on the Socio-Organizational Challenges of the Knowledge Economy Télé-université/Université du Québec à Montréal 1 Jean-Marc Fontan, Fontan. jean-marc@uqam
dgtrembl@teluq. uquebec. ca Biographical note Diane-Gabrielle Tremblay is the Canada Research Chair the Socio-Organizational Challenges of the Knowledge Economy.
Part Two will address innovation from the perspective of evolutionary economists. We will reconstruct an explanation of social innovation as a cognitive process confronted with localized social resistance,
By transposing this notion into the field of economics, Schumpeter derives from it the notion of business and entrepreneur.
but the one who introduces this discovery into the firm, the industry, the economy, that is, strictly speaking, the person responsible for its diffusion.
Only this act of entrepreneurship corresponds to the role and function of an entrepreneur. Schumpeter constructs his analysis in the economic environment
and sees an actor-transformer in anybody who can implement a new combination of arrangements in a firm, an organization with an economic vocation.
which make up physical capital. Veblen viewed technology as an indivisible possession of the community at large,
and if it is located in an appropriate diffusion or propagation environment. To a certain extent, Veblen's theory is imbued
and even goes beyond Schumpeter's analysis by bringing out the effects of reciprocity between technique/technology and the social environment.
not only do technologies have an effect on the cultural and institutional environment, but this institutional environment itself exerts an effect on the technologies.
Thus, a form of reciprocity of effects exists between the social context and the technologies (or innovation,
However, it was the evolutionary economists who completed their work by proposing a global vision of innovation.
Cyclical effect of innovation According to evolutionary economists, the innovation process occurs in an organization or a firm;
whereas the concentration of capital over the years has given rise to the domination of large firms and their research and development departments.
However, for the evolutionary economists, these two places (SMES and large enterprises) do succeed not necessarily one another in time
it is in some cases SMES and in other cases large enterprises which dominate the innovation process.
and new technologies appear, leading to the creation of new enterprises. On the contrary, during the maturity phase--for example,
and generally oligopolistic--technological changes and innovation in general constitute one of the, if not the main, weapons of competition.
when the manufacturing of the new product creates new market opportunities, attracts capital and thus generates new enterprises,
including small ones, where new usages and types of the product are developed. The creation is replaced subsequently by mass production with stricter and more intensified standards,
as suggested by Rostow (1960) in his study on the stages of economic growth. It also and especially refers to the voluntary actions taken jointly by entrepreneurs
The implementation of these solutions means new infrastructures and is expressed through the will to strengthen the partnerships between the large enterprises
and Society complements the approach of evolutionary economists and authors who have drawn on their work.
Rather than explaining the links between innovation and economic growth (Amable, Barré and Boyer, 1997), this new approach seeks to understand the heterogeneous innovation processes that bring about social change at the meso-social and micro-social levels.
who redefines the field of what constitutes economics. It should be recalled that Polanyi defines the economy as a dynamic set of social processes which are continuously being transformed
and from where stem forms of integration based on reciprocity (symmetric logic), redistribution (centralizing logic) and exchange (market logic).
and the altermondialist demands since the mid-1990s. A parallel can be established here with the social resistance mentioned by Veblen.
but because there is political capital to be gained in this recognition. The politician and the innovator play the political capital card,
The communication circuit includes a share of doubt, mistrust, fear of novelty or a share of incommunicable information.
The observed two-step-flow communication implies that the construction of the social usage of an invention will benefit greatly from going through the intermediary of opinion leaders.
but this cultural determinism is organized itself into a hierarchy around the reality of the global economy.
) Alliances, cooperative ventures and the role of government in the Knowledge Based Economy: Policy Issues for Canada and beyond.
,(ed.)Technical change and economic theory, New york, Pinter, pp. 221-238 Flichy, P. 1995) L'innovation technique.
The Part Played by People in the Flow of Mass Communications. Glencoe, IL: Free Press.
Technical Change and Economic theory, New york, Pinter, pp. 349-369. Maillat, D. 1992) Milieux et dynamique territoriale de l'innovation.
Phd thesis in economics, Université de Paris 1. 711 p. Tremblay, D.-G. 1992. Innovation et marchés internes du travail dans le secteur bancaire;
Innovation Dynamics in a Diverse Economy. Montreal and Kingston: Mcgill-Queen's university Press and School of Policy Studies, Queen's university.
Vernon, R. 1974) Les conséquences économiques et politiques des entreprises multinationales, Paris, Robert Laffont Wolfe, D. 2002) Social Capital and Clusters
research management and technology transfer and one of the top 10 Small and Medium-sized Enterprises (SMES) in Europe in terms of research participation.
and her experience in a French Innovation Agency has allowed her to gain experience to help SMES, academic researchers and other stakeholders to build multidisciplinary research projects and innovation services.
'which will stimulate a process of continuous policy learning among all interested regional policy stakeholders around Europe.
87 4 Executive Summary The innovation capacity of Small and Medium Enterprises (SMES) is a key issue for Europe's competitiveness and growth.
or commercial opportunities that have been neglected by more established companies and commercialise them, thereby contributing to growth and employment.
and companies face investment choices regarding scarce resources. Innovation is often in competition with other business functions for this investment.
To address this challenge, regional and local authorities can: Implement innovation voucher schemes Implement flexible innovation funding schemes (guarantees, public/private loans, grants) Support regional Venture capital Funds How to address the lack of innovation
management skills? Innovation processes need to be managed from the generation of ideas to the generation of profits on the markets with new products/services.
