[Theme in Focus] Innovation in SMEs | Innovation Management, WBC-RTI.info Newsletter Sep/Oct 2016

Innovation in SMEs | Horizon 2020

Small- and  Medium- sized  Enterprises  (SMEs) that are EU-based or established in a country associated to Horizon 2020 (thus including SMEs from Western Balkan countries) are  encouraged  to participate across the whole Horizon 2020 programme. The programme actively supports SMEs by providing both direct financial support, and indirect support to increase their innovation capacity. 'Innovation in SMEs' aims at creating a bridge between the core of the framework programme - support to research, development and innovation projects - and the creation of a favourable ecosystem for SME innovation and growth.

"The objective of ‘Innovation in SMEs’ is to optimise the Research, Development & Innovation environment for SMEs, including through the establishment and facilitation of a range of support services, with the aim of strengthening the innovation capacity of SMEs and creating value on the market and/or into society, thus underpinning the Europe2020 strategy for smart, inclusive and sustainable growth.

A range of actions contributes to building innovation management capacity for Small and Medium Enterprises. Innovation management capacity is the internal ability of companies to manage innovation processes from the generation of the idea to its profitability on the market.

SMEs can find this kind of support via a dedicated SME instrument, which is a novel approach to support SMEs' innovation activities. It attracts more SMEs to Horizon 2020,and helps to increase the economic impact of project results by a company-centric and market-driven approach.

The SME instrument addresses the financing needs of internationally oriented SMEs, in implementing high-risk and high-potential innovation ideas. It aims at supporting projects with a European dimension that lead to radical changes in how business (product, processes, services, marketing etc.) is done. It launches companies into new markets, promote growth, and create high returns of investment. The SME instrument addresses all types of innovative SMEs so as to be able to promote growth champions in all sectors.

'Innovation in SMEs' also includes actions which provide indirect support to SMEs in the form of tailored services and projects (innovation management capacity building, IPR management, etc…), networking and mobilization actions for innovation service providers and policymakers (i.e. exchange of experience between national innovation agencies); moreover, Horizon 2020 provides direct support to the Enterprise Europe Network, a key player in improving SMEs' access to funding opportunities. 'Innovation in SMEs' funds additional activities intended to support entrepreneurship, internationalisation, and improving access to markets (through the COSME programme).

Furthermore, this challenge supports the second EUREKA/Eurostars Joint Programme Initiative (2014-2020), that provides funding for market-oriented transnational collaborative R&D projects, spearheaded by R&D performing SMEs established in any of the 34 EUREKA Member-States that participate to Eurostars. Eurostars pools together national resources, with the aim of strengthening integration and synchronization of national research programmes contributing to the achievement of a European Research Area."

Western Balkan Enterprise Development and Innovation Facility (WB EDIF) | Enterprise Innovation Fund (ENIF)

One year ago, in October 2015, a new EUR 40 million venture capital equity fund has been launched in the Western Balkan to provide crucial funding to start-ups and early to expansion stage SMEs in the region. The Enterprise Innovation Fund (ENIF) forms one pillar of the umbrella structure - the Western Balkan Enterprise Development and Innovation Facility (WB EDIF) which provides a range of complementary financial instruments and support services to SMEs in the Western Balkans

The European Investment Fund (EIF) has selected South Central Ventures (SCV) to manage ENIF via offices in Belgrade (Serbia), Zagreb (Croatia), and Skopje (former Yugoslav Republic of Macedonia).  Investments are made in SMEs ranging from seed to early growth stage, in innovative sectors which show a high potential for growth, with a particular focus on Information and Communications Technology (ICT). The fund contains a dedicated 'seed pocket' focusing exclusively on pre-seed and seed companies across the region. The average investment size will range from EUR 0.5m to EUR 1.5m, and is expected to fund approximately 45-55 companies (including smaller pre-seed and seed investments).  According to South Central Ventures (SCV) website, 5 companies from the Balkans belong to the portfolio as of October 2016 with an investment of over 2 Mio. EUR.

The Unicorns from the Balkans?

One of the managing partners of South Central Ventures (SCV), Jure Mikuz writes about start-up scene and economy models in the Balkans the following:

"To create a vibrant start-up company you need: a dedicated team of entrepreneurs with engineering and business skills. Secondly, an innovative product has to be in place which differentiates the company from all the competitors. And then there has to be a fast growing market which will absorb the product. All the three ingredients must be in place in order to succeed. Timing is crucial and many of such companies failed in the past just because one of the above mentioned components wasn’t there.

There’s one more thing that needs to be available for unicorns to grow – capital. Unicorns can be raised only in the vibrant ecosystems. They need mentors, a supportive community and investors to nurture their talents to their full potential.

