Innovation Europe > News > Innovation EU Vol1-1 > Exploiting servicebased innovation

Services are increasingly important to the European economy, yet we know relatively little about how service industries innovate. Service industries tend to innovate in different ways to manufacturing, involving changes in the way technology is applied and used rather than “pure” innovation in the technology itself.

Europe INNOVA’s Knowledge Intensive Services (KIS) Innovation Platform addresses these issues, aiming to accelerate the take-up of services innovations in Europe. The KIS initiative is about fostering technological as well as non-technological innovation in services by helping innovative SMEs to better exploit research results and helping them in their search for investors and business partners. It is developing new tools for innovation support, addressing particularly the needs of innovative service companies with the ambition to grow and internationalise fast.

The Platform focuses not only on design and testing of new service packages but also new forms of service delivery which are specifically tailored to the strong market orientation of service companies. Activities are delivered by public and private-service providers who work in partnership to pilot new tailored business-support solutions for innovative service-based companies. These are complemented by a “horizontal” project that provides a platform for sectors and companies to learn from each other and opens doors to valuable information.

Achieving more from ICT

One of the sectors to benefit is information and communication technology (ICT), where the ACHIEVE MORE Partnership has been set up as a collaboration of investors, business and technology incubators and ICT clusters. The Partnership is helping European ICT SMEs to access the best tools and funding they need to accelerate their growth, and now covers 71 organisations from 27 countries. Partnership members exchange best practice in leading-edge incubation and clustering; use innovative coaching tools proven to accelerate start-up growth; and experiment with new models for seed funds.

Its most tangible achievement is the Entrepreneurship and Innovation Exchange (EIX, www.eandix.ning.com), a forum for practitioners in incubation, cluster management and early stage investment to share know-how and best practices. EIX has developed a toolkit offering a wide variety of tools, techniques and inspirational stories by which companies and network partners are able to interact directly with each other. These include leading-edge incubation tools, access to finance tools, access to markets and networking with clusters, and tools and best practice exchange for support providers.

This is just what Europe needs, according to Radu Ticiu from an IT incubator in Timisoara, Romania. “Getting closer to ACHIEVE MORE and the EIX could boost the scope and the efficiency of the services provided by a younger incubator such as ours,” he says. “The great deal of expertise offered and the sharing and openness is spectacular.”

The project also runs workshops on “investor readiness”, which have proved very successful in giving early stage entrepreneurs insight into their readiness to select the right kind of investment for their organisation and how to make a case to the appropriate type of investor. This emphasis on quality rather than quantity is certainly needed, according to Olle Stenberg, president of the renowned Chalmers Innovation in Sweden. “Incubation is not a volume game. It is not about how many businesses you created and how many get funded, but rather about how many are successful,” says Stenberg.

Satellite services ready for take-off

Use of satellite data in civilian applications is an important emerging market. KIS4SAT is a sectoral network that enables entrepreneurs and companies with highgrowth potential to seize such new opportunities in the field of satellite downstream applications.

Working closely with ENCADRE, the European network of 20 regional clusters, and ESINET, the European Network of 27 Space Incubators, the project supports the needs of enterprises in a variety of ways. It organises an annual KIS4SAT Academy where entrepreneurs and managers receive coaching in how to pitch their ideas and business plans to investors. Participants receive feedback to prepare them for future opportunities, in terms of raising venture capital, partnerships or product development agreements. Several of the companies receiving such training have gone on to pitch at investment events, such as the ESA Investment Forum (EIF), an annual investment fair for space-related businesses.

The KIS4SAT platform is also piloting a European innovation voucher system for SMEs, which companies are able to redeem according to their individual assessment of needs and requirements.

The concept of innovation vouchers was first tested by Senter Novem in the Netherlands – as a way to incentivise SMEs to engage in technology co-operation with research centres – and has since been taken up by other actors across Europe. The scheme works like this: an SME with an innovation project applies for a voucher. The public agency evaluates the application and attributes a voucher for use with accredited experts. The SME then asks the chosen expert for support in exchange for the voucher. The external service provider supports the SME with technical, managerial and financial expertise and then redeems the voucher directly from the agency together with an activity report signed by the SME.

Building Europe’s renewable energy services industry

A similar scheme is being applied in the third sector supported under the KIS Platform, the planning, installation, maintenance and scrapping (PIMS) of renewable energy systems.

The KIS-PIMS project is piloting so-called “second generation” innovation vouchers, which allow access to business (as opposed to technical) expertise. SMEs are put in touch with innovation consultants who undertake a full risk assessment for a project followed by management recommendations. For example, a company keen to launch a new service can get an external expert to look into the market, managerial, financial and IPR risk related to the launch.

Under KIS-PIMS expertise in renewable support is being provided under national innovation voucher schemes in Austria, France and Finland.

So-called “secondgeneration” innovation vouchers allow access to business – as opposed to technical – expertise

A platform for growth

The “horizontal” element of the Europe INNOVA KIS is known as KIS-PLATFORM. This promotes results from each of the three KIS sector projects and organises events and other activities on themes of mutual interest.

One such event is an annual KIS Partnering Forum, a networking and partnership-building meeting for policymakers, industry, investors and SMEs. More than 150 participants from all over Europe attended the first Forum in Brussels in February 2009. International SMEs providing services in the renewable energies, ICT and satellite applications sectors presented their activities to designated expert reviewers, who then selected the winners of the KIS Contest.

The winner in the “Most Successful Company” category was NTS Energy & Transports, a German company that plans to market a new type of wind turbine system. “These are hard times for start-ups,” said Managing Director Guido Luetsch. “Due to the financial crisis the investors loosed their pockets. Therefore the KISPartner Forum has been a good chance for us to present our unique and patented concept to harness wind at high altitude and produce electricity for lesser costs than fossil fuels. Even if the VCs didn’t write the cheques at the Forum, we have made good contacts that might lead to an investment.”

In total, 32 companies from 14 countries were selected to present at the Forum. Eleven companies also attended the KIS Academy the day before where they received valuable coaching.

Also related to financing, KIS-PLATFORM has set up a cross-sector Focus Group to look at the specific issues of funding of KIS SMEs, especially through seed funds.

Another of the Platform’s achievements is the KIS 100 Club (www.kis100club.eu), which brings together the most interesting and successful KIS companies in Europe with high-growth potential. The Club, which is accessible by invitation only, provides members with an opportunity to network with their peers and develop new co-operation partnerships with businesses from other sectors and markets. It also offers a good publicity platform and a forum to discuss common regulatory, technological and organisational issues with other companies.

For more information, visit: www.europe-innova.eu/innovationinservices