilateral agreements and funding schemes for Indian-European researcher mobility, staff exchange, fellowships, study visits, joint workshops and joint RTDI projects are available to support international cooperation at academic and industry level.

With a conducive environment – including high levels of eco-innovation in Europe and favourable policy and financing, as well as increasing opportunity spaces for internationalising, EU-SMEs are well positioned to take significant steps to further innovation, growth and new partnership beyond European borders. Upcoming EU support programmes such as COSME and frameworks such as Horizon 20-20 lay out comprehensive frameworks for EU small businesses and SMEs to prepare and leverage a variety of financing support to innovate, grow, and internationalise.



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clean technologies. Venture capital and private equity – a range of players are active in India in this segment. For example, The IFC, BP, India’s Technology Development Board, and the Indian Institute of Management have joined forces to create Infuse Ventures, an India-centric venture capital fund that will invest in cleantech and renewable energy start-ups. With an aim to raise $23 million, Infuse debuted in India in May 2013 with its first fund closing at $14 million.

A range of funding opportunities is also available for research initiatives. The FP7 - Seventh Framework Programme for Research and Technological Development - is the EU's main instrument for funding research in Europe during the years 2007-2013. FP7 was also designed to respond to Europe's employment needs, competitiveness and quality of life. FP7's budget amounted to ca. €50 billion for 2007-13. Under the cooperation programme, over 15% of the budget has been allocated to SMEs. Grants were available for projects with a EU dimension - e.g. involving partners from more than one EU country. Funding is available for SMEs performing or acquiring research. Post 2013, the Horizon 2020 programme will become the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe's global competitiveness. Running from 2014 to 2020 with an €80 billion budget, the EU’s new programme for research and innovation is part of the drive to create new growth and jobs in Europe. International cooperation will be an important crosscutting priority of Horizon 2020. In addition to Horizon 2020 being fully open to international participation, targeted actions with key partner countries and regions will focus on the EU’s strategic priorities.

In the era of rapid internationalization of science and technology, EU-India science and technology cooperation have considerably improved over a decade, through the EU-India Science and Technology Cooperation Agreement supported by regular revision and updating of joint S&T priorities. Science and technology represents a central element in the EU-India strategic partnership. Research cooperation started in the mid-80s, and the first science and technology cooperation agreement was signed in 2001 and extended in 2009. Since the agreement in 2001, India has become one of the major partners of the EU in the Framework Programmes for Research and Technological Development. Currently, over 225 Indian partners are involved in 150 projects in the FP7. These projects were funded with some € 337 million from the Framework Programme of which some € 30 million went directly to Indian partners. Key areas of cooperation with India include Health (57 projects), Environment (37), ICT (30) and Food, Agriculture and Fisheries, and Biotechnology (30). This is now supplemented by the New Indigo programme, an initiative of European and Indian S&T organisations involved in promoting research cooperation between Europe and India. The aim of New INDIGO project is to fill the gaps and allow the scientific community and institutions of India to access the European Research Area, and the Euro-Indian S&T cooperation to fully benefit from the new networking tools of FP7.

In addition to the above, in India, the central government plays a vital role in identifying research opportunities and funding them under different schemes and programmes. Indian government funding for research and development and innovation is provided and co-ordinated by a number of different organisations covering many sectors such as ICT, food and agriculture, space, biotechnology, energy, environment, transport, social science, material science. Besides, under various bilateral agreements and funding schemes for Indian-European researcher mobility, staff exchange, fellowships, study visits, joint workshops and joint RTDI projects are available to support international cooperation at academic and industry level.

With a conducive environment – including high levels of eco-innovation in Europe and favourable policy and financing, as well as increasing opportunity spaces for internationalising, EU-SMEs are well positioned to take significant steps to further innovation, growth and new partnership beyond European borders. Upcoming EU support programmes such as COSME and frameworks such as Horizon 20-20 lay out comprehensive frameworks for EU small businesses and SMEs to prepare and leverage a variety of financing support to innovate, grow, and internationalise.

The growing markets in these developing economies, along with the increasing recognition of the sustainability and environmental agendas in the countries in which these markets are based have created, and also increased, demand for eco-innovations and eco-industrial technology and services. The particularly rich experience and knowledge of European eco-innovators and eco-industries have a lot to offer to these emerging markets. Through international collaboration, European eco-innovators can also assist developing countries in economic and technological leapfrogging and give added environmental value to the development process.

With a vibrant SME sector and increasing opportunities in the Indian clean-tech market space, there is significant opportunity for EU SMEs and research centres to explore Indian markets and potential partnerships within India. Support systems to enable such ventures across the entire value chain are in place through one-stop shops such as EBTC, making it easier for EU SMEs to enter the Indian markets as also to learn from the Indian experience.



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SMEs in profile

European SMEs – The backbone of the EU economy

The European Union (EU) faced challenging economic conditions in 2011/12, with an intensifying sovereign debt crisis in the euro zone and weakening growth in even the better performing nations. Throughout the downturn, however, SMEs retained their position as the backbone of the European economy, with some 20.7 million firms accounting for more than 98 per cent of all enterprises, of which over 92 per cent were firms with fewer than 10 employees1. For 2012 it is estimated that SMEs accounted for 67 per cent of total employment and 58 per cent of gross value added (GVA)2. With more than 87 million persons employed, SMEs continue to be the backbone of the EU economy. Of course, at the same time, SME performance varies considerably among member states.

Firms active in “hi-tech” and knowledge intensive industry have shown a particular strong performance in terms of productivity and employment as well as GVA growth. There are almost 46,000 SMEs in high-tech manufacturing (HTM) and more than 4,3 million SMEs offering knowledge-intensive services (KIS) in the EU. These include SMEs producing pharmaceutical products, electronics or legal and accounting services as well as scientific research and development (R&D) and creative industries. Together they represent more than a fifth (21.1%) of all of the EUs SMEs. While Germany contains the largest number of SMEs in high-tech manufacturing, while Italy, the UK and France are home to the largest number of knowledge-intensive services.

1 For more detailed data on SMEs in Europe, see generally: http://ec.europa.eu/enterprise/policies/sme/facts-figures-

analysis/index_en.htm 2 GVA includes depreciation, rewards to labour, capital and entrepreneurial risk. GVA remains when the intermediate costs are

deducted from the sales or turnover.

The 23 million small and medium sized enterprises (SMEs) are the lifeblood of Europe’s economy, accounting for over 98% of businesses. They have provided two thirds of the total private employment and around 80% of new jobs created over the past five years.

What is an SME?

SMEs are defined as companies with fewer than 250 employees and which are independent from larger companies. In addition, they have an annual turnover up to €50 million or an annual balance sheet up to €43 million.

There are three types of SME:

• Micro-enterprises have fewer than 10 employees • Small enterprises have between 10 and 49 employees • Medium-sized enterprises have between 50 and 249 employees

Go online for more information: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/



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SMEs in profile

European SMEs – The backbone of the EU economy

The European Union (EU) faced challenging economic conditions in 2011/12, with an intensifying sovereign debt crisis in the euro zone and weakening growth in even the better performing nations. Throughout the downturn, however, SMEs retained their position as the backbone of the European economy, with some 20.7 million firms accounting for more than 98 per cent of all enterprises, of which over 92 per cent were firms with fewer than 10 employees1. For 2012 it is estimated that SMEs accounted for 67 per cent of total employment and 58 per cent of gross value added (GVA)2. With more than 87 million persons employed, SMEs continue to be the backbone of the EU economy. Of course, at the same time, SME performance varies considerably among member states.

Firms active in “hi-tech” and knowledge intensive industry have shown a particular strong performance in terms of productivity and employment as well as GVA growth. There are almost 46,000 SMEs in high-tech manufacturing (HTM) and more than 4,3 million SMEs offering knowledge-intensive services (KIS) in the EU. These include SMEs producing pharmaceutical products, electronics or legal and accounting services as well as scientific research and development (R&D) and creative industries. Together they represent more than a fifth (21.1%) of all of the EUs SMEs. While Germany contains the largest number of SMEs in high-tech manufacturing, while Italy, the UK and France are home to the largest number of knowledge-intensive services.

1 For more detailed data on SMEs in Europe, see generally: http://ec.europa.eu/enterprise/policies/sme/facts-figures-

analysis/index_en.htm 2 GVA includes depreciation, rewards to labour, capital and entrepreneurial risk. GVA remains when the intermediate costs are

deducted from the sales or turnover.

The 23 million small and medium sized enterprises (SMEs) are the lifeblood of Europe’s economy, accounting for over 98% of businesses. They have provided two thirds of the total private employment and around 80% of new jobs created over the past five years.

What is an SME?

SMEs are defined as companies with fewer than 250 employees and which are independent from larger companies. In addition, they have an annual turnover up to €50 million or an annual balance sheet up to €43 million.

There are three types of SME:

• Micro-enterprises have fewer than 10 employees • Small enterprises have between 10 and 49 employees • Medium-sized enterprises have between 50 and 249 employees

Go online for more information: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/

EU SMEs, cleantech eco-innovation and emerging economies

Cleantech and eco-innovation The cleantech concept embraces a diverse range of products, services, and processes across industry verticals that are inherently designed to improve the productive and responsible use of natural resources, greatly reduce or eliminate negative environmental impacts, and provide superior performance at lower costs.

Europe is a global leader in eco-innovation and cleantech, and the diffusion of eco-innovation (for EU country level snapshots of eco-innovation and innovation ranking, see Appendix 1). In the cleantech sector and eco-industries, European companies represent the largest share of the global eco-industry market. The world’s ‘green market’ is estimated at €0.6 to €1.0 trillion per year. Over one third of this market belongs to the EU and many European SMEs have discovered business opportunities in eco-industries. In clean energy, water and sustainable mobility sectors, the EU’s share ranges between 30% and 40% but it has acquired half of the global trade market in waste management technologies3.

Internationalisation and cleantech SMEs

International cooperation between the EU and southern countries evolves within national and international policy frameworks. Policies range from creating enabling environments and legal frameworks, through international agreements, to more targeted activities such as pilot project support and the establishment of technology support offices. A number of measures are being pursued through international environmental agreements, at both multilateral and bilateral levels, where the measures may reflect the agenda for the North-South transfer of environmentally sound technologies. International cooperation on eco-innovation is now well represented in the EU policy agendas.

3 Emerging markets: Eco-innovation Practices and Business Opportunities for European SMEs in the Emerging Markets of Asia,

Latin America, and Africa. Eco-Innovation Observatory (EIO) Thematic Report, April 2012, European Commission.

Cleantech and EU expertise

Europe has significant expertise in cleantech spanning many verticals/industry segments. Key areas of European cleantech expertise includes, indicatively:

Resource Management (resource and material efficiency, bioplastic/biorefinery, forestry and agriculture, waste — recycling and processing, sustainable water management, energy (renewable), energy (production and storage), energy efficiency, life sciences, eco-design, ecosystem management),

Pollution Management (air — prevention and reduction of pollution, mitigation of noise pollution, soil — prevention and remediation of pollution, waste minimisation & disposal, water & sanitation),

Monitoring and Forecasting (weather forecasting, environmental monitoring), and

Integrated technologies (sustainable mobility and intelligent transport, construction, ferrous and non-ferrous metals, extractive - mining and quarrying, nanotechnology, biotechnology).



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The EU’s engagement has been well demonstrated by the activities of the Environmental Technologies Action Plan (ETAP)4, which has now been replaced by the Eco-innovation Action Plan (EcoAP)5. EcoAP also focuses on “promoting responsible investments in and use of environmental technologies in developing countries and countries in economic transition”. In order to achieve these objectives, the EU promotes various support measures and initiatives, such as funding for international research projects, launching industry/sector internationalisation plans and promoting SMEs abroad via the organisation of special events in target markets, where European eco-firms can present their products and services.

European national governments are also increasingly recognising the large potential for internationalisation activities in the fields of cleantech and eco-industries. This places European business, especially cleantech SMEs in a strong strategic position to help build green markets overseas, especially in emerging markets such as India.

SMEs in India

As in Europe, the SME sector in India is considered to be the backbone of economy contributing to 45% of the industrial output, 40% of India’s exports, employing 60 million people, creating 1.3 million jobs every year and producing more than 8000 quality products for the Indian and international markets.

The Indian SME sector with over 30 million SMEs is growing at a rate of 8% per year. Some of the factors that have contributed to the growth of Indian SMEs include: funding of SMEs by local and foreign investors, new technologies assisting SMEs add considerable value to their business, and trade facilitation directories and trade portals that help linkages between buyer and supplier as well as reducing barriers to trade. In this context, the Indian SME sector can absorb a significant portion of the 12 million people expected to join the workforce in next 3 years provided it is backed up by strong government support to increase their competitiveness in the international market. 4 See http://ec.europa.eu/environment/ecoap/about-action-plan/etap-previous-action-plan/index_en.htm 5 See http://ec.europa.eu/environment/ecoap/index_en.htm

EU cleantech SMEs and emerging market opportunities

Internationalisation represents a significant opportunity to realise the full potential of innovative SMEs. International collaboration and engaging in international markets present both a business opportunity for European cleantech SMEs, as well as a chance to contribute not only economic and technological aspects to the development process but also environmental value.

The growing markets of the emerging economies such as India along with the increasing recognition of the sustainability and environmental agendas in their countries have created opportunities for eco-innovative business activities. Emerging economies including India are experiencing an increasing demand for energy and material resources that creates the need for more efficient and sustainable technological and organisational solutions. At the same time, there is a persistent demand for more traditional eco-industry services, such as pollution control, water supply and treatment, waste handling and the rehabilitation of contaminated sites. Today the global eco-innovators’ community offers numerous solutions that can contribute significantly to solving problems linked to growing levels of harmful emissions and problems of resource scarcity. The particularly rich experience and knowledge of European eco-innovators and eco-industries have a lot to offer to the emerging markets such as India. In addition, international collaboration with businesses in emerging economies provides much opportunity and learning potential for the European SMEs.



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The EU’s engagement has been well demonstrated by the activities of the Environmental Technologies Action Plan (ETAP)4, which has now been replaced by the Eco-innovation Action Plan (EcoAP)5. EcoAP also focuses on “promoting responsible investments in and use of environmental technologies in developing countries and countries in economic transition”. In order to achieve these objectives, the EU promotes various support measures and initiatives, such as funding for international research projects, launching industry/sector internationalisation plans and promoting SMEs abroad via the organisation of special events in target markets, where European eco-firms can present their products and services.

European national governments are also increasingly recognising the large potential for internationalisation activities in the fields of cleantech and eco-industries. This places European business, especially cleantech SMEs in a strong strategic position to help build green markets overseas, especially in emerging markets such as India.

SMEs in India

As in Europe, the SME sector in India is considered to be the backbone of economy contributing to 45% of the industrial output, 40% of India’s exports, employing 60 million people, creating 1.3 million jobs every year and producing more than 8000 quality products for the Indian and international markets.

The Indian SME sector with over 30 million SMEs is growing at a rate of 8% per year. Some of the factors that have contributed to the growth of Indian SMEs include: funding of SMEs by local and foreign investors, new technologies assisting SMEs add considerable value to their business, and trade facilitation directories and trade portals that help linkages between buyer and supplier as well as reducing barriers to trade. In this context, the Indian SME sector can absorb a significant portion of the 12 million people expected to join the workforce in next 3 years provided it is backed up by strong government support to increase their competitiveness in the international market. 4 See http://ec.europa.eu/environment/ecoap/about-action-plan/etap-previous-action-plan/index_en.htm 5 See http://ec.europa.eu/environment/ecoap/index_en.htm

EU cleantech SMEs and emerging market opportunities

Internationalisation represents a significant opportunity to realise the full potential of innovative SMEs. International collaboration and engaging in international markets present both a business opportunity for European cleantech SMEs, as well as a chance to contribute not only economic and technological aspects to the development process but also environmental value.

The growing markets of the emerging economies such as India along with the increasing recognition of the sustainability and environmental agendas in their countries have created opportunities for eco-innovative business activities. Emerging economies including India are experiencing an increasing demand for energy and material resources that creates the need for more efficient and sustainable technological and organisational solutions. At the same time, there is a persistent demand for more traditional eco-industry services, such as pollution control, water supply and treatment, waste handling and the rehabilitation of contaminated sites. Today the global eco-innovators’ community offers numerous solutions that can contribute significantly to solving problems linked to growing levels of harmful emissions and problems of resource scarcity. The particularly rich experience and knowledge of European eco-innovators and eco-industries have a lot to offer to the emerging markets such as India. In addition, international collaboration with businesses in emerging economies provides much opportunity and learning potential for the European SMEs.

Despite the strong growth rate at present, a huge potential among Indian SMEs is still untapped. Once this untapped potential becomes the source for growth of these units, there would be no stopping India joining US, Europe and China in becoming one of the world’s economic powerhouse.



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The India cleantech landscape and opportunities for EU cleantech India, one of the world’s fastest growing economies, presents lucrative opportunities for companies that offer products and services in the clean technologies industries. India is seeking to diversify its energy sources, become more energy efficient and also reduce carbon emissions in the context of sustained economic expansion. With the rapid growth of the Indian economy, the demand for clean technologies in the country is rising. For instance, the development of renewable energy resources and deployment of environment technologies has become a high priority for the Government of India.

The growth rate in biotech, energy, environment and transport (BEET) sectors is much higher than India's gross domestic product (GDP) growth rate. This offers huge opportunities in light of government policies and incentives for all the BEET sectors. Further, encouragingly, the number of private equity investments committed to clean technologies has increased.

India’s clean technology investments, have reached €7.65 billion in 2011, some 52 percent higher than the €5.1 billion invested in 2010. This was the highest growth figure of any significant economy in the world. There is plenty of room for further expansion as in 2011, India accounted only for 4 percent of global investment in clean energy. India ranks sixth among the world’s 20 leading economies in attracting funds to build clean energy infrastructure.

Table 1: Examples of EU technologies and India opportunities

Value Chain Area Business Opportunity for EU SMEs

Energy Generation

Wind - Onshore Technology transfer – joint ventures (JV) with Indian companies or Greenfield projects on turbine component manufacturing, wind energy analytics, forecasting & assessment, and engineering, procurement, and construction (EPC).

Wind - Offshore Technology transfer & research collaboration: site assessment, offshore components manufacturing, etc.

Solar photovoltaic (PV) Technology transfer and R&D collaboration for component or equipment manufacturing, niche segments in rooftop solar or building integrated photovoltaic (BIPV) systems, and EPCs.

Concentrating solar power (CSP)

Technology Transfer for components manufacturing, energy storage, and EPC.

Geothermal Technology Transfer for assessment and components manufacturing, and EPC.

Ocean – Wave/Tidal Technology Transfer for assessment and components manufacturing, and EPC.

Biomass Power Technology transfer (especially for small scale biomass), research collaboration in energy crops - small-scale biomass power systems, energy crops research, and waste heat usage.

Small Hydro Equipment and component supply, especially more efficient turbines, accessories and hydrokinetics.

Clean Coal & Carbon Technology transfer and R&D collaboration for ultra



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The India cleantech landscape and opportunities for EU cleantech India, one of the world’s fastest growing economies, presents lucrative opportunities for companies that offer products and services in the clean technologies industries. India is seeking to diversify its energy sources, become more energy efficient and also reduce carbon emissions in the context of sustained economic expansion. With the rapid growth of the Indian economy, the demand for clean technologies in the country is rising. For instance, the development of renewable energy resources and deployment of environment technologies has become a high priority for the Government of India.

The growth rate in biotech, energy, environment and transport (BEET) sectors is much higher than India's gross domestic product (GDP) growth rate. This offers huge opportunities in light of government policies and incentives for all the BEET sectors. Further, encouragingly, the number of private equity investments committed to clean technologies has increased.

India’s clean technology investments, have reached €7.65 billion in 2011, some 52 percent higher than the €5.1 billion invested in 2010. This was the highest growth figure of any significant economy in the world. There is plenty of room for further expansion as in 2011, India accounted only for 4 percent of global investment in clean energy. India ranks sixth among the world’s 20 leading economies in attracting funds to build clean energy infrastructure.

Table 1: Examples of EU technologies and India opportunities


Energy Generation

Wind - Onshore Technology transfer – joint ventures (JV) with Indian companies or Greenfield projects on turbine component manufacturing, wind energy analytics, forecasting & assessment, and engineering, procurement, and construction (EPC).

Wind - Offshore Technology transfer & research collaboration: site assessment, offshore components manufacturing, etc.

Solar photovoltaic (PV) Technology transfer and R&D collaboration for component or equipment manufacturing, niche segments in rooftop solar or building integrated photovoltaic (BIPV) systems, and EPCs.

Concentrating solar power (CSP)

Technology Transfer for components manufacturing, energy storage, and EPC.

Geothermal Technology Transfer for assessment and components manufacturing, and EPC.

Ocean – Wave/Tidal Technology Transfer for assessment and components manufacturing, and EPC.

Biomass Power Technology transfer (especially for small scale biomass), research collaboration in energy crops - small-scale biomass power systems, energy crops research, and waste heat usage.

Small Hydro Equipment and component supply, especially more efficient turbines, accessories and hydrokinetics.

Clean Coal & Carbon Technology transfer and R&D collaboration for ultra


Capture and Sequestration (CCS)

super critical and coal conversion technologies like gasification.

Energy Storage

Pumped Hydro Energy Storage (PHES)

Integration of PHES with a wind farm is likely to be a major trend that supports the growth of this market in the long term, along with the trend of storing hydropower through PHES. 56 sites for pumped storage schemes with an aggregate installed capacity of 94,000 MW have been identified.

Compressed air energy storage (CAES)

Only two plants exist in the world as of today, as the technology has a lot geographic constraints.

Batteries Key markets for batteries in India: • Off-grid solar PV Market - rooftop solar • Commercial demand for replacing DG sets • Indian cellular tower industry Tremendous growth from the non-grid segment in households, apartments or factories using solar or solar/wind hybrid for captive power consumption.

Flow batteries There is considerable need for flow batteries in the villages to whom it will be very expensive to extend transmission of power, and villages that will need good storage capability using flow batteries.

Fuel cells Major opportunities exist in the Telecom sector as many operators are looking to replace diesel powered towers with hydrogen based generation: • Green Initiative for Power Generation (GIP). • To set up 1000 MW aggregate hydrogen-based

power generation capacity. 50 MW standalone fuel cell power packs. 500 MW central fuel cell power plants.

Molten salt energy storage

CSP with molten storage is an upcoming technology that has a good potential as CSP technology is eyed as one of the most promising technologies in India.

Smart Grids Advanced metering Infrastructure

As per Government of India estimates, the country needs 130 million meters by 2021 The Smart Meter Task Force has been entrusted with the task of introducing low cost meters priced between ₹1,000-1,500 each (2-chip meters that can be connected through GSM technology).

High Voltage DC Transmission (HVDC) & Flexible AC Transmission System (FACTS)

India does not have HVDC-voltage source converters (VSC) technology at present.

Distribution automation (DA)

DA has been aimed at reducing major distribution losses, and huge potential exists as India accounts for one of the highest distribution losses.

Phase measurement units (PMUs)

In the 12th Plan it is proposed to install between 1,000-1,500 PMUs across all five regions (N, W, S.E, N.E.) along



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with a reliable high bandwidth, low latency fibre optic communication network and about 30-60 PDCs at strategic grid locations and control centres.

Phase shifting transformer (PST)

India’s market size is expected to increase at a compound annual growth rate (CAGR) of 12.5%. Main drivers influencing the PST sales in India are plans for capacity addition to meet growing electricity demand, planned investments in the transmission sector, and growth of the replacement market.

Micro grids Developing and emerging economies like India can use smart grids in priority areas such as household electrification to community and regional systems and rural electrification.

Environment Waste Water - Membrane bioreactor

Technology transfers and research collaboration: Joint ventures with Indian companies or greenfield projects on component manufacturing. Waste Water - UV

disinfection Waste Water - Nano filtration Solar desalination Technology transfer for components manufacturing and

EPCs. Electro dialysis desalination Air filters - Filtrometer /hybrid filter

Technology transfer for components manufacturing and EPCs.

Recycling management (municipal solid waste & E-Waste) Waste management (landfilling & incineration) Waste to energy Cleaner extraction technologies

Exporting and/or adapting technology

Resource efficiency technologies (materials, water, biomass, land)

Consulting, providing services, developing and adapting technologies

Transport Electric Vehicle (EV) - Battery technology

Technology transfer and R&D collaboration JV with Indian companies or projects on energy storage, solutions related to Li- ion replacing the Pb- Acid batteries and technologies to reduce charging time.

EV- Electric motor technology

Technologies transfer and research collaboration – equipment manufacturing and infrastructure development.

Urban mobility – High speed rail

Technologies transfer and research collaboration for component or equipment manufacturing, especially in rolling stock technology and infrastructure development.



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with a reliable high bandwidth, low latency fibre optic communication network and about 30-60 PDCs at strategic grid locations and control centres.

Phase shifting transformer (PST)

India’s market size is expected to increase at a compound annual growth rate (CAGR) of 12.5%. Main drivers influencing the PST sales in India are plans for capacity addition to meet growing electricity demand, planned investments in the transmission sector, and growth of the replacement market.

Micro grids Developing and emerging economies like India can use smart grids in priority areas such as household electrification to community and regional systems and rural electrification.

Environment Waste Water - Membrane bioreactor

Technology transfers and research collaboration: Joint ventures with Indian companies or greenfield projects on component manufacturing. Waste Water - UV

disinfection Waste Water - Nano filtration Solar desalination Technology transfer for components manufacturing and

EPCs. Electro dialysis desalination Air filters - Filtrometer /hybrid filter

Technology transfer for components manufacturing and EPCs.

Recycling management (municipal solid waste & E-Waste) Waste management (landfilling & incineration) Waste to energy Cleaner extraction technologies

Exporting and/or adapting technology

Resource efficiency technologies (materials, water, biomass, land)

Consulting, providing services, developing and adapting technologies

Transport Electric Vehicle (EV) - Battery technology

Technology transfer and R&D collaboration JV with Indian companies or projects on energy storage, solutions related to Li- ion replacing the Pb- Acid batteries and technologies to reduce charging time.

EV- Electric motor technology

Technologies transfer and research collaboration – equipment manufacturing and infrastructure development.

Urban mobility – High speed rail

Technologies transfer and research collaboration for component or equipment manufacturing, especially in rolling stock technology and infrastructure development.


Urban mobility – Intelligence transportation systems

Technology transfer for assessment in the areas of advanced signalling system, automated fare collection system, network surveillance, data archiving and infrastructure development.

Urban mobility – road congestion

Technology transfer for assessment and components manufacturing.

Road safety – collision avoidance

Technologies transfer and research collaboration on assessment of road safety, logistics and component manufacturing.

