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partnership-agreement-hungary-summary_en.pdf

EUROPEAN COMMISSION Brussels, 26 august 2014 Summary of the Partnership Agreement for Hungary, 2014-2020 Overall information The Partnership Agreement (PA) covers five funds:

the European Regional Development Fund (ERDF), the Cohesion Fund (CF), the European Social Fund (ESF), the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime

Policies in support of high growth innovative smes.pdf

Validated Policy Briefs shall be published on the INNO-Grips website. Acknowledgements We would like to thank the experts who reviewed the exposé and interim draft of this Policy Brief:

Diversification and clustering of SMES for future growth...74 5. 5 Israel: Envisaged targeted support for high-growth sectors and SMES...

78 6 Findings about company (non-)growth from the IW Future Panel...81 6. 1 Methodological explanations...

Questions about (non-)growth in IW Future Panel...106 Annex 3: Worldwide policy initiatives for high-growth SMES...

Section 2. 1) Consistent statistical data is missing Comparable international data about high-growth SMES are missing,

which data were available. A Eurobarometer study found that in several European countries the share of high-growth firms in the three years before 2009 was larger than 20%.

The strategic line of SME policy discussion in 2010 gravitated around the diversification and clustering of SME business activities.

Clustering policy initiatives focus on promoting local clusters, such as regional linkages among manufacturers, and university industry collaborations.

Section 5. 5.)Findings from the IW Future Panel According to the IW Future Panel, a survey of several thousand German enterprises,

For example, while the US are home to companies such as Google, Microsoft and Amazon which are all fairly young

in order to become the Googles, Microsofts or Amazons of tomorrow. The European commission's Innovation Union Communication of October 2010

including key findings from recent literature, statistical data, theoretical ideas and empirical results. Chapter 4 analyses current policy developments, focusing on European and national policy approaches as well as specific issues related to entrepreneurship, access to finance, internationalisation and industry focus.

it is used also here. 7 See Moore (1998). 8 See the results of a Flash Eurobarometer survey in Gallup Organisation (2009), p. 5. Policies for high-growth innovative SMES v1. 6

Matrix of main data sources for INNO-Grips Policy Brief 2 Quantitative focus Qualitative focus Primary data collection Representative enterprise survey (CATI

) INNO-Grips case studies and case briefs Interviews with individual experts Expert survey Secondary data analysis OECD

and Eurostat databases Data from industry associations Existing case studies from various sources Literature evaluation (desk research) 12 Research and development do not necessarily have to take place,

Internet research with key search words such as high-growth enterprises, gazelles. Data from various secondary sources is used here not only for exhibiting numbers of high-growth enterprises but also for other indicators such as venture capital provision.

Primary data collection The description of examples of successful support of high-growth innovative companies is a key element of this Policy Brief.

Chapter 5 includes three extended case studies about policies for high-growth SMES in South korea Singapore and Canada as well as overviews of general SME policies in Japan and Israel.

IW Future Panel) in early 2011. This panel includes several thousand German companies that replied to a written questionnaire providing information about their business activity and impacts of current economic developments.

The 2011 survey deals with innovation issues and is suited thus very well for questions about innovation-related high growth.

issues of human capital, access to specialised technology and business consulting, R&d clustering, technology scouting to identify R&d projects with commercial potential, technology transfer,

However, the study concludes that from the nature of the data collected and the limited number of examples of relevant policies precluded the formulation of any specific recommendations for Commission action,

unsatisfactory statistical data From a scientific point of view data availability is always unsatisfactory, but measurement of entrepreneurial activity, including high-growth SMES,

Internationally comparable data are scarce. The most notable initiative to make international data on entrepreneurship available may be the joint OECD-Eurostat Entrepreneurship Indicators Programme (EIP) launched in 2006.

Some key findings from the EIP are presented in the following, supplemented by data from other sources.

OECD The EIP provides data about high-growth enterprises which may be taken as a proxy for data about highgrowth innovative SMES.

Data are available for 15 countries divided by manufacturing and services. 19 The most recent data available at the time of authoring this Policy Brief were for 2006.

For this year, Bulgaria was on top for both manufacturing (8. 6%high-growth enterprises)

and services (8. 2%)see Exhibit 4. The following countries were Italy (8%/7. 9%),Estonia (7. 1%/5. 6),

%Brazil (6. 9%/5%)and the USA (5. 9%/19 See OECD (2009), pp. 28-31.

which data about high-growth enterprises were available, including Hungary, Sweden Spain, Norway, Luxembourg, Finland, and Romania.

