Introduction and Methodology

1. Approach, methods and tools for the analysis

The present report presents the main outcomes from the analysis performed under the Innovation Capacity of SMEs theme and focuses on the following projects:

Table 1 – List of Core Projects
Smart+ (
District+ (
InnoHubs (
InnoMot (
Mini-Europe (
Peria (
Erik Action (

The objective of the thematic capitalisation is to better exploit the knowledge generated by projects working on a similar theme for the benefit of local and regional authorities in Europe, as well as to increase the visibility of the programme and its impact on the policymaking process at local, regional, national and European levels.

To fulfill the objectives of the mission, the Experts answer the following questions:

Table 2 – Capitalisation questions
1. What are the common features/ challenges / difficulties/ successes among the projects of the same topic?
2. In particular, do these projects have similar good practices in common? If yes, what are these good practices? Are they easily transferable to other regions? Should they be further disseminated for the benefit of other regions?
3. Did the partner regions find different solutions to the same issue?
4. Does one region have a particularly interesting or innovative practice or policy identified that would deserve to be made available to other regions in Europe?
5. Has a project achieved a particular interesting result (e.g. in terms of transferring good practices or improving policies) that could be useful for the other projects in the same topic and more generally for other local/regional authorities dealing with that topic?
6. Do the participating regions identify core pre-requisites for a successful implementation of their regional policy in the domain tackled?
7. Depending on the expert’s knowledge, are there any possible synergies between the projects concerned and initiatives undertaken in other EU programmes?
8. Based on the findings of the analysis, can specific recommendations be provided to individual projects that may not be aware of important practices/ policies or which may be less advanced and experienced than other projects?
9. Based on the answers to all the above questions, which overall lessons learnt/ policy recommendations can be drawn that could be useful for policymakers at regional, national and/or European levels?

The underlining question guiding the present thematic study relates to the Innovation Capacity of SMEs – or how regions can cooperate under INTERREG IVC to create better support policies and framework conditions for helping companies and, in particular, Small and Medium-sized Enterprises (SMEs) to unlock their innovation potential and improve their competitiveness. With this question in mind, the study has reviewed seven projects and screened available information (reports, web-sites, and other deliverables). Contact was made with the coordinators and/or partners when found relevant. The goal in each case has been to identify and highlight practices that enhance technology transfer and business innovation support to companies, and in particular to SMEs. The initial analysis of the projects’ focuses and strategies has been based on:

  • the project specific documentation received from the JTS at the start of the task;
  • contacts with projects, via email or telephone;
  • other information on the projects gathered from the web-sites or directly from the projects;
  • thorough desk research conducted on the basis of the sources of information identified by the expert

This analysis has been applied to the screened projects leading to an initial profile of the projects, which are further explored in the next phase, and which, to the maximum possible extent, consider:

  • context analysis (regional, national and European);
  • project objectives;
  • partners’ expectations;
  • results and achievements generated within the project;
  • implementation and exploitation channels;
  • means and resources available;
  • market conditions and competition;

Once the analysis of the project strategy is outlined and validated the experts carry out a broader benchmark of the project, both against the other projects from the same subtheme and the wider range of European and International projects in the field. The following stage focuses on developing the final report of the study, building on the data and early analysis carried out in the previous stage in order to extract conclusions on the added-value, EU and regional relevance of the transnational cooperation and its outputs and finally makes suggestions and recommendations for future action. The main methodological steps are presented below:

Figure N.º 1 – Methodology for Performing Project Analysis

The results of the analysis are presented in Section 4, while Section 2 reviews the framework of the analysis in terms of the content and challenges posed by the Innovation Capacity of SMEs theme. Before that, the next sub-section briefly reviews definitions of the most relevant theme-specific terms.

2. Definition of theme-specific terms

In order to facilitate the reading of this report, this sub-section briefly presents and develops the most relevant theme-specific terms.