Biotechnology Bio-Pharma Therapeutic or preventative medicines that are derived from materials naturally present in living organisms, using recombinant DNA (rdna) technology

Bio-Services Includes clinical research and contract research organisations (CRO) along with custom manufacturing

Bio-Agri Segmented into hybrid seeds, transgenic crops, bio-pesticides and bio-fertilizers

Bio-Industrial Predominantly comprises enzyme manufacturing and marketing companies

Bio-Informatics Creation and maintenance of extensive electronic databases on various biological systems; it is the smallest part of the current domestic biotechnology industry

From a policy standpoint, there has been a genuine push towards clean energy, across wind, solar, hydro and bio. Grid-connected renewable capacity in India stood at 22 gigawatts (GW), comprising 11% of total power generation in the country, with 2.8 GW of wind capacity added in 2011 alone. Solar capacity is on the rise due to both the Jawaharlal Nehru National Solar Mission (JNNSM) as well as several state-level initiatives. The 12th Five-Year Plan aims to install 18.5GW of renewable energy.

There is opportunity across the entire supply chain, not just on the generation front. The immediate prospect lies in addressing the challenge in the transmission and distribution losses, estimated to be close to 30% due to sub-standard grid infrastructure and pilferage. Energy efficiency is another sector that holds tremendous potential, as India is already investing in this subsector under the aegis of the National Mission for Enhanced Energy Efficiency (NMEEE). Also, the fact that all large consulting firms have set up sustainable building or infrastructure business units indicates that they see cleantech as an engine of growth.

Likewise, India’s Smart Grid market is at a very nascent stage and huge opportunities lie in each of the segments related to smart grid. A high growth trend is likely to continue for a long period, with India recently launching a Smart Grid Task Force and Smart Grid Forum coupled with €675 billion in investment planned for generation, transmission, distribution and power quality, India is set for massive growth. The Indian smart grid market is set to reach €1.43 billion by 2015; the India Power Ministry is already evaluating 14 smart grid proposals with an outlay of € 0.05 billion.

The environmental technologies market in India has been estimated at approximately €6.75 billion per year with an annual growth rate of 15%. Growing environmental consciousness, increasing compliance and enforcement of environmental legislation, the availability of finance and rising domestic demand due to the rapid growth in urban population has led to the deployment of clean technologies in the



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country. The Indian Government has initiated many new projects for improving environmental conditions and reducing pollution (€9.3 billion is reserved for improvement of waste management, development of urban areas, water and sanitation, etc., in 63 cities nationwide).

The booming Indian economy, rapid industrialization, and urbanization have all contributed to severe environmental damage, which creates opportunities for firms that, can offer technology solutions to these challenges. Enabling environments provided under various government initiatives to leverage environmental technologies including the National Mission for Sustainable Habitat, and the National Water Mission bolsters these opportunities. To facilitate the creation of an organized waste management and recycling sector, the Indian Planning Commission is planning to launch the National Recycling Program (NRP) in the 12th Five Year Plan (2012–17) - NRP will be an overarching framework to create and mainstream the organized waste management and recycling industry.

Likewise, the transportation sector in India is undergoing a transformation, with a clear move towards greener and more sustainable mobility solutions. Market penetration of electric vehicles in India would largely depend on the fuel prices, as this has been cited as the significant reason for users to make a switch to electric vehicles. Though the Indian EV market is currently a nascent stage, it has been projected that EVs could account for nearly 5% of the Indian car market. By 2020, it is estimated that over 6-7 million electric/hybrid automobile could be on the roads in India, out of which 4.7 million are estimated to be only two wheelers.

The intelligent transportation systems (ITS) sub-sector too has significant market potential in the Indian market. Sensors, detectors, communication devices and traffic management centre, automated speed enforcement and automated fare collection systems. As majority of logistics movement is through heavy trucks, collision avoidance system (CAS) technologies can be applied in India. Key focus segments in the sector for India could include battery, motor and high speed rail technologies.

In the Indian biotechnology sector, revenues for the year 2017 are expected to be €8.7 billion, giving an indication of the scope and scale of the market. India is amongst the top 12 biotech destinations in the world, and ranks second in Asia, after China. It is also largest producer of recombinant Hepatitis B vaccine in the world. Indian biotech exports were €1.35 billion in 2010–11, constituting 52% of the industry’s revenue – bio-pharma leading followed by bio-services.

Growth in the sector is fuelled by public policy and funding for product innovation and research, focused R&D activities by private biotech firms, foreign direct investment (FDI) permission up to 100 per cent via the automatic route, and a low cost and skilled labour force attracting outsourced research activity. Many global companies setting up base in India – for example, Lonza is setting up a manufacturing base with an investment of €0.11 billion. More recently, the Government of India (GoI) has announced intentions of setting up of a €1.65 billion venture funding for biotech infrastructure.



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country. The Indian Government has initiated many new projects for improving environmental conditions and reducing pollution (€9.3 billion is reserved for improvement of waste management, development of urban areas, water and sanitation, etc., in 63 cities nationwide).

The booming Indian economy, rapid industrialization, and urbanization have all contributed to severe environmental damage, which creates opportunities for firms that, can offer technology solutions to these challenges. Enabling environments provided under various government initiatives to leverage environmental technologies including the National Mission for Sustainable Habitat, and the National Water Mission bolsters these opportunities. To facilitate the creation of an organized waste management and recycling sector, the Indian Planning Commission is planning to launch the National Recycling Program (NRP) in the 12th Five Year Plan (2012–17) - NRP will be an overarching framework to create and mainstream the organized waste management and recycling industry.

Likewise, the transportation sector in India is undergoing a transformation, with a clear move towards greener and more sustainable mobility solutions. Market penetration of electric vehicles in India would largely depend on the fuel prices, as this has been cited as the significant reason for users to make a switch to electric vehicles. Though the Indian EV market is currently a nascent stage, it has been projected that EVs could account for nearly 5% of the Indian car market. By 2020, it is estimated that over 6-7 million electric/hybrid automobile could be on the roads in India, out of which 4.7 million are estimated to be only two wheelers.

The intelligent transportation systems (ITS) sub-sector too has significant market potential in the Indian market. Sensors, detectors, communication devices and traffic management centre, automated speed enforcement and automated fare collection systems. As majority of logistics movement is through heavy trucks, collision avoidance system (CAS) technologies can be applied in India. Key focus segments in the sector for India could include battery, motor and high speed rail technologies.

In the Indian biotechnology sector, revenues for the year 2017 are expected to be €8.7 billion, giving an indication of the scope and scale of the market. India is amongst the top 12 biotech destinations in the world, and ranks second in Asia, after China. It is also largest producer of recombinant Hepatitis B vaccine in the world. Indian biotech exports were €1.35 billion in 2010–11, constituting 52% of the industry’s revenue – bio-pharma leading followed by bio-services.

Growth in the sector is fuelled by public policy and funding for product innovation and research, focused R&D activities by private biotech firms, foreign direct investment (FDI) permission up to 100 per cent via the automatic route, and a low cost and skilled labour force attracting outsourced research activity. Many global companies setting up base in India – for example, Lonza is setting up a manufacturing base with an investment of €0.11 billion. More recently, the Government of India (GoI) has announced intentions of setting up of a €1.65 billion venture funding for biotech infrastructure.

The enabling environment for EU cleantech and SMEs

EU Initiatives to promote cleantech Amid rising concerns about global climate change and growing anxieties over regional energy security, the EU has launched a range of initiatives to spur adoption of clean technologies6. These include, indicatively:

20-20-20 Directive 7 , which sets clean energy goals for 2020 (20 percent cut in energy consumption; increase of the renewable share of EU energy consumption to 20 percent; reduction of greenhouse gas emissions by 20 percent below 1990 levels)

Strategic Energy Technologies (SET) plan8, which seeks to position Europe as a leader in clean technologies through systematic coordination of national and supra-national resources

EU Roadmap for a Low Carbon Economy9, whose aspirations for 2050 go well beyond the 20-20-20 targets (80-95 percent reduction of greenhouse gases from the 1990 level) The slow and halting recovery from the global financial crisis has dampened private investment in clean technologies, while the fiscal consolidation underway in many EU countries has constrained public financial support of renewable energy projects. But the challenging economic environment has not diminished the EU’s official commitment to clean technologies. Indeed, in 2010 the European Commission (EC) broached the possibility of raising the 2020 emissions reduction target from 20 to 30 percent if circumstances warrant. EU authorities are also proceeding with their plans to revamp the Emissions Trading Scheme (ETS) in 2013, when they will set a community-wide emissions cap to establish a stable and predictable carbon price.

Rising demand for a better environment has led to an expanding supply of environmentally friendly techniques, products and services in both the industrialised and developing countries. Europe’s first major drive to boost eco-innovation came with the ETAP. Adopted in 2004, this Action Plan focused on the further development and use of environmental technologies. Its goal was to tackle the financial, economic and institutional barriers hindering growth of these technologies, as well as to encourage their adoption by the market.

Under ETAP, Europe’s eco-industries have flourished. This sector today has an estimated annual turnover of €227 billion or around 2.2% of the EU’s gross domestic product – outperforming the European aerospace or pharmaceutical industries – and directly employs 3.4 million people. Close to half of European companies active in manufacturing, agriculture, water, and food services have recently eco-innovated and benefited as a result. Clearly there is great potential for eco-innovation to create new business opportunities, jobs and growth in Europe.

The EcoAP is a logical successor to the ETAP. Launched by the EC in December 2011, the new Action Plan will build on the valuable experience gained to date – especially in promoting eco-innovation’s development and uptake across Europe. The EcoAP is a significant step forward for eco-innovation, moving the EU beyond green technologies and fostering a comprehensive range of eco-innovative processes, products and services. The ambitious plan will also focus on developing stronger and broader eco-innovation actions across and beyond Europe.

6 Talking Point: Clean Technology in Europe, RSM International, August 2011 7 See http://ec.europa.eu/clima/policies/package/index_en.htm 8 See http://ec.europa.eu/energy/technology/set_plan/set_plan_en.htm 9 See http://ec.europa.eu/clima/policies/roadmap/index_en.htm



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The EcoAP is a broad policy framework. It provides directions for eco-innovation policy and funding. Until 2013, the eco-innovative projects will be funded under the EU’s Seventh Framework Programme for Research and Technological Development (FP7); the Competitiveness and Innovation Framework Programme (CIP); and LIFE+, as well as structural and cohesion funds. From 2014 to 2020, the main source of support will be Horizon 2020. This new research and innovation programme will strengthen the role of eco-innovation. It will also provide the financial means for implementing the EcoAP. It has for example set aside €3 160 million for climate action and resource efficiency initiatives, which include eco-innovation. To support eco-innovative businesses, the Commission will develop new financial instruments offering them targeted debt and equity facilities. The Eco-innovation initiative of the EU in companies leads to reduced costs, improves capacity to capture new growth opportunities and enhances their reputation among customers.

European SME policy The EC recognises the crucial role played by SMEs in the European economy. For this reason, it has placed SMEs at the centre of its policy strongly supporting the implementation of the Small Business Act for Europe10 (SBA), adopted in June 2008.

Figure 1: EU polices framework and one stop shops for SMEs

To give new impetus to the process and to propose new actions linked with the Europe 2020 strategy, a review of the SBA was adopted in February 2011.

10 http://ec.europa.eu/enterprise/policies/sme/small-business-act/



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The EcoAP is a broad policy framework. It provides directions for eco-innovation policy and funding. Until 2013, the eco-innovative projects will be funded under the EU’s Seventh Framework Programme for Research and Technological Development (FP7); the Competitiveness and Innovation Framework Programme (CIP); and LIFE+, as well as structural and cohesion funds. From 2014 to 2020, the main source of support will be Horizon 2020. This new research and innovation programme will strengthen the role of eco-innovation. It will also provide the financial means for implementing the EcoAP. It has for example set aside €3 160 million for climate action and resource efficiency initiatives, which include eco-innovation. To support eco-innovative businesses, the Commission will develop new financial instruments offering them targeted debt and equity facilities. The Eco-innovation initiative of the EU in companies leads to reduced costs, improves capacity to capture new growth opportunities and enhances their reputation among customers.

European SME policy The EC recognises the crucial role played by SMEs in the European economy. For this reason, it has placed SMEs at the centre of its policy strongly supporting the implementation of the Small Business Act for Europe10 (SBA), adopted in June 2008.

Figure 1: EU polices framework and one stop shops for SMEs

To give new impetus to the process and to propose new actions linked with the Europe 2020 strategy, a review of the SBA was adopted in February 2011.

10 http://ec.europa.eu/enterprise/policies/sme/small-business-act/

The main objective is to ensure that the ‘Think Small First’ principle is fully applied at European and national level. Efforts focus on three priority areas identified by the Commission together with the Member States and SME stakeholders: improving SME access to finance, simplifying the regulatory environment (Think Small First principle) and enhancing SME access to markets.

The EC’s Entrepreneurship 2020 Action Plan is a blueprint for decisive action to unleash Europe's entrepreneurial potential, to remove existing obstacles and to revolutionise the culture of entrepreneurship in Europe. Investments in changing the public perception of entrepreneurs, in entrepreneurship education and to support groups that are underrepresented among entrepreneurs are indispensable if we want to create enduring change. The Entrepreneurship 2020 Action Plan is built on three main pillars:

Entrepreneurial education and training

Creation of an environment where entrepreneurs can flourish and grow, and

Developing role models and reaching out to specific groups whose entrepreneurial potential is not being tapped to its fullest extent or who are not reached by traditional outreach for business support.

The Action Plan and its key actions will be followed up by the Commission through the competitiveness and industrial policy and the Small Business Act governance mechanisms. The EC is ready to help the Member States administrations implement the Entrepreneurship 2020 Action Plan by providing its own know-how and foster peer learning and exchange of good practices with other Member States.

Several initiatives have also been taken to promote entrepreneurship, such as the European Network of Mentors for Women Entrepreneurs and Erasmus for Young Entrepreneurs. The objectives are to increase the number of women starting businesses and to encourage cross border knowledge transfer and co-operation among entrepreneurs in Europe.

One-stop shops The EU acknowledges that entrepreneurs are confronted with time-consuming procedures and too much paperwork when they want to start a company. Since the introduction of the SBA, Member States have stepped up their efforts to reduce the time and cost of starting a business. So far, 18 Member States have set up ‘one-stop shops’ that allow you to create a private limited company in a single visit. Governments learn from one another’s experience of making it easier to get started. A ‘single point of contact’ also exists in 22 countries to help companies wanting to provide services across borders.

At the EU/EC level, there are similar one-stop shop portals that deliver information and support services to small businesses including SMEs. For example the European Small Business Portal that integrates information on what the EU does to boost small businesses in Europe and on the global market. Available in 21 language versions, the European Small Business Portal gathers together all the information provided by the EU on and for SMEs, ranging from practical advice to policy issues, from local contact points to networking links. Similarly, the Enterprise Europe portal helps small companies make the most of the business opportunities in the EU including finding international partners, resources to apply for EU funding, help on finding financing, sourcing new technologies, or advise on issues so diverse as intellectual property, going international, or EU law and standards. The Enterprise Europe Network brings together business support organisations from more than 50 countries. They are connected through powerful databases and know Europe inside out. With close to 600 member organisations, the Network is always close and available for providing assistance or connecting with a specialised branch in any region. The Network’s services are free of charge.



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Access to finance for EU SMEs The challenge is to ensure that SMEs have access to appropriate types of financing. The following subsections therefore outline the key potential sources of finance/funding available that European SMEs can leverage.

On-going EU support programmes for SMEs11 The EU provides support to European SMEs. This is available in different forms such as grants, loans and, in some cases, guarantees. Support is available either directly or through programmes managed at national or regional level, such as the EU’s Structural Funds. SMEs can also benefit from a series of non-financial assistance measures in the form of programmes and business support services.

Figure 2: On-going EU funding/financing support programmes that SMEs can leverage

The assistance schemes have been divided into the following four categories:

1. Thematic funding opportunities

This funding is mostly thematic with specific objectives - environment, research, and education - designed and implemented by various Departments of the EC. SMEs or other organisations can usually apply directly for the programmes, generally on condition that they present sustainable, value-

11 This subsection aims to present the European programmes available to SMEs and contains brief information as well as the

main web sites for each programme. Please note that the guide is not meant to be exhaustive; other sources may be available.



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Access to finance for EU SMEs The challenge is to ensure that SMEs have access to appropriate types of financing. The following subsections therefore outline the key potential sources of finance/funding available that European SMEs can leverage.

On-going EU support programmes for SMEs11 The EU provides support to European SMEs. This is available in different forms such as grants, loans and, in some cases, guarantees. Support is available either directly or through programmes managed at national or regional level, such as the EU’s Structural Funds. SMEs can also benefit from a series of non-financial assistance measures in the form of programmes and business support services.

Figure 2: On-going EU funding/financing support programmes that SMEs can leverage

The assistance schemes have been divided into the following four categories:

1. Thematic funding opportunities

This funding is mostly thematic with specific objectives - environment, research, and education - designed and implemented by various Departments of the EC. SMEs or other organisations can usually apply directly for the programmes, generally on condition that they present sustainable, value-

11 This subsection aims to present the European programmes available to SMEs and contains brief information as well as the

main web sites for each programme. Please note that the guide is not meant to be exhaustive; other sources may be available.

added and trans-national projects. Depending on the programme, applicants can also include industrial groupings, business associations, business support providers and/or consultants. Co-funding is the general rule: the support of the EU usually consists of subsidies, which only cover part of the costs of a project.

2. Structural funds

The Structural Funds (European Regional Development Fund [ERDF] and European Social Fund [ESF]) are the largest Community funding instruments benefiting SMEs, through the different thematic programmes and community initiatives implemented in the regions. The beneficiaries of structural funds receive a direct contribution to finance their projects. Note that the programmes are managed and the projects selected at national and regional level.

3. Financial instruments

Most of the financial instruments are only available indirectly, via national financial intermediaries. The European Investment Fund manages many of them.

4. Support for the internationalisation of SMEs

These generally consist of assistance to intermediary organisations and/or public authorities in the field of internationalisation, in order to help SMEs to access markets outside the EU.

5. Where can I get help locally?

Information is available on the Enterprise Europe Network (see page 5 above), which offers business support in the Member States and beyond.

Thematic funding

Environment, Energy and Transport

LIFE +

This programme is divided into three strands: Nature and Biodiversity Environment Policy and Governance Information and Communication

The budget foreseen for LIFE+ is €2.1 billion for the period 2007-2013. SMEs may be able to access LIFE+ funds, both from the part managed centrally by the EC and from that managed by national agencies.

Further information: http://ec.europa.eu/environment/life/funding/lifeplus.htm For other environment-related sources of funding, please refer to the web pages of the Environment Directorate-General: http://ec.europa.eu/environment/funding/intro_en.htm

Competitiveness and Innovation Framework Programme (CIP)

The CIP is a coherent and integrated response to the objectives of the renewed Lisbon strategy for growth and jobs. Running from 2007 to 2013, it has a budget of approximately €3.6 billion. As regards environment and energy concerns, the CIP comprises of an:

a) Entrepreneurship and Innovation Programme (EIP) with an eco-innovation part, to which approximately €430 million has been allocated. The aim is to tap the full potential of



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environmental technologies to protect the environment, while contributing to competitiveness and economic growth;

b) Intelligent Energy Europe Programme (IEE) to which approximately €727 million has been allocated. The Intelligent Energy-Europe Programme includes actions to increase the uptake and demand for energy efficiency, to promote renewable energy sources and energy diversification, and to stimulate the diversification of fuels and energy efficiency in transport;

c) Information and Communication Technologies Policy Support Programme (ICT-PSP), with a budget of approximately €730 million. Funding goes mainly to pilot actions, involving both public and private organizations. These aim to stimulate innovation and competitiveness through the wider uptake and best use of ICT also regarding energy efficiency and smart mobility.

Further information: http://ec.europa.eu/cip/index_en.htm

Marco Polo II (2007-2013)

The Marco Polo Programme aims to reduce road congestion, to improve the environmental performance of the freight transport system within the Community and to enhance intermodality, thereby contributing to an efficient and sustainable transport system. To achieve this objective, the Programme support actions in freight transport, logistics and other relevant markets, including motorways of the sea and traffic avoidance measures. The programme has a budget of €450 million for the period 2007-2013.

Further information: http://ec.europa.eu/transport/marcopolo/index_en.htm

Education and Training

Integrated Action Programme in Lifelong Learning

The Integrated Action Programme in Lifelong Learning for the 2007-2013 period covers four specific programmes: COMENIUS for general education activities concerning schools up to the end of the upper secondary level; ERASMUS for education and advanced training activities at a higher education level; LEONARDO DA VINCI for all other aspects of vocational education and training; and GRUNDTVIG for adult education. The LEONARDO DA VINCI programme is of most direct relevance to enterprises, since it supports innovative trans-national initiatives for promoting the knowledge, aptitudes and skills necessary for successful integration into working life and the full exercise of citizenship.

Further information: http://ec.europa.eu/education/lifelong-learning-programme/doc78_en.htm

Erasmus for Young Entrepreneurs

This programme was initiated by the EU in 2009. It provides practical and financial assistance for new entrepreneurs who wish to spend some time in an enterprise in another EU country and thus learn from experienced entrepreneurs. The objectives are to exchange ideas, experience and information between entrepreneurs, to enhance market access and to identify potential partners for new businesses in other EU countries. The programme is co-financed by the EU, with a total budget of around €4.3 million, and it covers the travel and accommodation expenses during the stay.

Further information: http://ec.europa.eu/enterprise/entrepreneurship/support_measures/erasmus/index.htm



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environmental technologies to protect the environment, while contributing to competitiveness and economic growth;

b) Intelligent Energy Europe Programme (IEE) to which approximately €727 million has been allocated. The Intelligent Energy-Europe Programme includes actions to increase the uptake and demand for energy efficiency, to promote renewable energy sources and energy diversification, and to stimulate the diversification of fuels and energy efficiency in transport;

c) Information and Communication Technologies Policy Support Programme (ICT-PSP), with a budget of approximately €730 million. Funding goes mainly to pilot actions, involving both public and private organizations. These aim to stimulate innovation and competitiveness through the wider uptake and best use of ICT also regarding energy efficiency and smart mobility.

Further information: http://ec.europa.eu/cip/index_en.htm

Marco Polo II (2007-2013)

The Marco Polo Programme aims to reduce road congestion, to improve the environmental performance of the freight transport system within the Community and to enhance intermodality, thereby contributing to an efficient and sustainable transport system. To achieve this objective, the Programme support actions in freight transport, logistics and other relevant markets, including motorways of the sea and traffic avoidance measures. The programme has a budget of €450 million for the period 2007-2013.

Further information: http://ec.europa.eu/transport/marcopolo/index_en.htm

Education and Training

Integrated Action Programme in Lifelong Learning

The Integrated Action Programme in Lifelong Learning for the 2007-2013 period covers four specific programmes: COMENIUS for general education activities concerning schools up to the end of the upper secondary level; ERASMUS for education and advanced training activities at a higher education level; LEONARDO DA VINCI for all other aspects of vocational education and training; and GRUNDTVIG for adult education. The LEONARDO DA VINCI programme is of most direct relevance to enterprises, since it supports innovative trans-national initiatives for promoting the knowledge, aptitudes and skills necessary for successful integration into working life and the full exercise of citizenship.

Further information: http://ec.europa.eu/education/lifelong-learning-programme/doc78_en.htm

Erasmus for Young Entrepreneurs

This programme was initiated by the EU in 2009. It provides practical and financial assistance for new entrepreneurs who wish to spend some time in an enterprise in another EU country and thus learn from experienced entrepreneurs. The objectives are to exchange ideas, experience and information between entrepreneurs, to enhance market access and to identify potential partners for new businesses in other EU countries. The programme is co-financed by the EU, with a total budget of around €4.3 million, and it covers the travel and accommodation expenses during the stay.

Further information: http://ec.europa.eu/enterprise/entrepreneurship/support_measures/erasmus/index.htm

http://www.erasmus-entrepreneurs.eu

Please note that there are also education and training opportunities in third countries.

Structural Funds Structural Funds are designed to help reduce disparities in the development of regions, and to promote economic and social cohesion within the EU. The EC therefore co-finances regional projects in the Member States. Nevertheless, it is important to stress the fact that direct aid to SMEs to co-finance their investments is only possible in the economically less developed regions (the co-called “convergence” regions). In other regions, priority has been given to actions having a high leverage effect (e.g. entrepreneurship training, support services, business incubators, technology transfer mechanisms, networking, etc.), as opposed to direct aid to individual SMEs (please note that the programmes are managed and the projects selected at national and/or regional level).

For the period 2007-2013 the strategy and resources of cohesion policy (ERDF, ESF and European Cohesion Fund) are grouped into three priority objectives, with a total allocation of € 347.41 billion:

Convergence: to speed up the economic convergence of the less developed regions (81.54% of the budget);

Regional competitiveness and employment: to strengthen regional competitiveness and attractiveness and help workers and companies to adapt themselves to economic changes (15.94% of the budget);

European territorial co-operation: to strengthen cross-border, transnational and interregional co-operation (2.52% of the budget).

European Regional Development Fund

The ERDF is the largest Community financial instrument benefiting SMEs. Its aim is to reduce disparities in the development of regions and to support social and economic cohesion within the EU. In order to strengthen the creation and competitiveness of SMEs, the ERDF co-finances activities in a broad range of areas:

1. entrepreneurship, innovation and competitiveness of SME (for example entrepreneurial mentoring, innovative technologies and management systems in SMEs, eco-innovation, better use of ICT);

2. improving the regional and local environment for SMEs (for example access to capital for SMEs in the start-up and growth phase, business infrastructure an support services for SMEs, regional and local research and technological development and innovation capacities, business co-operation and innovation capacities);

3. interregional and cross-border co-operation of SMEs;

4. investment in human resources (along with funding from the European Social Fund).

Unlike many other EU funding sources, ERDF programmes are not directly managed by the Commission but by national and regional authorities. These are also contact points for funding applications and project selection.

Further information: http://ec.europa.eu/regional_policy/funds/feder/index_en.htm



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The web site of the Directorate-General for Regional Policy provides information on the EU’s action in support of regional development:

http://ec.europa.eu/regional_policy/index_en.htm

This includes: a list of the managing authorities of structural funds in every region:

http://ec.europa.eu/regional_policy/manage/authority/authority_en.cfm

A summary of the programmes available in every region:

http://ec.europa.eu/regional_policy/country/prordn/index_en.cfm

European Social Fund For the period 2007-2013, the ESF provides support for anticipating and managing economic and social change, with a number of opportunities for supporting SMEs. The four key areas for action under the “Regional competitiveness and employment” objective are:

1. increasing adaptability of workers and enterprises;

2. enhancing access to employment and participation in the labour market;

3. reinforcing social inclusion by combating discrimination and facilitating access to the labour market for disadvantaged people;

4. promoting partnership for reform in the fields of employment and inclusion.

In the least prosperous regions, the Fund concentrates on promoting structural adjustment, growth and job creation. To this end, under the “Convergence” objective, the ESF also supports:

1. efforts to expand and improve investment in human capital, in particular by improving education and training systems;

2. actions aimed at developing institutional capacity and the efficiency of public administrations, at national, regional and local level.