Among the countries for which data are performed available, Bulgaria best (2. 3%gazelles in manufacturing, 1. 9%in services).

Eurobarometer A Eurobarometer survey in 2009 of more than 9, 000 companies provided data for all EU-27 countries. 20 As the denominator

and the data source is different from the OECD data, both datasets cannot be compared. It found that 12%of the companies had grown by over 20%on average per year in the previous three years, in terms of full-time employment or full-time equivalents.

063 companies were interviewed by telephone in the EU, Croatia, Iceland and Norway. Eligible respondents were chief executive officers or chief financial officers.

Exhibit 3-3 shows the related data. 21 See Veugelers (2009), p. 2. The largest US companies were taken from the Financial times Global 500 of 2007, the largest European companies from the EU-IPTS Top 1000 of 2007,

Firm-level data was provided by the Zentrum für Europäische Wirtschaftsforschung (ZEW Mannheim, Germany. Policies for high-growth innovative SMES v1. 6 21 Exhibit 3-3:

Illustrative examples mentioned in the Bruegel report are founded Microsoft 1975, the US'fourth largest R&d spender), Amgen (1980, tenth largest in R&d) and Cisco (1984, 12th in R&d.

and contraction in Europe and the US, drawing from a purpose-built database of business growth in the period from 2002-2005 with individual records for six million businesses.

Companies like Microsoft Genetech, Google and Facebook not only grew rapidly but also stimu-28 For recent studies on the issue of determinants of firm growth see Moreno/Casillas (2008);

Harms/Scillitoe (2010; Stam (2010; Wiklund/Patzelt/Shepherd (2009). 29 See also Janczak/Bares (2010) for a recent study about characteristics and strategies of gazelles in France.

A population survey of the Global Entrepreneurship Monitor 2010 in 21 innovation-oriented countries asked

for high-growth innovative SMES v1. 6 27 A Kauffmann Institute study of the US economy in 2010 with data for 2007 contained 5. 5 million firms.

Empirical tests with two longitudinal data sets found that the profitable low growth firms are both more likely to reach the desirable state of high growth

and 26 by GIF2 at an average cost of 600,000 euro. 61 No valid data for jobs created,

Further European countries with such policies include Estonia (Estonian Development Fund), France (Gazelles Programme, France Gazelles fund), Ireland (High tech Startup programme), Netherlands (Growth Accelerator Groeiversneller),

/69 See Symbion homepage, English version, at http://symbion. dk/index. php? id=815. Policies for high-growth innovative SMES v1. 6 33 management team,

but the companies tend to be knowledge-intensive, for example in environmental technology, biotechnology, power efficiency and mobile information technology.

It also tracks baseline data for its performance, such as employees, revenue growth and number of customers.

p. 10.75 See https://www. efvf2011. b2bmatchmaking. com/p index. php. 76 See http://www. tem. fi/?

The core of the team is made up of the account manager from the regional office in charge and an advisor from the organisation abroad.

and policies to support coaching deserve special attention. 84 Findings from the IW Future Panel do

when its core technology becomes obsolete within a few years. Management often does not understand how to make the transition from customised products for pilot customers to scalable products for larger markets.

see http://ventureconnection. sfu. ca/index. php?//grow/nrc irap industry technology advisors ita/./88 Directly translated: High tech Start-up Funds;

Furthermore, findings from the IW Future Panel (see Section 6. 2) indicate that difficult access to finance is not a primary reason for non-growth of companies at least in Germany.

analyses of growth finance can hardly be based on solid data. Access to finance for entrepreneurs and young businesses, both debt and equity capital

is one area where there is scarce availability of comparable data across countries; often reliable data are not even available at the country level. 96 92 Definition of the European Venture capital Association,

see http://www. evca. eu/toolbox/glossary. aspx? id=982.93 See Deutsche bank Research (2010). 94 See Gallup (2009),

The Eurobarometer survey quoted in the following provides insightful data and it is based on almost 10,000 interviews,

the European commission established a permanent SME Finance Forum to monitor 98 Murray/Hyytinen/Maula (2009),

Website informing entrepreneurs about where to seek finance for certain stages in the life of an enterprise in a certain region may be helpful

and growth of EU's innovative companies confirms this. 119 Analysing empirical data for EU companies,