Table 3 – Definitions of theme-specific terms
Innovation:This analysis uses the broader definition of innovation adopted by the OECD (1). There is growing recognition that innovation encompasses a wide range of activities in addition to R&D, such as organisational change, training, testing, marketing and design. The latest (third, from 2005) edition of the Oslo Manual defines innovation as the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations.  Innovation, thus defined, is clearly a much broader notion than R&D and is therefore influenced by a wide range of factors, some of which can be influenced by policy, particularly including regional policy such as INTERREG IVC projects. Innovation can occur in any sector of the economy, including government services such as health or education. However, in the current thematic analysis, the focus is solely on business innovation, and specifically on Small and Medium-sized Enterprises (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 most commonly taken to mean everything from micro-companies (of only 1 employee) to large companies employing several hundred people and with a turnover of millions of Euros – basically only excluding multinational companies or large industrial conglomerates. Formally, the most common definition of SME is that of the European Commission (2), which defines Small companies as those with fewer than 50 employees and an annual turnover below €10 Million and Medium-sized companies as those with fewer than 250 employees and an annual turnover below €50 million. The same recommendation defines micro-companies as those with fewer than 10 employees and a turnover below €2 million.
In this study, as the focus of the assessment of results and actions is on the side of the regional policymakers (the project partners) and not on the final beneficiaries (SMEs), we have followed the ‘most common’ definition, without a rigorous segmentation of final beneficiaries, excluding measures specifically targeted to micro-companies (that 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.
R&DWhile it is mentioned above that the innovation concept is a much broader notion than Research & Development, this is still a key aspect of the innovation capacity of firms and also of SMEs. For the purposes of this study, the definition of R&D proposed by the US Department of Defense (DOD) (3) that includes Basic Research, Applied Research and Advanced Technology Development, including in this last activity the stages of ‘Demonstration and Validation’, ‘Engineering and Manufacturing Development’, ‘Operational System Development’, ‘Developmental Test and Evaluation’, ‘Operational Test and Evaluation’ and ‘R&D Management Support’, which are common practice in most firms, is used.
IPR:Economies rely increasingly on knowledge-based competitiveness, and innovation is increasingly non-technological in nature. Against this backdrop, Intellectual Property Rights (IPR) – which allow for the appropriation of knowledge-based assets – are a topic SMEs have to deal with much more than in the past. According to the definition of the World Intellectual Property Organization (WIPO) (4), Intellectual property (IP) refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce. IP is divided into two categories:  Industrial property, which is the most relevant for SMEs and includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and Copyright, which includes literary and artistic works and is not relevant for the present study.
PPI:Public Procurement of Innovation (PPI) has been regarded for a long time as an important driver of innovation and is currently re-emerging as the most sought after instrument of demand-side innovation policies in Europe, with a particular impact on SMEs. It is therefore an instrument of the foremost importance for this study, in each of its two dimensions – as defined by Charles Edquist (5), and which are:
Direct PPI is when the procuring organisation is also the end-user of the product resulting from the procurement. The buying agency simply uses its own demand or need to influence or induce innovation; this type of PPI includes the procurement undertaken to meet the (‘mission’) needs of the public agencies themselves. However the resulting product is often also diffused to other users. Hence, innovations resulting from PPI can be useful for the performing agencies, as well as for society as a whole.
Catalytic PPI is when the procuring agency serves as a catalyst, coordinator and technical resource for the benefit of end-users. The needs are located ‘outside’ the public agency acting as the ‘buyer’. Hence, the public agency aims to procure new products on behalf of other actors. It acts to catalyze the development of innovations for broader public use and not for directly supporting the mission of the agency.
Innovation Funding:Innovation funding is a core aspect of SME policies. Within this study, we refer to Innovation Funding in its broad sense, which encompasses both public funding sources (such as grants and subsidies for innovation activities granted by public agencies) and private financial instruments to give SMEs access to finance including ‘equity’ and ‘debt’ financing, as well as novel instruments such as crowdfunding.
Clusters:Networking and partnership strategies are essential for addressing the innovation capacity of SMEs, and may take several forms, one of the most popular of which, and of particular relevance for this study, is clusters. The definition followed in this study is that of the Community Framework for State Aid for Research and Development and Innovation (6), which defines innovation clusters as “groupings of independent undertakings — innovative start-ups, small, medium and large undertakings as well as research organisations — operating in a particular sector and region and designed to stimulate innovative activity by promoting intensive interactions, sharing of facilities and exchange of knowledge and expertise and by contributing effectively to technology transfer, networking and information dissemination among the undertakings in the cluster.


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