Further information: http://ec.europa.eu/employment_social/esf

Rural Development Fund The Rural Development Fund for the period 2007-2013 focuses on three thematic axes: improving competitiveness for farming and forestry; environment and countryside; improving quality of life and diversification of the rural economy. A fourth axis also introduces possibilities for locally based bottom-up approaches to rural development. For each set of priorities, Member States prepare national rural development strategies on the basis of the following six community strategic guidelines:

1. improving the competitiveness of the agricultural and forestry sectors;

2. improving the environment and the countryside;

3. improving the quality of life in rural areas and encouraging diversification;

4. building Local Capacity for Employment and Diversification;

5. translating priorities into programmes;

6. complementarity between Community Instruments.

Further information: http://ec.europa.eu/agriculture/rurdev/index_en.htm



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The web site of the Directorate-General for Regional Policy provides information on the EU’s action in support of regional development:

http://ec.europa.eu/regional_policy/index_en.htm

This includes: a list of the managing authorities of structural funds in every region:


A summary of the programmes available in every region:

http://ec.europa.eu/regional_policy/country/prordn/index_en.cfm

European Social Fund For the period 2007-2013, the ESF provides support for anticipating and managing economic and social change, with a number of opportunities for supporting SMEs. The four key areas for action under the “Regional competitiveness and employment” objective are:

1. increasing adaptability of workers and enterprises;

2. enhancing access to employment and participation in the labour market;

3. reinforcing social inclusion by combating discrimination and facilitating access to the labour market for disadvantaged people;

4. promoting partnership for reform in the fields of employment and inclusion.

In the least prosperous regions, the Fund concentrates on promoting structural adjustment, growth and job creation. To this end, under the “Convergence” objective, the ESF also supports:

1. efforts to expand and improve investment in human capital, in particular by improving education and training systems;

2. actions aimed at developing institutional capacity and the efficiency of public administrations, at national, regional and local level.

Further information: http://ec.europa.eu/employment_social/esf

Rural Development Fund The Rural Development Fund for the period 2007-2013 focuses on three thematic axes: improving competitiveness for farming and forestry; environment and countryside; improving quality of life and diversification of the rural economy. A fourth axis also introduces possibilities for locally based bottom-up approaches to rural development. For each set of priorities, Member States prepare national rural development strategies on the basis of the following six community strategic guidelines:

1. improving the competitiveness of the agricultural and forestry sectors;

2. improving the environment and the countryside;

3. improving the quality of life in rural areas and encouraging diversification;

4. building Local Capacity for Employment and Diversification;

5. translating priorities into programmes;

6. complementarity between Community Instruments.

Further information: http://ec.europa.eu/agriculture/rurdev/index_en.htm

Financial instruments Note that these schemes do not provide direct funding to SMEs, but are usually processed through financial intermediaries such as banks, credit institutions or investment funds. They are intended to increase the volume of credit available to SMEs and to encourage these intermediaries to develop their SME lending capacity.

CIP

Under the CIP, €1130 million has been allocated for financial instruments for the period 2007-2013. These are organised under three schemes, which are managed on behalf of the EC by the European Investment Fund (EIF):

1. The High Growth and Innovative SME Facility (GIF) aims to increase the supply of equity for innovative SMEs both in their early stages (GIF1) and in the expansion phase (GIF2). GIF shares risk and reward with private equity investors, providing important leverage for the supply of equity to innovative companies.

2. The SME Guarantee Facility provides additional guarantees to guarantee schemes, in order to increase the supply of debt finance to SMEs. It concentrates on addressing market failures in four areas:

a) access to loans (or loan substitutes such as leasing) by SMEs with growth potential;

b) provision of microcredit;

c) access to equity or quasi-equity; and

d) securitisation.

3. A Capacity Building Scheme supports the capacity of financial intermediaries in some Member States.

Further information:

http://ec.europa.eu/cip/index_en.htm http://ec.europa.eu/enterprise/policies/finance/cip-financial-instruments/index_en.htm http://eif.europa.eu/

Joint European Resources for Micro and Medium Enterprises (JEREMIE)

JEREMIE is a joint initiative of the EC and the European Investment Fund with the European Investment Bank. It aims to improve access to finance for micro to medium sized enterprises and in particular the supply of micro-credit, venture capital finance or guarantees and other forms of innovative financing. Special emphasis is given to supporting start-ups, technology transfer, technology and innovation funds and micro-credit. JEREMIE is managed as an integral part of the European Regional Development Fund, and projects are selected at the relevant national and regional level.


http://eif.europa.eu/jeremie/

http://ec.europa.eu/regional_policy/funds/2007/jjj/jeremie_en.htm

To access financing, locate national/regional managing authorities who can inform you about how to obtain financing in your country or region via the JEREMIE facility:




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Joint Action to Support Micro-finance Institutions in Europe - JASMINE

JASMINE is a joint initiative of the EC and the European Investment Fund together with the European Investment Bank, and complements the JEREMIE initiative. It aims to develop the supply of micro-credit in Europe by means of two main actions: by providing technical assistance to micro-finance institutions in order to help them to be credible financial intermediaries and to obtain capital more easily; and by financing the activities of non-bank financial institutions to enable them to make a higher number of loans. The aim of the programme is to improve the access to finance of small businesses, unemployed people, or people not currently in employment who would like to become self-employed but who are unable to access traditional banking services. This programme was launched in 2008 with a three-year pilot phase, with an initial capital of €50 million.


http://ec.europa.eu/regional_policy/funds/2007/jjj/micro_en.htm

http://www.eif.org/what_we_do/microfinance/JASMINE/index.htm

European Investment Fund (EIF) own investments The EIF’s activity is based on two instruments:

• EIF’s venture capital instruments consist of capital investments in venture capital funds and business incubators that support SMEs, particularly those that are newly created and technology-oriented.

• EIF’s guarantee instruments consist of providing guarantees to financial institutions that cover credits to SMEs.


http://www.eif.europa.eu/

http://www.eif.org/EIF_for/sme_finance/index.htm

European Investment Bank (EIB) loans These loans will be delivered via intermediaries such as commercial banks. They are targeted at tangible or intangible investments by SMEs. EIB loans may also help to provide a stable working capital base to SMEs, i.e. loans granted to finance liabilities associated with the SME’s trading cycle and reflecting the SME long-term funding needs in that respect may also be eligible for EIB financing. The duration of the loans will be between 2 and 12 years, with a maximum amount of €12.5 million per loan.


http://eib.europa.eu

http://eib.europa.eu/projects/topics/sme/index.htm

http://eib.europa.eu/projects/topics/sme/intermediaries/index.htm

For a list of the financial intermediaries in the EU:

http://www.eib.org/projects/topics/sme/intermediaries/europe.htm

For a list of the financial intermediaries outside the EU:

http://eib.europa.eu/projects/topics/sme/outside-eu/index.htm?lang=en



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Joint Action to Support Micro-finance Institutions in Europe - JASMINE

JASMINE is a joint initiative of the EC and the European Investment Fund together with the European Investment Bank, and complements the JEREMIE initiative. It aims to develop the supply of micro-credit in Europe by means of two main actions: by providing technical assistance to micro-finance institutions in order to help them to be credible financial intermediaries and to obtain capital more easily; and by financing the activities of non-bank financial institutions to enable them to make a higher number of loans. The aim of the programme is to improve the access to finance of small businesses, unemployed people, or people not currently in employment who would like to become self-employed but who are unable to access traditional banking services. This programme was launched in 2008 with a three-year pilot phase, with an initial capital of €50 million.


http://ec.europa.eu/regional_policy/funds/2007/jjj/micro_en.htm

http://www.eif.org/what_we_do/microfinance/JASMINE/index.htm

European Investment Fund (EIF) own investments The EIF’s activity is based on two instruments:

• EIF’s venture capital instruments consist of capital investments in venture capital funds and business incubators that support SMEs, particularly those that are newly created and technology-oriented.

• EIF’s guarantee instruments consist of providing guarantees to financial institutions that cover credits to SMEs.


http://www.eif.europa.eu/

http://www.eif.org/EIF_for/sme_finance/index.htm

European Investment Bank (EIB) loans These loans will be delivered via intermediaries such as commercial banks. They are targeted at tangible or intangible investments by SMEs. EIB loans may also help to provide a stable working capital base to SMEs, i.e. loans granted to finance liabilities associated with the SME’s trading cycle and reflecting the SME long-term funding needs in that respect may also be eligible for EIB financing. The duration of the loans will be between 2 and 12 years, with a maximum amount of €12.5 million per loan.


http://eib.europa.eu

http://eib.europa.eu/projects/topics/sme/index.htm

http://eib.europa.eu/projects/topics/sme/intermediaries/index.htm

For a list of the financial intermediaries in the EU:

http://www.eib.org/projects/topics/sme/intermediaries/europe.htm

For a list of the financial intermediaries outside the EU:

http://eib.europa.eu/projects/topics/sme/outside-eu/index.htm?lang=en

EPMF - The PROGRESS Microfinance Facility for Employment and Social Inclusion The EU has set up a new European Progress Microfinance Facility providing microcredit to small businesses and to people who have lost their jobs and want to start their own small businesses. An initial budget of €200 million is expected to leverage €500 million of credit in cooperation with international financial institutions such as the EIB Group. The Facility will be expressly designed to fit with existing instruments, in particular the ESF.


http://ec.europa.eu/social/main.jsp?langId=en&catId=836

http://www.eif.org/what_we_do/microfinance/progress/index.htm

You can find out if there is already a selected microcredit provider for the Progress Microfinance in your country: http://ec.europa.eu/social/main.jsp?catId=983&langId=en.

Support for the internationalisation of SMEs12

Candidate and Neighbourhood Countries For the following programmes, the EC provides indirect funding to SMEs by facilitating access to loans, leasing and equity operations, through cooperation with international financial institutions (the EIB and European Bank for Reconstruction and Development [EBRD]). Financial intermediaries in the candidate countries must be committed to develop SMEs’ operations as a significant part of their business.

For information on local intermediaries in the Neighbourhood Countries, see the websites of the EBRD and the EIB:

http://www.ebrd.com/pages/sector/financial/sme.shtml

http://eib.europa.eu/products/loans/intermediated/index.htm

The Instrument of Pre-Accession Assistance (IPA)

From January 2007 onwards, the Instrument of Pre-Accession Assistance (IPA) replaces a series of instruments for candidate countries (PHARE, ISPA, SAPARD…). It is made up of five different components: assistance for transition and institution building; cross-border cooperation; regional development; human resources; rural development.

The beneficiary countries are divided into two categories:

EU candidate countries, which are eligible for all five components of IPA;

Potential candidate countries in the Western Balkans, which are only eligible for the first two components.

Further details and information on the national contact points for each country:

http://ec.europa.eu/regional_policy/funds/ipa/index_en.htm

The European Neighbourhood Policy Instrument The aim of the European Neighbourhood policy, launched in 2004, is to establish a privileged collaboration with the EU neighbours through a deeper political relationship and economic

12 A number of these schemes do not provide direct funding to SMEs, but are directed at intermediaries and/or public

authorities to support them instead. Therefore, support is often indirect.



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integration. A total of sixteen neighbour countries benefit from this policy. Its actions are financed through the European Neighbourhood Policy Instrument (ENPI). For the period 2007-2013 the total budget for this policy €12 billion, allocated to individual country programmes depending on their needs, their absorption capacity and the implementation of agreed reforms. Under this framework, there are several initiatives addressed to SMEs:

The Neighbourhood Investment Facility (NIF)

The Facility supports, among others, the private sector particularly through risk capital operations targeting SMEs. For the 2007-2013 period, the total budget for this initiative is of €745 million, which are complemented by direct contributions from Member States and a trust fund managed by the EIB. To benefit from the facility, the project has to be submitted by a European public finance institution recognised by the NIF board as eligible (for instance, the EIB or the EBRD.


http://ec.europa.eu/world/enp/index_en.htm

http://ec.europa.eu/europeaid/where/neighbourhood/regional-cooperation/irc/investment_en.htm

EU/EBRD SME Finance facility

It provides financing to SMEs in 11 countries in central Europe, including EU accession states and new member states. This finance is processed through local banks, leasing companies and equity funds. The funding available is of €847 million from the EBRD, with a contribution from the EC of €130 million.



http://www.ebrd.com/pages/about/policies/msme.shtml

EBRD Non-financial support: TAM and BAS programmes

Through TAM (Turn Around Management) and BAS (Business Advisory Services) programmes, the EBRD helps private enterprises to adapt to the demands of market economy and contributes to the development of small and medium-size enterprises. The first programme focuses on managerial and structural changes within companies, providing advice from experienced executives, whereas the second one supports short-term initiatives and develops a sustainable infrastructure for local business advisory services.

To apply, companies can directly send TAM/BAS an application form, which is submitted to the management team, who decides whether the project can go ahead and decides the terms of the cooperation.


http://www.ebrd.com/pages/workingwithus/tambas.shtml

http://www.ebrd.com/pages/workingwithus/tambas/guide.pdf

EIB loans for SMEs in Eastern Neighbourhood countries

In the framework of the Eastern partnership, the EIB launched at the end of 2009/2010 SME loans in Eastern Neighbourhood countries, thus expanding geographic coverage beyond the EU, Western Balkans and pre-accession countries.


http://www.eib.europa.eu/projects/regions/eastern-neighbours/index.htm?lang=en



34

integration. A total of sixteen neighbour countries benefit from this policy. Its actions are financed through the European Neighbourhood Policy Instrument (ENPI). For the period 2007-2013 the total budget for this policy €12 billion, allocated to individual country programmes depending on their needs, their absorption capacity and the implementation of agreed reforms. Under this framework, there are several initiatives addressed to SMEs:

The Neighbourhood Investment Facility (NIF)

The Facility supports, among others, the private sector particularly through risk capital operations targeting SMEs. For the 2007-2013 period, the total budget for this initiative is of €745 million, which are complemented by direct contributions from Member States and a trust fund managed by the EIB. To benefit from the facility, the project has to be submitted by a European public finance institution recognised by the NIF board as eligible (for instance, the EIB or the EBRD.


http://ec.europa.eu/world/enp/index_en.htm

http://ec.europa.eu/europeaid/where/neighbourhood/regional-cooperation/irc/investment_en.htm

EU/EBRD SME Finance facility

It provides financing to SMEs in 11 countries in central Europe, including EU accession states and new member states. This finance is processed through local banks, leasing companies and equity funds. The funding available is of €847 million from the EBRD, with a contribution from the EC of €130 million.



http://www.ebrd.com/pages/about/policies/msme.shtml

EBRD Non-financial support: TAM and BAS programmes

Through TAM (Turn Around Management) and BAS (Business Advisory Services) programmes, the EBRD helps private enterprises to adapt to the demands of market economy and contributes to the development of small and medium-size enterprises. The first programme focuses on managerial and structural changes within companies, providing advice from experienced executives, whereas the second one supports short-term initiatives and develops a sustainable infrastructure for local business advisory services.

To apply, companies can directly send TAM/BAS an application form, which is submitted to the management team, who decides whether the project can go ahead and decides the terms of the cooperation.


http://www.ebrd.com/pages/workingwithus/tambas.shtml

http://www.ebrd.com/pages/workingwithus/tambas/guide.pdf

EIB loans for SMEs in Eastern Neighbourhood countries

In the framework of the Eastern partnership, the EIB launched at the end of 2009/2010 SME loans in Eastern Neighbourhood countries, thus expanding geographic coverage beyond the EU, Western Balkans and pre-accession countries.


http://www.eib.europa.eu/projects/regions/eastern-neighbours/index.htm?lang=en

For information on local intermediaries in the Neighbourhood Countries, see the websites of the EIB:

http://eib.europa.eu/products/loans/intermediated/index.htm

Asia specific funding EuropeAid, the co-operation Office of the EU publishes tender and calls for proposals on its web site for external relations programmes, for some of which SMEs may apply.


https://webgate.ec.europa.eu/europeaid/online-services/index.cfm?do=publi.welcome

Upcoming EU Support Programmes for SMEs

Programme for the Competitiveness of enterprises and SMEs (COSME) 2014-2020 The new Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) will run from 2014 to 2020, with a planned budget of €2.3 billion (current prices).

Objectives

1. facilitating access to finance for SMEs

2. creating an environment favourable to business creation and growth

3. encouraging an entrepreneurial culture in Europe

4. increasing the sustainable competitiveness of EU companies

5. helping small businesses operate outside their home countries and improving their access to markets

COSME will:

ensure continuity with initiatives and actions already undertaken under the EIP, such as the Enterprise Europe Network, building on results and lessons learnt.

continue the many successful features of the EIP, while simplifying management of the programme to make it easier for entrepreneurs and small businesses to benefit.

support, complement and help coordinate actions by EU member countries. COSME will specifically tackle transnational issues that – thanks to economies of scale and the demonstration effect – can be more effectively addressed at European level.

Expected results easier access to finance for entrepreneurs and small businesses

more prominent role for self-employment and business development as important sources of growth and job creation

in individual EU countries: a more competitive industry, more entrepreneurs and higher employment rates.



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Main beneficiaries

Existing entrepreneurs (small businesses in particular) – easier access to funding for development, consolidation and growth of their business.

Future entrepreneurs (including young people) – assistance in setting up their own business.

National, regional and local authorities – tools for effectively reforming policy: reliable, EU wide data and statistics, best practice and financial support to test and scale up sustainable solutions for improving global competitiveness.

Impact on competitiveness of businesses large and small

COSME is expected to contribute to an annual increase of €1.1 billion in the EU's GDP. The Enterprise Europe Network is expected to assist 40,000 companies with partnership agreements, resulting in:

1,200 new business products, services or processes annually

€400mn annually in additional turnover for assisted companies.

Access to finance will be easier for entrepreneurs, in particular those willing to launch cross-border activities, resulting in an expected annual increase of €3.5 billion in additional lending and/or investment for EU companies.

What happens now?

The European Parliament and the Council, which must agree to adopt it, will discuss the Commission’s proposal. COSME should start on 1 January 2014.

Support from individual EU member countries and respective institutions/agencies In addition to the above sources, SMEs could also potentially find funding/financing from various agencies in individual EU member countries. The EU supports entrepreneurs and businesses with a wide range of EU programmes (2007-2013) providing loans, guarantees, venture capital and other equity financing.

Figure 3: Support from individual EU member countries and respective institutions/agencies



36

Main beneficiaries

Existing entrepreneurs (small businesses in particular) – easier access to funding for development, consolidation and growth of their business.

Future entrepreneurs (including young people) – assistance in setting up their own business.

National, regional and local authorities – tools for effectively reforming policy: reliable, EU wide data and statistics, best practice and financial support to test and scale up sustainable solutions for improving global competitiveness.

Impact on competitiveness of businesses large and small

COSME is expected to contribute to an annual increase of €1.1 billion in the EU's GDP. The Enterprise Europe Network is expected to assist 40,000 companies with partnership agreements, resulting in:

1,200 new business products, services or processes annually

€400mn annually in additional turnover for assisted companies.

Access to finance will be easier for entrepreneurs, in particular those willing to launch cross-border activities, resulting in an expected annual increase of €3.5 billion in additional lending and/or investment for EU companies.

What happens now?

The European Parliament and the Council, which must agree to adopt it, will discuss the Commission’s proposal. COSME should start on 1 January 2014.

Support from individual EU member countries and respective institutions/agencies In addition to the above sources, SMEs could also potentially find funding/financing from various agencies in individual EU member countries. The EU supports entrepreneurs and businesses with a wide range of EU programmes (2007-2013) providing loans, guarantees, venture capital and other equity financing.

Figure 3: Support from individual EU member countries and respective institutions/agencies

Financial intermediaries such as banks, venture capital funds and other financial institutions manage these financial instruments. The decision to provide a loan, guarantee or venture capital/ equity financing will be made by the local financial institution. The exact financing conditions -the amount, duration, interest rates and fees- depends on the financial institution.

Select examples of national level support for SMEs

Finland

Finland is the EU's top performer in access to finance. In terms of access to credit, Finland continues to score well on all indicators except for the relative difference in interest rate levels between loans above €1 million and loans below that threshold. Finland performs best on the willingness of banks to provide loans: only 1% of SMEs reported deterioration in banks' attitudes in this regard, the best score of all EU Member States. Finland has also made inroads as regards the cost of credit for small firms (SME-sized credits). The mark-up for smaller loans in 2011 was higher in Finland than in the EU as a whole (30% compared to 24%); this year, the mark-up fell to 19%, which is practically on par with the EU average. Payment delays remained relatively short - only 23 days compared to the EU average of 53 days - and so did payment losses - only 1.9% of total turnover (EU: 2.9%). Both factors had a positive effect on the cash-flow situation of SMEs. Access to venture capital is also above average,

while the indicators describing the basic regulatory characteristics of the financial market, such as the legal rights of creditors and depth of credit information, show a more mixed and rather average picture overall.

A number of policy measures have been taken recently to improve the situation in this policy area in Finland. In February 2011, the Finnish government and the Export Credit Agency decided to award € 700 million in investment loans for 2011. The financial problems of SMEs in particular are larger than before the economic recession, so this type of financing is needed as a complement to the financial markets.

New conditions for financing firms due to economic recession were introduced in February 2011. On 3 February 2011, the public-owned credit agency (Finnvera) extended the maximum loan time from six to ten years, improving the financing prospects for SMEs in particular. On 21 December 2011, the government agreed to extend Finnvera's counter-cyclical financing by one year (to the end of 2012) on account of the weakening economic climate in 2012.

For more information, see:

SBA factsheet for Finland: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/finland_en.pdf

Actions supporting access to finance for SMEs: http://ec.europa.eu/enterprise/policies/finance/data/enterprise-finance-index/downloads/country-pages/additional/apx-fi_en.pdf

EU Country Snapshots of Potential (Indicative) Sources of Funding for SMEs The EU supports entrepreneurs and businesses with a wide range of EU programmes (2007-2013) providing loans, guarantees, venture capital and other equity financing. These financial instruments are managed by financial intermediaries such as banks, venture capital funds and other financial institutions.

http://access2eufinance.ec.europa.eu/youreurope/business/finance-support/access-to-finance/

For detailed tables on EU country-level information on funding sources, visit the link above and choose your country.



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France

France offers slightly better conditions for access to various sources of financing for SMEs, but progress on this front has stalled and the return of the financial crisis has created a difficult climate for businesses. On the positive side, the cost of credit for small businesses (for loans under €1 million) has fallen. It is about 11% higher than for larger enterprises (which generally need loans of over €1 million), but this gap has diminished significantly since 2010.

Institutions and systems that can facilitate access to finance, such as credit registry bureaus and the legal rights system are as solid as in most other EU countries. The same can be said of the availability of early-stage venture capital, which amounted to 0.019% of the country's GDP in 2009.

A number of policy measures have been taken lately to improve the situation in this policy area in France. On 1 December 2011, the government asked Rene Ricol to be the coordinator for public investment in companies. (He was formerly the coordinator for the €35-billion Large National Loan, attached to the Ministry of the Economy). There are several institutions responsible for public funding, including OSEO, CDC Enterprises, the Strategic Investment Fund ('Fonds strategique d'investissement'), Ubifrance, the credit ombudsman and various regional bodies. The coordinator should help ensure that public funds are better managed (nationally and regionally) and will send the government proposals for improvements. One option would be to merge several national funding institutions. Another option is to have a regional one-stop shop where SMEs can apply for European, national and local grants.

In January 2012, the government announced that OSEO, the state agency that provides financial support for companies, would create 'OSEO Industrie' - a bank for companies. The bank became operational in February 2012, with funds worth €1 billion. This allows it to borrow another €9 billion, making a total of €10 billion. These funds are mainly used to finance medium-sized companies (with fewer than 5000 employees) in the industrial sector (manufacturing or services).


SBA factsheet for France: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/france_en.pdf

Actions supporting access to finance for SMEs: http://ec.europa.eu/enterprise/policies/finance/data/enterprise-finance-index/downloads/country-pages/additional/apx-fr_en.pdf

Germany

According to the SBA Fact Sheets, Germany's performance in access to finance improved substantially in 2011 compared to the previous year. This not only applies to its overall performance relative to its peers - in 2012 Germany moved up from an 'average' to an 'above-EU average' performance level - but also to its performance on almost all individual indicators in this segment. Although Germany does not lead its EU peers in any of the financial indicators, it now clearly outperforms the EU average in two-thirds of them. There was a significant improvement in the share of SMEs that reported deterioration in the willingness of banks to provide loans (down from 27% to 16% with the EU average only down from 30% to 27% this year). The share of rejected loan applications and unacceptable loan offers also dropped - from 26% to only 8% (much more than the EU average which declined from 22% to 15% in 2011). It should be noted, however, that these year-on-year improvements ended a longer period (since 2007), which saw financing conditions deteriorate in the first phase of the financial crisis.

The interest rate differential between loans of less than a million euro and those above is still higher in Germany (24%) than in the EU (19%). The margin, however, has come down from almost 29% in the previous year. The good performance is rounded off by above average results for most of the



38

France

France offers slightly better conditions for access to various sources of financing for SMEs, but progress on this front has stalled and the return of the financial crisis has created a difficult climate for businesses. On the positive side, the cost of credit for small businesses (for loans under €1 million) has fallen. It is about 11% higher than for larger enterprises (which generally need loans of over €1 million), but this gap has diminished significantly since 2010.

Institutions and systems that can facilitate access to finance, such as credit registry bureaus and the legal rights system are as solid as in most other EU countries. The same can be said of the availability of early-stage venture capital, which amounted to 0.019% of the country's GDP in 2009.

A number of policy measures have been taken lately to improve the situation in this policy area in France. On 1 December 2011, the government asked Rene Ricol to be the coordinator for public investment in companies. (He was formerly the coordinator for the €35-billion Large National Loan, attached to the Ministry of the Economy). There are several institutions responsible for public funding, including OSEO, CDC Enterprises, the Strategic Investment Fund ('Fonds strategique d'investissement'), Ubifrance, the credit ombudsman and various regional bodies. The coordinator should help ensure that public funds are better managed (nationally and regionally) and will send the government proposals for improvements. One option would be to merge several national funding institutions. Another option is to have a regional one-stop shop where SMEs can apply for European, national and local grants.

In January 2012, the government announced that OSEO, the state agency that provides financial support for companies, would create 'OSEO Industrie' - a bank for companies. The bank became operational in February 2012, with funds worth €1 billion. This allows it to borrow another €9 billion, making a total of €10 billion. These funds are mainly used to finance medium-sized companies (with fewer than 5000 employees) in the industrial sector (manufacturing or services).


