Brussels, 05 Apr 2005
Small and medium-sized enterprises (SMEs) represent 99 per cent of the total number of companies in the EU and as such should be given greater attention in the Seventh Framework Programme (FP7), says UEAPME, the European Association for small and medium sized enterprises and craft.
In a position paper released ahead of the European Commission's proposal on FP7, due to be published on 6 April, UEAPME states that if the Barcelona objective of increasing research investment to three per cent of GDP is to be achieved, the research and development (R&D) expenditure of SMEs must be increased. According to UEAPME, the R&D budget of small US firms is on average seven or eight times greater than that of European SMEs, an imbalance that must be corrected if Europe is to catch up with the US.
'The Commission must pay more than just lip service to these aims in FP7 and tailor programmes to the needs of small businesses,' says Hans-Werner Müller, UEAPME Secretary General, implying that an increased budget from the EU for SMEs would stimulate further R&D investment by SMEs themselves.
Under the Sixth Framework Programme (FP6), just 22 per cent of SME proposals considered to be of a 'very high standard' received funding, whereas 50 per cent of total projects of a 'very high standard' were funded. UEAPME regrets this imbalance and points out that 'this is the result not of a lack of SME funds in general, but because of the allocation of 80 per cent of the SME budget towards low demand new instruments and only 20 per cent to high-demand SME programmes.'
Furthermore, states UEAPME, the new instruments are too big for SMEs and efforts should be made towards small-scale projects. From an SME perspective, the CRAFT, Collective Research, and Economic and Technical Intelligence (ETI) programmes fit needs perfectly. The take innovative approach, make available an appropriate, medium-sized budget, limit the number of participants, and have a medium-term duration.
UEAPME therefore proposes to include a seventh objective: 'SME and R&D/ Innovation: the motor for economic development', which would make more use of the 'bottom-up' approach of SME specific programmes. 'Such an SME objective is preferred to adding-up SME elements to each of the six other objectives, as it would form a consistent and clear picture to improve the design of the framework,' states the UEAPME report.
Under this objective, both SME specific programmes and participation in new instruments would be financed, using a more realistic and demand-driven budget division than the present 80:20 per cent. UEAPME also calls for an enlarged budget for SME specific programmes of at least one billion euro with an expansion of the highly successful CRAFT and Collective Research programmes and the development of a dissemination programme based on the present ETI scheme. Furthermore, UEAPME proposes the re-introduction of the Exploratory Awards scheme used under the Fifth Framework Programme (FP5).
Finally, in order to improve the operation of the Framework Programme, UEAPME recommends setting up a central registration system containing key data on participants. This, it is believed, would reduce the administrative burden for participants and the Commission.
In addition, adds UEAPME, the selection period from submission of a project to the signing of a contract has to be reduced significantly to a maximum of six months. At present, the process typically takes over a year. 'This acts as a disincentive for small firms with limited resources,' states UEAPME. 'The process should be simplified. There should be greater use of lump sums at the initial project proposal stage, which would help to reduce the timeframe of the approval procedure.'
'Commissioner Potocnik has committed to increasing the involvement of SMEs in the next framework programme. Given the importance of R&D to growth generation, it is vital for the EU economy that the Commission delivers on this commitment in the proposal for FP7 this week,' concludes Mr Müller. To read the full UEAPME position paper, please visit: http:/ /www.ueapme.com/docs/pos_papers/20 05/FP7_PositionPaper.doc
To follow the debate on FP7, please visit: http://www.cordis.lu/fp7/