Moreover, an increasingly complex innovation system combining‘open'innovation approaches with closed ones requires more sophisticated in-house innovation management skills on the part of firms
How to develop the marketing of innovation and of innovative products and services? This challenge is particularly true with regard to the promoting of internationalisation
and exploiting public procurement opportunities. In this regard, new business opportunities are being driven by three types of public or pure market drivers:
o The promotion of lead markets in a bid to restore European union (EU) competitiveness o The creation of new market opportunities related to the search for technological and other solutions to societal challenges
o Expanding markets abroad 5 To address this barrier, regional and local authorities can: Support the internationalisation of SMES Promote innovative marketing tools Help SMES to improve their Corporate Social Responsibility How to address the lack of research capabilities in most firms and in particular SMES?
and includes similarities from other capitalisation themes, such as Innovation Systems or Entrepreneurship. It is structured according to the identified barriers faced by SMES to improve their innovation capacity.
in order to validate the benchmark of the knowledge from INTERREG IVC? What is their learning effect on the still running INTERREG IVC projects?
and stakeholders Visit to the EURIS project Two Thematic Workshops organized together with the Innovations Systems theme.
Innovation can occur in any sector of the economy, including government services such as health or education.
However, for the current thematic analysis, the focus is solely on innovation in SMES. SMES The theme of the analysis is the capitalisation of INTERREG IVC results addressing the innovation capacity of Small and Medium-sized Enterprises (SMES.
In terms of regional policy, the SME concept is taken generally to mean everything from micro-companies (of only 1 employee) to large companies employing several hundred people
(which can better be assessed under the theme‘Entrepreneurship) 'but including for example actions in favour of clusters that can impact both SMES and larger organisations.
IPR Economies rely increasingly on knowledge-based competitiveness, and innovation is increasingly non-technological in nature.
The buying agency simply uses its own demand or need to influence or induce innovation;
Professor CIRCLE (Centre for Innovation, Research and Competence in the Learning Economy), Lund University, Sweden,
However, the global economic crisis had a rapid and significant negative impact on innovation worldwide. OECD figures reveal7 that total OECD-area business expenditure on research and development (R&d) declined by a record 4. 5%in 2009;
despite an overall improvement in overall innovation performance over the last five years (within EU27), performance in the categories‘Firm investments'and‘Innovators'has diminished.
A high negative growth rate is observed also in the categories‘Non-R&d innovation expenditure'and‘Venture capital'and, to a lesser extent
the situation is reflected best by the results of the IUS (2011) in the categories‘Linkages & Entrepreneurship
Within the new strategy, Horizon 2020 (H2020), the programme for the Competitiveness of Enterprises and SMES (COSME) and the European Regional Development Fund (ERDF) offer both direct and indirect funding
CIP With Small and Medium-sized Enterprises (SMES) as its main target, the Competitiveness and Innovation Framework Programme (CIP) supported innovation activities (including eco-innovation),
and delivered business support services in the regions. The main tools/facilities used by CIP to support innovation activities were:
The Enterprise Europe Network (EEN), which offered a'one-stop shop'to meet all the information needs of SMES and companies in Europe.
which provided venture capital for SME financing. The GIF was funded by the CIP but was managed by the European Investment Fund (EIF) on behalf of the Commission.
The GIF's objective was to improve access to finance for the start-up and growth of SMES and investment in innovation activities, including eco-innovation.
According to its Interim Evaluation10 CIP's efficiency improved at both national and European levels through the establishment of a single Network for SMES across Europe.
Besides the administrative burden which continues to be mentioned by the stakeholders interviewed during the evaluation process,
%of which was allocated to Innovation and the knowledge economy. The programme supports two types of projects:
projects such as Business to Nature which contributed to the endogenous development of European regions by promoting entrepreneurship in underdeveloped areas building on local skills,
This programme provides assistance to stakeholders that are implementing programmes under the European Territorial Cooperation Objective.
'December 2010 13 http://www. interreg4c. eu/15 Innovation in SMES The goal of the actions bundled under this objective is to build innovation management capacity for Small and Medium Enterprises,
a programme known as COSME15 (Competitiveness of Small and Medium Enterprises) will also be set up. COSME will run alongside H2020 with a budget of €2. 4 billion.
The overall objective of the programme is to foster a business-friendly environment for SMES with a view to ensuring
It is designed principally to strengthen the role and innovation services of the Enterprise Europe Network-EEN under this programme.
and loan instruments thereby making‘improving access to finance'the main objective of the programme. 14 Scheme adapted from‘SME opportunities for EU-US collaboration in Horizon 2020'.
http://www. euussciencetechnology. eu/15 http://ec. europa. eu/enterprise/initiatives/cosme/index en. htm Market Lump sum:
Innovation is the main driver for economic growth in the EU, but innovation performances still need to be improved.
/research/innovation-union/index en. cfm The smart specialisation concept promotes efficient, effective and synergetic use of public investments and supports countries and regions in strengthening their innovation capacity,
while focusing scarce human and financial resources in a few globally competitive areas in order to boost economic growth and prosperity.
boosting their economy and productivity therefore benefiting SMES. Furthermore the RIS3 are built upon the industrial and economic fabric of each region,
ensuring that there will be economic growth. The entrepreneurial knowledge is used to define each RIS3 and it is known as‘the entrepreneurial process of discovery18.
and to develop B to b opportunities. They contribute to creating a favourable environment for SME development and innovation and help in their internationalization.
Strong clusters combine entrepreneurial dynamism top-level academic knowledge and synergies among innovation stakeholders. They contribute to the building of a knowledge-based economy
and to achieving the Europe 2020 objectives of new growth and job creation. Procurement of Innovation Platform The Procurement of Innovation Platform19 is an online hub developed by ICLEI (an association of over 1200 local governments) to help public authorities with Public Procurement of Innovation (PPI) and Public
pre-Commercial Procurement (PCP. It offers a website (including calls for tenders), a forum and a resource centre.
and services and yield benefits for both public and private sectors. These benefits include: Increased economic growth Better products and services Initiatives towards solving societal challenges In 2009,
public procurements accounted for about 19%of the European union's GDP, and in 2011, the European commission estimated the number of contracting authorities to be about 250 000.