SBA factsheet for France: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/france_en.pdf

Actions supporting access to finance for SMEs: http://ec.europa.eu/enterprise/policies/finance/data/enterprise-finance-index/downloads/country-pages/additional/apx-fr_en.pdf

Germany

According to the SBA Fact Sheets, Germany's performance in access to finance improved substantially in 2011 compared to the previous year. This not only applies to its overall performance relative to its peers - in 2012 Germany moved up from an 'average' to an 'above-EU average' performance level - but also to its performance on almost all individual indicators in this segment. Although Germany does not lead its EU peers in any of the financial indicators, it now clearly outperforms the EU average in two-thirds of them. There was a significant improvement in the share of SMEs that reported deterioration in the willingness of banks to provide loans (down from 27% to 16% with the EU average only down from 30% to 27% this year). The share of rejected loan applications and unacceptable loan offers also dropped - from 26% to only 8% (much more than the EU average which declined from 22% to 15% in 2011). It should be noted, however, that these year-on-year improvements ended a longer period (since 2007), which saw financing conditions deteriorate in the first phase of the financial crisis.

The interest rate differential between loans of less than a million euro and those above is still higher in Germany (24%) than in the EU (19%). The margin, however, has come down from almost 29% in the previous year. The good performance is rounded off by above average results for most of the

remaining indicators, including those measuring cash flow conditions (average payment delay and share of lost payments), access to venture capital and the depth of credit information. These factors are important for creditors' confidence in lending money to enterprises.

A number of policy measures have been taken recently to improve the situation in this policy area in Germany. In 2011, the Federal Ministry of Economics and Technology, the KfW, and twelve large German companies set up the Second Equity Fund for High-Tech Start-ups. The fund provides early-stage (seed) financing for promising high-tech start-ups. Together with the Entrepreneur Loan programme 'StartGeld', the KfW provides a guarantee for 80 per cent of a loan made by a private bank to a start-up or young company. In spring 2011, the maximum loan amount was raised from €50,000 to €100,000.


SBA factsheet for France: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/germany_en.pdf

Actions supporting access to finance for SMEs: http://ec.europa.eu/enterprise/policies/finance/data/enterprise-finance-index/downloads/country-pages/additional/apx-de_en.pdf

Spain

According to information from the SBA Fact Sheets, access to finance remains one of the most problematic areas for Spanish SMEs. Spain performs well below the EU average on this aspect, despite a few signs of improvement.

The general credit conditions and standards that banks apply to SME borrowers seem to have slightly loosened from 2009 to 2011. The proportion of rejected loans has significantly decreased from 31% to 16%, and fewer Spanish business owners report deterioration in the banks' willingness to provide loans. Similarly, the cost of credit for small businesses (for loans under EUR 1 million) was, in 2011, 31% higher than for larger enterprises (which generally need loans of over EUR 1 million), but this gap has shrunk significantly since 2010 when it was 40%.

Despite these positive trends, the credit crunch is squeezing entrepreneurs and small businesses in Spain much more than their counterparts in other European countries. The relatively limited availability of venture capital is a further limit to the scope for highly innovative companies to grow in the early stages of their development. Excessively long payment periods exacerbate the liquidity problems that businesses in Spain face. The institutions and systems that can facilitate access to finance, such as credit registry bureaus, and the legal rights system are as solid as in most other EU countries.

Apart from the cases related to European funds, SMEs' access to finance opportunities is still very limited. To improve this situation, DG SME launched an initiative to provide subsidised loans under the ENISA 'Business Growth Lines', and also to offer personalised assistance and training to small and medium-sized companies undergoing expansion through the Industrial Organisation School (EOI). Both schemes have a budget of €3.5 million.


• SBA factsheet for France: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/spain_en.pdf

• Actions supporting access to finance for SMEs: http://ec.europa.eu/enterprise/policies/finance/data/enterprise-finance-index/downloads/country-pages/additional/apx-es_en.pdf



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Sweden

According to the information from the SBA Fact Sheets, Swedish SMEs enjoy better financing conditions than the average EU SME: the country is among the top scorers in this SBA area. In particular, they have a much lower chance of seeing a loan application rejected or having a client default on a payment, they are more likely to get paid on time and attract venture capital investment, and are satisfied with their access to public financial support. Furthermore, they find that their banks have become more willing to grant a loan. The positive attitude of Swedish banks towards SMEs is probably a result of the good economic climate the country enjoyed in 2011, which saw a strong GDP growth of 3.9%. However, the conditions attached to smaller loans offers are, in comparison with those for larger ones, worse than the EU average. Lastly, Sweden's performance in terms of the strength of legal rights and the availability of credit information is in line with the average.

On the policy front, in June 2011 the government approved a proposition whereby Sweden accepted the European rules for investment funds (UCITS IV). This means that establishing Swedish investment funds in Europe and EU funds in Sweden will become significantly easier. This measure could encourage investment in Sweden, particularly due to the fact that from 11 January 2012, Swedish (and foreign) investment funds will be fully exempted from taxation. Moreover, the taxation of solely owned corporations is set to be changed, in order to reduce the costs associated with transfers to other owners. This will encourage investment, as well as ease the general burden for entrepreneurs.

Lastly, the 2012 state budget includes important amendments regarding complementary financing measures for SMEs. They range from the possibility to facilitate private, early-stage investments through so-called public fund of-funds solutions, to encouraging later stage venture capital funding and the merger of two public actors (Almi Feretagspartner AB and Innovation bridge AB) whose extensive remit includes providing loans and venture capital to companies in order to promote economic growth.


SBA factsheet for France: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/sweden_en.pdf

Actions supporting access to finance for SMEs: http://ec.europa.eu/enterprise/policies/finance/data/enterprise-finance-index/downloads/country-pages/additional/apx-se_en.pdf

UK

According to the SBA Fact Sheets, the UK still performs within the EU average on access to finance. However, it is now 30% more expensive for SMEs to get loans, compared to large companies. In the past, the difference was only 11%. Also the percentage of lost payments increased from under to above the EU average. On the bright side, the UK has very well-functioning systems for the protection of legal rights, readily available credit information, and it is easy for venture capitalist to invest in start-ups.

From a policy point of view, the government has introduced or implemented a wide range of access to finance policies, focusing on the funding gap between GBP 100000 and GBP 1 million (€120000 and €1.2 million). The measures are aimed at encouraging private-sector investment in business start-ups and creating favourable conditions for small businesses to grow. They include the launch of the Business Angel Co-investment Fund to provide investment in early-stage, high-growth SMEs; the launch of the Business Growth Fund, which provides equity finance for small businesses with high growth trajectories; and systems to increase SME access to loan finance, under the National Loan Guarantee Scheme and the Enterprise Finance Guarantee.



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Sweden

According to the information from the SBA Fact Sheets, Swedish SMEs enjoy better financing conditions than the average EU SME: the country is among the top scorers in this SBA area. In particular, they have a much lower chance of seeing a loan application rejected or having a client default on a payment, they are more likely to get paid on time and attract venture capital investment, and are satisfied with their access to public financial support. Furthermore, they find that their banks have become more willing to grant a loan. The positive attitude of Swedish banks towards SMEs is probably a result of the good economic climate the country enjoyed in 2011, which saw a strong GDP growth of 3.9%. However, the conditions attached to smaller loans offers are, in comparison with those for larger ones, worse than the EU average. Lastly, Sweden's performance in terms of the strength of legal rights and the availability of credit information is in line with the average.

On the policy front, in June 2011 the government approved a proposition whereby Sweden accepted the European rules for investment funds (UCITS IV). This means that establishing Swedish investment funds in Europe and EU funds in Sweden will become significantly easier. This measure could encourage investment in Sweden, particularly due to the fact that from 11 January 2012, Swedish (and foreign) investment funds will be fully exempted from taxation. Moreover, the taxation of solely owned corporations is set to be changed, in order to reduce the costs associated with transfers to other owners. This will encourage investment, as well as ease the general burden for entrepreneurs.

Lastly, the 2012 state budget includes important amendments regarding complementary financing measures for SMEs. They range from the possibility to facilitate private, early-stage investments through so-called public fund of-funds solutions, to encouraging later stage venture capital funding and the merger of two public actors (Almi Feretagspartner AB and Innovation bridge AB) whose extensive remit includes providing loans and venture capital to companies in order to promote economic growth.


SBA factsheet for France: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/sweden_en.pdf

Actions supporting access to finance for SMEs: http://ec.europa.eu/enterprise/policies/finance/data/enterprise-finance-index/downloads/country-pages/additional/apx-se_en.pdf

UK

According to the SBA Fact Sheets, the UK still performs within the EU average on access to finance. However, it is now 30% more expensive for SMEs to get loans, compared to large companies. In the past, the difference was only 11%. Also the percentage of lost payments increased from under to above the EU average. On the bright side, the UK has very well-functioning systems for the protection of legal rights, readily available credit information, and it is easy for venture capitalist to invest in start-ups.

From a policy point of view, the government has introduced or implemented a wide range of access to finance policies, focusing on the funding gap between GBP 100000 and GBP 1 million (€120000 and €1.2 million). The measures are aimed at encouraging private-sector investment in business start-ups and creating favourable conditions for small businesses to grow. They include the launch of the Business Angel Co-investment Fund to provide investment in early-stage, high-growth SMEs; the launch of the Business Growth Fund, which provides equity finance for small businesses with high growth trajectories; and systems to increase SME access to loan finance, under the National Loan Guarantee Scheme and the Enterprise Finance Guarantee.

The government will also encourage banks to work together through the Business Growth Fund. It will provide tax relief of 50% for individuals who buy shares in new start-up businesses through the newly announced Seed Enterprise Investment Fund. Some of these initiatives are still in their formative stages.


SBA factsheet for France: http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/countries-sheets/2012/uk_en.pdf

Actions supporting access to finance for SMEs: http://ec.europa.eu/enterprise/policies/finance/data/enterprise-finance-index/downloads/country-pages/additional/apx-gb_en.pdf

Other EU sources of finance and/or support systems

SME Finance Forum The EC has set up the SME Finance Forum, which regularly brings together organisations representing SMEs, banks and other financial institutions to reflect on how to best address both the current challenges and long-term structural issues in access to finance for SMEs.

For more information:

http://ec.europa.eu/small-business/funding-partners-public/finance/index_en.htm

Equity finance Risk capital comprises funds made available to a company during its early growth stages (start-up and development). Innovative and growth oriented small businesses need to raise capital (equity investment) from external sources, because they do not have their own resources or cannot access loans. However, many investors are reluctant to invest in start-ups and innovative firms because of the high risks and transaction costs, or because they estimate that the expected returns will not compensate for the risk.

The Commission is working closely with the Member States to improve the efficiency of the markets for equity investment so that sound projects can find suitable investors, as well as to create a more open and competitive pan-European venture capital market. The Commission aims to encourage Member States to learn from good practices by supporting business angel investments, in particular across borders, and through cooperation with venture capital funds.



Mezzanine finance The EC is also committed to improving the European markets in financial products combining the features of loans and equity finance. This so-called mezzanine finance is suited to supporting businesses in various phases of their lifecycle such as growth or transfer of the business.





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Venture Capital Venture Capital is an important source of funding for the cleantech industry, and represents a significant source of funds in the early/growth stage of cleantech firms. In 2010, cleantech represented about 20-25% of overall European VC, with investments to the tune $16B in >200 companies in 2009.

Table 2: Leading countries for cleantech VC (data for 2009 – Q3 2010)

Country Amount (USD) Number of Deals

United Kingdom $1154m 143

Germany $532m 82

France $442m 40

Norway $369m 29

Belgium $245m 24

Ireland $179m 21

Netherlands $169m 20

Italy $137m 15

Sweden $134m 11

Denmark $91m 11

Finland $35m 11

Spain $28m 5

Austria $19m 3

Greece n/a 1

Many corporations also invest in cleantech start-ups.

Figure 4: Select examples of corporate investors in European cleantech start-ups in 2010

Corporations also focus on later-stage companies:

VC Deals of $5m or above: 39% involve a corporation

VC Deals less than $5m (or undisclosed): 9% involve a corporation



42

Venture Capital Venture Capital is an important source of funding for the cleantech industry, and represents a significant source of funds in the early/growth stage of cleantech firms. In 2010, cleantech represented about 20-25% of overall European VC, with investments to the tune $16B in >200 companies in 2009.

Table 2: Leading countries for cleantech VC (data for 2009 – Q3 2010)

Country Amount (USD) Number of Deals

United Kingdom $1154m 143

Germany $532m 82

France $442m 40

Norway $369m 29

Belgium $245m 24

Ireland $179m 21

Netherlands $169m 20

Italy $137m 15

Sweden $134m 11

Denmark $91m 11

Finland $35m 11

Spain $28m 5

Austria $19m 3

Greece n/a 1

Many corporations also invest in cleantech start-ups.

Figure 4: Select examples of corporate investors in European cleantech start-ups in 2010

Corporations also focus on later-stage companies:

VC Deals of $5m or above: 39% involve a corporation

VC Deals less than $5m (or undisclosed): 9% involve a corporation

Improving cash flow While access to finance is a major concern for businesses, the other side of the ‘cash crunch’ is the difficulty that companies face in getting paid on time. The time it takes for invoices to be settled varies widely across Europe, and in many countries this delay causes serious problems for SMEs. This is why the EU in October 2010 reached agreement to revamp the Late Payments Directive, to give better protection to creditors, in most cases SMEs, while respecting the freedom of contract. Public authorities will have to pay bills within 30 days, or else pay a minimum interest rate agreed at EU level. This measure is expected to result in an extra €180 billion of liquidity being available to businesses.


http://ec.europa.eu/small-business/most-of-market/rules/index_en.htm

In the Member States: Lending a hand to SMEs To help economic recovery, in 2009 the EU adopted temporary changes to its state aid rules which make it easier for Member States to support small businesses. The Commission has also simplified state aid rules for support to SMEs. A Handbook on State Aid Rules now also gives public authorities a concise overview of how they can support SMEs under the revised arrangements.


http://ec.europa.eu/small-business/most-of-market/rules/index_en.htm

Non-EU sources of finance and/or support systems Funding for cleantech ventures in India may be available from a range of non-EU sources from time to time. These could, indicatively include:

Multilateral sources such as the World Bank and other group agencies such as the International Finance Corporation (IFC), UN agencies such as the United Nations Industrial Development Organisation (UNIDO), and other multilateral mechanisms such as the Global Environment Facility (GEF). The GEF-UNIDO for example jointly administer the Global Cleantech Programme for SMEs, and also recently (May 2013) launched the India Cleantech Programme;

Bilateral sources such as USAID, which for example, recently (June 2013) committed $100-million investment in India’s clean energy sector;

Specialised funds such as the Climate Investment Funds (CIF), which includes the $5.2 billion Clean Technology Fund (CTF) provides middle income countries with resources to explore options to scale up the demonstration, deployment, and transfer of low-carbon, clean technologies.

Venture capital and private equity – a range of players are active in India in this segment. For example, The IFC, BP, India’s Technology Development Board, and the Indian Institute of Management have joined forces to create Infuse Ventures, an India-centric venture capital fund that will invest in cleantech and renewable energy start-ups. With an aim to raise $23 million, Infuse debuted in India in May 2013 with its first fund closing at $14 million.



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Funding for research

Current research funding in the EU – the FP7 FP7 is the short name for the Seventh Framework Programme for Research and Technological Development. This is the EU's main instrument for funding research in Europe during the years 2007-2013. FP7 was also designed to respond to Europe's employment needs, competitiveness and quality of life. FP7's budget amounted to ca. €50 billion for 2007-13. Under the cooperation programme, over 15% of the budget has been allocated to SMEs. Grants were available for projects with an EU dimension - e.g. involving partners from more than one EU country.

For SMEs performing research

Cooperation The Cooperation Programme is the heart of FP7 and represents two thirds of the overall budget. It is intended to facilitate collaborative research across Europe through transnational consortiums of industry. Research is carried out across ten themes, each of which has its own dedicated SME strategy. At least 15% of the funding available under the cooperation Programme goes to SMEs.

The major initiatives that favour the involvement of SMEs include selection of SME-relevant topics, SME dedicated calls, a budget earmarked for SMEs within specific calls and coordination and support actions across the themes. It should be noted that SME participation is not uniform across the themes. Across the themes particular attention has been paid to ensure enhanced SME participation within the various calls for proposals, particularly with regard to knowledge-intensive SMEs. Research in the interest of SMEs is promoted with an explicit reference to the expected impact upon SMEs. The expected results of these projects must be of interest and potential to SMEs, the consortia should have a significant share of the requested EC funding going to SMEs.

Areas of particular interest to SMEs have been identified in individual work programmes. Financial and administrative procedures have been simplified and funding rates for the R&D activities of SMEs have been increased to 75%. There is also greater flexibility in choosing the appropriate type of project.

The ten themes include:

1. Health

2. Food, agriculture and fisheries, and biotechnology

3. Information and Communication Technologies (ICTs)

4. Nanosciences, nanotechnologies, materials and new production technologies (NMP)

5. Energy

6. Environment (including climate change)

7. Transport (including aeronautics)

8. Socio-economic sciences and the humanities

9. Space

10. Security

Joint Technology Initiatives (JTI)

The JTIs will build on European Technology Platforms (ETPs) by bringing together different partners to undertake projects that cannot be reached via the ‘Calls for Proposals’, where enhanced collaboration



44

Funding for research

Current research funding in the EU – the FP7 FP7 is the short name for the Seventh Framework Programme for Research and Technological Development. This is the EU's main instrument for funding research in Europe during the years 2007-2013. FP7 was also designed to respond to Europe's employment needs, competitiveness and quality of life. FP7's budget amounted to ca. €50 billion for 2007-13. Under the cooperation programme, over 15% of the budget has been allocated to SMEs. Grants were available for projects with an EU dimension - e.g. involving partners from more than one EU country.

For SMEs performing research

Cooperation The Cooperation Programme is the heart of FP7 and represents two thirds of the overall budget. It is intended to facilitate collaborative research across Europe through transnational consortiums of industry. Research is carried out across ten themes, each of which has its own dedicated SME strategy. At least 15% of the funding available under the cooperation Programme goes to SMEs.

The major initiatives that favour the involvement of SMEs include selection of SME-relevant topics, SME dedicated calls, a budget earmarked for SMEs within specific calls and coordination and support actions across the themes. It should be noted that SME participation is not uniform across the themes. Across the themes particular attention has been paid to ensure enhanced SME participation within the various calls for proposals, particularly with regard to knowledge-intensive SMEs. Research in the interest of SMEs is promoted with an explicit reference to the expected impact upon SMEs. The expected results of these projects must be of interest and potential to SMEs, the consortia should have a significant share of the requested EC funding going to SMEs.

Areas of particular interest to SMEs have been identified in individual work programmes. Financial and administrative procedures have been simplified and funding rates for the R&D activities of SMEs have been increased to 75%. There is also greater flexibility in choosing the appropriate type of project.

The ten themes include:

1. Health

2. Food, agriculture and fisheries, and biotechnology

3. Information and Communication Technologies (ICTs)

4. Nanosciences, nanotechnologies, materials and new production technologies (NMP)

5. Energy

6. Environment (including climate change)

7. Transport (including aeronautics)

8. Socio-economic sciences and the humanities

9. Space

10. Security

Joint Technology Initiatives (JTI)

The JTIs will build on European Technology Platforms (ETPs) by bringing together different partners to undertake projects that cannot be reached via the ‘Calls for Proposals’, where enhanced collaboration

and considerable investment are essential to long-term success. The JTIs aim to establish long-term public-private partnerships in research at the European level. They are large-scale multi-financed actions intended to coordinate research efforts and respond to the needs of industry, leading to flagship projects for increasing European competitiveness.

Under the Cooperation Specific Programme currently six fields are envisaged, including:

• Innovative Medicines (IMI)

• Nanoelectronics Technology 2020 (ENIAC)

• Embedded Computing Systems (ARTEMIS)

• Fuel Cells and Hydrogen (FCH)

• Aeronautics and Air Transport (‘Clean Sky’).

• Global Monitoring for Environment and Security (GMES)

Other possible themes are to be identified at a later date.

How to participate in projects?

For a simple overview, please see the Step by Step Guide:

http://ec.europa.eu/research/sme-techweb/index_en.cfm?pg=step_by_step

People - Marie Curie Actions The Marie Curie Actions ("People" Programme in FP7) are focused on training, mobility and career development of researchers. They are open to individual researchers at all stages of their career and research institutions both in the public and the private sector. Applicants may be situated in EU Member States, Associated States and Third countries. Proposals from all areas of research are welcome, there are no thematic priorities.

One of the Actions, the "Industry-Academia Partnerships and Pathways" ("IAPP") scheme aims specifically at establishing long-term research cooperation between the public and the private sector, including SMEs.

Industry-Academia Partnerships and Pathways (IAPP)

IAPPs are partnerships between public and private research organisations (including universities, large and small enterprises, manufacturing industries), based on a common research project and aiming to increase skills exchange between the two sectors.

Who can apply?

A typical consortium consists of one research organization from the public sector (university, research centre) and one from the private sector (any size: SME, spin-off, big industry), but there is no pre-defined maximum number of participants.

Proposals must include as a minimum of one organisation from each sector. The participating organisations must be established in at least two different Member States or Associated Countries of which at least one must be from the EU27.





45

Which research topics are supported?

There are no pre-defined priority areas. Research fields are chosen freely by the applicants and all domains of research and technological development addressed under the EC-Treaty are eligible for funding (except areas of research covered by the EURATOM Treaty).

How does it work?

Proposals are submitted, evaluated against a series of predetermined criteria by international peer review and selected for funding, typically for 4 years.

What does the funding cover?

Support will be provided for:

1. Exchange of know-how and experience through inter-sector two-way secondments of research staff of the participants

2. Research and Networking activities

3. Optionally:

• Recruitment of experienced researchers from outside the partnership, for involvement in transfer of knowledge and/or training of researchers

• Organisation of workshops and conferences, involving the participants' own research staff and external researchers

• For SMEs: research equipment (up to 10% of the EC contribution for each SME participant) on a duly justified basis

How to apply



EUROSTARS

The EUROSTARS programme is offered by EUREKA, an intergovernmental initiative established in 1985, aimed at enhancing European competitiveness through support to businesses, research centres and universities who carry out pan-European projects for developing innovative, products, processes and services. EUROSTARS is an Article 185 initiative focusing on funding for R&D-performing SMEs. The programme offers combined national funding to support R&D performing SMEs leading international collaborative research projects. Thirty three one countries are involved. Eurostars combines a bottom-up approach with a central submission and evaluation process, and synchronized national funding from the 33 Eurostars countries.

Objective

Eurostars aims to support research performing SMEs by co-financing their transnational market-oriented research projects and by providing them with the necessary legal and organizational framework. It is fine-tuned to focus on the needs of research performing SMEs, and specifically targets the development of new products, processes and services.



46

Which research topics are supported?

There are no pre-defined priority areas. Research fields are chosen freely by the applicants and all domains of research and technological development addressed under the EC-Treaty are eligible for funding (except areas of research covered by the EURATOM Treaty).

How does it work?

Proposals are submitted, evaluated against a series of predetermined criteria by international peer review and selected for funding, typically for 4 years.


Support will be provided for:

1. Exchange of know-how and experience through inter-sector two-way secondments of research staff of the participants

2. Research and Networking activities

3. Optionally:

• Recruitment of experienced researchers from outside the partnership, for involvement in transfer of knowledge and/or training of researchers

• Organisation of workshops and conferences, involving the participants' own research staff and external researchers

• For SMEs: research equipment (up to 10% of the EC contribution for each SME participant) on a duly justified basis

How to apply



EUROSTARS

The EUROSTARS programme is offered by EUREKA, an intergovernmental initiative established in 1985, aimed at enhancing European competitiveness through support to businesses, research centres and universities who carry out pan-European projects for developing innovative, products, processes and services. EUROSTARS is an Article 185 initiative focusing on funding for R&D-performing SMEs. The programme offers combined national funding to support R&D performing SMEs leading international collaborative research projects. Thirty three one countries are involved. Eurostars combines a bottom-up approach with a central submission and evaluation process, and synchronized national funding from the 33 Eurostars countries.

Objective

Eurostars aims to support research performing SMEs by co-financing their transnational market-oriented research projects and by providing them with the necessary legal and organizational framework. It is fine-tuned to focus on the needs of research performing SMEs, and specifically targets the development of new products, processes and services.

Applications

More than 70% of the applicants of the Eurostars projects are research performing SMEs. Eligibility criteria include:

1. Project proposals must have a civilian purpose and be aimed at the development of a new product, process or service.

2. The leading participant must be a research performing SME from a Eurostars member country.

3. SMEs shall mean micro-, small- and medium-sized enterprises, as defined in Commission Recommendation 2003/361/EC; a research performing SME is an SME having at least 10% of its turnover or at least 10 FTEs dedicated to research activities

4. The project must involve at least 2 participants (legal entities) from 2 different Eurostars member countries.

5. The research performing SMEs must take charge of at least 50% of total project cost

6. No more than 75% of project total costs should be borne by the same participant or country

7. The project should be market-driven

8. The project duration is minimum 3 years

9. Go-to-market is foreseen within 2 years after project end

The 10th Eurostars submission deadline has passed. No further application deadlines will occur in 2013. 594 applications were submitted on the cut-off date for 2013, April 4. 510 of those applications (86%) were eligible for possible support.

EUROSTARS 2

In June 2012, the Eureka Ministerial Conference endorsed the "BUDAPEST DOCUMENT" which stated strong interest of Eureka countries in supporting the continuation of a strengthened Eurostars-2 programme within Horizon 2020, the EU’s new Framework Programme for Research and Innovation. In line with the recommendations from the interim evaluation of Eurostars 1, Eurostars-2 will characterized by:

streamlined programme administration

stronger integration (standardised rules, 50 top ranking projects funded, etc.)

shorter time to contract

The legal basis for the Eurostars-2 proposal is article 185 of the TFEU; its adoption requires a decision by the European Parliament and Council.

Adoption of the commission proposal: July 2013

Start of inter-institutional procedure : Autumn 2013

First call: Early 2014


http://www.eurostars-eureka.eu/home.do



47

For SMEs acquiring research The capacities programme is divided into six broad areas. One of these, ‘Research for the benefit of SMEs’, is aimed specifically at small to medium-sized enterprises and their associations who wish to out-source their research.

The coordination activities of two ERA-NET projects specifically for SMEs are also funded under the Capacities programme. These are the EraSME and CORNET projects, which are funded under national funding programmes.

Research for SMEs

Through the ‘Research for SMEs’ scheme, research-acquiring SMEs can receive support as individual SMEs. Projects must fit into the overall business and innovation needs of the SMEs, and render clear exploitation potential and economic benefits for the SMEs involved.

Research for SMEs supports small groups of innovative SMEs in solving technological problems and acquiring technological know-how. Projects must fit into the overall business and innovation needs of the SMEs, which are given the opportunity to subcontract research to RTD performers in order to acquire the necessary technological knowledge. Projects must render clear exploitation potential and economic benefits for the SMEs involved.

Who can apply?

SMEs that need to ‘acquire’ research by outsourcing, such as low to medium technology SMEs with little or no research capacity; or research intensive SMEs that need to outsource in order to complement their core research capability. Projects are intended to create new knowledge or produce results with clear potential to improve or develop new products, processes or services for the SMEs taking part.

Which activities are supported?

Within the framework of each project, the Research for SMEs scheme will support SMEs in:

1. Research and technical development activities Research undertaken by RTD performers will form the bulk of each funded project. SMEs will focus on the testing and validation of project results, and the preparatory stages for applied use.

