Reinforcing synergies between experimentation spaces and innovation procurement

Today’s challenges are inherently complex and systemic and cannot be solved by individual actors or territories in isolation. Enhancing the innovation ecosystems across the European Union (EU) requires a holistic approach that is nuanced, collaborative and inclusive, connecting diverse actors along the research and innovation cycle.

Interconnectedness is particularly crucial to boost Europe’s competitiveness. Despite the competitive advantages of the European innovation ecosystems, much of the knowledge produced in Europe remains unexploited. As has been highlighted by the Draghi report^[1], a key reason behind this failure is the fact that researchers in Europe are less well integrated into networks of universities, startups, large companies and venture capitalists, which account for a large share of successful commercialisations in high-tech sectors. This indicates that strengthening the links between resources, organisations and investors is a crucial step to putting research and innovation at the heart of our economy.

Such effectively connected ecosystems can provide innovative companies with the necessary support and conditions to thrive through access to capabilities, data, customers, knowledge, and talent. Network connectivity within and between innovation ecosystems greatly contributes to sustainable business growth with high societal value. In line with the EU Startup and Scaleup Strategy, this destination improves the framework conditions for startups and scaleups, enabling them to capitalise on new geopolitical opportunities and reducing the reasons to relocate outside the EU.

Therefore, the actions of this destination aim to shift the European economy towards a more entrepreneurial, innovative and inclusive model by strengthening and expanding cooperation between innovation players. They aim to create a dynamic ecosystem to better support the next generation of innovative companies whose solutions will lead the shift towards a more competitive EU and a more sustainable, inclusive, and resilient world.

In addition to stronger innovation performance, increased competitiveness and faster transitions to a green and digital society, ecosystem integration can provide innovation actors and companies with access to new resources, markets, customers, and contribute to disruptive and innovative solutions. By being actively engaged in their local, regional, national, and European networks, companies can increase their overall growth potential.

Accordingly, this destination offers a holistic package of actions that:

• Increase the capacity to convert research results generated in Europe into innovative products and services, leading to a higher rate of successful commercialization of these solutions by companies based in the Member States and Associated Countries;
• Reinforce EU strategic autonomy and increase resilience in the supply chains by opening up opportunities for innovative companies to access the public procurement market and scale up their business;
• Establish robust, pan-European alliances of top-tier deep tech startup and scaleup hubs embedded in research and higher education ecosystems;
• Facilitate market expansion for deep tech startups across regions and sectors, thus enhancing cohesion and competitiveness across the EU;
• Strengthen less-connected innovation ecosystems by integrating them into a Europe-wide collaborative network;
• Increase the level of public and private investments in innovative companies, particularly startups and scaleups, through strengthened links with investors, including foundations;
• Establish stronger links between regions and countries with different innovation performances across the EU and Associated Countries;
• Promote a better alignment of the innovation policies of the Member States and Associated Countries, in line with the EU Startup and Scaleup Strategy, through the EIC Forum;
• As a result of the above, achieve an increased level of retention of promising startups and scaleups in Europe, particularly in the deep tech sector and strategic sectors like life sciences, artificial intelligence, clean tech, biotech, security, defence (including dual use technologies), robotics, advanced and raw materials, quantum technologies, cybersecurity, and many others.

Where appropriate, the applicants should consider and actively seek synergies with possibilities for further funding from other relevant EU, national and/or regional innovation programmes, including Cohesion Policy funds, the Recovery and Resilience Fund and other public and private funds or financial instruments.