It offers the opportunity for bilateral field visits. 18 This idea was introduced and is elaborated on by Foray et al (2009) in'Smart Specialisation The Concept,
and Promotion of RTD Enforcing SMES role in the transition from traditional industry regions to knowledgebased economy regions Innohubs http://www. innohubs. eu Innovation Hubs Promotion of innovation
development in Europe Promotion of innovation for SMES DISTRICT+http://districtplus. it/Disseminating Innovative Strategies for Capitalisation of Targeted Good Practices Support to the transition between traditional economy and competitive economy PERIA
on European Innovation Agencies Improvement of innovation services provided by the Regional Innovation Agencies ERIK ACTION http://www. eriknetwork. net/erikaction/Upgrading the innovation capacity of existing firms
and do not make use of wider international commercial links and opportunities, which can affect their capacity for growth and competitiveness.
and adoption of new business models in SMES by designing, implementing and managing strategies, policies and tools,
focussing on the main themes of promoting entrepreneurship and providing infrastructure for innovation to SMES.
and Innovation and to contribute to the transformation of knowledge into new and marketable products and services.
of existing enterprises in the partner regions by using structural funds to capitalise on the results from previous projects,
incl. training models and an innovation friendly environment incl. CSR) Weaknesses in networking Lack of internal research capabilities Shortage of financial resources Shortage of innovation management skills Insufficient marketing of innovation 21 It is also useful to visualize this information in a schematic
'Some of these projects are analysed fully under the themes of Innovation Systems, Entrepreneurship, Creative Industries or E-government.
Improving relations between different stakeholders to support open innovation Innovation Systems SMART+Innomot Innohubs Mini-Europe DISTRICT+PERIA ERIK ACTION DISTRIC Mini
and open Regional Innovation Strategies Developing an open innovation environment Innovation Systems INOLINK http://www. inolink. eu/Innovation Policy in University City Regions
and the Knowledge Economy Exchange, sharing and transfer of Egovernment and Wireless Broadband good practices E-government Young SMES http://www. youngsmes. e u/about/Sharing Interregional knowledge to define Supporting Programmes for Young SMES Development strategies
Entrepreneurship UNICREDS http://www. unicreds. eu/i ndex. html Enhancing the regional competences in strategic management of innovation policies Smart Specialisation strategies
GPS from this project are mentioned in sections 3. 2 and 3. 4. GPS from the entrepreneurship theme were categorized as follow:
Education and culture Finance Regulatory environment and procurement Infrastructure Support and technical assistance Those from the‘finance',‘regulatory environment and procurement'and‘support and technical assistance'categories may also relate to the innovation capacity of SMES;
and the Knowledge Economy) project's objectives were to improve regional and local Innovation & Knowledge-Economy policies through the exchange, sharing
and transfer of E-government and Wireless Broadband good practices. It identified GPS specifically addressing the inclusion of online services and management In public Administrations,
dealing mostly with entrepreneurship, with innovation systems (mainly Science Parks or other infrastructures) or with specific industries such as energy, transport or ICT.
The problem is particularly urgent in a period of economic crisis and shortage of bank loans to industry,
and is a top priority for all regional and national stakeholders involved in innovation support.
The Public Consultation on the effectiveness of innovation support in Europe (2010) 22 on 1 000 companies (a large majority of which were innovative micro and small enterprises)
o Lack of access to finance is viewed by enterprises as the main factor hampering innovation activities. o Lack of access to finance is considered by institutional stakeholders as the principal barrier preventing businesses from bringing innovations
http://ec. europa. eu/enterprise/policies/innovation/files/swd effectiveness en. pdf SMART+INNOHUBS INNOMOT MINI-EUROPE DISTRICT+PERIA ERIK ACTION 02468
etc) Equity (Public or Private) Seed Capital Venture capital Seed/Start-up Emerging growth Debt financing Bank loans Guarantees Public loans Emerging growth Development
They typically facilitate liaison between private enterprises (notably SMES) and external knowledge/research providers (universities, R&d service providers or private consultants),
This will increase the range and quality of services available to SMES, as well as strengthening international networking
(Technological Environment Innovation Subsidy) or specific types of SMES (Young Innovative Enterprises Contract: MINI-EUROPE28 o Technological Environment Innovation Subsidy DISTRICT+29 o Joint R&d call PERIA23 o Young innovative Enterprises Contract, with grants
and public loans ERIK ACTION30 27 INNOSUP-4-2014 within the‘Innovation in small and medium-sized enterprises'Work Programme 28 GP described in the MINI-EUROPE Good
Practices Catalogue: http://interreg-minieurope. com/29 GP described on the DISTRICT+website: http://districtplus. it/30 GPS described in the ERIK ACTION Good Practices Report:
the innovation vouchers help micro enterprises to start an innovation process by building up a first technological partnership with a service provider.
%It can be used to finance a wide variety of services: technical feasibility studies, tests, product characterization, prototypes, market survey, technical state of the art, modelling,
and first patent registration expenditures. The service provider is paid directly once the company has paid its share.
Innovoucher directly supports micro and small-sized enterprises to undertake innovative initiatives and increase supply
and demand in the field of innovation services. Calls for proposals focused on innovation were financed from an Innovation Fund.
The National Office for Research and Technology (NORT) launched a call for R&d services in the regions in which SMES could apply.
the programme aims to support SMES'R&d investments by providing funding to help companies clarify their R&d investment needs (€3 500) as well as actual R&d funding (€50 000.