2. Demonstration activities - these are intended to demonstrate the viability of new technologies produced through the research, offering a potential economic advantage, but which are unable to be commercialised directly (e.g. testing of product-like prototypes). This is the last development stage before products or processes enter production

3. Other activities (OTHER) facilitate the take-up of results by the SMEs, in particular training and dissemination activities. RTD performers will train technical and managerial staff from participating SMEs, focusing on best-practice utilisation of results and technologies generated by project research. Dissemination to third parties will be accomplished through conferences, publications, workshops, web-based initiatives etc.

4. Management activities Over and above the technical management of individual work packages, these activities will provide an appropriate framework for bringing together all components of the project and maintaining regular communication with the Commission.

How does it work?

Under FP7, the funding model used for Research for SMEs (formerly Cooperative Research) maintains its guiding principle to strengthen the innovation capacities of SMEs to develop new products and markets through the acquisition of new knowledge from those institutions best suited to carry out



48

For SMEs acquiring research The capacities programme is divided into six broad areas. One of these, ‘Research for the benefit of SMEs’, is aimed specifically at small to medium-sized enterprises and their associations who wish to out-source their research.

The coordination activities of two ERA-NET projects specifically for SMEs are also funded under the Capacities programme. These are the EraSME and CORNET projects, which are funded under national funding programmes.

Research for SMEs

Through the ‘Research for SMEs’ scheme, research-acquiring SMEs can receive support as individual SMEs. Projects must fit into the overall business and innovation needs of the SMEs, and render clear exploitation potential and economic benefits for the SMEs involved.

Research for SMEs supports small groups of innovative SMEs in solving technological problems and acquiring technological know-how. Projects must fit into the overall business and innovation needs of the SMEs, which are given the opportunity to subcontract research to RTD performers in order to acquire the necessary technological knowledge. Projects must render clear exploitation potential and economic benefits for the SMEs involved.

Who can apply?

SMEs that need to ‘acquire’ research by outsourcing, such as low to medium technology SMEs with little or no research capacity; or research intensive SMEs that need to outsource in order to complement their core research capability. Projects are intended to create new knowledge or produce results with clear potential to improve or develop new products, processes or services for the SMEs taking part.


Within the framework of each project, the Research for SMEs scheme will support SMEs in:

1. Research and technical development activities Research undertaken by RTD performers will form the bulk of each funded project. SMEs will focus on the testing and validation of project results, and the preparatory stages for applied use.

2. Demonstration activities - these are intended to demonstrate the viability of new technologies produced through the research, offering a potential economic advantage, but which are unable to be commercialised directly (e.g. testing of product-like prototypes). This is the last development stage before products or processes enter production

3. Other activities (OTHER) facilitate the take-up of results by the SMEs, in particular training and dissemination activities. RTD performers will train technical and managerial staff from participating SMEs, focusing on best-practice utilisation of results and technologies generated by project research. Dissemination to third parties will be accomplished through conferences, publications, workshops, web-based initiatives etc.

4. Management activities Over and above the technical management of individual work packages, these activities will provide an appropriate framework for bringing together all components of the project and maintaining regular communication with the Commission.

How does it work?

Under FP7, the funding model used for Research for SMEs (formerly Cooperative Research) maintains its guiding principle to strengthen the innovation capacities of SMEs to develop new products and markets through the acquisition of new knowledge from those institutions best suited to carry out

research. The SME participants are the direct beneficiaries of the project: they invest in the RTD project and outsource (subcontract) most of the research and demonstration activities to RTD performers and receive in return the technological know-how they need to develop new or improve existing products, systems, processes or services. The relationship between the SMEs and the RTD performers under this programme is therefore a “customer-seller” relationship. The idea is to allow SMEs to further develop their activities by buying knowledge from RTD performers, who sell their expertise and work. Research and development activities undertaken by the SMEs themselves with their own resources are essentially focussed on initial specifications and, later, on validation and testing of the acquired knowledge. In this context, the real investment or cost incurred by the SMEs includes the price they pay for the know-how they wish to acquire: the intellectual property rights and knowledge developed during the project. It is important to note that Research for SMEs is a bottom-up scheme: the projects may address any research topic across the entire field of science and technology


The European Community will provide a financial support to the project, which covers only part of the total costs. The SME participants will therefore have to contribute with own resources, in cash or in-kind, to the project. The EC contribution is based on upper funding limits for individual activities:

RTD activities: maximum of 50 % of the eligible costs. However, for SMEs, non-profit public bodies, secondary and higher education establishments, and research organisations: a maximum of 75 %

Demonstration activities: maximum of 50%

Management and other activities: maximum of 100%

One important rule for the calculation of the EC contribution applies: In accordance with the rules of participation and in order to achieve the aim of promoting the outsourcing of research and demonstration activities, the financial support to the project will be limited to 110% of the total amount of the subcontracting to the RTD performers (price to be invoiced by RTD performers to SMEs).

For a more detailed explanation of the scheme please see the brochure entitled "Research for SMEs at a glance": http://ec.europa.eu/research/sme-techweb/pdf/smes_glance.pdf#view=fit&pagemode=none

How do you form a Research for SMEs consortium?

Projects require participants from the following categories:

• SME participants: At least three independent SMEs established in three different Member States or associated countries.

• RTD performers: At least two RTD performers which must be independent from any other participant and which can come from any country. Examples of RTD performers are universities, research organisations and industrial companies, including research-performing SMEs.

In addition, other enterprises and end-users may participate by making a particular contribution to the project. They must also be independent from any other participant.

Recommendations for resources and duration

The size of the consortium should typically be between 5 and 10 participants. The overall budget of the project should typically be between €0.5 million to €1.5 million and the duration of the project should normally be between 1 and 2 years. If a project deviates from these recommendations a justification is required.



49

How to participate in Research for SMEs



Calls are published on CORDIS under the section dealing with the Capacities Programme: Research for the benefit of SMEs:

http://cordis.europa.eu/fp7/dc/index.cfm?fuseaction=UserSite.CapacitiesCallsPage&id_activity=14

Research for SME associations Research for SME Associations aims at developing technical solutions to problems common to a large number of SMEs in specific industrial sectors or segments of the value chain through research that could not be addressed under Research for SMEs. Projects can, for example, aim to develop or conform to European norms and standards, and to meet regulatory requirements in areas such as health, safety and environmental protection. Projects must be driven by the SME associations, which are given the opportunity to subcontract research to RTD performers in order to acquire the necessary technological knowledge for their members. Projects must render clear exploitation potential and economic benefits for the SMEs members of the associations involved.

Who can apply?

SME associations that are normally best placed to appreciate or identify the common technical problems of their members.


The focus should be on strengthening the competitiveness of SMEs and improving industrial competitiveness across the EU. Therefore, particular emphasis will be given to the economic impact of the results for participating SMEs. A consortium’s plan for disseminating the project’s results will be central to the evaluation process.

It takes a multifaceted approach to enhance participants’ competitiveness. Within the framework of each project, this scheme will support SME-AGs in:

1. Research and technical development activities form the core of the project with a major contribution from the RTD performers. SME associations, their members and the SMEs directly involved in the project focus on specifications, testing and validation of project results and the preparatory stages for further use.

2. Demonstration activities are designed to prove the viability of new technologies that offer a potential economic advantage but which cannot be commercialised directly (e.g. testing of product-like prototypes). This is the last development stage before products or processes enter production

3. Other activities (OTHER) facilitate the take-up of results by the SME associations and their members, in particular training and dissemination activities. RTD performers will train technical and managerial staff from the participating SMEs from participating SMEs, focusing on best-practice utilization of results and technologies generated by project research. Dissemination to third parties will be accomplished through conferences, publications, workshops, web-based initiatives etc.

Projects include activities to effectively disseminate the results of research to members of the SME-AGs, and if appropriate, more widely. Furthermore, dissemination to policy makers, including



50

How to participate in Research for SMEs





Research for SME associations Research for SME Associations aims at developing technical solutions to problems common to a large number of SMEs in specific industrial sectors or segments of the value chain through research that could not be addressed under Research for SMEs. Projects can, for example, aim to develop or conform to European norms and standards, and to meet regulatory requirements in areas such as health, safety and environmental protection. Projects must be driven by the SME associations, which are given the opportunity to subcontract research to RTD performers in order to acquire the necessary technological knowledge for their members. Projects must render clear exploitation potential and economic benefits for the SMEs members of the associations involved.

Who can apply?

SME associations that are normally best placed to appreciate or identify the common technical problems of their members.


The focus should be on strengthening the competitiveness of SMEs and improving industrial competitiveness across the EU. Therefore, particular emphasis will be given to the economic impact of the results for participating SMEs. A consortium’s plan for disseminating the project’s results will be central to the evaluation process.

It takes a multifaceted approach to enhance participants’ competitiveness. Within the framework of each project, this scheme will support SME-AGs in:

1. Research and technical development activities form the core of the project with a major contribution from the RTD performers. SME associations, their members and the SMEs directly involved in the project focus on specifications, testing and validation of project results and the preparatory stages for further use.

2. Demonstration activities are designed to prove the viability of new technologies that offer a potential economic advantage but which cannot be commercialised directly (e.g. testing of product-like prototypes). This is the last development stage before products or processes enter production

3. Other activities (OTHER) facilitate the take-up of results by the SME associations and their members, in particular training and dissemination activities. RTD performers will train technical and managerial staff from the participating SMEs from participating SMEs, focusing on best-practice utilization of results and technologies generated by project research. Dissemination to third parties will be accomplished through conferences, publications, workshops, web-based initiatives etc.

Projects include activities to effectively disseminate the results of research to members of the SME-AGs, and if appropriate, more widely. Furthermore, dissemination to policy makers, including

standardisation bodies, is encouraged to facilitate the use of policy-relevant results by the appropriate bodies at international, European, national or regional level.

How does it work?

Under FP7, the funding scheme Research for SME Associations (formerly Collective Research) maintains its guiding principles to strengthen the innovation capacities of SMEs to develop new products and markets through the acquisition of new knowledge from those institutions best suited to carry out research.

The SME associations and their members are the direct beneficiaries of the project: they invest in the RTD project and outsource (subcontract) most of the research and demonstration activities to RTD performers and receive in return the technological know-how they need.

The relationship between the SME associations, who act on behalf of their members and the RTD-performers under this programme, is therefore a “customer-seller” relationship. The idea is to allow SME associations to assist their members in further developing their activities by buying knowledge from RTD performers, who sell their expertise and work. Research and development activities undertaken by the SME associations themselves (and their members) with their own resources are essentially focussed on initial specifications and, later, on validation and testing of the acquired knowledge. In this context, the real investment or cost incurred by the SME associations includes the price they pay for the know-how they wish to acquire on behalf or for their members: the intellectual property rights and knowledge developed during the project.

From the perspective of the associations and their members, but also for a positive evaluation of the proposal, it is important that it is well verified and justified how the proposed research investment addresses the needs of large communities of SMEs. Furthermore it is crucial to demonstrate how the activities for dissemination and use will ensure that indeed large communities of SMEs will benefit economically from the project results. The associations and their members have to keep in mind that, even if the level of public funding provided is substantial, it will never cover all the costs, shortfalls will have to be covered by the participating associations themselves.

It is important to note that Research for SMEs associations is a bottom-up scheme: the projects may address any research topic across the entire field of science and technology.

Intellectual Property Rights

By default, SMEs retain full ownership of the Intellectual Property Rights (IPR). The consortium may, however, reach a different agreement in their own best interests, as long as the SMEs are provided with all the rights that are required for their intended use and dissemination of the project results.


The European community will provide a financial support to the project which covers only part of the total costs. The SME associations will therefore have to contribute with their own or financial resources to the project. The EC contribution is based on upper funding limits for individual activities:

• Research and technological development activities: maximum of 50 % of the eligible costs. However, SMEs, non-profit public bodies, secondary and higher education establishments, and research organisations may receive up to 75 %.SME associations, which fulfil any of the above mentioned conditions, qualify for the higher funding rate.

Demonstration activities: maximum of 50%

Management and Other activities: maximum of 100%

One important rule for the calculation of the EC contribution applies:



51

In accordance with the rules for participation and in order to achieve the aim of promoting the outsourcing of research and demonstration activities, the financial support to the project will be limited to 110% of the total amount of the subcontracting to the RTD performers (price to be invoiced by RTD performers to SMEs).

For a more detailed explanation of the scheme please see a small brochure entitled "Research for SME Associations at a glance":

http://ec.europa.eu/research/sme-techweb/pdf/sme_assoc_glance.pdf#view=fit&pagemode=none

How do you form a Research for SMEs Associations consortium?

Projects under Research for SME associations require participants from the following categories:

• At least three independent SME association/groupings (SME-AGs), established in three different Member States or associated countries, or one European SME association/grouping. SME associations/groupings are legal persons, composed mostly of and representing the interests of SMEs (e.g. industrial associations, national or regional industrial associations and chambers of industry and commerce).

• RTD performers: At least two RTD performers which must be independent from any other participant and which can come from any country. Examples of RTD performers are universities, research organisations and industrial companies, including research performing SMEs.

• In addition, other enterprises and end-users (including SMEs) may participate by making a particular contribution to the project. They must also be independent from any other participant.

A limited number of individual SMEs (2-5) must participate to ensure that the results of the project address SME needs and can be used by a large number of SMEs.


The size of the consortium should typically be between 10 and 15 participants. In addition, the SME end users group should be limited to 2 to 5 members. The overall budget of the project should typically be between €1.5 million to €4.0 million and the duration of the project should normally be between 2 and 3 years. If a project deviates from these recommendations a justification is required.

How to participate in Research for SME associations





Upcoming research funding in the EU – the Horizon 2020 Horizon 2020 is the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe's global competitiveness. Running from 2014 to 2020 with an €80 billion budget, the EU’s new programme for research and innovation is part of the drive to create new growth and jobs in Europe.

Horizon 2020 provides major simplification through a single set of rules. It will combine all research and innovation funding currently provided through the Framework Programmes for Research and Technical Development, the innovation related activities of the CIP and the European Institute of Innovation and Technology (EIT).



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In accordance with the rules for participation and in order to achieve the aim of promoting the outsourcing of research and demonstration activities, the financial support to the project will be limited to 110% of the total amount of the subcontracting to the RTD performers (price to be invoiced by RTD performers to SMEs).

For a more detailed explanation of the scheme please see a small brochure entitled "Research for SME Associations at a glance":

http://ec.europa.eu/research/sme-techweb/pdf/sme_assoc_glance.pdf#view=fit&pagemode=none

How do you form a Research for SMEs Associations consortium?

Projects under Research for SME associations require participants from the following categories:

• At least three independent SME association/groupings (SME-AGs), established in three different Member States or associated countries, or one European SME association/grouping. SME associations/groupings are legal persons, composed mostly of and representing the interests of SMEs (e.g. industrial associations, national or regional industrial associations and chambers of industry and commerce).

• RTD performers: At least two RTD performers which must be independent from any other participant and which can come from any country. Examples of RTD performers are universities, research organisations and industrial companies, including research performing SMEs.

• In addition, other enterprises and end-users (including SMEs) may participate by making a particular contribution to the project. They must also be independent from any other participant.

A limited number of individual SMEs (2-5) must participate to ensure that the results of the project address SME needs and can be used by a large number of SMEs.


The size of the consortium should typically be between 10 and 15 participants. In addition, the SME end users group should be limited to 2 to 5 members. The overall budget of the project should typically be between €1.5 million to €4.0 million and the duration of the project should normally be between 2 and 3 years. If a project deviates from these recommendations a justification is required.

How to participate in Research for SME associations





Upcoming research funding in the EU – the Horizon 2020 Horizon 2020 is the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe's global competitiveness. Running from 2014 to 2020 with an €80 billion budget, the EU’s new programme for research and innovation is part of the drive to create new growth and jobs in Europe.

Horizon 2020 provides major simplification through a single set of rules. It will combine all research and innovation funding currently provided through the Framework Programmes for Research and Technical Development, the innovation related activities of the CIP and the European Institute of Innovation and Technology (EIT).

The proposed support for research and innovation under Horizon 2020 will:

1. Strengthen the EU’s position in science with a dedicated budget of €24,598 million. This will provide a boost to top-level research in Europe, including an increase in funding of 77% for the very successful European Research Council (ERC).

2. Strengthen industrial leadership in innovation €17,938 million. This includes major investment in key technologies, greater access to capital and support for SMEs.

3. Provide €31,748 million to help address major concerns shared by all Europeans such as climate change, developing sustainable transport and mobility, making renewable energy more affordable, ensuring food safety and security, or coping with the challenge of an ageing population.

Horizon 2020 will tackle societal challenges by helping to bridge the gap between research and the market by, for example, helping innovative enterprise to develop their technological breakthroughs into viable products with real commercial potential. This market-driven approach will include creating partnerships with the private sector and Member States to bring together the resources needed.

International cooperation will be an important cross-cutting priority of Horizon 2020. In addition to Horizon 2020 being fully open to international participation, targeted actions with key partner countries and regions will focus on the EU’s strategic priorities. Through a new strategy, a strategic and coherent approach to international cooperation will be ensured across Horizon 2020.

Horizon 2020 will be complemented by further measures to complete and further develop the European Research Area by 2014. These measures will aim at breaking down barriers to create a genuine single market for knowledge, research and innovation.

On 14 September 2012, the Commission adopted a Communication entitled 'Enhancing and focusing EU international cooperation in research and innovation: a strategic approach'. The Communication sets out a new strategy for international cooperation in research and innovation, in particular with a view to implementing Horizon 2020.

What are the core principles of the new strategy? International cooperation in research and innovation is not an end in itself. It is a means for the Union to achieve its higher level objectives, in particular by:

1. strengthening the Union’s excellence and attractiveness in research and innovation and its economic and industrial competitiveness;

2. tackling global societal challenges, such as food and energy security and climate change;

3. supporting the Union’s external policies.

To achieve these objectives, the strategy will follow a dual approach:

Horizon 2020 will be open to participation from entities from across the world, although the approach to providing funding from the Union budget to these entities will be revised. Through this general opening, European researchers will be free to cooperate with their third country counterparts on topics of their own choice;

To complement the general opening, targeted activities will be developed where cooperation will be sought on particular topics and with well identified countries and/or regions

A number of cross-cutting issues will also be an integral part of the strategy:

The partnership with the Member States will be strengthened, building on the work of the Strategy Forum for International S&T Cooperation;



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Common principles for the conduct of international research and innovation activities will be developed and promoted together with key international partners, in order to create a global level playing field;

Research and innovation will make a stronger contribution to the Union's external policies.

Excellent Science Horizon 2020 will raise the level of excellence in Europe's science base and ensure a steady stream of world-class research to secure Europe's long-term competitiveness. It will support the best ideas, develop talent within Europe, provide researchers with access to priority research infrastructure, and make Europe an attractive location for the world's best researchers.

Horizon 2020 will:

1. support the most talented and creative individuals and their teams to carry out frontier research of the highest quality by building on the success of the ERC;

2. fund collaborative research to open up new and promising fields of research and innovation through support for Future and Emerging Technologies (FET);

3. provide researchers with excellent training and career development opportunities through the Marie Curie Actions;

4. ensure Europe has world-class research infrastructures (including e-infrastructures) accessible to all researchers in Europe and beyond.

Competitive Industries The Competitive Industries objective aims at making Europe a more attractive location to invest in research and innovation, by promoting activities where businesses set the agenda. It will provide major investment in key industrial technologies, maximise the growth potential of European companies by providing them with adequate levels of finance and help innovative SMEs to grow into world-leading companies.

Horizon 2020 will:

1. build leadership in enabling and industrial technologies, with dedicated support for ICT, nanotechnologies, advanced materials, biotechnology, advanced manufacturing and processing, and space, while also providing support for cross-cutting actions to capture the accumulated benefits from combining several Key Enabling Technologies;

2. facilitate access to risk finance;

3. provide union wide support for innovation in SMEs.

Leadership in enabling and industrial technologies: will support the development of technologies underpinning innovation across a range of sectors, including ICT and space. Horizon 2020 will have a strong focus on developing European industrial capabilities in Key Enabling Technologies (KETs) with a budget of € 5894 million in constant 2011 prices. These include:

Micro- and nano-electronics; photonics

Nanotechnologies

Advanced materials

Biotechnology

Advanced manufacturing and processing



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Common principles for the conduct of international research and innovation activities will be developed and promoted together with key international partners, in order to create a global level playing field;

Research and innovation will make a stronger contribution to the Union's external policies.

Excellent Science Horizon 2020 will raise the level of excellence in Europe's science base and ensure a steady stream of world-class research to secure Europe's long-term competitiveness. It will support the best ideas, develop talent within Europe, provide researchers with access to priority research infrastructure, and make Europe an attractive location for the world's best researchers.

Horizon 2020 will:

1. support the most talented and creative individuals and their teams to carry out frontier research of the highest quality by building on the success of the ERC;

2. fund collaborative research to open up new and promising fields of research and innovation through support for Future and Emerging Technologies (FET);

3. provide researchers with excellent training and career development opportunities through the Marie Curie Actions;

4. ensure Europe has world-class research infrastructures (including e-infrastructures) accessible to all researchers in Europe and beyond.

Competitive Industries The Competitive Industries objective aims at making Europe a more attractive location to invest in research and innovation, by promoting activities where businesses set the agenda. It will provide major investment in key industrial technologies, maximise the growth potential of European companies by providing them with adequate levels of finance and help innovative SMEs to grow into world-leading companies.

Horizon 2020 will:

1. build leadership in enabling and industrial technologies, with dedicated support for ICT, nanotechnologies, advanced materials, biotechnology, advanced manufacturing and processing, and space, while also providing support for cross-cutting actions to capture the accumulated benefits from combining several Key Enabling Technologies;

2. facilitate access to risk finance;

3. provide union wide support for innovation in SMEs.

Leadership in enabling and industrial technologies: will support the development of technologies underpinning innovation across a range of sectors, including ICT and space. Horizon 2020 will have a strong focus on developing European industrial capabilities in Key Enabling Technologies (KETs) with a budget of € 5894 million in constant 2011 prices. These include:

Micro- and nano-electronics; photonics

Nanotechnologies

Advanced materials

Biotechnology

Advanced manufacturing and processing

Development of these technologies requires a multi-disciplinary, knowledge and capital-intensive approach.

Tackling Societal Challenges Horizon 2020 reflects the policy priorities of the Europe 2020 strategy and addresses major concerns shared by citizens in Europe and elsewhere. A challenge-based approach will bring together resources and knowledge across different fields, technologies and disciplines, including social sciences and the humanities. This will cover activities from research to market with a new focus on innovation-related activities, such as piloting, demonstration, test-beds, and support for public procurement and market uptake. It will include establishing links with the activities of the EIP.

Funding will be focussed on the following challenges:

Health, demographic change and wellbeing;

Food security, sustainable agriculture, marine and maritime research, and the bio-economy;

Secure, clean and efficient energy;

Smart, green and integrated transport;

Inclusive, innovative and secure societies;

Climate action, resource efficiency and raw materials.

A time line for Horizon 2020 From 30/11: Parliament and Council negotiations on the basis of the Commission proposals

Ongoing: Parliament and Council negotiations on EU budget 2014-20 (including overall budget for Horizon 2020)

Mid 2012: Final calls under 7th Framework Programme for Research to bridge gap towards Horizon 2020

By end 2013: Adoption of legislative acts by Parliament and Council on Horizon 2020

1/1/2014: Horizon 2020 starts; launch of first calls

EU – India Research Collaboration

EU-India S&T Cooperation In the era of rapid internationalization of science and technology, EU-India science and technology cooperation have considerably improved over a decade, with the signature of the EU-India Science and Technology Cooperation Agreement supported by regular revision and updating of joint S&T priorities. Science and technology represents a central element in the EU-India strategic partnership. Research cooperation started in the mid-80s, and the first science and technology cooperation agreement was signed in 2001 and extended in 2009.

Since the signature of the EU-India Agreement on Science and Technology Cooperation in 2001, India has become one of the major partners of the EU in the Framework Programmes for Research and Technological Development. India currently ranks 5th, both in terms of participation and of total amount of EU financial contribution received. Currently, over 225 Indian partners are involved in 150 projects in the FP7. These projects were funded with some € 337 million from the Framework Programme of which some € 30 million went directly to Indian partners. Key areas of cooperation with India include Health (57 projects), Environment (37), ICT (30) and Food, Agriculture and Fisheries, and Biotechnology (30).



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Cooperation includes a number of "coordinated calls", where both partners select and finance participants in parallel in key areas of mutual interest. These include computational material sciences (financial participation of 5M€ each by India and the EU), food and nutrition research (3M€ each) solar energy research (5M€ each) and more recently in water and bio-resources in the context of the EU/MS-India Pilot Initiative (16M€ each). A new pilot initiative, the Strategic Forum for International S&T Cooperation (SFIC), aims at making Europe’s international research policy towards non-EU countries more effective and coherent through enhanced dialogue and cooperation between the EC, EU member states and other major partner countries outside Europe. The SFIC chose India as the first strategic partner country with which it started implementing its first pilot initiative. Mobility and training of researchers is another key aspect of long term EU-India cooperation, with over 350 Indian Researchers currently participating in Marie Curie actions.

EU-India Bilateral S&T agreements India has had bi-lateral S&T cooperation agreements with all the larger European countries and also with majority of the smaller EU member nations. The India Gate Project has identified and mapped the bilateral agreements and has provided a database of EU-India research and innovation initiatives and programmes.

For more information: http://www.access4.eu/

India Gate Background and objectives

6 European and Indian Partner organizations are focusing on achieving one objective – To increase the S&T cooperation between India and the EU by creating a “one-stop shop” for funding opportunities that are available in India for European organizations.

The INDIA GATE project aimed to identify Indian research and innovation funding programmes, the obstacles that inhibit EU researchers and organizations from taking part in the identified opportunities and make the information available in a user-friendly manner to stimulate, encourage and facilitate participation. INDIA GATE aimed to bring EU-India scientific cooperation forward by an increased participation of European organisations in Indian funding programmes and contribute to an increased mutual understanding of EU-India respective research systems.

What does INDIAGATE do for you?

Map and identify funding opportunities open for European organisations in India with a focus on their reciprocity character, rules of participation and funding rates

Analyse the obstacles for participation with focus on their reciprocity conditions

Review the bilateral agreements and arrangements between EU Member States and India

Enhance know how on cultural differences in business conduct and working style via an user friendly e-training

Identifies the innovation landscape and capacity in India, with special emphasis on the mechanisms that support cooperation with the EU

Develop feedback and recommendations for decision makers and provide expert input to the Joint Committee meetings

Increase the mutual understanding of respective research systems

Analyses Indian clusters and cooperation with European clusters



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Cooperation includes a number of "coordinated calls", where both partners select and finance participants in parallel in key areas of mutual interest. These include computational material sciences (financial participation of 5M€ each by India and the EU), food and nutrition research (3M€ each) solar energy research (5M€ each) and more recently in water and bio-resources in the context of the EU/MS-India Pilot Initiative (16M€ each). A new pilot initiative, the Strategic Forum for International S&T Cooperation (SFIC), aims at making Europe’s international research policy towards non-EU countries more effective and coherent through enhanced dialogue and cooperation between the EC, EU member states and other major partner countries outside Europe. The SFIC chose India as the first strategic partner country with which it started implementing its first pilot initiative. Mobility and training of researchers is another key aspect of long term EU-India cooperation, with over 350 Indian Researchers currently participating in Marie Curie actions.

