Friday, February 26, 2010

EU Reveals Key to Success for Small and Medium Sized Enterprises in KAPPA-Health Project

What are the performance factors that strengthen participation of small and medium-sized enterprises (SMEs) in the health and biotechnology fields? The KAPPA-Health ('Key performance factor assessment and valorisation for successful EU-FP project participation of innovation SMEs in the area of health') project is finding out. KAPPA-Health is backed with almost $1 million (EUR 750,000) in funding under the Health Theme of the EU's Seventh Framework Programme (FP7).

Researchers have made great strides in fuelling biotechnology, medical technologies and bioengineering, which in turn have helped strengthen the field of medical research. However, there are a number of obstacles involved when trying to bring medical products and services to market. Entrepreneurs may be very willing to commercialise their inventions but one crucial factor either makes or breaks its commercial success: financing.

Healthcare biotechnology is more often than not a casualty, because product development may actually take more than a decade before the product hits the shelves. Businesses need external funding for extensive periods to ensure their high-quality research and development activities.

The EU's Sixth and Seventh Framework Programmes (FP6 and FP7 respectively) are instrumental in providing critical financial support to such businesses. Ask SMEs if they think their participation in EU-funded projects is a success and more than 90% will give a resounding yes. Half of these SMEs have already yielded commercial return.

In the first phase of the project, the KAPPA-Health partners assessed almost 200 SMEs to identify the performance factors that triggered their success. The results of their assessment would benefit companies eyeing participation in an EU-funded project. In the second phase of the project, the partners are conducting in-depth interviews and analysis on another 40 enterprises. Of the SMEs interviewed by the KAPPA-Health team, 50% said their participation in an EU-funded project was a success.

Up to 80% of the SMEs polled said the biggest upshot for participating in these projects was obtaining greater knowledge. They also highlighted the fact that the EU projects helped them expand their network, build a stronger client base, access complementary expertise and gain stronger footholds on the global market.

It should be noted that posting commercially exploitable results was not cited as an objective since the criteria for participating in such projects is to develop pre-competitive scientific research, the partners say. More than three quarters of the businesses that have taken part in projects stipulate that the research is consistent with their core activity.

The KAPPA-Health partners also found that around 80% of successful SMEs took part in more than 1 project, while 83% of the projects generate research contacts, and 50% business contacts. SMEs favour taking part in small or medium-sized projects because they are easier to handle, according to the researchers.

So far, KAPPA-Health has identified a number of success factors that boost a business participating in EU-funded projects and confirm that new technologies can go to market: the SMEs' core activity should correspond to the research project; participating members should have previous FP project experience; expert or specialised services support can help identify the role of each partner and expected results; SMEs would benefit by collaborating with partners from an existing network; smaller projects are key; and SMEs should take advantage of their strong ties to the academic research world.

Another significant factor is that 90% of the SMEs participating in FP6 projects successfully co-financed the project, according to the KAPPA-Health team.

Coordinated by the Belgian group EuroTop, the KAPPA-Health project brings together researchers and industry actors from Germany, Greece, Israel and Switzerland.
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