Venture capital funds In addition to innovation vouchers and public grants which are popular GPS within the projects and across Europe in general,
INTERREG IVC projects have addressed also access to Venture capital (VC) with: SMART+31 o INNOFIN, to improve the working skills of the people working in seed funds INNOHUBS32 o Business Accelerator,
for the promotion of private VC o Business Angel Network to connect private investors to entrepreneurs MINI-EUROPE33 o Financial Engineering for public/private VC o FLIIN
The objective of the mechanism was to stimulate investment in micro-companies in order to improve their products and/or services, facilities, equipment,
and other necessary modifications. The mechanism also aimed to promote investment in developing strategic areas such as quality, new technologies, environment, security and hygiene.
The mechanism is applied through a partnership between ADRAL (the regional development agency), the council and a commercial bank,
With their wide knowledge of the territory and environment they can guide the fund to the most needed areas
This GP is now part of a national investment programme. Young Innovative Enterprise (YIE) Contract (Champagne-ardenne, France) in the PERIA project:
The GP was developed by the Champagne-ardenne Regional Council and addresses the shortage of financial resources of innovative start-ups by supporting them financially for the first three years of their existence through loans.
Furthermore, grants can also be allocated up to a maximum of €30 000 for consulting services (training, advice on intellectual property rights, market research, technology transfer services,
%20report. pdf One of the most relevant Good Practices concerning access to Venture capital is: Financial Engineering (Veneto Region, Italy) in the MINI-EUROPE project:
The practice consists of a synergic set of tools designed to foster investments in innovation in order to:
-Decrease the costs for innovative investments, -Enhance SMES'access to the credit system,-Launch a venture capital fund for start-ups and companies at an early stage.
A well-balanced mix of financial engineering tools, focused on research and innovation, has been set up and launched.
-System of guarantee for innovative investments-Revolving fund for SMES innovative investment-Venture capital and private equity fund In line with the operating programme strategy, the regional authority has launched tenders to select
and moreover, the venture capital fund is based on a reinvestments system. This GP was used to improve financing methodologies in the Észak-Alföld Region, Hungary. 32 for innovation,
Large enterprises provide an innovation mentoring service to smaller ones. This is achieved through the organisation of training sessions on the level of day-to-day business operating.
In addition to practical training, events offer networking opportunities. The Parenthood project approach is based on the following principles:
and responds to the unique circumstances of the commercial and industrial environment. -Group development approach:
It creates a business to business environment in a regional context. It is a flexible but simple concept.
which shows its growing importance in terms of regional (nontechnological) innovation policies. 34 Virtual Enterprises and Organisation Finally,
the PRAI/VINCI GP aimed to promote Virtual Enterprises and Virtual Organisation as an instrument for the creation and managements of clusters leading enterprises to share skills and competencies more easily.
This GP also addresses weaknesses in networking. Examples of GPS in staff recruitment: The Summer Design Office (Sweden) in the MINI-EUROPE project:
while the success of‘Summer Entrepreneur'can almost instantly be measured by the number of new ventures created
This GP was transferred successfully to NW England A unique GP about virtual enterprises PRAI/VINCI (Tuscany, Italy) in the ERIK ACTION project:
VINCI aimed to promote the Virtual Enterprise/Virtual Organisation as an instrument for the creation and management of clusters,
thus strengthening the competitiveness of the main industrial systems in the Tuscan economy. A Virtual Enterprise (VE) is a temporary alliance of enterprises that come together to share skills
or core competencies and resources in order to better respond to business opportunities, and whose cooperation is supported by computer networks.
It is a manifestation of Collaborative Networks and of Virtual Organisation (VO: a productive organisational entity that uses telecommunication tools to enable,
maintain and sustain members'relationships in distributed work environments). The VE/VO was tested particularly in the field of technological innovation and technology transfer,
o I-CREO, brings an expert within each SMES'network to seek new business opportunities o RURCED,
to support cross-border marketing opportunities o World trade center Almere, where all international services are available to stimulate international entrepreneurship and innovation PERIA43:
o International Cooperation Visits o Foreign Trade Fairs It is very interesting to note the GPS that tackle the challenge differently, in such a way as IVEX or ICREO.
insofar as it introduces an expert directly to the supported SMES network to help them find new business opportunities
and bring new business opportunities to fruition, including in export markets. In Valencia the Institute for Small and Medium Industry of the Generalitat Valenciana (IMPIVA),
and promote business opportunities and to gather essential information in order to start up innovation strategies in each of the sectors.
Only the INNOHUBS and the SMART+projects promoted GPS offering, among other services, training courses and consultancy in innovative tools for SMES:
and procure goods and services in international markets. Assistance is provided in two different phases: i) Inception:
Information is provided to companies through a website containing business opportunities, reports on the business environment and selected sectors such as water, energy, construction in 22 countries.
It is focused on facilitating internationalisation opportunities for SMES, and it is a purely transnational initiative,
and real added-value services were deployed at local level for the final beneficiaries. This was a small-scale measure with a good potential reach.
together with Tuscan SMES, Fabrica Ethica has constructed a production process that makes the regional economy more competitive and able to differentiate its production on the basis of material and immaterial quality.
Fabrica Ethica hinges on the respect for workers, consumer rights and the environment. It encourages an approach based on continuous improvements
Universities and enterprises network to increase technology transfer MINI-EUROPE47 o Genomnanotech: Setting up of a technology transfer office
and start-up stages by providing them with advisory and capital services. 45 GPS described in the ERIK ACTION Good Practices Report:
and develop products/services/technologies together. This increases the regional and national competitiveness of the country.
o Enhancing R&d intensive investments in the Észak-Alföld region in cooperation with Innova. This GP was used as a model by Veneto Innovazione to establish a regional technology transfer office (Italy.