EU-India Bilateral S&T agreements India has had bi-lateral S&T cooperation agreements with all the larger European countries and also with majority of the smaller EU member nations. The India Gate Project has identified and mapped the bilateral agreements and has provided a database of EU-India research and innovation initiatives and programmes.

For more information: http://www.access4.eu/

India Gate Background and objectives

6 European and Indian Partner organizations are focusing on achieving one objective – To increase the S&T cooperation between India and the EU by creating a “one-stop shop” for funding opportunities that are available in India for European organizations.

The INDIA GATE project aimed to identify Indian research and innovation funding programmes, the obstacles that inhibit EU researchers and organizations from taking part in the identified opportunities and make the information available in a user-friendly manner to stimulate, encourage and facilitate participation. INDIA GATE aimed to bring EU-India scientific cooperation forward by an increased participation of European organisations in Indian funding programmes and contribute to an increased mutual understanding of EU-India respective research systems.

What does INDIAGATE do for you?

Map and identify funding opportunities open for European organisations in India with a focus on their reciprocity character, rules of participation and funding rates

Analyse the obstacles for participation with focus on their reciprocity conditions

Review the bilateral agreements and arrangements between EU Member States and India

Enhance know how on cultural differences in business conduct and working style via an user friendly e-training

Identifies the innovation landscape and capacity in India, with special emphasis on the mechanisms that support cooperation with the EU

Develop feedback and recommendations for decision makers and provide expert input to the Joint Committee meetings

Increase the mutual understanding of respective research systems

Analyses Indian clusters and cooperation with European clusters

Support for EU-India Joint Research Collaboration New Indigo Partnership Programme (EU-India ERA-NET Project) New Indigo It is an initiative of European and Indian S&T organisations involved in promoting research cooperation between Europe and India. The aim of New INDIGO project is to fill the gaps and allow the scientific community and institutions of India to access the European Research Area, and the Euro-Indian S&T cooperation to fully benefit from the new networking tools of FP7.

Background of the project

Regarding its rising importance not only in economical and political terms, but also from a scientific point of view, India has been quoted a strategic target country by the EC.

Since the signature of the Europe-India Science and Technology Agreement in November 2001 a Joint Action Plan has been drawn up and EU-India summits in S&T are held in order to promote this cooperation. It was quoted in the India-EU Joint Statement of 30 November 2007 that effort should be consented towards the creation of joint infrastructure for advanced research and funding systems for symmetric programmes for promotion of S&T collaboration. It was also stated that leaders would welcome strengthened partnership initiatives such as joint projects with co-investment of resources in selected fields of mutual priority.

On the other hand longstanding scientific cooperation between India and certain European countries, especially France, Germany and UK, is vigorous and fruitful. Despite these facts, relationships with India in R&D have not been harmonized so far at a European level. There is little multilateral S&T cooperation between the EU and India, and there is no dedicated programme of cooperation between these two big scientific poles.

The aim of New INDIGO is to help filling these gaps and ultimately provide the most relevant framework to allow the scientific community and institutions of India to access the European Research Area, and the Euro-Indian S&T cooperation to fully benefit from the new networking tools which have been set up, notably the FP7.

There are four main activities by which New INDIGO will attain this goal:

1. Implementing and monitoring a call for collaborative research projects.

2. Developing a success scenario for future S&T cooperation and thereby analysing the potential as well as drivers of and barriers to this cooperation. This is done by the implementation of a Policy Foresight Study.

3. Screening of ongoing S&T cooperation between and identification of research hotspots in India and Europe. A respective database of institutions in Europe and India and existing bilateral programmes has been setup.

4. Sharing experience with other geographic Era-Nets and identify opportunities for mutual beneficial cooperation between India and thematic Era-Nets as well as between India and NCP-projects.

Since its start, New INDIGO has planned and implemented four multilateral calls to enable scientific and innovative cooperation of excellent researchers from Europe and India. These Networking Pilot Programme (NPP) initiatives currently involve STI stakeholders in more than ten EU Member States and Associated Countries of the EU as well as the Indian DBT (Department for Biotechnology) and DST (Department for Science and Technology). The fourth call with DST in Energy Research has just been launched and is open for proposals until the 23rd of August 2013. More information can be found under the "Open Calls" section. By bringing together Indian and European researchers and innovation actors to jointly work on topics of mutual interest, NPP is paving the way to high quality collaborative research.



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Involving more then 60 scientists from over ten countries, thirteen scientific projects in the field of Biotechnology and Health were funded under the first NPP call, 9 projects in the second and 6 projects in the third call. You may follow their traces by reading through the New Indigo Cooperation Stories. The projects under the first call had opportunity to meet with each other and present their results during the EU-India STI Days that were held Vienna in December 2011, those from the second call met and presented their finding during the EU-India STI Cooperation Days last year in Hyderabad and this year both the projects from the first and third calls dealing with Biotechnology related to Health will meet and present their experiences and findings in the EU-India STI Days on the 10th and 11th of October this year in Paris.

For more information: http://www.newindigo.eu/

The programme website also identifies various cooperation opportunities and provides links to various resources including the presentation "European Funding: where to get started" gives an overview over participating in a call for projects funded under FP7:

http://newindigo.eu/attach/European_Funding_where_to_get_started.pdf

Additionally, you may identify opportunities for cooperation between European and Indian research through three mechanisms:

• the EU Framework Programme for Research and Technological Development: http://www.newindigo.eu/programme/eu_framework.html

• the bilateral programmes running between Europe and India: http://www.newindigo.eu/object/programme/list

• partner search tools to help find the right partner for ideas and research initiatives in S&T cooperation between Europe and India: http://newindigo.stage.zsi.at/programme/partnersearch.html

Indian scientists looking for local support to participate in the EU Framework Programme can contact the Indian Focal Points, a network of Indian researchers experienced in FP7 providing first assistance to their colleagues:

• http://euindiacoop.org/focal_point.php

Government of India Funding

In India, the central government plays a vital role in identifying research opportunities and funding them under different schemes and programmes. Indian government funding for research and development and innovation is provided and co-ordinated by a number of different organisations covering many sectors such as ICT, food and agriculture, space, biotechnology, energy, environment, transport, social science, material science. Besides, under various bilateral agreements and funding schemes for Indian-European researcher mobility, staff exchange, fellowships, study visits, joint workshops and joint RTDI projects are available to support international cooperation at academic and industry level.

Some of the Open Programmes are:

1. Various bilateral programmes of several Ministries and Departments that are given below in table 3 below;

2. Welcome trust - DBT alliance;

3. Visiting Scientist from Abroad Programme (VSAP) from DBT;

4. Coordinated calls between DST/DBT and EU;

5. New Indigo Programme (ERA-NET);



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Involving more then 60 scientists from over ten countries, thirteen scientific projects in the field of Biotechnology and Health were funded under the first NPP call, 9 projects in the second and 6 projects in the third call. You may follow their traces by reading through the New Indigo Cooperation Stories. The projects under the first call had opportunity to meet with each other and present their results during the EU-India STI Days that were held Vienna in December 2011, those from the second call met and presented their finding during the EU-India STI Cooperation Days last year in Hyderabad and this year both the projects from the first and third calls dealing with Biotechnology related to Health will meet and present their experiences and findings in the EU-India STI Days on the 10th and 11th of October this year in Paris.

For more information: http://www.newindigo.eu/

The programme website also identifies various cooperation opportunities and provides links to various resources including the presentation "European Funding: where to get started" gives an overview over participating in a call for projects funded under FP7:

http://newindigo.eu/attach/European_Funding_where_to_get_started.pdf

Additionally, you may identify opportunities for cooperation between European and Indian research through three mechanisms:

• the EU Framework Programme for Research and Technological Development: http://www.newindigo.eu/programme/eu_framework.html

• the bilateral programmes running between Europe and India: http://www.newindigo.eu/object/programme/list

• partner search tools to help find the right partner for ideas and research initiatives in S&T cooperation between Europe and India: http://newindigo.stage.zsi.at/programme/partnersearch.html

Indian scientists looking for local support to participate in the EU Framework Programme can contact the Indian Focal Points, a network of Indian researchers experienced in FP7 providing first assistance to their colleagues:

• http://euindiacoop.org/focal_point.php

Government of India Funding

In India, the central government plays a vital role in identifying research opportunities and funding them under different schemes and programmes. Indian government funding for research and development and innovation is provided and co-ordinated by a number of different organisations covering many sectors such as ICT, food and agriculture, space, biotechnology, energy, environment, transport, social science, material science. Besides, under various bilateral agreements and funding schemes for Indian-European researcher mobility, staff exchange, fellowships, study visits, joint workshops and joint RTDI projects are available to support international cooperation at academic and industry level.

Some of the Open Programmes are:

1. Various bilateral programmes of several Ministries and Departments that are given below in table 3 below;

2. Welcome trust - DBT alliance;

3. Visiting Scientist from Abroad Programme (VSAP) from DBT;

4. Coordinated calls between DST/DBT and EU;

5. New Indigo Programme (ERA-NET);

6. Ramanujam Fellowship;

7. Internship Programme of CSIR; and

8. CSIR Distinguished/Senior Foreign Scientist Award Scheme

Table 3: Indicative listing of ministries involved in funding bilateral and multilateral programmes

Ministry of Science &

Technology (MST)

Ministry of Communicatio

ns and Information Technology

(MCIT)

Ministry of Health and

Family Welfare

(MoHFW)

Ministry of Human

Resource Development (MHRD)

Ministry of Agriculture

and Cooperation (MoAC)

Ministry of Environme

nt and Forests (MOEF)

Ministry of New and

Renewable Energy (MNRE)

Ministry of Food

Processing Industries

(MFPI)

Department of Science & Technology (DST) Department of Biotechnology (DBT) Department of Ocean Development (DOD) Council of Scientific & Industrial Research (CSIR)

Department of Electronics & Information Technology (DeitY)

Indian Council of Medical Research (ICMR)

University Grants Commission (UGC) All India Council for Technical Education (AICTE)

Department of Agricultural Research and Education (DARE) Indian Council of Agricultural Research (ICAR)

National Biodiversity Authority (NBA) Aquaculture Authority of India (AAI) Zoological Survey of India (ZSI) Botanical Survey of India (BSI)

Indian Renewable Energy Development Agency (IREDA) Solar Energy Centre Centre for Wind Energy Technology (C-WET)

National Institute of Food Technology Entrepreneurship and Management Indian Institute of Crop Processing Technology Indian Grape Processing Board

Bilateral Programmes/ Multilateral Programmes








Table 3 above gives the list ministries involved in funding bilateral and multilateral programmes.

For additional information sources on EU-India collaboration and the Indian S&T System, see Appendix 2.



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The Way Forward for EU SMEs With a conducive environment – including high levels of eco-innovation in Europe and favourable policy and financing, as well as increasing opportunity spaces for internationalising, EU-SMEs are well positioned to take significant steps to further innovation, growth and new partnership beyond European borders. Upcoming EU support programmes such as COSME and frameworks such as Horizon 20-20 lay out comprehensive frameworks for EU small businesses and SMEs to prepare and leverage a variety of financing support to innovate, grow, and internationalise.





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The Way Forward for EU SMEs With a conducive environment – including high levels of eco-innovation in Europe and favourable policy and financing, as well as increasing opportunity spaces for internationalising, EU-SMEs are well positioned to take significant steps to further innovation, growth and new partnership beyond European borders. Upcoming EU support programmes such as COSME and frameworks such as Horizon 20-20 lay out comprehensive frameworks for EU small businesses and SMEs to prepare and leverage a variety of financing support to innovate, grow, and internationalise.



Appendix 1: EU Country Snapshots of Eco-innovation

Austria Austria is a small, open and well-developed social market economy with a high innovation potential. While the exports is a key motor of the Austrian economy, the cleantech, the measurement, controlling and regulating technologies, and environmental monitoring technologies sectors are the export leaders in Austria.

The country is one of the best eco-innovation performers in the EU. It has high records in environmental patenting. High share of the local companies introduce eco-innovation such as one on improving resource efficiency. Austrian companies and research organisations have a solid track record in sustainable construction, systemic waste management as well as the sustainable energy solutions. Resource efficiency and e-mobility are emerging eco-innovation areas. Although there is no explicit eco-innovation policy, the country implements a number of relevant measures and strategies, including a dedicated policy addressing resource efficiency.

2012 Eco-innovation Scoreboard ranking for Austria

In March 2011 the Federal Government approved the national strategy for research, technology and innovation in a long-term binding framework. The goal of this strategy is to transform Austria into an innovation leader in Europe (until 2020). For this reason the research, technology and innovation strategy was implemented in different levels. More precisely, the innovation support through public procurement, funding mechanisms, such as venture capital to promote business start-ups and innovative developments, technology and knowledge transfer are intensively stimulated through this integrated strategy.

As already mentioned in previous reports, Austria has showed its leadership in innovation in particular in the field of green technology. For 2012, the Austrian leadership remained strong in energy efficiency, renewable energies, e-mobility and ecological construction. In 2012, Austria additionally had higher eco-innovation activities in other areas. These new emerging eco-innovative branches correspond to sectors such as production industry, chemical industry, health and pharmaceuticals, informatics and communication technologies.



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Belgium

Belgium is a small, densely populated country with a modern, open, private enterprise and service-oriented economy that has capitalized on its central geographic location, at the crossroads of the European single market. It has highly developed transit transport network, and diversified industrial and commercial base. With few natural resources, Belgium depends on substantial imports of raw materials and exports large volumes of manufactured goods. Roughly three-quarters of Belgium's trade is with other EU countries.

Eco-innovation concept is well embedded in Belgian global and integrated innovation policies. The development of the green economy is both an environmental and an economic priority for the country. In this regard, the regional and national authorities are encouraging companies to promote environmental investments and R&D through allowances, subsidies and tax breaks. Furthermore, Belgium’s three Regions have reoriented their economies towards sustainable development. In implementing ETAP roadmap the Federal and Regional governments have their own areas of emphasis, but the common policy lines are clearly visible and focus on such areas as energy efficiency and green energy, resources and materials efficiency, biodiversity preservation and development of life sciences. A strong focus has been on the eco-industry sector, where the number of active companies has increased by 44% in the last ten years.

2012 Eco-innovation Scoreboard ranking for Belgium

In the 2012 composite index of the Eco-innovation Scoreboard Belgium ranks sixth with an overall score of 118 while the EU27 average is 100. In 2012, a number of new measures addressing sustainable and green innovations have been proposed at the regional level. The Walloon region has launched the several initiatives including the Platform for Industrial Ecology NEXT, the mobilizing program "Erable", which focuses on energy efficiency and renewable energy. Likewise, there are some important new initiatives in Flanders, such as the launch of the i-cleantech platform for promoting innovation in these domains Eco-innovation is covered also in the Materials Programme of the Transition for Sustainable Materials Management in the framework of the transition approach in the overall future strategy of the Flemish Government ‘Flanders in Action’.



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Belgium

Belgium is a small, densely populated country with a modern, open, private enterprise and service-oriented economy that has capitalized on its central geographic location, at the crossroads of the European single market. It has highly developed transit transport network, and diversified industrial and commercial base. With few natural resources, Belgium depends on substantial imports of raw materials and exports large volumes of manufactured goods. Roughly three-quarters of Belgium's trade is with other EU countries.

Eco-innovation concept is well embedded in Belgian global and integrated innovation policies. The development of the green economy is both an environmental and an economic priority for the country. In this regard, the regional and national authorities are encouraging companies to promote environmental investments and R&D through allowances, subsidies and tax breaks. Furthermore, Belgium’s three Regions have reoriented their economies towards sustainable development. In implementing ETAP roadmap the Federal and Regional governments have their own areas of emphasis, but the common policy lines are clearly visible and focus on such areas as energy efficiency and green energy, resources and materials efficiency, biodiversity preservation and development of life sciences. A strong focus has been on the eco-industry sector, where the number of active companies has increased by 44% in the last ten years.

2012 Eco-innovation Scoreboard ranking for Belgium

In the 2012 composite index of the Eco-innovation Scoreboard Belgium ranks sixth with an overall score of 118 while the EU27 average is 100. In 2012, a number of new measures addressing sustainable and green innovations have been proposed at the regional level. The Walloon region has launched the several initiatives including the Platform for Industrial Ecology NEXT, the mobilizing program "Erable", which focuses on energy efficiency and renewable energy. Likewise, there are some important new initiatives in Flanders, such as the launch of the i-cleantech platform for promoting innovation in these domains Eco-innovation is covered also in the Materials Programme of the Transition for Sustainable Materials Management in the framework of the transition approach in the overall future strategy of the Flemish Government ‘Flanders in Action’.

Bulgaria

Bulgaria is a small open economy in South-Eastern Europe. Like most of the Eastern Europe economies, in the early 90s Bulgaria experienced transition from a centrally planned economy and undergone market liberalisation. The economic growth has been significant in the service sector and the industry where substantial increase in the innovation activities has taken place. Most of the innovations relevant to improvement of environmental conditions, environmental protection, sustainable business and know-how transfer activities are imported as good practices implemented within the frame of EU LIFE and LIFE Plus programmes. Some eco-innovative activities are observed in energy efficiency improvement in housing, renewable energy sector and waste recycling. Business community is experiencing a raise of eco-certification; these trends are expected to continue. Thanks to dedicated initiatives one can expect development of eco-industrial parks, clusters, etc. in coming years in Bulgaria. The country has no specific national or local policy documents or programs targeting eco-innovation. Several other policy strategies (e.g. S&T, R&D, regional, energy, etc.) indirectly touch upon some eco-innovation promotion issues.

2012 Eco-innovation Scoreboard ranking for Bulgaria

The trends in eco-innovation in Bulgaria in 2012 generally maintained its positive direction. The National Action Plan promoting the production and accelerated entry of environmental vehicles, including electric mobility in Bulgaria, for the period 2012-2014, was developed. Another development in 2012 was a mechanism for selecting NGOs to participate in work groups for the design and advancement of national programs for the period 2014 – 2020 in a variety of areas such as regional development, environment, SMEs’ competitiveness, transport etc. which deal with issues like eco-labelling, EMAS, green procurement, energy efficiency, electrical transportation.

There are also funding opportunities for SMEs’ technical assistance and advice under the Programme ”Competitiveness of the Bulgarian economy”. Part of these projects is aimed towards innovation, including introduction of eco-innovative products and technologies, and cluster development. Support from the state in identifying potential markets and / or customers for eco-innovation and green products and services were provided.



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Cyprus

After Sicily and Sardinia, Cyprus is the third largest island in the Mediterranean. It is considered as a high-income country in terms of GDP per capita. It has progressively transformed itself from an exporter of agricultural products and minerals in the period 1960 to 1974 and an exporter of processed goods in the second half of the ’70s, to a major tourist destination and services centre. Tourism is not only an important source of foreign exchange for Cyprus to the extent of 43% of the total revenue from exports of goods and services, but also a major contributor to the GDP with an estimated share of 13%. In general, Cyprus has an open, free-market, services-based economy with some light manufacturing.

In the field of innovation, Cyprus’ performance has improved in the last five years and currently the country is classified as a growth leader among the group of innovation followers, with an innovation performance just above the EU27 average and a rapid rate of improvement. However in eco-innovation performance, the country still remains lower than the EU average. Nevertheless there are substantial developments towards promotion of green innovations. A number of relevant legislations are in place and being developed, several schemes, such as business incubators, grant scheme, etc. are utilised in promoting eco-efficient and environmentally friendly technologies. Sectors with a leading role in eco-innovation in Cyprus are: the manufacturing of non-metallic mineral products; the food and beverages manufacturing which uses organic cultivation, bio or environmental certification; the solar energy sector; as well as water saving in irrigation. Water recycling, grey water and desalination technologies’ trends are rapidly increasing since they have gained importance by the water shortage situation on the island.

2012 Eco-innovation Scoreboard ranking for Cyprus

In the 2012 composite index of the Eco-IS Cyprus ranks below the EU 27 average with an overall score of 74 while the EU27 average is 100. In comparison to the 2011 Eco-IS Cyprus has not changed its position significantly, but has moved up in the EU27 ranking from 21st to 20th. Cyprus records a positive growth of Exports of products from eco-industries (5.1) of about 13%.



64

Cyprus

After Sicily and Sardinia, Cyprus is the third largest island in the Mediterranean. It is considered as a high-income country in terms of GDP per capita. It has progressively transformed itself from an exporter of agricultural products and minerals in the period 1960 to 1974 and an exporter of processed goods in the second half of the ’70s, to a major tourist destination and services centre. Tourism is not only an important source of foreign exchange for Cyprus to the extent of 43% of the total revenue from exports of goods and services, but also a major contributor to the GDP with an estimated share of 13%. In general, Cyprus has an open, free-market, services-based economy with some light manufacturing.

In the field of innovation, Cyprus’ performance has improved in the last five years and currently the country is classified as a growth leader among the group of innovation followers, with an innovation performance just above the EU27 average and a rapid rate of improvement. However in eco-innovation performance, the country still remains lower than the EU average. Nevertheless there are substantial developments towards promotion of green innovations. A number of relevant legislations are in place and being developed, several schemes, such as business incubators, grant scheme, etc. are utilised in promoting eco-efficient and environmentally friendly technologies. Sectors with a leading role in eco-innovation in Cyprus are: the manufacturing of non-metallic mineral products; the food and beverages manufacturing which uses organic cultivation, bio or environmental certification; the solar energy sector; as well as water saving in irrigation. Water recycling, grey water and desalination technologies’ trends are rapidly increasing since they have gained importance by the water shortage situation on the island.

2012 Eco-innovation Scoreboard ranking for Cyprus

In the 2012 composite index of the Eco-IS Cyprus ranks below the EU 27 average with an overall score of 74 while the EU27 average is 100. In comparison to the 2011 Eco-IS Cyprus has not changed its position significantly, but has moved up in the EU27 ranking from 21st to 20th. Cyprus records a positive growth of Exports of products from eco-industries (5.1) of about 13%.

Czech Republic

The current nature and structure of the Czech Republic’s economy has become more similar to that seen in the EU15 countries. In comparison with both EU15 and EU27, the material intensity of the Czech economy remains very high, similar to other countries of the Visegrad Group. In the last decade, industrial production has decreased and there has been a continuing decline in electricity generated from coal-burning power plants. The share of industry in the national economy of the Czech Republic is still quite high, around 38% that causes high demands on energy, resources, and materials. The quality of the environment has not significantly improved even though the overall pressures on the environment from the national economy’s main industries decreased.

In eco-innovation related developments the Czech Republic is performing better than most of the new EU member states. Over the last decade overall carbon and energy intensity of the economy has been improving, he country has seen some cleantech investment flows. The country has significant number of companies with green certificates (ISO14001). Among the current most prominent eco-innovation areas are the waste management, small-scale hydropower technologies, and specific development in nanotechnologies. There are initiatives on improving energy efficiency of building and development of cleaner vehicles. In the Czech Republic innovations and eco-innovations are associated with major environmental issues, and addressed within the national environmental policy, legislation and strategies, there is no dedicated eco-innovation development strategy in the country.

2012 Eco-innovation Scoreboard ranking for Czech Republic

The Czech Republic’s eco-innovation performance has slightly risen in comparison to 2011. It went to the 13th position from the 14th position in the EU27 Eco-innovation scoreboard (EIO, 2012). Eco-innovation is still a developing area in the Czech Republic. High attention is paid to the development and establishment of modern, innovative, and environment friendly R&D centres, especially in the areas of nanotechnology, biotechnology, new materials, information systems, recycling. Newly emerging and more developing eco-innovation areas include innovation in waste management, intelligent distribution network development and Smart Grids.



65

Denmark

Denmark is a modern economy with high dependence on foreign trade, and with a financial position among the strongest in Europe. With few natural resources, the mixed economy of Denmark relies almost entirely on human resources, where the service sector makes up the vast amount of the employment and economy. Today, the service sector accounts for 68% of total GDP in the private sector, 64% of total private employment, and for 80% of new jobs in the country. Therefore, it is recognised by the Danish government that innovation and research, especially in the private sector, will be a key driver to sustain growth. As a consequence, initiatives have already been taken to boost Research and Development (R&D), especially with focus on creating a fossil-free economy. Where the EU countries still are negotiating about increasing the target for national investments in R&D, Denmark already reached the target of investing more than 3% of GDP in R&D in 2008.

Denmark historically has been one of the leaders in the EU in promotion of sustainable economies and eco-innovation. Denmark is one of the leading exporters of environmental solutions and technology; its R&D investments boosted eco-innovations in air, water, waste, energy, clean transport areas. Today, products and services related to energy and environment has become the second-largest export sector in the country, only surpassed by the transport sector but more important than food products. A number of sectors have high potential for future eco-innovations; among those are shipping, bio-technology, and industrial symbiosis. In Denmark a wide range of public Institutions are involved in supporting eco-innovation, either through policy-making (setting standards, strategies, programmes), or though direct funding or co-financing programmes for development and demonstration of new technologies, green business scheme, etc.

2012 Eco-innovation Scoreboard ranking for Denmark



66

Denmark

Denmark is a modern economy with high dependence on foreign trade, and with a financial position among the strongest in Europe. With few natural resources, the mixed economy of Denmark relies almost entirely on human resources, where the service sector makes up the vast amount of the employment and economy. Today, the service sector accounts for 68% of total GDP in the private sector, 64% of total private employment, and for 80% of new jobs in the country. Therefore, it is recognised by the Danish government that innovation and research, especially in the private sector, will be a key driver to sustain growth. As a consequence, initiatives have already been taken to boost Research and Development (R&D), especially with focus on creating a fossil-free economy. Where the EU countries still are negotiating about increasing the target for national investments in R&D, Denmark already reached the target of investing more than 3% of GDP in R&D in 2008.

Denmark historically has been one of the leaders in the EU in promotion of sustainable economies and eco-innovation. Denmark is one of the leading exporters of environmental solutions and technology; its R&D investments boosted eco-innovations in air, water, waste, energy, clean transport areas. Today, products and services related to energy and environment has become the second-largest export sector in the country, only surpassed by the transport sector but more important than food products. A number of sectors have high potential for future eco-innovations; among those are shipping, bio-technology, and industrial symbiosis. In Denmark a wide range of public Institutions are involved in supporting eco-innovation, either through policy-making (setting standards, strategies, programmes), or though direct funding or co-financing programmes for development and demonstration of new technologies, green business scheme, etc.

