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MEMO
SISME Programme : Smart Innovation for SMEs
Rationale : Many small companies are confronted with harsh market conditions. The current
economic crisis has weakened their financial health, especially in industries that are globalizing
rapidly. These changing market conditions force them to look for new ways to differentiate their
products and services or create new businesses. Because they lack the required internal resources,
SME’s need to collaborate with external partners, either industrial or academic, in order to innovate
successfully and reach more profitable positions in the competitive landscape. It is understood that
firms that know how to manage a network of innovation partners can seize new business
opportunities ; they can become key players in growth industries and turn themselves into profitable
companies.
Scope : The SISME programme primarily targets SMEs involved in open innovation projects, that
is to say, collaborative R+D projects involving at least one other company and a research
laboratory. These projects need to be ambitious in scope, answer a nationwide strategic issue
(as well as respond to regional smart specialization). They explicitly need to target new
marketable products or services and, as such, bear the promise for future value and job
creation. Expected projects need to be based on at least 5m€ in R+D spending.
Financial Aid : Financial aids could be granted in the form of subsidies (to address industrial
research) and reimbursable loans (to address experimental development). They will follow the
orientations of the new GBER (general block exemption regulation). An enhanced financial aid could
be granted for trans-border projects, although trans-border projects should not be a requirement to
enter the SISME programme.
The relevancy of the business plan implementing the R+D projects submitted for funding under
SISME should be a key analysis factor. This also helps asserting the ability of the project partners
to reimburse the loans, once the R+D project is completed, as well as contribute to additional
royalty payments based on achieved sales targets.
Procedure : Because it targets time-to-market sensitive SMEs, the SISME programme needs to be
implemented very efficiently. To that end, a “Fast Track” procedure should be implemented under
which no longer than 3 months should separate the presentation of a complete case by a SME from
the signature of the contract granting the public funding. This implies a significant amount of
administrative process streamlining, backed by simple and standardized procedures.
Governance : To achieve the expected level of operational efficiency, as well as manage the
industrial confidentiality that is required when handling such projects, the SISME program should
be implemented mainly at the at the State member level, under guidelines and scrutiny at EU
level.
Sizing : Medium size project could be around 10m€ in financial aid. For France, a target of 15
projects to be funded per year seems to be a reasonable one, leading to an overall funding
requirement of 150m€ per year, and 450m€ for a 3-year period. At EU level, it could be around 2,5
bn for a 3-year period?
Expected leverage : A typical project would include half a dozen partners and represent 20m€ in
spending, half of it being funded by SISME. 5 to 10 years after the end of the R+D project (that is
to say typically 10 to 12 years after the start of the project), it is expected that the sales of the
products and services developed under the R+D project will represent 7 times the total amount of
the R+D project. The portfolio of projects funded under SISME over a 3 year period could therefore
generate up to 2b€ in additional sales.
SISME Programme : Smart Innovation for SMEs
Rationale : Many small companies are confronted with harsh market conditions. The current
economic crisis has weakened their financial health, especially in industries that are globalizing
rapidly. These changing market conditions force them to look for new ways to differentiate their
products and services or create new businesses. Because they lack the required internal resources,
SME’s need to collaborate with external partners, either industrial or academic, in order to innovate
successfully and reach more profitable positions in the competitive landscape. It is understood that
firms that know how to manage a network of innovation partners can seize new business
opportunities ; they can become key players in growth industries and turn themselves into profitable
companies.
Scope : The SISME programme primarily targets SMEs involved in open innovation projects, that
is to say, collaborative R+D projects involving at least one other company and a research
laboratory. These projects need to be ambitious in scope, answer a nationwide strategic issue
(as well as respond to regional smart specialization). They explicitly need to target new
marketable products or services and, as such, bear the promise for future value and job
creation. Expected projects need to be based on at least 5m€ in R+D spending.
Financial Aid : Financial aids could be granted in the form of subsidies (to address industrial
research) and reimbursable loans (to address experimental development). They will follow the
orientations of the new GBER (general block exemption regulation). An enhanced financial aid could
be granted for trans-border projects, although trans-border projects should not be a requirement to
enter the SISME programme.
The relevancy of the business plan implementing the R+D projects submitted for funding under
SISME should be a key analysis factor. This also helps asserting the ability of the project partners
to reimburse the loans, once the R+D project is completed, as well as contribute to additional
royalty payments based on achieved sales targets.
Procedure : Because it targets time-to-market sensitive SMEs, the SISME programme needs to be
implemented very efficiently. To that end, a “Fast Track” procedure should be implemented under
which no longer than 3 months should separate the presentation of a complete case by a SME from
the signature of the contract granting the public funding. This implies a significant amount of
administrative process streamlining, backed by simple and standardized procedures.
Governance : To achieve the expected level of operational efficiency, as well as manage the
industrial confidentiality that is required when handling such projects, the SISME program should
be implemented mainly at the at the State member level, under guidelines and scrutiny at EU
level.
Sizing : Medium size project could be around 10m€ in financial aid. For France, a target of 15
projects to be funded per year seems to be a reasonable one, leading to an overall funding
requirement of 150m€ per year, and 450m€ for a 3-year period. At EU level, it could be around 2,5
bn for a 3-year period?
Expected leverage : A typical project would include half a dozen partners and represent 20m€ in
spending, half of it being funded by SISME. 5 to 10 years after the end of the R+D project (that is
to say typically 10 to 12 years after the start of the project), it is expected that the sales of the
products and services developed under the R+D project will represent 7 times the total amount of
the R+D project. The portfolio of projects funded under SISME over a 3 year period could therefore
generate up to 2b€ in additional sales.
