Friday, 8 November 2013

The new SME instrument fails to meet expectation

Despite recent presentations by EC officials, key aspects of this instrument remain unclear.

Any topic? According to the legislation, the instrument is bottom up: any topic can be proposed. So you would expect it to appear just once in the soon-to-be-published Workprogramme. But in the current Workprogramme draft it appears thirteen times: in each of the seven Societal Challenges and six Enabling and Industrial Technologies. And the thirteen versions show different interpretations of “bottom up”.

• In the areas of Transport and Climate Change, any topic within their ambit (defined by the H2020 Specific Programme, now agreed by the legislators) can be funded. This is in line with the concept defined in the legislation.

• In Energy, any aspect of low-carbon energy can be funded except energy storage technologies and those related to the electricity grid. Another component of Energy, called “Smart Cities”, does not include use of the SME instrument at all.

• The ICT part of the workprogramme describes its use of the instrument as “Open, disruptive innovation”, without explaining the meaning of “open”. It could be interpreted as a requirement or preference for open source software, which will deter many SMEs.

Free choice of technology partners? Earlier this year, the EC’s designer of the SME instrument said the usual rules on subcontracting – open tendering - would not apply. Now they are saying that the choice of subcontractor will need to be justified. A new special clause is being devised for the grant agreement just for this instrument, but only to allow an exemption to the usual condition that the core work of the project is not subcontracted.

Funding via lump sums? Lump sums are payments according to results, and avoid the need for recording the actual cost of the project and any financial audit. Now it appears this will apply only in the small phase 1 (€50k lump sum): the main phase, with a grant between €1m and €3m, will use actual costs, so the SMEs must record all time spent on the project, work out the hourly cost of their staff and keep records of all expenses.

It seems the ambitions for a simple instrument have been defeated by the Eurocracy.

Singleimage - FP7/H2020 Training Workshops and Advice