The initiative provides financial instruments to support those spinoffs with huge growth potential that are capable of generating new products, technology or services from research results.
and businesses, converting scientific knowledge into economic activity, and leading to the creation of a network for business start-ups and knowledge transfer.
and business plans are received for evaluation. The success of CAMPUS is largely due to collaboration between the agents that integrate the itinerary for the consolidation of a spin off, with Universities and Research Centres.
The main stakeholders involved in the Campus Programme are: IDEA as the manager of the initiative, the Capital Investment and Risk management company of Andalusia INVERCARIA,
which is the first venture capital company at regional level and is owned 100 by IDEA, and collaborating entities composed of the universities of Andalusia, CSIC (Spanish Council for Scientific research), CTAP, FIBA, ISAPA and FSP.
This GP was transferred to the Alentejo region, Portugal, by integrating it into the FAME GP(§3. 2. 1),
This shows good transferability as well as opportunities for bilateral exchange of Good Practice. This type of GP has also been described in the UNICREDS50 project from the Innovation Systems Theme:
cluster internationalisation and cluster creation Most GPS addressed services to support cluster management/development improvement:
The action is open to SMES of all sectors of industry and industryrelated services. The support consists of 4 pillars:
to foster and support the development of productive clusters o Cluster Support Environment Model, focusing on the physical infrastructure requirements of a cluster o Regional Innovation Pole of Western Greece,
to promote innovation processes within the business system PERIA49 o Cluster Management Services, to strengthen cooperation between cluster members MINI-EUROPE particularly focused on GPS related to cluster management improvement with three of them adapted to other regions (annexe 3). Concerning SMART+,sub-projects such as
Cluster Support Environment Model (NW England) in the MINI-EUROPE project: This good practice has been developed based on activity undertaken by the Sixth Framework Programme (CLUNET project.
either require space in an incubator or in managed workspace depending on the technical complexity of the business
It focused on both the foreign investment in firms from local clusters leading to cluster upgrading
http://districtplus. it/Cluster internationalisation via foreign investment: Cluster and Foreign Investment Dovetailing (West midlands, United kingdom) in the NICER sub-project (DISTRICT+project):
this GP aimed at increasing foreign direct investment (FDI) within the local cluster firms by embedding the attraction of FDI into the regional development strategy,
achieved by dovetailing the attraction of FDI with the regional cluster policy. The attraction of FDI was aimed to strengthen existing regionally embedded clusters favouring technology anchoring,
The actions will support energy-related initiatives by further identifying funding opportunities and engaging the involvement and commitment of local and regional authorities to uptake aspects related to the utilisation of renewable energy sources into local and regional development policies.
this GP focused on improving innovation capacity in the wood sector, a sector of great importance for the regional economy.
everybody had the opportunity to discuss their business and any problems or obstacles they were facing.
small-scale (often up to €25k) for provision of external technical services(§3. 2. 1). Very high Venture capital Funds MINI-EUROPE Financial Engineering Financial engineering
involving guarantees, revolving funds and venture capital funds(§3. 2. 1). High Public Grants, Loans and Guaranties PERIA Young Innovative Enterprise Contract Public loans for young innovative enterprises and public grants for consulting services(§3. 2. 1). High Private
/Public Loans ERIK-ACTION FAME Bank loans for innovation projects ensured by guarantees from regional authorities(§3. 2. 1). High Shortage in skills Innovation Management ERIK-ACTION Parenthood project Professionalise SMES management by organising learning networks by
/VINCI Support for the setting up of Virtual Enterprises based on ICT models(§3. 2. 2). Medium Insufficient marketing of innovation Internationalisation PERIA Foreign Trade Fairs International
I-Creo To identify innovation opportunities through a network of professionals working as a think tank(§3. 2. 3). High Corporate Social Responsibility INNOMOT ERIK-ACTION Fabrica Etica Impresa
and cooperation Cluster management MINI-EUROPE Cluster Support Environment Model Clustering physical infrastructure requirements to facilitate growth
and R&d cooperation(§3. 2. 5). Medium Cluster internationalisation DISTRICT+Cluster and Foreign Investment Dovetailing Support for foreign direct investment within cluster firms
Every project detailed at length the various opportunities and obstacles to transferring GPS, as well as all the transfer steps they took.
and assistance for the implementation of external GPS Bilateral meeting or partnering fora/platforms The stakeholders involved,
Indeed, projects mention that the stakeholders wishing to implement an external GP need to have the political and financial independence necessary to do so:
It has been noticed by the projects that the opportunity window for implementing a GP can be very slim.
It also gives an opportunity to showcase some GPS for upscaling. The INTERREG IVC website has a GP database,
which is useful for an initial benchmark, but it is not detailed to the extent of this report (and to the level of the other thematic reports).
With such a tool, regional stakeholders, including those not involved in INTERREG projects would be able to choose GPS of interest to them
the PERIA project focused on GPS from stakeholders of the local innovation systems, Regional Innovation Agencies and Managing Authorities,
or a GP promoting networking opportunities from IPP (Entrepreneurs'day-Promoting Networking and Entrepreneurship). Other themes can also contribute to the innovation capacity of SMES, such as Entrepreneurship or Creative Industries.
Indeed, young SMES need to innovate in order to grow and to find new markets, and their innovation capacity should be included within the companies'Business plans.
Another example from the Creative Industries sector: the Cross Innovation project described a GP related to the hiring of research staff within SMES with public support (Technological Promoters for Innovation) 61, a GP very similar to the PERIA one (Creation of R&d departments.