So – does the Balkans have all the components, needed to breed a unicorn? Engineering talent is here. There are many brilliant engineers with a deep understanding of the technologies. Great business developers are much harder to be found around here. These skills can be imported or even better, developed on the local markets where the companies do their businesses. These great entrepreneurial teams can build super products. So the second ingredient is in place as well. The markets in the region are all too small and too fragmented, no doubt about that. That’s why it is crucial the future unicorns are oriented on the bigger markets outside the region or even on the global scale from their early days. Investors are scarse in the Balkans, especially when it comes to the early stage investors. But they can be found, our firm being one of the most active venture capital providers. The missing factor is the mentality of the general public. People and their leaders even more so need to realize the old economy models are pretty much dead. They need to see the new paradigm and use the opportunities which are so obvious on the market. They need to accept the new start-up economy as the new industrial class and follow the most successful ones as their role models. Otherwise maybe not in this generation, but in the next for sure, they will become obsolete."

Turn your ideas into action - a word from CEO Mr. Zoran Torgasev from Intranea Solutions Ltd.

WBC-RTI.info spoke with one of the successful young entrepreneurs from the region – Mr. Zoran Torgasev, CEO of Intranea Solutions Ltd. Kragujevac, Serbia. This company, founded in 2007 and currently employing over 20 people, is operating in the field of integrated innovation management.  Its mission is to provide an efficient and productive solution for people to collaborate on and develop their ideas with the aim to achieve long-term growth and profitability through structured and sustainable innovation. Focusing on customer's needs, Intranea Solutions Ltd developed a broad range of products that covers leading online software solutions for idea, product portfolio and innovation process management. Their best known products are DataStation platform, Innovation Cloud and Crowdsourcing plugin. The CEO’s message to young people from the Western Balkans is clear – turn your ideas into action! Below he writes for WBC-RTI.info about his way to success while encouraging young people from the Western Balkans to take their chance and use the possibilities where they are offered.

Written by Zoran Torgasev, CEO of Intranea Solutions Ltd

"While I was a student of Informatics in Engineering at the University of Kragujevac, Faculty of Mechanical Engineering, I’ve been exercising quite some programming. At that time there was not much open-source software one could use to learn more and start new projects, so one had to build everything from scratch. After a couple of tries to create something meaningful on internet in the early 2000's (online magazine, online ads website), I started building a Content Management System software for powering commercial websites. This turned out to be a good thing since many local companies needed a website for their business, so my financial independence started there.

Few dozen projects later, and with master university degree completed, I started to think about my personal way forward. Do I want to continue to build websites for local companies? Do I want to get employed in an engineering company in my city, in a time where the economic situation was, let's say, not so promising for a fresh graduated engineer? Should I leave my country and move to one of the western European countries or even overseas where IT engineers are wanted? Should I maybe continue my education and pursue an academic career? Or should I even join a political party?

I decided to postpone the final decision for a while. In the meantime, by making new contacts around, I was offered the possibility to create a company intranet portal, for which I could use already existing CMS software. My work was well received, and I felt even more empowered to think about the business in general.

By participating in (then emerging) online communities for software projects demand and supply, I managed to strike more business for my CMS and intranet platform. Among others, there were also some requests for online systems for community communication, exchange of opinions, Q&A and such. This made me think once again. Can this be something I can create software to support? Are there other vendors offering this service? What is the generalized topic these requests are part of? Some research needed to be made.

In the mid-2000 the topic of innovation process management was fresh, and only a couple of big vendors offered some kind of software services that tackled this topic. This was an eye-opener for me. What if I could build a system that collects ideas, l encourage people to talk about them and co-creates really important stuff? How do they do it now?

I started bidding on some projects, and won few of them, one of which targeted collecting of ideas. Software was simple, customer was satisfied and they generated over 100 ideas in few months. For me, this was it: it works, it's unoccupied territory in global terms, I need to do this. After working with few other customers on the same topic of collecting ideas, I have managed to get sufficient funding to kick-start my business.

In 2007 I created a start up named Intranea Solutions ltd, and immediately invited a colleague from University to join me in building an idea and innovation management software. I didn't need any funds since earnings from previous projects were sufficient to pay operation for the next half year, and I had the belief that we were going to get more work in the meantime. We didn't use any credits or venture funding, as they were unavailable to us at that time. Few years later we named our software solution DataStation, published a website and our shop was officially open for global business.

Currently, DataStation Innovation Cloud is being used by some of the most influential global companies from around the world. From a simple idea of collecting software, we have built it year over year into a full platform for innovation management, helping customers to collect/enrich/rank/prioritize ideas, to start and develop new products/services from idea to launch, and to track performance of new innovations in the market and their success.

Next year we will celebrate the 10th anniversary and from my perspective that is 10 years of hard work, constant learning and continuous improvements. But the development we have experienced since then proves that it was worth the long and hard work. Therefore, I want to encourage all people and in particular young people from the Western Balkan countries to think about the idea to start own business, maybe even as an alternative to emigration? Even more, I want to encourage them not only to think about it, but to try to realise own ideas; since everything starts with an idea, but it will remain only an idea if something is not done about it."  

A selection of topic related events, news, calls, documents, organisations, links etc. is available here.

Document type
  • Newsletter


Publication Year


Geographical focus
  • Western Balkans
Scientifc field / Thematic focus
  • Cross-thematic/Interdisciplinary
  • Engineering and Technology

Entry created by Ines Marinkovic on November 10, 2016
Modified on December 30, 2016