Policies for high-growth innovative SMES v1. 6 45 Brief. 124 Finally, findings from the IW Future Panel (see Section 6. 2 of this Policy Brief) support the importance

development and innovation. 125 The relationship between internationalisation and clustering may be of particular interest, since local clusters are seen often as breeding grounds for innovation.

and national level. 126 One could assume that clustering and internationalisation mutually reinforce each other. 127 However,

While the determinants of success of clusters and the relationship between clustering and internationalisation cannot be dealt with in depth in this Policy Brief,

for example for operating the website and search tool, for promotional and informational local events as well as for advisory services e g. about EU 124 See for example the statements from Gabriella Cattaneo in the workshop proceedings,

and practical tools in Europe is also considering the links between clustering and internationalisation; see http://www. proinno-europe. eu/tactics. 128 Dahl Fitjar/Rodríguez-Pose (2011),

EEN provides an internet-based business platform to facilitate companies'networking activities. However, SMES'deeper participation in such platforms may be limited for several reasons:

but the companies tend to be knowledge-intensive, for example in environmental technology, biotechnology, power efficiency and mobile information technology.

In Japanese government's SME policies, the strategic line of discussion gravitates around the diversification and clustering of SME business activities.

Websites (English versions to ease readers'follow-up Korean versions were used for this case study: Korea Credit Guarantee Fund (KODIT:

SPRING (Standards, Productivity and Innovation for Growth) Singapore and A*STAR with a sub-programme named Get-Up (Growing Enterprises through Technology Upgrade.

SPRING will co-fund these SMES to train the graduates to run core and expanding operations of the company.

Get-Up Programme with A*STAR The GET-Up programme, short for Growing Enterprises through Technology Upgrade,

of Micro United Network Micro United Network Pte Ltd (http://www. microunited. com. sg) provides voice, video and data through internet protocol product distribution

The company was incorporated in 1999 in collaboration with an India-based technology company that had years of experience in running niche distribution for internet-based products and solutions.

2006) note about the rise of Asian countries in high technology production, the availability of a knowledge-intensive professional service firms that assist start-ups in outsourcing their non-core work plays a significant role in the growth of high

Websites: Agency for Science, Technology and Research (A*STAR: http://www. a-star. edu. sg/.

Superior skills, Quality Jobs, Higher Incomes<http://www. mof. gov. sg/budget 2010/download/FY2010 FLYERS FOR BUSINESSES. pdf>Singapore's National Day Rally 2010, Part 2:

http://blogs. straitstimes. com/2010/8/29/national-day-rally-part-2. SPRING Singapore http://www. spring. gov. sg/.

The Rise of Asia in High tech"."Stanford, CA: Stanford university Press, 2006. Policies for high-growth innovative SMES v1. 6 68 5. 3 Canada and US:

which data are available when a combination of venture capital 150 See Cooper (2009). Policies for high-growth innovative SMES v1. 6 69 and IRAP assistance is available,

Gazelles are defined as high growth firms which within a five-year period double in size to a minimum of 20 employees or to 10 million Canadian dollars (CAD) in sales or both.

The VC market in Canada collapsed from a peak of 5. 9 billion CAD placed in 2000 to just over 1 billion CAD in each of the past three years. 151 Many technology-based

In Canada total bio investments increased from 210 million CAD in 2009 to 300 million in 2010.154 Description of Canadian capital Financing Market Business Angels Angel financing is dispersed widely across most regions

According to the Canadian Angel Investment Network their members are currently investing over CAD 3 billion in Canadian businesses each year. 155 Venture capital:

VC investments by the VC community in Canada have decreased from a peak of CAD 5. 9 billion dollars in 2000 to just over CAD one billion dollars for each of the past three years (2008-2010.

Indeed for placements of over CAD 5 million dollars over 75%of the funds come from foreign sources.

the total foreign sources have dropped from 41%in 2007 to 26%in 2008 with CAD 549 million dollars to only 22%of the 151 CVCA (2009)

Policies for high-growth innovative SMES v1. 6 70 CAD 334 million dollars in 2nd quarter 2009.

but there is no data available to measure the investment performance of this group of funds.

