From start-up ecosystems to innovation funding: EU4Digital begins ICT legislation gap analysis across priority areas

The EU4Digital Facility has begun the EU-Eastern Partnership (EaP) legislation gap analysis in the priority ICT policy areas that have been selected by the EaP partner countries. The completed gap analysis will be the starting point for the development of recommendations favouring ICT innovation in the EaP countries.

The selected priority policy areas are as follows:

New organisational forms in support of ICT Innovation (selected by Azerbaijan)

These include:

1.       Private-Public Partnership-based projects (‘federated’ projects with multiple stakeholders). For a wide usage of key digital technologies (5G, big data, High Performance Computing, cybersecurity, photonics, robotics and electronic components & systems technologies), consolidation of efforts of diverse stakeholders is needed (public-private partnership projects). The EU has established Public-Private Partnerships (PPPs) for Cybersecurity, Photonics, High Performance Computing, Robotics, Future internet (5G), ECSEL (electronic components and embedded software) and Factories of the Future.

2.       Clusters, fablabs, accelerators, competence centres, digital innovation hubs. There is a spectrum of organisational models of innovation support organisations existing in the EU:

• fablabs – provide start-ups with the first prototyping facilities; 
• accelerators – assist digital companies in growth and scaleup; 
• competence centres – serve as a focal point and R&D concentration on specific technological areas;
• digital innovation hubs – provide consulting to SMEs on digital innovation business models). 

These models are barely established on a regulated level in EaP countries and often lack strong and stable links between them. Recommendations developed by the EU4Digital Facility aim to address these shortcomings. EU examples include the European Cluster Collaboration Platform (ECCP), The European Cluster Observatory, European Observatory for Clusters and Industrial Change, the European Stress Test for Cluster Policy, European Strategic Cluster Partnerships (ESCPs), Accelerator assembly, Unicorns forum, Investors forum, Start-up Europe Nations Network and Digital innovation hubs.

Ecosystems for start-ups and scaleups (Networking innovators and ecosystem actors) (selected by Moldova)

Networking helps stakeholders with diverse expertise and needs to find each other. It is useful in both mature ecosystems (with a large number of actors), and early-stage ecosystems (need for identification of interested actors and to bring them together).

Recommendations developed by the EU4Digital Facility will seek to strengthen the start-up ecosystem in Moldova by supporting the development of innovative clusters, networks and communities in a framework of national innovation policies or digital policies.

Examples from the EU include: One Stop Shop (start-ups and ecosystem builders have easy access to all the funding services and other support offered at EU level), Enterprise Europe Network; Business Centres in China and Thailand; EU-Japan Centre for Industrial Cooperation; Market Access Database; Export Helpdesk (helpdesk and market access information for import into the EU); Social Innovation Community portal; The European Trade Association for Business Angels, Seed Funds and Early Stage Market Players (EBAN); Business Angels Europe; Start-up Europe Partnership (SEP); Accelerator assembly; Unicorns forum; Investors forum; Start-up Europe Nations Network; EUCluster Partnership Platform; EU-wide network of DIHs.

SMEs’ access to finance for digital innovations (selected by Georgia and Ukraine)

During their development, SMEs face different needs both in the size and the type of investment funds:

• Early stages (ideation, market search) – crowdsourcing, crowdfunding and crowdinvesting; Precommercial procurement and innovation vouchers.
• Seed and early start-up stage (more money needed, high risks) – business angels.
• Late start-up stage (proven market demand for product or service, much higher investments needed) – venture capital funds, bank loans guarantees.
• Scaled-up business – stock markets and growth stock markets.

The EU helps SMEs to access finance in all phases of their lifecycle. All EaP countries have asked for access to existing EU funding instruments and programmes for SMEs.

EU4Digital recommendations will help EaP countries to create financing instruments and programmes for ICT innovation and to get access to EU funding for ICT innovation.

Examples of EU funding opportunities for ICT innovation: Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) programme; Horizon 2020; COSME Equity Facility for Growth; COSME Loan Guarantee Facility (LGF); Fintech action plan; Regulation on European Venture Capital Funds; Guide on crowdfunding for SMEs; The European Trade Association for Business Angels, Seed Funds and Early Stage Market Players (EBAN); Business Angels Europe; Connecting Europe Facility; European fund for strategic investments (EFSI).

Intellectual property rights management for digital innovations (selected by Armenia)

Intellectual property rights (IPR) are maintained by regulations to provide innovators with the monopolistic rights for a certain period of time in a certain territory.

IPR management is not about how to obtain a patent, but about how to use IP assets in a business strategy, which is difficult for SMEs.

Currently, all EaP countries are members of the World Intellectual Property Organisation (WIPO). Thus, the legal framework for the procedures of obtaining patents and enforcement as well as the copyright and related rights are already harmonized between the EU and EaP.

However, in Armenia, a comprehensive study of the legal texts for intellectual property with recommendations on amendments to legal texts was carried out by an international team of lawyers (Armenian Bar Association and IP/IT Committee for Armenia) in 2019. Discussions on the implementation of these recommendations have revealed a number of institutional and capacity challenges in Armenia, which are to be studied in detail during the activities of the EU4Digital ICT innovation component.

Digitising industry (digital transformation of SMEs in traditional sectors) (selected by Belarus)

The European Union is boosting the digitisation of European industry in order to maintain its global competitiveness, with special attention to traditional sectors and small and medium enterprises (SMEs), and regional disparities.

The objective of the EU initiative ‘Digitising European Industry’ (2016) is to ensure that businesses of all sizes, location and sectors in Europe can draw the full benefits from digital innovation.

The EU has proposed Digital Innovation Hubs (DIH) as a key tool to bridge the current disparities in digitisation of SMEs across different sectors and regions.

The EU4Digital Facility will use the EU experience to help form a framework for cooperation between government, business, academia and society in the area of digitising industry, which should encourage dialogue and new initiatives in Belarus. 

Through its EU4Digital initiative, the European Union supports reforms and actions to favour the development of ICT research, start-ups & innovation ecosystems across the Eastern Partnership region, drawing from EU experience and best practices.