2012 Eco-innovation Scoreboard ranking for Denmark

Estonia

During last 10 years the socio-economic development in Estonia has been impressive – GDP has grown 2.1 times, average economic growth has been 4% and Estonia has almost caught up with the EU innovation leaders. Starting from a catch-up position in 2001, Estonia has continuously invested into innovation activities and reached the position of innovation followers by 2011. The picture looks very promising, although the recent innovation investments have little to do with eco-innovation. In terms of eco-innovation Estonia is lagging behind many EU countries. However, there are examples of application of newer environment-friendly materials in construction, use of novel ICT and high-tech inventions whose side-effects contribute to energy saving, CO2 and waste reduction. The more prominent innovative activities are taking place in optimisation of energy production and energy efficiency, as well as in oil shale industry. There are no specific policy measures promoting eco-innovation, however Estonia has a number of indirect measures providing implicit and ongoing support to eco-innovation (e.g. the improving legal environment, taxation policies, public procurement, awareness raising, and public involvement in decision-making on sustainable development issues).

One of the country’s official priorities is the reduction of negative environmental of energy use and the promotion of resource efficiency together with sustainable consumption and production patterns. Estonian economy is highly dependent on the supply of fossil fuels, approximately 90% of electricity is produced through the combustion of indigenous fossil fuels (oil shale). According to the Development Plan of the Estonian Electricity Sector until 2018 and the National Development Plan of the Energy Sector until 2020 the energy supply will be diversified and more different sources of energy will be used.

2012 Eco-innovation Scoreboard ranking and for Estonia



67

Finland

Finland is one of the most innovative EU Member States based .The Finnish national innovation system is an extensive entity, based on education, research, product development as well as knowledge-intensive business and industry. The innovation policy is bound to science and technology policies, which together aim at ensuring balanced development and extensive cooperation within the innovation system. Eco-efficiency and environmental approach has traditionally been a baseline of Finnish production technology, which has been apparent through the research and development (R&D) funding and development of increased eco-efficiency in industrial processes. Today, the national innovation system in Finland is explicitly involved in the environmental sector. Ministry of Employment and the Economy is developing operational preconditions for ecologically sustainable and competitive business life, and for the growing field of environment and eco-export. Hence the innovation policy includes a principle of integration of environmental considerations within all aspects of R&D.

However, eco-innovation needs and challenges of Finland are strongly associated with material efficiency. Performance in material efficiency because of the large share of energy and material intensive industries such as pulp and paper industry, base metal industry and chemical industry. The greatest challenges for eco-innovations concern high material consumption, the aging of society as well as low material productivity, energy-efficiency and high GHG emissions, which result from energy intensive industrial sectors, freight transportation and traffic as well as extensive earthworks and hydraulic engineering. The Finnish economy is based strongly on added value obtained from natural resources. At the same time Finland has abundant natural resources in terms of the clean forest, fresh water as well as peat, mineral reserves and arable land. Finland has an explicit policy for developing a national innovation system, and eco-innovation is a part of this system by a strong emphasis on specific R&D programmes. The country also implements a large number of relevant strategies and measures such as environmental taxation.

2012 Eco-innovation Scoreboard ranking for Finland



68

Finland

Finland is one of the most innovative EU Member States based .The Finnish national innovation system is an extensive entity, based on education, research, product development as well as knowledge-intensive business and industry. The innovation policy is bound to science and technology policies, which together aim at ensuring balanced development and extensive cooperation within the innovation system. Eco-efficiency and environmental approach has traditionally been a baseline of Finnish production technology, which has been apparent through the research and development (R&D) funding and development of increased eco-efficiency in industrial processes. Today, the national innovation system in Finland is explicitly involved in the environmental sector. Ministry of Employment and the Economy is developing operational preconditions for ecologically sustainable and competitive business life, and for the growing field of environment and eco-export. Hence the innovation policy includes a principle of integration of environmental considerations within all aspects of R&D.

However, eco-innovation needs and challenges of Finland are strongly associated with material efficiency. Performance in material efficiency because of the large share of energy and material intensive industries such as pulp and paper industry, base metal industry and chemical industry. The greatest challenges for eco-innovations concern high material consumption, the aging of society as well as low material productivity, energy-efficiency and high GHG emissions, which result from energy intensive industrial sectors, freight transportation and traffic as well as extensive earthworks and hydraulic engineering. The Finnish economy is based strongly on added value obtained from natural resources. At the same time Finland has abundant natural resources in terms of the clean forest, fresh water as well as peat, mineral reserves and arable land. Finland has an explicit policy for developing a national innovation system, and eco-innovation is a part of this system by a strong emphasis on specific R&D programmes. The country also implements a large number of relevant strategies and measures such as environmental taxation.

2012 Eco-innovation Scoreboard ranking for Finland

France

France is at the heart of the European economy and is one of the leading economies in the world. France currently faces a number of environmental issues that could be addressed through eco-innovative solutions. The two most-important issues relate to the need to reduce GHG emissions (from households, buildings and transports) as well as energy dependency on non-renewable sources. Soil contamination (with copper, lead, phosphorous) as well as underground and coastal water contamination by nitrates are additional causes for concern. France currently ranks 4th worldwide (and 2nd in Europe) by size of the eco-industry sector. The sector was estimated to represent €60 billion in annual turnover in 2008 and 400 000 jobs in 2007. France owes this strong position especially to the activity of two leading international groups (Veolia and Suez), a number of important ‘challenger’ firms (SAUR, Nicollin, Serpol, Séché, CNIM, etc.), and a dense network of SMEs (Chambolle).

In eco-innovation performance France displays good levels in terms of environmental (material productivity of the economy) and socio-economic outcomes (e.g. jobs and turnover), and underperforms in terms of eco-innovation activities, capturing company level eco-innovative performance. Two of the most important leading eco-innovation sectors are water sanitation and waste management. In addition, the energy efficient buildings sector has also become a successful innovating sector in France. The areas with high eco-innovation potential are renewable energy, carbon capture and storage, carbon-free vehicles, and green urban development schemes. The French government shows it dedication to eco-innovation agenda by launching an ambitious programme aimed at further developing the national eco-industrial potential. A number of public agencies are involved in its implementation. Eco-innovation has steadily risen to become one of the key issues on the French policy agenda, principally over the course of the last ten years. This is illustrated by the importance given to eco-innovation within the ‘Grenelle de l’Environnement’ environmental legislation package and the Investments for the Future programme recently adopted by the French government.

2012 Eco-innovation Scoreboard ranking for France



69

Germany

Germany is the largest national economy in Europe, the fourth largest (by nominal GDP) in the world Since the age of industrialisation, the country has been a driver, innovator, and beneficiary of an ever more globalised economy. Germany is the world's second largest exporter. Exports account for more than one-third of national output. Germany’s major economic sectors in terms of their contribution to GDP are services (69.0%) and the manufacturing industry (30.1%). Agriculture and forestry only amount to 0.9%. In comparison, Germany holds a strong industrial base; many services are related to industrial activities. The country is strong in the production of environmental goods (technologies, machinery and equipment). With a global market share of 16.1% it was the largest exporter of environmental technologies in 2006. Measured against its competitors U.S. (14.9%), Japan (9.2%), Italy (6.1%), United Kingdom (5.1%) and France (4.6%) the German environmental protection industry has a very high level of competitiveness. In 2008, the share of environmental protection goods of the German industrial goods exports was nearly 7%. Since the contribution of environmental technologies within the German export has always been exceptionally high, the environmental technology industry kept this position at a steady high level. In 2007, the European Patent Office granted about 23% of all new in environmental technology patents to German firms

Germany is one of the high performing countries in the EU in eco-innovations. The country hosts a large number of companies with environmental certificates. The share of material and energy reducing companies is high in comparison to other EU Member States. Leading eco-innovation areas are circular economy technologies (e.g. automatic separation processes, decentralised water treatment) and renewable energy technologies. Germany’s eco-innovation policy covers action plans (such as the High Tech Strategy) and funding for research (e.g. innovation alliances). The country is particularly advanced in research on material efficiency measures, policies and institutions.

2012 Eco-innovation Scoreboard ranking for Germany



70

Germany

Germany is the largest national economy in Europe, the fourth largest (by nominal GDP) in the world Since the age of industrialisation, the country has been a driver, innovator, and beneficiary of an ever more globalised economy. Germany is the world's second largest exporter. Exports account for more than one-third of national output. Germany’s major economic sectors in terms of their contribution to GDP are services (69.0%) and the manufacturing industry (30.1%). Agriculture and forestry only amount to 0.9%. In comparison, Germany holds a strong industrial base; many services are related to industrial activities. The country is strong in the production of environmental goods (technologies, machinery and equipment). With a global market share of 16.1% it was the largest exporter of environmental technologies in 2006. Measured against its competitors U.S. (14.9%), Japan (9.2%), Italy (6.1%), United Kingdom (5.1%) and France (4.6%) the German environmental protection industry has a very high level of competitiveness. In 2008, the share of environmental protection goods of the German industrial goods exports was nearly 7%. Since the contribution of environmental technologies within the German export has always been exceptionally high, the environmental technology industry kept this position at a steady high level. In 2007, the European Patent Office granted about 23% of all new in environmental technology patents to German firms

Germany is one of the high performing countries in the EU in eco-innovations. The country hosts a large number of companies with environmental certificates. The share of material and energy reducing companies is high in comparison to other EU Member States. Leading eco-innovation areas are circular economy technologies (e.g. automatic separation processes, decentralised water treatment) and renewable energy technologies. Germany’s eco-innovation policy covers action plans (such as the High Tech Strategy) and funding for research (e.g. innovation alliances). The country is particularly advanced in research on material efficiency measures, policies and institutions.

2012 Eco-innovation Scoreboard ranking for Germany

Greece The Greek economy, part of the hardly hit by the debt crisis Eurozone countries, has seen its annual growth rates falling from an average of 3-4% since 2004. The on-going financial crisis inevitably affected all economic sectors, local business and labour market. On the other hand, the financial downturn has provided the impetus for a comprehensive and structural reform, aimed at the development of a healthier investment and business environment, including among others faster licensing procedures, a better focused investment law and the liberalisation of a number of markets; however the implementation of these structural changes is still at an early stage. The uncertainty of the economic and social environment seems to have further enhanced the openness of the Greek businesses and society to new concepts.

Eco-innovation is not an exception to the above. Despite the crisis, public funding available for eco-innovation investments has increased (Structural Funds), while the availability of scientific and research personnel has remained adequate, even though often lacks sufficient business experience. Availability of eco-innovation inputs is expected to be further improved in the future; the Greek National Strategic Framework for Research and Innovation (NSFRI) is based on a global target for R&D public spending at 2 % of GDP in 2020, while at the same time anticipates that research will be primarily focused on selected priority areas, with ‘Environment’ already being identified as a prominent sector, in line with the national strategic objective for Green Growth.

It shows relatively better performance in company level eco-innovation activities targeting energy and material efficiency improvement. Furthermore, Greece ranks among the five top EU performers in energy productivity of its economy. Food and chemical industries are showed to be more active in promoting eco-innovative products and processes. Present policy priorities and strategic developments indicate the following emerging lead markets with a good potential for eco-innovation: the waste management sector (recycling, treatment, re-use), the green tourism industry; the green banking services. Eco-innovation is not explicitly framed in the policy agenda of Greece; at the same time, there are regulatory and policy restrictions in business exploitation of eco-innovative concepts.

2012 Eco-innovation Scoreboard ranking for Greece



71

Hungary Hungary is a medium-sized economy in central Europe. Like most eastern European economies, in the early 1990s it experienced a transition away from a centrally planned economy and has undergone the market liberalisation. Since then it has been getting nearly one third of all foreign direct investment flowing into central Europe. The overall eco-innovation performance of Hungary has been improving over time. Environmental outcomes particularly water and material productivity of the economy are on a relatively better level. More dynamic eco-innovative activities are observed in the renewable energy industry (namely biomass and geothermal energy), housing sector, which promotes energy efficiency measures, public transport and industrial biotechnology. More sophisticated innovations are upcoming in housing, construction and green mobility areas. There is no specific eco-innovation strategy in Hungary, although there are a number of strategic policy documents addressing the topic (including those covering innovation, S&T policies, sustainable development and economic growth).

Spending on eco-innovation-related areas makes up only a small proportion of total R&D expenditures in Hungary. Although there is a growing awareness of eco-innovation and positive development in terms of ‘eco-dynamism‘ amongst Hungarian companies, the trend is still far slower than in the EU eco-innovation leaders. In recent years, the EU subsidies targeting environmental problems in Hungary mainly supported the development of environmental infrastructure: between 2000-2006 over €28m of EU Structural Funds (SF) support was invested in water treatment and waste processing facilities and around €9.1m were channelled into renewable sources of energy. In 2000-2006, SFs were not allocated to support companies and SMEs in the development and application of cleaner technologies. However, in the 2007-2013 period, the amount of cohesion policy investment for Hungary allocated to support eco-innovation in SMEs has reached nearly €52m. Furthermore, around €941m have been planned for environmental and sustainable infrastructure, energy efficiency and pollution control in the country. The impact of the cohesion policy expenditure on eco-innovation is likely to be limited as the focus has been on establishing conventional environmental infrastructure, rather then on eco-innovative projects.

2012 Eco-innovation Scoreboard ranking for Hungary



72

Hungary Hungary is a medium-sized economy in central Europe. Like most eastern European economies, in the early 1990s it experienced a transition away from a centrally planned economy and has undergone the market liberalisation. Since then it has been getting nearly one third of all foreign direct investment flowing into central Europe. The overall eco-innovation performance of Hungary has been improving over time. Environmental outcomes particularly water and material productivity of the economy are on a relatively better level. More dynamic eco-innovative activities are observed in the renewable energy industry (namely biomass and geothermal energy), housing sector, which promotes energy efficiency measures, public transport and industrial biotechnology. More sophisticated innovations are upcoming in housing, construction and green mobility areas. There is no specific eco-innovation strategy in Hungary, although there are a number of strategic policy documents addressing the topic (including those covering innovation, S&T policies, sustainable development and economic growth).

Spending on eco-innovation-related areas makes up only a small proportion of total R&D expenditures in Hungary. Although there is a growing awareness of eco-innovation and positive development in terms of ‘eco-dynamism‘ amongst Hungarian companies, the trend is still far slower than in the EU eco-innovation leaders. In recent years, the EU subsidies targeting environmental problems in Hungary mainly supported the development of environmental infrastructure: between 2000-2006 over €28m of EU Structural Funds (SF) support was invested in water treatment and waste processing facilities and around €9.1m were channelled into renewable sources of energy. In 2000-2006, SFs were not allocated to support companies and SMEs in the development and application of cleaner technologies. However, in the 2007-2013 period, the amount of cohesion policy investment for Hungary allocated to support eco-innovation in SMEs has reached nearly €52m. Furthermore, around €941m have been planned for environmental and sustainable infrastructure, energy efficiency and pollution control in the country. The impact of the cohesion policy expenditure on eco-innovation is likely to be limited as the focus has been on establishing conventional environmental infrastructure, rather then on eco-innovative projects.

2012 Eco-innovation Scoreboard ranking for Hungary

Ireland Ireland’s economy is knowledge based and the country has an established reputation as an industry leader in ICT and biomedical science. A low corporation tax rate and a highly skilled employment base have facilitated many large global high tech industries to locate themselves within the country. Nine of the top ten global pharmaceutical and medical technology companies are located in Ireland while the ICT sector accounts for €50 billion in Irish exports. The value of Irish exports stands continues to experience growth. Ireland is placed in the top 20 exporting countries in the world with agricultural exports (including agri-food and drink) accounting for 46% of GDP.

The Irish economy is still essentially a dual economy with less competitive and innovative national firms struggling while foreign direct investors use Ireland as a base for production and exporting in EU. Ireland is currently experiencing one of the deepest recessions; however, the rate of contraction is slowing as the economy adjusts to the recent domestic and international crises. Ireland shows an outstanding performance in attracting the cleantech investment. However in eco-innovative activities in companies and eco-patent filing it has rather modest statistics. An energy inefficient building stock, fossil fuel-based electricity generation and a culture of car dependency are the principle challenges facing Ireland for some years. As with many Member States, Ireland is continuing to mainly invest in energy efficiency and sustainable transport. Besides, the country has interesting examples of eco-innovations in industries (e.g. in microelectronics, services, chemical industry, renewable energy, etc.)

There is a good understanding by the Government that the eco-environmental technologies field provides a significant opportunity, also in economic recovery. Considerable investments were committed to low carbon sector, smarter transport, and science development.

2012 Eco-innovation Scoreboard ranking for Ireland



73

Italy Italy is the fourth largest economy in Europe. The country’s GDP is made up by the sectors agriculture (1.8%), industry (25%), and services – trade, finance, transportation, tourism (73.1%). The highly industrialized and prosperous North contrasts with the agricultural and less prosperous south. Italy is among the four countries in the EU that have major expenditures on the protection of the environment, as a result environmental legislation and related opportunities for implementing environmental management systems and processes, and there was a strong growth trend in 2008. Innovation in general and eco-innovation processes in particular have shown a significant growth trend over the last decade, stimulated by public finance and, in particular, by EU funding and EU R&D projects. Many innovative ideas and projects, however, start spontaneously in existing and new companies, both as a result of the strict environmental legislation and the opportunities that arise from the awareness of a sustainable lifestyle.

Italy has good achievements in improving energy efficiency, renewable energies (solar, hydro, geothermal), material recycling, as well as in greening the transport and eco-innovations in industrial biotechnology. Good opportunities are seen for second-generation bio-fuels productions, green tourism, smart grids and carbon capture and storage. A number of national measures targeting eco-innovation have been implemented that include tax incentives, subsides in eco-innovation related R&D, public procurement, etc.

2012 Eco-innovation Scoreboard ranking for Italy



74

Italy Italy is the fourth largest economy in Europe. The country’s GDP is made up by the sectors agriculture (1.8%), industry (25%), and services – trade, finance, transportation, tourism (73.1%). The highly industrialized and prosperous North contrasts with the agricultural and less prosperous south. Italy is among the four countries in the EU that have major expenditures on the protection of the environment, as a result environmental legislation and related opportunities for implementing environmental management systems and processes, and there was a strong growth trend in 2008. Innovation in general and eco-innovation processes in particular have shown a significant growth trend over the last decade, stimulated by public finance and, in particular, by EU funding and EU R&D projects. Many innovative ideas and projects, however, start spontaneously in existing and new companies, both as a result of the strict environmental legislation and the opportunities that arise from the awareness of a sustainable lifestyle.

Italy has good achievements in improving energy efficiency, renewable energies (solar, hydro, geothermal), material recycling, as well as in greening the transport and eco-innovations in industrial biotechnology. Good opportunities are seen for second-generation bio-fuels productions, green tourism, smart grids and carbon capture and storage. A number of national measures targeting eco-innovation have been implemented that include tax incentives, subsides in eco-innovation related R&D, public procurement, etc.

2012 Eco-innovation Scoreboard ranking for Italy

Latvia Latvia is a small country, with a population of about 2.2m. It has been a Member State of the EU since 2004. The main economic sectors in the Latvian economy are the service industries with 72% of the GDP. The processing and manufacturing industries make up about 10% of the national economy’s GDP. In 2010, Latvia started its slow recovery from the economic crisis of 2008-2009 and economic growth continued to accelerate in 2011. Latvia belongs to a group of countries with modest eco-innovation performance. The country has relatively better scores for environmental outcomes, due to improved water and energy productivity, and for socio-economic outcomes, thanks to higher employment and expansion of eco-industries. In terms of eco-innovativeness, positive results were achieved by two sectors: the wood industry and bio-cosmetics. It is expected that eco-innovations in nanotechnology, as well as greening of service sectors and agriculture will be taking place in the near future. Eco-innovation challenges in Latvia can be associated with a lack of political awareness of innovation in general. However, Latvia has a series of environmental issues to be solved. The most pressing of these are the energy inefficiency of the housing stock, a lack of efficient waste sorting and the need for more mobility solutions.

Currently Latvia has no specific eco-innovation policy strategy, neither has it environmental technology action plan. Other policies might address eco-innovation via programmes on innovation, energy, environmental technologies and entrepreneurship.

2012 Eco-innovation Scoreboard ranking for Latvia



75

Lithuania After the restoration of its independence in 1991, Lithuania underwent a rapid socio-economic and political transformation. Upon becoming the member of the EU in 2004, a solid assistance from the EU Structural Funds has provided great possibilities for the development of the Lithuanian economy, which today is a small open economy driven by exports and domestic demand.

Lithuania cannot boast of abundant natural resources. The economic development of the country, its growing dependence on the import of primary energy, decommissioning of Ignalina Nuclear Power Plant in 2009, have all substantially increased the demand for new measures directed towards energy efficiency, environmental and management improvement. The prevailing sectors in Lithuania are those of low and medium-low technology, together with manufacturing where raw materials, fuel and energy account for nearly two thirds of the total costs. This prevents the country from reaching high competitive positions in the global markets. Consequently, product or process eco-innovations should play a very important role in raising Lithuania’s competitiveness in the world markets.Through the local initiatives (e.g. Clean Production programme), Lithuania is supporting environmental innovations in a range of industries. The most visible achievements are in renewable energy, oil spill remediation. Growing potential in eco-innovation is expected in construction, solar energy, waste management, and green transport. Promotion of eco-innovations in Lithuania is covered under the general innovation policy agenda; it is understood that environmental considerations are an organic part of innovations nowadays.

2012 Eco-innovation Scoreboard ranking for Lithuania



76

Lithuania After the restoration of its independence in 1991, Lithuania underwent a rapid socio-economic and political transformation. Upon becoming the member of the EU in 2004, a solid assistance from the EU Structural Funds has provided great possibilities for the development of the Lithuanian economy, which today is a small open economy driven by exports and domestic demand.

Lithuania cannot boast of abundant natural resources. The economic development of the country, its growing dependence on the import of primary energy, decommissioning of Ignalina Nuclear Power Plant in 2009, have all substantially increased the demand for new measures directed towards energy efficiency, environmental and management improvement. The prevailing sectors in Lithuania are those of low and medium-low technology, together with manufacturing where raw materials, fuel and energy account for nearly two thirds of the total costs. This prevents the country from reaching high competitive positions in the global markets. Consequently, product or process eco-innovations should play a very important role in raising Lithuania’s competitiveness in the world markets.Through the local initiatives (e.g. Clean Production programme), Lithuania is supporting environmental innovations in a range of industries. The most visible achievements are in renewable energy, oil spill remediation. Growing potential in eco-innovation is expected in construction, solar energy, waste management, and green transport. Promotion of eco-innovations in Lithuania is covered under the general innovation policy agenda; it is understood that environmental considerations are an organic part of innovations nowadays.

2012 Eco-innovation Scoreboard ranking for Lithuania

Luxembourg Luxembourg is the second-smallest Member State of the EU, just after Malta, and with a territory of about 2,586 km2. It is characterised by having both, high demographic and high economic growth in a stagnating region. As a consequence, Luxembourg is experiencing increased transport flows, mainly by road (i.e. around 90% of commuters drive their own car into Luxembourg); and the population growth has put greater pressure for building up areas of housing, offices, services and infrastructures.

The country has a longstanding tradition in the cleantech sector, and even if small, it has an established eco-industry sector within the national economy. However, the Luxembourg eco-innovation industries only play a marginal role in the national economy. Their turnover represented only 0.48% of total GDP in 2008 (down from 1.16% in 2004), which is only 24% of the EU27 average in the same year. Only about 0.53% of the total workforce was employed in the eco-industries in 2008. Finally, exports of the eco-industry accounted to 1.4% of total (about double of the EU average), increasing considerably from the 2007 level of only 0.23%. This reflects a fast growing “outward-looking” eco-industry.

Leading eco-innovation areas in Luxembourg include eco-construction and eco-materials; eco-transport and eco-logistics; sustainable management of water resources; and green nanotechnologies. Innovative materials for passive and energy efficient housing, environmental information technology and sustainable smart mobility, and electric mobility, are emerging eco-innovation areas. The Luxembourg Ecoinnovation Cluster, launched in 2009, is one of the key initiatives aiming at empowering the development of the eco-technologies sector. Luxembourg has a strong and comprehensive set of environmental and innovation laws, based largely on European legislation, which have been an effective tool for implementing relevant policies, and a main driver for the promotion of eco-technologies and eco-innovation.

2012 Eco-innovation Scoreboard ranking for Luxembourg



77

Malta Malta is characterised by its small size, its climatological parameters and its long coastline. This sets the context for specific eco-innovation activities to be stimulated and developed not only for local use but also for international replication. Europe is going through difficult economic times which have had their knock on effect on most countries of which Malta is no exception. However, during 2010, GDP registered an increase of 3.2% in real terms and 6.2% in nominal terms.

Malta’s small size and significant population density places considerable pressure on the consumption of resources. Its size also runs counter to developing a wide export base which makes it vulnerable to external shocks. Malta’s dependency on fossil fuels for transportation and energy needs is symptomatic of Malta’s vulnerability to external circumstances and which often, both from a financial and perhaps from an environmental perspective, provide the stimulus for eco-innovation initiatives. Similarly, from a resource perspective, freshwater volumes in Malta are insufficient to meet demand. This has led to extensive reliance on desalinated water. The water shortage problem contributed to the development of solutions which permit the reuse of treated sewage effluent as an alternative to groundwater supplies.

In comparison to other EU countries, Malta is especially well positioned in the area of environmental outcomes (i.e. material and energy productivity). Strongly dependent on the tourism industry and with the highest population density in Europe, the Maltese sectors of tourism, water and waste management are taking the lead and are nowadays considered to be the most promising sectors in the area. Although still in its infancy, the issue of eco-innovation is increasingly appearing in the political agenda. The Maltese government has committed towards the adoption of eco-innovation solutions and is supporting eco-innovation activities mostly through provision of various incentives.

Malta’s Research and Innovation (R&I) strategy, Malta’s draft Energy Policy, Malta’s Operational Programme I as well as the financial incentives offered by Malta Enterprise set the context for the development of eco-innovation within the headline innovation bracket. In fact both Research and Development (R&D) and eco-innovation are recognised as a pillar for Malta’s economic development.

2012 Eco-innovation Scoreboard ranking for Malta



78

Malta Malta is characterised by its small size, its climatological parameters and its long coastline. This sets the context for specific eco-innovation activities to be stimulated and developed not only for local use but also for international replication. Europe is going through difficult economic times which have had their knock on effect on most countries of which Malta is no exception. However, during 2010, GDP registered an increase of 3.2% in real terms and 6.2% in nominal terms.

Malta’s small size and significant population density places considerable pressure on the consumption of resources. Its size also runs counter to developing a wide export base which makes it vulnerable to external shocks. Malta’s dependency on fossil fuels for transportation and energy needs is symptomatic of Malta’s vulnerability to external circumstances and which often, both from a financial and perhaps from an environmental perspective, provide the stimulus for eco-innovation initiatives. Similarly, from a resource perspective, freshwater volumes in Malta are insufficient to meet demand. This has led to extensive reliance on desalinated water. The water shortage problem contributed to the development of solutions which permit the reuse of treated sewage effluent as an alternative to groundwater supplies.