The Urban Development Network Programme aims to improve the effectiveness of urban development policies. 57 H2020 call in the Innovation in small and medium-sized enterprises work programme:
INNOSUP-5-2014 58 H2020 call in the Innovation in small and medium-sized enterprises work programme:
as URBACT projects are grouped into nine areas of expertise including‘innovation and creativity'and‘human capital and entrepreneurship'.
creating incubators and business networks. Another example is the‘4d Cities'project64, aimed at promoting innovation as well as the knowledge economy in the field of health.
It is interesting to note that the INNOHUBS project from the INTERREG IVC programme involved edge cities.
Support given to enterprise creation very often appears at city level when dealing with incubators and real estate offers, with links between existing companies and start-ups,
but at regional level when dealing with financing (seed capital, venture capital, tax exemption, etc..Therefore it seems relevant to have common tools between the two programmes
and more links when defining the calls for proposals and organising events. Indeed, it can be fairly difficult for project partners (INTERREG
or URBACT) to stay abreast of the GP benchmark that they should do when there are several different programmes and several hundreds of projects.
analyses and scenarios on territorial dynamics and (2) revealing territorial capital and potentials for development of regions and larger territories contributing to European competitiveness, territorial cooperation and a sustainable and balanced development.
and represent the demand for data to support policy development. Therefore, these projects are not about GPS,
This programme provides assistance to stakeholders that are implementing programmes under the European Territorial Cooperation Objective.
and a hub for sharing information and GPS among stakeholders involved in ETC programmes. It is a bridge between these various programmes.
energy and culture & creative industries. 63 http://urbact. eu/en/projects/human-capital-entrepreneurship/fin-urb-act/homepage/64 http://urbact
however, it is somewhat difficult to conduct a benchmark when sources of knowledge are diverse and not known.
Another way to improve synergies would be for the programme to require a benchmark analysis of the GPS that exist
Finally, new stakeholders like associations or Non-governmental organizations are invited to participate in the consortium to make the results more sustainable and inclusive.
guarantees schemes, seed capital and venture capital. We have seen that access to financing is one of the most important barriers impeding innovation in SMES.
will involve SMES but also other kinds of stakeholder (research, education companies, citizens, NGO, etc.)The overarching objective of the Commission is to have 20%of the financing allotted to SMES (in FP7,
to have networking opportunities for networking and to obtain funding. Besides H2020, there are other initiatives like:
COSME is launched a programme by DG Enterprise with a budget of €2. 4billion. It will consist in more than 70%financing tools (loan,
The cluster policy launched by DG Enterprise with support for meta-clusters (13 have been identified) and labelisation.
and to support their stakeholders to take part in other European Programmes (including H2020). Second, regional authorities are supposed to orient their structural funds towards activities and innovations related to their RIS3.
'and the‘innovation capacity of SMES'are crucial for fostering economic growth within local companies allowing for a better'entrepreneurial process of discovery
and stakeholders active in assisting SMES to overcome barriers to innovation. 4. 1 General Recommendations for Local
e g. small scale grants (typically up to €25 000) for the provision of technical services, as addressed in MINI-EUROPE, DISTRICT+and PERIA.
Support regional Venture capital Funds, either public, private (with regional support), or public-private, as addressed in SMART+(through the sub-project Innofin), INNOHUBS, INNOMOT, MINI-EUROPE and DISTRICT+.
with a typical reach of ten beneficiary companies per year for investments of €1 million or higher,
and a return on investment of five years or more. It is important to note that the innovation vouchers are very popular in European Regions,
and networking in order to create virtual enterprises/organisations. Altogether, these Good Practices cover the most important skills necessary to foster
of SMES to help them access external markets for their innovative products, processes or services.
and to help them stay up to date with innovation support services and policies. The RDT Bretagne GP (ERIK ACTION),
They can provide a favourable environment for the innovation of SMES. 4. 3 Recommendations for local & regional policymakers not addressed by the projects We have noticed that some activities that could address‘innovation capacity of SMES'barriers were not
such as peer-to-peer lending services or crowdsourcing (fund-raising for specific projects from individuals, normally using web platforms to reach scale).
The key to crowdfunding lies in the fact that many participants (those that provide a financial contribution) are often emotionally
which appeals to the typical crowdfunding participant. As is the case with tax reliefs or peer-to-peer lending,
few are aware of the possibilities of crowdfunding. It is therefore a promising area for publicly funded projects,
especially to include investments in innovation management (e g. tools, dedicated staff and training. Today, most national tax incentive schemes encourage strictly R&d investments
and activities and rarely cover aspects of non-technological innovation. Tax incentives target established companies that make profit,
and this is precisely the group that might benefit most from increasing their innovation management capacity.
In Poland, the Public Procurement Office was commissioned by the Polish Agency for Enterprise Development to conduct a project on new forms of public procurement including a series of training courses for procurers
A master's degree course at Dublin City university offers public procurement officers the opportunity to obtain professional expertise with regard to innovation procurement.
Enterprise Ireland channels technical advice and market information to contracting authorities helping them to identify types of product
However, this requires a level of investment that is outside the scope of INTERREG IVC projects and is suited better to trans-border
Project acronym Project name Detailed topic DISTRICT+Disseminating Innovative STRATEGIES for Capitalisation of Targeted Good Practices Support to the passing between traditional economy
and competitive economy Erik Action Upgrading the innovation capacity of existing firms Improvement of the capacities to increase innovation within SMES INNOHUBS Innovation Hubs Promotion of innovation in edge cities Innomot
based economy Project acronym Number of partners68 Country of the LP69 ERDF funding (€) Total budget (€) Startin g date Ending date Type
Innovation and the knowledge economy Theme: Innovation, research and technology development TYPE OF INTERVENTION Type of intervention:
, Wroclaw 4 Romania Brasov County Council, Brasov 5 Germany Ministry of Science and Economy Saxony-Anhalt, Magdeburg 6 United kingdom Birmingham Technology Limited
+3 were on the topic of science parks (including their impact on entrepreneurship), and 3 were clearly within the scope of the innovation capacity of SMES.
