Will the wind of change blow through the EIC?

In its proposal for the next EU Research and Innovation program, Horizon Europe, the European Commission proposed to invest 94,1 billion euros over seven years. The new program, to run between 2021 and 2027, would be implemented through three pillars – with one-fourth transversal pillar referring to “Strengthening the European Research Area”. Nicolas Sabatier, advisor to Jean-David MALO, Director “Open Innovation & Open Science” at the DG Research & Innovation of the European Commission will attend the next INPHO® Venture Summit 11th & 12th in Bordeaux, France, and accepted to share with us his vision of this new architecture.

Beyond the amounts of future investments that promise to nurture long and tough negotiations between the European institutions, the proposal of the European Commission for the next Research & innovation program introduces several new features that have already raised also some interesting discussions.

To mention just a few, in its third pillar dedicated to Open innovation, the European Commission proposes to confirm the creation of the European Innovation Council (EIC) designed to help the most innovative start-ups and companies scale up their ideas. In the 2nd pillar on Global challenges and Industrial competitiveness, the European Commission states their “mission-based” approach focusing on “global challenges” embodied in 5 clusters:

  • Health;
  • Inclusive and secure society;
  • Digital and industry;
  • Climate, energy, and mobility;
  • Food and natural resources).

Furthermore, despite the difficulties, the European Commission confirms its ambition to allow Open access to publications and data (Open Science).

Nicolas Sabatier, Advisor to Jean-David MALO, Director of the Open Innovation and Open Science at the European Commission, accepted to share with our partner BLUMORPHO, some first insights on the questions raised by those proposals.

[BLUMORPHO] What will be the role of the new EIC, what is expected from this new structure?

[Nicolas Sabatier] The EIC will combine all EU support to breakthrough market-creating innovation in one place. It will integrate activities currently carried out under the EIC pilot in Horizon 2020, such as the SME Instrument, Fast Track to Innovation and Future and Emerging Technologies (FET). So-called ‘breakthrough market-creating innovations the type that creates new markets and therefore growth and jobs are becoming more science-based (deep-tech). Compared to the US and Asia, they are however still rare in Europe because of a lack of venture capital, a deep-rooted aversion to risk (from banks but also from venture capitalists in the deep-tech area), an inability to exploit the scale of the Union and regulatory complexity. The role of the EIC is to nurture a culture of innovation in Europe by providing support and funding to high-risk companies with innovations that have the potential to create new markets, growth, and jobs, as well as have a major positive impact on the lives of European citizens.

[BLUMORPHO] There is already an EIC pilot going on, are there already some lessons learned from their experience? What will be the governance model of this EIC?
[Nicolas Sabatier] Indeed, from the EIC pilot, we learned many important lessons. We learned that the evaluation process should continue to focus on the individual(s), as the face-to-face interviews with a team of expert evaluators, the last phase of the evaluation of the SME Instrument of the EIC pilot have proven a very useful way to ensure the motivation, commitment, talent and enthusiasm of EIC funded projects. Also taking from the EIC pilot, we would like to more towards providing direct tailor-made support to innovators, moving away from traditional grants schemes and a ‘one-size-fits-all’ approach.
The EIC will be implemented through and EIC Advisory Board, which will assist in defining the EIC work programs, objectives, actions, evaluation criteria and selection of experts (not yet clear how this Board will be established). The EIC will also have its own work program, based on the advice of the EIC Board, and prepared in consultation with the EIC Board.

[BLUMORPHO] How will the EIC coordinate with the 5 specialized clusters of the 2nd pillar on Global Challenges and Industrial competitiveness?  Will there be some synergies and interaction between the two pillars?

[Nicolas Sabatier] Indeed, there are many synergies between the two pillars. Firstly, Pathfinder-funded projects falling within the scope of a Mission but based on radical thinking will be managed in close relation with the corresponding Mission. The Accelerator will play a key role as a take-up and market deployment measure for the whole of Horizon Europe. Any spin-off from the clusters’ projects (2nd pillar) will benefit from fast-track access to EIC’s Accelerator, to support any additional innovation activities and effective market deployment. As well as working closely with EIT’s Knowledge and Innovation Communities (KICS), partnerships that bring together businesses, research centers, and universities, the Accelerator will support spin-offs from national innovation programs. As this is the first time such an acceleration instrument will exist under and EU R&I Framework Programmes, it constitutes a major novelty under Horizon Europe and will bring tremendous EU added-value.

[BLUMORPHO] The EC proposal mentions 2 new funding instruments, one for early-stage innovation and the other for the development and market deployment. Will those 2 funding instruments be totally new or will they be built on pre-existing tools?

[Nicolas Sabatier] The Pathfinder and the Accelerator, the two funding instruments of the proposed EIC in Horizon Europe, are enhanced versions of the current instruments under the EIC pilot. They have the following common characteristics: a focus on breakthrough innovation; a risk-taking approach; a focus on innovator needs; and proactive management.
The Pathfinder of the EIC will be the EU instrument to develop breakthrough and disruptive innovation from early to the pre-commercial stage – this instrument is completely new. It will be operated like the US DARPA or ARPA-E, based on vision and hand-on management by high-level Programme Managers enjoying a full autonomy in advising the Commission on objectives and on selection and funding decisions. Disruptive ideas will be further developed through the funding of various interrelated projects and activities of a multidisciplinary nature, constituting a portfolio of projects developing a vision or targeting specific objectives. The overall aim will be to nurture the long-run potential market-creating innovations.

[BLUMORPHO] How will they complete the European Fund for strategic investments and InvestEU?

[Nicolas Sabatier] The Accelerator builds on SME Instrument Phase II, improves and enhances it, and focuses it where there is a clear EU added-value, and to be even more innovator-centric. The Accelerator also provides part of the Business Acceleration Services (SME Instrument Phase II) to cover other expenditures, including those necessary for initial market deployment (TRL9) and/or the scaling-up, in the form of equity or a full bank loan guarantee, whichever chosen by the beneficiary.
It is important to note that the main objective of the EIC is to target funding and finance towards high-risk, breakthrough and disruptive market-creating companies. InnovFin – EU Finance for Innovators – funded by Invest EU, will continue to provide a range of financing tools to innovative companies across Europe, and the European Fund for Strategic Investments will continue to provide funding to small and medium-sized companies, however, these EU programs will not necessarily focus funding on high-risk or disruptive innovation.

INPHO® Venture Summit, the unique event for executives active in smart technologies and deep tech innovations will hold its 6th edition on 11th & 12th October 2018, in Bordeaux. The event will be chaired by George Ugras, General Manager at AV8 Ventures. In its five previous editions, INPHO® has attracted more than 500 European participants, 50 international keynote speakers, and over 80 VCs and corporate funds. More than 60 start-ups have been selected to pitch, raising more than 150 M€.