In comparison to other EU countries, Malta is especially well positioned in the area of environmental outcomes (i.e. material and energy productivity). Strongly dependent on the tourism industry and with the highest population density in Europe, the Maltese sectors of tourism, water and waste management are taking the lead and are nowadays considered to be the most promising sectors in the area. Although still in its infancy, the issue of eco-innovation is increasingly appearing in the political agenda. The Maltese government has committed towards the adoption of eco-innovation solutions and is supporting eco-innovation activities mostly through provision of various incentives.

Malta’s Research and Innovation (R&I) strategy, Malta’s draft Energy Policy, Malta’s Operational Programme I as well as the financial incentives offered by Malta Enterprise set the context for the development of eco-innovation within the headline innovation bracket. In fact both Research and Development (R&D) and eco-innovation are recognised as a pillar for Malta’s economic development.

2012 Eco-innovation Scoreboard ranking for Malta

Netherlands The Netherlands is a relatively small and densely populated country with modern economy largely based on service sector. An indication of the performance of the Dutch economy is that the Netherlands ranks 8th in the Global Competitiveness Index of the World Economic Forum (2010). The high population density and the significant economic activities have created large environmental pressure in the country. The quality of the environment, however, has improved since 1990: air emissions, connection rate to waste water treatment and municipal waste management are in the forefront in the EU. There are still large environmental challenges related to greenhouse gas emissions (and related use of renewable energy, reduction of energy consumption), local air quality (dust), noise and pressure on nature (biodiversity, ecological water quality). The Netherlands has high outputs in terms of eco-patents; the situation with material productivity of the economy is also among the best in Europe.

Eco-innovation in the Netherlands has a long-standing tradition dating back to the 1970s. Since then, eco-innovation moved from the traditional end-of-pipe environmental technologies to recycling and more process integrated approaches and product design. All types of approaches are still valid options, and the approach that is most economically viable is in general applied, although there may be more attention for long-term profitability instead of short-term shareholder value with some companies. Traditionally the most eco-innovative sectors have been water technologies, chemical sector, agro-food industry, as well as electronics. New developments are on rise in service sectors, including banking, healthcare, ICT, tourism. Biobased economy, with development in biofuels, biochemicals, etc. is also showing positive potential. Most eco-innovations are incremental in nature: radical/transformative eco-innovations are difficult in a small, but very open economy, esp. when there is only limited leadership from the government.

Environmental and sustainability issues are well integrated in the various national policies and instruments and influence eco-innovation development in the country. However, “eco-innovation” concept is not very explicit in the Dutch policymaking; it is seen as a mean to move towards sustainability. “Resource efficiency” debate is quite recent in the agenda and has been gaining some attention.

2012 Eco-innovation Scoreboard ranking for The Netherlands



79

Poland Poland is one of the largest EU Member States and the only one that had positive economic growth during the 2008–09 crisis. During the last 20 years, like other Eastern European states Poland went through two transformations: the first from totalitarianism and a centrally planned economy to democracy and a market-based economy; the second through accession to EU membership. Currently, the main policy focus is to diminish the gap in standards of living between Poland and the most developed EU Member States.

Poland, since its accession to the EU in 2004, has been trying to utilise EU funds, reduce the backlogs in transportation infrastructure and environmental protection and at the same time build a strong and stable economy. The state of the natural environment has improved, while the resources productivity and energy intensity have increased. Despite that, Polish productivity indexes per GDP still remain below performances of the most of the EU countries. During the last 20 years, energy consumption remained stable in spite of significant GDP growth (due to energy efficiency improvement and changing the structure of economy). Nevertheless, the energy intensity index is still 2-3 times lower than the EU-27 average.

Despite the fact that the official state policy in the area of eco-innovation misses synergy, the eco-innovations have been addressed via national policy strategies on environmental protection, product policy, energy efficiency in buildings, etc. The interest of SMEs in eco-innovation is slowly growing, especially in relation to cost reduction possibilities (notably reduction of energy consumption and decreasing expenditures related to pollutant emissions). The country also has outstanding examples of eco-innovations in energy and water management, hazardous waste treatment, solar energy, green banking and coke industry and a number of eco-innovation related programmes and initiatives within various clusters. On the other hand, eco-innovation does not constitute a driving force for new business opportunities in Poland.

2012 Eco-innovation Scoreboard ranking for Poland



80

Poland Poland is one of the largest EU Member States and the only one that had positive economic growth during the 2008–09 crisis. During the last 20 years, like other Eastern European states Poland went through two transformations: the first from totalitarianism and a centrally planned economy to democracy and a market-based economy; the second through accession to EU membership. Currently, the main policy focus is to diminish the gap in standards of living between Poland and the most developed EU Member States.

Poland, since its accession to the EU in 2004, has been trying to utilise EU funds, reduce the backlogs in transportation infrastructure and environmental protection and at the same time build a strong and stable economy. The state of the natural environment has improved, while the resources productivity and energy intensity have increased. Despite that, Polish productivity indexes per GDP still remain below performances of the most of the EU countries. During the last 20 years, energy consumption remained stable in spite of significant GDP growth (due to energy efficiency improvement and changing the structure of economy). Nevertheless, the energy intensity index is still 2-3 times lower than the EU-27 average.

Despite the fact that the official state policy in the area of eco-innovation misses synergy, the eco-innovations have been addressed via national policy strategies on environmental protection, product policy, energy efficiency in buildings, etc. The interest of SMEs in eco-innovation is slowly growing, especially in relation to cost reduction possibilities (notably reduction of energy consumption and decreasing expenditures related to pollutant emissions). The country also has outstanding examples of eco-innovations in energy and water management, hazardous waste treatment, solar energy, green banking and coke industry and a number of eco-innovation related programmes and initiatives within various clusters. On the other hand, eco-innovation does not constitute a driving force for new business opportunities in Poland.

2012 Eco-innovation Scoreboard ranking for Poland

Portugal Portugal joined the EU in 1986. For a large part of the two following decades, EU funding was invested mainly in road, utilities and housing infrastructures. These investments, together with several economic reforms prompted the country to grow above EU average in the nineties. However, since 2002 the economy decelerated and 2008 was characterised by a zero growth rate: a consequence of the global economic crisis. Despite the unfavourable short to medium term development forecast, government is aware that a new paradigm shift is needed to support a new economic base. And environment-driven projects can become part of this transformation. In this context eco-innovation needs and challenges for Portugal are currently focused on three objectives: 1) improving material efficiency, 2) improving energy efficiency, and; 3) creating new products and services which can be seen as source of exports.

In Eco-innovation performance Portugal can be described as a country in a transition phase from a low-innovation country towards a high-innovation country group. It has far better performance in eco-innovation activities (due to high material productivity and high level of environmental certification at companies), as well as in terms of gross energy productivity and carbon intensity. Portugal has made dramatic progress in renewable energy (mainly solar energy), implemented practices of e-governance. It shows commitments to 20% reduction in energy consumption through innovative projects on electric vehicles, smart grids, renewable-based decentralised production (e.g. wind), energy management of buildings. While there is no dedicated eco-innovation policy strategy, eco-innovation is somewhat addressed in general innovation, S&T, environmental, and energy policies.

2012 Eco-innovation Scoreboard ranking for Portugal



81

Romania Romania is a country of considerable potential: a wealth of natural resources, rich agricultural lands, important renewable energy sources (wind, biomass, hydro, geothermal), a substantial industrial base, an educated work force and opportunities for expanded development in tourism on the Black Sea and in the Carpathian Mountains. At the same time the country faces various environmental challenges and is still in the process of catching up with the environmental performance of the average of EU27 countries. The economy is still based on fossil fuels (40%). Since 1990, Romania has constantly made efforts to reduce CO2 emissions; however emission reduction remains a challenge. In the Renewable Energy Resource Assessment, the EBRD estimates domestic solar water heating for public buildings and hotels, passive solar systems and stand-alone systems for sites far from the grid to be the most promising applications. Some positive trends are observed in the eco-industry, which shows growing employment and turnover. However the eco-industry is still not very strong in the country; the few cleantech companies operating in the country suffer from lack of investment.

In the last decade the country has been widely promoting measures on improving energy efficiency in the residential housing and public transport, advancing renewable energy exploitation (biomass, wind, geothermal, hydro). Using joint funding the country has set initiatives on supporting eco-innovations in local companies, building collaboration platforms, and promoting green public procurement. A number of policy strategies and programmes address eco-innovations with the main focus on infrastructure development and improving entrepreneurial environment.

2012 Eco-innovation Scoreboard ranking for Romania



82

Romania Romania is a country of considerable potential: a wealth of natural resources, rich agricultural lands, important renewable energy sources (wind, biomass, hydro, geothermal), a substantial industrial base, an educated work force and opportunities for expanded development in tourism on the Black Sea and in the Carpathian Mountains. At the same time the country faces various environmental challenges and is still in the process of catching up with the environmental performance of the average of EU27 countries. The economy is still based on fossil fuels (40%). Since 1990, Romania has constantly made efforts to reduce CO2 emissions; however emission reduction remains a challenge. In the Renewable Energy Resource Assessment, the EBRD estimates domestic solar water heating for public buildings and hotels, passive solar systems and stand-alone systems for sites far from the grid to be the most promising applications. Some positive trends are observed in the eco-industry, which shows growing employment and turnover. However the eco-industry is still not very strong in the country; the few cleantech companies operating in the country suffer from lack of investment.

In the last decade the country has been widely promoting measures on improving energy efficiency in the residential housing and public transport, advancing renewable energy exploitation (biomass, wind, geothermal, hydro). Using joint funding the country has set initiatives on supporting eco-innovations in local companies, building collaboration platforms, and promoting green public procurement. A number of policy strategies and programmes address eco-innovations with the main focus on infrastructure development and improving entrepreneurial environment.

2012 Eco-innovation Scoreboard ranking for Romania

Slovakia Slovakia’s economy is small but very open and is affected by the economic crisis mostly in terms of foreign trade and via the downturn in confidence regarding the restoration of positive economic development. Although Slovakia's GDP derives mainly from the services sector, the industrial sector plays an important role within the Slovak economy. It comprises mainly heavy industry and the automotive sector. Slovakia’s economy is characterised by a relatively high share of energy-intensive industries, making the transition to a greener economy very challenging.

Among the most discussed environmental improvements related topics in Slovakia are energy efficiency, the greater utilisation of renewable energy sources, and various adaptation measures including flood protection. A promising area with certain prospects appears to be the sector of renewable energy sources (RES) and energy efficiency within the building sector. The country’s natural conditions make it particularly suitable for the development of hydro energy and the use of biomass. Appropriate resources for biomass are provided mainly by forestry. This area of emerging national eco-innovation faces some daunting challenges including the disposal of environmental burdens (contaminated sites), the reconstruction and modernisation of transport infrastructure, and expanding energy savings in the building sector.

Innovation and eco-innovation are presented and understood in public discourse from a variety of perspectives. While the Slovak Innovation Policy strategy document explains the term “innovation” as an achieved situation in which innovations are one of the main tools of knowledge economy development and ensuring high economic growth with the objective of achieving the level of the most advanced EU economies, the concept of “eco-innovation” is dominated by such terms as “green procurement”, “energy transition”, “enforcement of energy efficiency”, “environmental labelling” and “small and medium-sized enterprises”. In both cases, the focus is on economic growth and its relation to the knowledge economy

2012 Eco-innovation Scoreboard ranking for Slovakia



83

Slovenia Slovenia is a post-transitional Central European country that has gained independence through the break-up of Yugoslavia in 1991. Today Slovenia is a private economy country with a liberal market, well integrated in EU and international market exchange. Slovenian economy has developed into a post-industrial economy; approx. one-third of the GDP is produced by industrial activities (manufacturing, construction, energy) and farming, while two-thirds are services. Forests cover almost 60 % of the country, making it the third country in Europe by share of forests. Natura 2000 protected area covers 31,4 % of the country, what is the largest share of all EU countries. In last two decades Slovenia has become a leader of the EU new Member States group in economic development and achieving higher efficiency. Despite its small size, Slovenia has a high biodiversity and extensive natural habitats. However, today Slovenia is facing manifold economic and environmental challenges, such as growing prices for natural resources, economic and financial crisis on one hand and high emissions of greenhouse gases, high energy intensity of the economy and inefficient water and waste treatment on the other hand.

In eco-innovation indicators Slovenia is among the best performing countries in the new Member States group. The most eco-innovative sectors in Slovenia are electric equipment industry, solar power equipment industry, construction sector introducing energy saving measures, and waste recycling industry. Research and innovation on electric vehicles has been on raise. There is no specific eco-innovation policy strategy and no significant incentive for eco-innovations apart from general innovations and R&D support programs, entrepreneurship support measures. Within the frame of the environmental policy there is a focus on greenhouse gas emissions reduction, nature protection, improved quality of life and reduction of waste and industrial pollution.

2012 Eco-innovation Scoreboard ranking for Slovenia



84

Slovenia Slovenia is a post-transitional Central European country that has gained independence through the break-up of Yugoslavia in 1991. Today Slovenia is a private economy country with a liberal market, well integrated in EU and international market exchange. Slovenian economy has developed into a post-industrial economy; approx. one-third of the GDP is produced by industrial activities (manufacturing, construction, energy) and farming, while two-thirds are services. Forests cover almost 60 % of the country, making it the third country in Europe by share of forests. Natura 2000 protected area covers 31,4 % of the country, what is the largest share of all EU countries. In last two decades Slovenia has become a leader of the EU new Member States group in economic development and achieving higher efficiency. Despite its small size, Slovenia has a high biodiversity and extensive natural habitats. However, today Slovenia is facing manifold economic and environmental challenges, such as growing prices for natural resources, economic and financial crisis on one hand and high emissions of greenhouse gases, high energy intensity of the economy and inefficient water and waste treatment on the other hand.

In eco-innovation indicators Slovenia is among the best performing countries in the new Member States group. The most eco-innovative sectors in Slovenia are electric equipment industry, solar power equipment industry, construction sector introducing energy saving measures, and waste recycling industry. Research and innovation on electric vehicles has been on raise. There is no specific eco-innovation policy strategy and no significant incentive for eco-innovations apart from general innovations and R&D support programs, entrepreneurship support measures. Within the frame of the environmental policy there is a focus on greenhouse gas emissions reduction, nature protection, improved quality of life and reduction of waste and industrial pollution.

2012 Eco-innovation Scoreboard ranking for Slovenia

Spain In the last several decades Spain's socio-economic situation has been marked by rapid economic and social development, and significant population growth. These developments have driven an enormous increase in housing stock, demand for transport services, and waste generation. Despite water efficiency improvements over the last decades the country is facing ever increasing water shortage which poses the need in water efficiency innovations. There are growing amounts of solid wastes, while the resource efficiency and consumption need improvements towards sustainable patterns. Growing number of cars in fact, cancelled out the improved energy and environmental efficiency achieved in other sectors. Industries and agriculture sector are increasingly contributing to the nation's water pollution problem. Economic crises also pose additional eco-innovation needs and challenges in Spain.

The solution involves putting in place processes allowing economic growth to be completely disassociated from environmental degradation and the use of resources (producing more with less), while incorporating “sufficiency” criteria for rational consumption. Primary energy intensity and greenhouse gas emissions have declined in Spain since 1999 reflecting the decoupling of economic growth from primary energy consumption. Many enterprises and technology providers are emerging in the sector of renewable energy. However, a large potential rests in the eco-innovations involving low energy consuming practices in industry and housing, ICT solutions, etc.

Today there is a high recognition of green certification among Spanish companies. The country also has larger set of eco-labelled products. Governmental allocation for environmental R&D is higher than in most of other EU countries. Among the leading eco-innovation areas in Spain are water management, sustainable construction, and biogas industry. New technologies controlling the electricity demand as well as eco-innovative nanotechnologies, and electric cars are expected to gain a potential in the national market. The national policy domain offers a range of strategies and documents related to innovation, energy, climate change, and sustainable development that directly or indirectly influence eco-innovation development. The policies support eco-innovation resulting in greater resource and energy efficiency in production processes.

2012 Eco-innovation Scoreboard ranking for Spain



85

Sweden Sweden is positioned in a group of eco-innovation leader countries. It has especially high performance in eco-innovation inputs and outputs explained by high R&D human resources and generous cleantech investment and high eco-patenting. Eco-innovation is an important component of Sweden´s national environmental policy strategy. The Swedish government regards the development and use of good environmental technology as important means of reducing the negative environmental impact from consumption and production, at the same time as competitiveness and industrial growth are promoted. The Swedish approach not only includes technologies and technical systems in themselves; it also involves holistic ideas on integrated systems solutions.

Sweden has a strong environmental performance reputation that is based on a pro-active approach (including an active environmental policy) to address environmental challenges and has also developed a high competence in the area of technologic eco-innovations. The areas where Sweden is particularly successful include waste management, water and sewage treatment, renewable energy, air purification and increasing energy efficiency. New areas on the rise include Information, Communication and Technology (ICT), Space technology, Biotechnology and Nanotechnology.

2012 Eco-innovation Scoreboard ranking for Sweden



86

Sweden Sweden is positioned in a group of eco-innovation leader countries. It has especially high performance in eco-innovation inputs and outputs explained by high R&D human resources and generous cleantech investment and high eco-patenting. Eco-innovation is an important component of Sweden´s national environmental policy strategy. The Swedish government regards the development and use of good environmental technology as important means of reducing the negative environmental impact from consumption and production, at the same time as competitiveness and industrial growth are promoted. The Swedish approach not only includes technologies and technical systems in themselves; it also involves holistic ideas on integrated systems solutions.

Sweden has a strong environmental performance reputation that is based on a pro-active approach (including an active environmental policy) to address environmental challenges and has also developed a high competence in the area of technologic eco-innovations. The areas where Sweden is particularly successful include waste management, water and sewage treatment, renewable energy, air purification and increasing energy efficiency. New areas on the rise include Information, Communication and Technology (ICT), Space technology, Biotechnology and Nanotechnology.

2012 Eco-innovation Scoreboard ranking for Sweden

United Kingdom The United Kingdom (UK) has the world's sixth largest economy by nominal GDP. It was the world's first industrialised country. The main economic sectors of the UK economy are services (76.2% GDP), including finance, digital and creative, and communications; industry and manufacturing (22.8% GDP) with aerospace and defence, automotive, pharmaceuticals particularly prominent; and agriculture (0.9% GDP). The UK has a strong track record in science and innovation. In 1990s UK’ significant energy intensive industry and an energy generation sector dominated by oil and coal. However, in 2008, the UK had already surpassed its Kyoto target based resulting mainly from a fuel switch, from coal to gas. UK has good performance in eco-innovation inputs due to more generous cleantech investments, and in environmental outcomes, presented by high material, water and energy productivity of the economy. Its leading eco-innovation areas are renewable energy, energy efficiency, and waste recycling. Increasing focus on more efficient use of resource gives a good ground for eco-innovation in such areas as resource extraction, bio-based materials, sustainable design, materials processing, manufacturing, service provision, recycling and disposal. There is a diverse set of policy instruments, strategies, and programmes directly and indirectly promoting eco-innovations on national and regional level. Scotland, Wales and Northern Ireland have their own support schemes and policies in addition to, and sometimes in place of central government schemes. Eco-innovation needs and challenges in the UK are associated with old, energy inefficient buildings stock, the increasing prices for natural resources, and the current quandary over the future of the nuclear power system. The long term industrialisation and urbanisation of the UK and climate change are also beginning to have an impact. There is a growing awareness of environmental and sustainability issues in the UK and this is enabling eco-innovation to become a more acceptable part of everyday life. However awareness or knowledge is still slow to translate into action.

2012 Eco-innovation Scoreboard ranking for The United Kingdom



87

Appendix 2: Additional Information Sources

India - EU Cooperation EC Delegation in India http://www.delind.ec.europa.eu/ Generic overview of the Delegation of EU in India

EC External Relations - India http://ec.europa.eu/external_relations/india/index_en.htm. This site provides information about EU-India relation in general including trade, research, important EU-India ministerial summits, key documents and many others.

EC’s Directorate for Research http://ec.europa.eu/research/iscp/index.cfm?lg=en&pg=india. This EU website allows you to read latest information about the European and Indian political decisions and advances in the research and development.

India-EU Council http://www.indiaeu.eu/. The website acts as a point of access to the exchange of opportunities across EU-India which further aim to establish and support co-operation among Europeans and Indians.

EuroIndiaResearch http://euroindiaresearch.org/. The portal serves as a main point of access for Indian organizations to know about EU funding in research and development and its main aim is to enhance research level co-operation between EU and India.

Indian S&T System Indian Science and Technology system consists of various ministries, departments, councils and institutes. Major S&T agencies/departments are:

Council of Scientific and Industrial Research (CSIR) http://www.csir.res.in/ CSIR is a premier industrial autonomous R&D organization. It gives a view on industrial competitiveness, social welfare, strong S&T base for strategic sectors and advancement of fundamental knowledge.

Department of Atomic Energy (DAE) http://www.dae.gov.in/ DAE is an independent department under central government. It informs about all the units/labs of atomic energy in India.

Department of Biotechnology (DBT) http://dbtindia.nic.in/ DBT website informs on the development of modern biology and biotechnology in India and also about the major R&D projects and several national and international programmes. Department of Space (DOS) http://www.sac.gov.in/dos.html DOS is an independent department under central government that informs about the development and applications of space technology and space science for the socio-economic benefits of the nation.

Department of Telecommunication (DOT) http://www.dot.gov.in/ DOT briefs about the research and development under telecommunication, international cooperation and private investments in telecommunication.

Department of Science and Technology (DST) http://www.dst.gov.in/ DST website gives a detailed overview of the S&T activities in the country, technology development programmes relating to key sectors and development of international cooperation in S&T.

Department of Scientific and Industrial Research (DSIR) http://www.dsir.gov.in/ DSIR acts as a platform to promote research in industry and supports scientific laboratories and facilitates the transfer of technology between various stakeholders.

Indian Council of Agricultural Research (ICAR) http://www.icar.org.in/ ICAR is an autonomous organisation. It guides and manages research and education in agriculture including horticulture, fisheries and animal sciences.

Indian Council of Medical Research (ICMR) http://www.icmr.nic.in/ ICMR informs on the latest biomedical research and technological development through various research programmes.

Ministry of Communications and Information Technology (MOCIT) & Department of Information Technology (DIT) http://www.mit.gov.in/ The website provides information about latest projects and



88

Appendix 2: Additional Information Sources

India - EU Cooperation EC Delegation in India http://www.delind.ec.europa.eu/ Generic overview of the Delegation of EU in India

EC External Relations - India http://ec.europa.eu/external_relations/india/index_en.htm. This site provides information about EU-India relation in general including trade, research, important EU-India ministerial summits, key documents and many others.

EC’s Directorate for Research http://ec.europa.eu/research/iscp/index.cfm?lg=en&pg=india. This EU website allows you to read latest information about the European and Indian political decisions and advances in the research and development.

India-EU Council http://www.indiaeu.eu/. The website acts as a point of access to the exchange of opportunities across EU-India which further aim to establish and support co-operation among Europeans and Indians.

EuroIndiaResearch http://euroindiaresearch.org/. The portal serves as a main point of access for Indian organizations to know about EU funding in research and development and its main aim is to enhance research level co-operation between EU and India.

Indian S&T System Indian Science and Technology system consists of various ministries, departments, councils and institutes. Major S&T agencies/departments are:

Council of Scientific and Industrial Research (CSIR) http://www.csir.res.in/ CSIR is a premier industrial autonomous R&D organization. It gives a view on industrial competitiveness, social welfare, strong S&T base for strategic sectors and advancement of fundamental knowledge.

Department of Atomic Energy (DAE) http://www.dae.gov.in/ DAE is an independent department under central government. It informs about all the units/labs of atomic energy in India.

Department of Biotechnology (DBT) http://dbtindia.nic.in/ DBT website informs on the development of modern biology and biotechnology in India and also about the major R&D projects and several national and international programmes. Department of Space (DOS) http://www.sac.gov.in/dos.html DOS is an independent department under central government that informs about the development and applications of space technology and space science for the socio-economic benefits of the nation.

Department of Telecommunication (DOT) http://www.dot.gov.in/ DOT briefs about the research and development under telecommunication, international cooperation and private investments in telecommunication.

Department of Science and Technology (DST) http://www.dst.gov.in/ DST website gives a detailed overview of the S&T activities in the country, technology development programmes relating to key sectors and development of international cooperation in S&T.

Department of Scientific and Industrial Research (DSIR) http://www.dsir.gov.in/ DSIR acts as a platform to promote research in industry and supports scientific laboratories and facilitates the transfer of technology between various stakeholders.

Indian Council of Agricultural Research (ICAR) http://www.icar.org.in/ ICAR is an autonomous organisation. It guides and manages research and education in agriculture including horticulture, fisheries and animal sciences.

Indian Council of Medical Research (ICMR) http://www.icmr.nic.in/ ICMR informs on the latest biomedical research and technological development through various research programmes.

Ministry of Communications and Information Technology (MOCIT) & Department of Information Technology (DIT) http://www.mit.gov.in/ The website provides information about latest projects and

schemes undertaken in R&D under various aspects of information technology including research efforts in electronics and related fields.

Ministry of Environment and Forests (MOEF) http://moef.nic.in/index.php MOEF informs about the promotion of environmental and forestry research, international cooperation and creation of environmental awareness.

Ministry of Earth Sciences (MoES) & Department of Ocean Development (DOD) http://www.dod.nic.in/ This site creates awareness of the atmospheric, oceanic and seismic regime & provides information about development of technology and technological aids for harnessing of resources.

Ministry of Food Processisng Industries (MFPI) http://www.mofpi.nic.in/ This site acts as a catalyst for guiding the industry, encouraging exports and creating conducive environment for healthy growth of the food processing industry.

Ministry of Non-Conventional Energy Sources (MNES)/ Ministry of Renewable Energy (MNRE) http://mnre.gov.in/ The website gives an overview about the functions relating to all aspects of renewable energy and also promotes national and international programmes in renewable energy.



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This publication has been produced with the assistance of the European Union. The views expressed in this publication are those of the authors and do not necessarily reflect the views of EBTC or the European Union.

The European Business and Technology Centre (EBTC) supports EU companies and researchers on their market entry to India by offering long-term hands-on support with a myriad of services. With offices in India’s metros of New Delhi, Mumbai, Bengaluru and Kolkata, EBTC is well placed to offer complete end-to-end solutions to companies who want to enter and flourish in the Indian market.

EBTC’s efforts focus on 4 key sectors – Biotech, Energy, Environment and Transport – all of which offer enormous scope for closer EU-India collaboration, be it in business, science or technology. As the connecting platform between business, research, and government, EBTC ensures that EU players are well networked with a solid base from which to develop their venture.

EBTC New Delhi (Head Office)DLTA Complex, South Block, 1st Floor1, Africa Avenue, New Delhi 110 029, INDIATel: +91 11 3352 1500Fax: +91 11 3352 1501E-mail: [email protected]

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