Innovative SMEs should be eligible for state aid, says Commission 

Innovative small and medium sized companies (SMEs) may soon be eligible for access to state aid. According to a new Commission communication of 21 September 2005, EU state aid rules need to be improved to allow states to boost innovative start-ups and to stimulate a culture of risk capital in Europe. 

"Even though effective competition is the best tool to strengthen innovation and competitiveness in Europe, state aid can also play a very useful supporting role," said Competition Commissioner Neelie Kroes. "There are instances where markets fail to deliver an appropriate environment for innovation. This is where state aid can help."

The Commission's efforts to boost innovation and R&D are in line with the relaunch of the Lisbon strategy in February 2005 as well as the economic approach laid down in the June 2005 State Aid Action Plan (see EurActiv 8 June 2005). In the consultation document, the Commission sets out specific ideas to develop criteria for the rules of state aid for innovative initiatives. In particular, the proposals cover six areas:

• support for the creation of innovative start-ups
• more flexibility for allocating state aid to risk capital
• the integration of innovation into existing rules on state aid for R&D
• subsidies for SMEs to buy services from innovation intermediaries
• subsidies for training and mobility between research personnel and SMEs
• poles of excellence for projects of common European interest

The European SME organisation UEAPME has welcomed the initiative. "Instead of funding unproductive, national champions, state aid will now be targeted towards small, innovative firms and encouraging this sizeable section of the economy to develop their potential," said its Director Gerhard Huemer.