However, a study by Cooper of 2, 240 firms which had received venture capital (CAD 18 billion dollars) between 1995 and 2005 showed much higher levels of gazelles creation at 12%in the 1, 500 technology based firms,

%For firms (193) known to have received VC funding CAD 1. 6 billion dollars including the 156 Source:

Even though they had the data, the review did not assess the presence of high growth firms

An Assessment of the Small Business Innovation Research Program at http://www. nap. edu/catalog. php?

http://www. nap. edu/openbook. php? record id=11963&page=65. Policies for high-growth innovative SMES v1. 6 72 high tech firms is leading to increased numbers of foreign takeovers and strategic alliances,

thereby weakening the potential for future job growth in Canada. VC financed firms provide greater economic benefits Hellmann et al at the University of British columbia undertook an international study of the performance of 21,852 firms based in 25 countries including Canada, the US and several Asian ones.

http://www. cvca. ca/files/Downloads/Government involvement in the vc industry intl comparisons may 2010. pdf. 163 See Hellmann 2005 study. Policies for high-growth innovative SMES v1. 6 73 ticular interest in the richest program.

If Europe plans to put programming into place for which SMES will be expected to apply, the regulations regarding eligibility based upon ownership will need to be clarified from the outset.

http://www. cvca. ca/files/Downloads/CVCA VC IMPACT STUDY JAN 2009 FINAL ENGLISH. pdf 2010 October. CVCA (2010) and Kirk Falconer (2010) Thompson-Reuters. See http://www. cvca. ca/files/News/CVCA Q4 2010 VC PRESS RELEASE FINAL FEB 16 2011. pdf and http://www. canadavc. com/files

Duruflé, G, Government involvement in the venture capital industry International comparisons. http://www. cvca. ca/files/Downloads/Government involvement in the vc industry intl comparisons may 20 10. pdf. Gompers/Lerner (2004:

The Venture capital Cycle, Chapter 13, http://www. google. ca/#hl=en&biw=958&bih=444&q=lerner+impact+sbir&aq=f&aqi=&aql=&oq=&gs rfai=&fp

Awards-U s. Small Business Administration Tech-Net Database; Responses-NRC Phase II Survey and NIH Phase II Survey and updates. http://www. ncbi. nlm. nih. gov/bookshelf/br. fcgi?

Available at http://www. nap. edu/openbook. php? record id=11963&page=65. Websites: Ontario programs: http://www. ovcf. com/Quebec programs:

http://www. newswire. ca/en/releases/archive/March2010/03/c6611. html BC Tax credit: web article:

http://mikevolker. com/2010/09/b-c-investment-tax-credit-program/Policies for high-growth innovative SMES v1. 6 74 5. 4 Japan:

Diversification and clustering of SMES for future growth Summary Although the fall out from the 2008 Lehman brothers collapse continues to skew the Japanese government's SME (small and medium-sized enterprise) policies towards finance and employment safety net issues,

the strategic line of discussion in 2010 gravitates around the diversification and clustering of SME business activities.

Clustering policy initiatives focus on promoting (1) local clusters, such as regional linkages among small and medium manufacturers,

Through these overlapping diversification and clustering policy initiatives, the government's 2009 New Growth Strategy (Basic Policies) Toward a Radiant Japan identifies SMES as an engine for future high economic growth.

Third, the government will create platforms for growth in the areas of science, technology and information technology, employment and human resources, and financing.

1) technology development and IT (information technology) adoption and (2) new business activities. Further policy fields Further important fields of current Japanese SME policy include the following:

According to the OCS data most of the grants are provided to high growth SMES, though the OCS makes great efforts to increase the participation of firms belonging to traditional sectors.

2) projects to upgrade traditional industry, aimed at developing new technology or products;(3) cooperation with international enterprises, aimed at developing joint technological projects;(

The companies that received Magneton support come from different high tech fields, such as communication, biotech, software, new materials.

Websites: Ministry of Industry, Trade and Labor (MOIT), http://www. moit. gov. il. Office of the Chief Scientist (OCS), http://www. moit. gov. il/Cmstamat/Rsrc/Madaanenglish/Madaanenglish. html. MATIMOP-the Israeli Industry Center for R&d, http

www. it. themarker. com. Policies for high-growth innovative SMES v1. 6 81 6 Findings about company (non-)growth from the IW Future Panel 6

. 1 Methodological explanations About the IW Future Panel A specific set of questions about reasons for growth and non-growth of SMES, commissioned by the INNOGRIPS, was included in the 16th wave of the IW-Zukunftspanel (IW

Future Panel) of IW Consult, the consulting branch of the Institut der deutschen Wirtschaft (IW, Institute for the German Economy).

164 The IW Future Panel is a survey of German enterprises which was established in 2005 with the objective of identifying trends and challenges of structural changes of the economy.

Companies in the IW Future Panel are more innovative and more export-oriented than the average of German companies.