It addressed policies for attracting foreign direct investment into business clusters as well as policies supporting their internationalisation.
This project aimed to enhance the uptake of eco-innovation in enterprises within the construction and mobility sectors and the transnational transfer of knowledge,
tools and methodologies for linking knowledge providers with enterprises to increase the development or uptake of eco-innovation products and services.
allowing policy practitioners to deliver the right level of support services. Figure 10: DISTRICT+-Content Analysis Shortage of financial resources for innovation Shortages in skills to manage innovation,
Within specific technological sectors, the poles deliver advanced services to strengthen the links between the research and the business systems.
This programme from the School in Business Economics and Law at the University of Gothenburg allows master students in Business Economics to do an internship within a growing SME.
The programme aims to support SMES'R&d investments by providing funding to help companies clarify their R&d investment needs (€3 500) as well as actual R&d funding (€50 000.
(2) to develop a cluster of innovation support services and (3) to favour the establishment of industrial clusters.
including the SHARP-CLOUD environment (the tool used to interconnect the GPS identified in terms of issues tackled, topics,
This SHARP-CLOUD environment is enabling organisations, including SMES, to form and join online communities,
and customers who share common business or technical goals, at reduced costs and with minimal infrastructural investments.
Lately, the growing penetration of cloud technologies opens up further new paths for the provision of new services,
and web/cloud platforms for improved provision of services that could be followed by other projects. 66 Upgrading the innovation capacity of existing firms:
Innovation and the knowledge economy Theme: Innovation, research and technology development TYPE OF INTERVENTION Type of intervention:
Innovation, Rennes 8 Belgium Flemish Government-Enterprise Flanders, Brussels 9 Romania The Southeast Regional Development Agency, Braila 10 Sweden LTC AB
(virtual organisations) Parenthood (Trainings) 68 the PRAI/VINCI is given particularly relevant its focus on Virtual Enterprises
which promotes Corporate Social Responsibility as a means by which SMES can reposition themselves and their innovative products and services in the market,
VINCI aimed to promote the Virtual Enterprise/Virtual Organisation as an instrument for the creation and management of clusters,
thus strengthening the competitiveness of the main industrial systems in the Tuscan economy. A Virtual Enterprise (VE) is a temporary alliance of enterprises that come together to share skills
or core competencies and resources in order to better respond to business opportunities, and whose cooperation is supported by computer networks.
It is a manifestation of Collaborative Networks and of Virtual Organisation (a productive organisational entity that uses telecommunication tools to enable,
maintain and sustain member relationships in distributed work environments). The VE/VO was experimented particularly in the field of technological innovation
The objectives of the mechanism were to stimulate investment in micro companies in order to improve their products and/or services, facilities, equipment,
and other necessary modifications. The mechanism also aimed to promote investment in developing strategic areas such as quality, new technologies, environment, security and hygiene.
The mechanism is applied through a partnership between ADRAL (the regional development agency), the council and a commercial bank and provides companies with loans
With their deep knowledge of the territory and environment they can guide the fund to the most needed areas
Together with Tuscan SMES, Fabrica Ethica has constructed a production process that makes the regional economy more competitive and able to differentiate its production on the basis of material and immaterial quality.
Fabrica Ethica hinges on the respect for workers, consumer rights and the environment. It encourages an approach that is based on continuous improvements
Innovation and the knowledge economy Theme: Innovation, research and technology development TYPE OF INTERVENTION Type of intervention:
building from a group of‘edge cities'(cities on the edge of the major capitals of Europe) grouped under the Edge Cities Network (ECN).
its main focus was on entrepreneurship, with the main aim being to identify and exchange Good Practices relating to the support and promotion of local entrepreneurship and innovative SMES among the partner Edge Cities.
This goal would be achieved through the creation of an‘innohub'in each city, drawing and building on the experience of the Lead Partner City (Nacka)
advising and mentoring resource staffed by local experts from the academia and business environment, available for private individuals as well as businessmen and other entrepreneurs,
Start-up) were oriented clearly entrepreneurship, focused on university students, and therefore lie outside the scope of the present analysis. The other three (Operation, Growth, Collaboration) were related to the innovation capacity of SMES in general,
(Advice on Public Grants) Innovation Race (training) KREO (training) 72 1. Desire to Innovate high level commitment to work strategically with innovation a. Innovation champions engage key stakeholders
dedicated space that connects all the innovation programmes 6. Communication to encourage engagement and participation A a municipality is in a good position to communicate about innovation to all its citizens 7. Evaluation and policy improvement an ongoing process of measurement,
The services are provided by local advisors or hired-in professionals. Regular training sessions also take place in the centre
and market research/business intelligence services are available. Company growth is associated always with product or process innovation.
It offers free services to support SMES in all phases of innovation development. It can go from a simple phone call to personal meetings,
Innovation Stockholm has about 1 000 customers a year, and 20%of them commercialize their innovative idea.
a network that brings together towns and cities on the edge of the major capitals of Europe.
Innovation and the knowledge economy Theme: Innovation, research and technology development TYPE OF INTERVENTION Type of intervention:
so it is important to know how the project has been able to draw the line between innovative‘non-technological'measures and simple modernisation or support to investment initiatives.