Breakdowns In all surveys of the IW Future Panel the enterprises are asked about their growth by employment and turnover;

Other items with outstandingly high percentages may confirm this interpretation of the data. 83%of the highgrowth companies said that good coaching by external consultants was no reason for growth.

Reasons for high growth of companies in the IW Future Panel 31 49 71 0 19 27 43 25 51 31 20 1720 32

Reasons for non-growth of companies in the IW Future Panel 39 10 40 15 21 11 35 26 20 6 24 45 30

Reasons for growth of young high-growth enterprises (gazelles) in the IW Future Panel 23 55 82 0 32 27 42 24 55 27

Improving the data base for company finance A further issue is the data base on which policies to enhance finance can build.

Access to finance for entrepreneurs is an area with scarce comparable data across countries (see section 4. 2. 2)

the European commission could seek to further improve the development of related databases. 180 See European commission (2010), p. 14-15;

Here again SMES have to scan the EEN technology database or to subscribe for the EEN technology e-alert system by using a keyword based profile.

and technologies from the EEN database ranked by relevance. This semantic based search concept would offer to the SME the opportunity to conduct a quick scan of relevant topics, short descriptions and related EEN technologies in a very efficient way.

The access to meta-data would be straightforward. It would empower the user to discover new knowledge

and open opportunities without having to process extensive data and information from various sources. In this way, the EEN could contribute more to SME growth and possibly high growth.

Since these factors and their interplay are difficult to monitor, policies favouring specific types of companies are prone to producing more economic damage than benefit. 189 7. 4 Concluding overview Ten policy implications Research for this Policy Brief leads

Global Entrepreneurship Monitor 2007 Global Report on High-Growth Entrepreneurship. GERA: London. Available at http://www. gemconsortium. org/download. asp?

fid=606. Autio, Erkko (2007b: Support Initiatives for High-Growth SMES: Lessons Learned and Recommendations for Improved Policies.

Global Entrepreneurship Monitor (GEM) Länderbericht Deutschland. Hannover/Nuremburg. Policies for high-growth innovative SMES v1. 6 98 Centre for Strategy and Evaluation Services;

Putting the horse in front of the cart? In: Proceedings Max Planck Institute Schloss Ringberg Conference, pp. 1-46, Tegernsee, Germany.

Available at http://www. proinno-europe. eu/sites/default/files/IG-WS2 HIGHGROWTH SMES SUMMARY V1. 0. pdf. Janczak, Sergio;

and interpreting innovation data. The Measurement of Scientific and Technological Activities. Third edition. A joint publication of OECD and Eurostat.

Download at http://www. oseo. fr/oseo/oseo in english2 (accessed 19 october 2010. Parker, Simon C.;Storey, David J.,Witteloostuijn Arjen van (2005:

Available at http://www. proinnoeurope. eu/sites/default/files/newsroom/2010/12/Innogripsii report barriers. to . internationalisation. a nd . growth 0. pdf. Shane, Scott (2009:

Websites Allan Martel Consulting: http://www. allanmartelconsulting. com, last accessed May 2011. Autorola: http://www. autorola. co. uk, last accessed May 2011.

https://www. efvf2011. b2bmatchmaking. com/p index. php, last accessed May 2011. Exponential. Training & Assessment, EU Projects:

ISI Web of Knowledge: http://www. isiwebofknowledge. com, last accessed May 2011. Korea Eximbank: http://www. koreaexim. go. kr/en2/index. jsp,

Singapore Agency for Science Technology and Research, Growing Enterprises through Technology Upgrade (GET UP: http://www. astar. edu. sg/Industry/Programmesforsmes/GETUPPROGRAMME/tabid/220/Default. aspx, last accessed May 2011.

Questions about (non-)growth in IW Future Panel The following questions were included in the IW Zukunftspanel (IW Future Panel) in spring 2011.194 Note:

no computer-assisted telephone interviews. Nr. Basis Question/Information Answers 1<Filter for companies growing 20

Country Name of activity, organisation Objectives and main characteristics Website Focus level EU Denmark Accelerace, by Symbion Accelerace is a practical, fast-action and internationally focused business

/http://symbion. dk/sub sites/accelerace/engli sh/**Estonia Arengufond The Development Fund performs risk capital investments into the starting

and financial support to French SMES. http://www. oseo. fr/os eo/oseo in english2**Ireland High Potential Start-up (HPSU) Funding by Enter-The HPSU offers a range of supports for start-up

Policies in support of high-growth innovative SMEs - EU - Stefan Lilischkis.pdf