Ireland Meath County Enterprise Board, Navan 5 Bulgaria Regional Agency for Entrepreneurship and Innovations Varna (RAPIV
and adoption of new business models in SMES by designing, implementing and managing strategies, policies and tools,
) Shops by hand is a retail trade network created over ten years ago to help its members develop innovating services and products to locals and tourists in their villages.
and procure goods and services in international markets. Assistance is provided in two different phases: i) inception:
Information is provided to companies through a website containing business opportunities, reports on the business environment and selected sectors such as water, energy, construction in 22 countries.
the research centres and the consumers together in order to develop innovative products, services and processes. The food sector always needs to adapt to consumers and social issues (environment, climate and health issues.
The activities carried out by the hub include coaching, internationalization and funding. Mindshake (Navarra, Spain:
Innovation and the knowledge economy Theme: Innovation, research and technology development TYPE OF INTERVENTION Type of intervention:
The project's most visible impact has been in the topic of entrepreneurship, due to the success of the Good Practice Summer Entrepreneur
however harder to measure while success of‘Summer Entrepreneur'can almost instantly be measured by the number of new ventures created
http://interregminieurope. com/76 Annex 3-PERIA Technological Environment Innovation Subsidy (Vouchers) Cluster Supp (Cluster mgmt) I-CREO (Internationalisatio Productive Clusters
and bring new business opportunities to fruition, including in export markets. Genomnanotech (Hungary: The Hungarian government realized that the subsidisation of innovation oriented R&d at universities is very important.
and develop products, services & technologies together. This increases the regional and national competitiveness of the country.
-Enhancing R&d intensive investments in the Észak-Alföld region in cooperation with Innova. Main conclusions and recommendations:
Innovation and the knowledge economy Theme: Innovation, research and technology development TYPE OF INTERVENTION Type of intervention:
and the transformation of knowledge into new and marketable products and services, through the sharing of experiences and good practices, development of joint guidelines and methodologies, amongst Regional Innovation Agencies (RIAS).
Innovation vouchers (4 regions from 3 countries proposed innovation voucher schemes) and other R&d funding opportunities;‘
‘Cluster Management Services'and other networking support programmes, corresponding to the barrier of‘weaknesses in networking';
'Technology transfer services and other SMES/Universities joint R&d collaborative programmes or business cooperation. Furthermore, some of the Good Practices also addressed the Innovation Systems theme (Regional Innovation Scoreboard,
training activities for innovation support stakeholders, coordination of the innovation support stakeholder's actions). As a matter of fact, the partnership's structure was very relevant to Innovation Systems as PERIA paired Regional Authorities and RIAS.
PERIA had a unique focus on the role and impact of RIAS and their policies, on the innovation capacity of local SMES.
a) Defining principles and communication rules; b) Identification of GPS focused on RIAS; c) External evaluation.
Foreign Trade Fairs (Internationalisation) Creation of R&d Depts. New staff) Cluster Mgmt Services (Cluster mgmt) Innovation vouchers Young Innovative Enterprise contract (loans) New
Innovation vouchers from the Innovalis RIA (Aquitaine) to the Veneto Region and Young Innovative Enterprise Contract from the Champagne-ardenne Regional Council was transferred to Valencia via the creation of a new funding instrument.
Young Innovative Enterprise (YIE) Contract (Champagne-ardenne, France: The Good Practice was developed by the Champagne-ardenne Regional Council and addresses the shortage of financial resources of innovative start-ups by supporting them financially for the first 3 years of their existence through loans.
Furthermore, grants can also be allocated to a maximum of €30 000 for consulting services (training, advice on intellectual property rights, market research, technology transfer services,
The innovation vouchers help micro enterprises to start an innovation process by building up a first technological partnership with a service provider.
%It can be used to finance a wide variety of services: technical feasibility studies, tests, product characterization, prototypes, market survey, technical state of the art, modelling,
and first patent registration expenditures. The service provider is paid directly once the company has paid its share.
It is focused on facilitating internationalisation opportunities for SMES, and it is a purely transnational initiative,
and measures for regions wishing to enhance the services provided by their Regional Innovation Agencies.
Innovation and the knowledge economy Theme: Innovation, research and technology development TYPE OF INTERVENTION Type of intervention:
experiences and tools for entrepreneurship, securing financing and offering tools for joint marketing by the SMES of all the European regions taking part in the project.
The Role of Innovative Services in the Tourism Market to Support Regional Development (Smart Tourism:
Support for development of innovative enterprise Support for development of clusters Support for development of cooperation between the research and SME sectors Its objectives and activities covered most of the barriers to innovation affecting SMES,
The SMES were considered always the main stakeholders of the whole process. Good Practice analysis: As SMART+was a mini-programme that managed sub-projects,
as a result of the response to a bottom-up call for proposals open for six topics (Consulting Services for SMES, Cooperation between SME & Research Institutes, Financial services for SMES, Company-based Innovation Management, SME Network
conferences and seminars, organized in cooperation with regional authorities, business environment institutions or entrepreneurs'associations,
and real added-value services were deployed at local level for final beneficiaries. This was a small scale measure with a good potential reach.
This allows for better services to be deployed to a specific group of SMES (e g. to the tourism sector,
Commission recommendation of 6 may 2003.2003/361 on the definition of micro, small and medium-sized enterprise.
Call in the Innovation in Small and Medium-sized Enterprises work programme. 2014. Link. INNOSUP-5 2014:
Call in the Innovation in Small and Medium-sized Enterprises work programme. 2014. Link Innovation and business strategy:
Smart Specialisation the Concept, Knowledge Economists Policy Brief n°9. Knowledge f or Growth Expert Group advising the then Commissioner for Research, Janez Potocnik. 2009.
SME opportunities for EU-US collaboration in Horizon 2020. Information guide from the project Bilat USA 2. 0. Link.
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