Expected impact

Proposals for topics under this destination should set out a credible pathway to strengthening robust interconnected innovation ecosystems and creating a favourable environment to promote the scalability of businesses, including in the deep tech sector, and more specifically covering one or several of the following impacts:

• More competitive and more efficient European innovation ecosystems which provide favourable framework conditions for the development and market uptake of innovative solutions, drawing on the existing strengths of national, regional, and local ecosystems;
• Enhanced cross-border network connectivity and inter-regional collaboration to untap Europe’s potential for successful commercialization of innovative products and services, notably through reinforced links between resources, organizations, investors and policymakers;
• Improved access to funding by European startups and scaleups, notably in the deep-tech and strategic sectors, through diverse sources, including innovation procurement and philanthropy;
• Enhanced knowledge and technology transfer and capacity building within the European innovation ecosystems, providing innovative companies with the necessary conditions to thrive;
• Increased participation of less represented R&I stakeholders and less advanced innovation territories in the R&I cycle, capitalising on the experience and vision of an increasingly diverse range of people, companies and territories while promoting social cohesion, inclusion, accessibility and gender balance;
• Improved systemic conditions to tackle key EU strategic priorities, including the green and digital transitions, through building innovative capacities;
• Increased coordination of innovation policy and networking activities by the Member States and Associated Countries through the EIC Forum.

[1] The future of European competitiveness – A competitiveness strategy for Europe

Expected Outcome:

Project results are expected to contribute to the following outcomes:

• Advancing public sector modernization by capitalising on the transformational power of innovative technologies to improve the quality and efficiency of public services;
• Reinforce EU strategic autonomy and increase resilience in the supply chains by opening up opportunities for innovative companies, including notably SMEs and startups, to access the public procurement market and scale up their business;
• Improving opportunities for market uptake and economies of scale for the supply side through increased demand for innovative solutions and where relevant contribution to standardisation, regulation or certification;
• It is expected that if PCP results in the successful innovative solutions than at least one of those will be ready for deployment or even being already deployed in the project.
• Supporting the uptake of innovative and sustainable solutions through collaborative procurement approaches that encourage safer and more efficient practices in public sector applications.

Scope:

This topic aims to shorten the time to market for innovations by reinforcing synergies between innovation procurement and experimentation spaces such as test beds, livings labs or regulatory sandboxes. While public buyers often do not use experimentation spaces to test before they invest, companies also too often only start looking for potential customers, verifying regulatory compliance and product certification after R&D is finished, which delays commercialisation. This action enables innovators to develop and test innovative solutions immediately in cooperation with public buyers and where relevant also with competent regulatory and certification bodies.

This specific challenge tackles both the gap between supply and demand for innovative solutions and the lack of cooperation of buyers with test beds, living labs, regulatory authorities and certification bodies during R&D. It targets therefore consortia of public buyers with similar procurement needs to drive innovation from the demand side, by together challenging the market to develop innovative solutions and by cooperating with test beds, living labs and where applicable with regulatory and certification bodies to remove regulatory and/or certification barriers for innovative solutions to enter the market in Europe. Cooperating with regulatory authorities has the specific benefit that then the testing environment of the PCP procurement can serve also as a regulatory sandbox. By fostering innovation procurement and opening a route to the market for innovative companies, including in particular also startups and scaleups, this topic contributes to the objectives of the EU Startup Scaleup Strategy and the European Innovation Act.

PCP actions target consortia of procurers with similar needs that want to procure together and with relevant competent regulatory and certification bodies that want to cooperate with the procurers during the PCP project. Therefore, this topic does not provide direct funding to developers, industry or research organisations to perform R&D. They will be able to respond to the call for tenders launched by consortia of procurers funded under this call, and the winning tenderers will receive procurement contracts from the procurers. Specific guidance on PCP actions and minimum eligibility requirements can be found in General Annexes H of the Horizon Europe work programme.

Joint pre-commercial procurement enables public buyers to share the effort and costs of procuring R&D and create a critical mass of demand that can trigger suppliers to commercialise promising research that can address concrete public sector needs. The aim of engaging in such more forward-looking R&D procurement strategies is to modernise the provision of public services faster, whilst creating also opportunities for industry and researchers in Europe to take international leadership in new markets. Establishing a cooperation between public buyers and suppliers during the development and testing of the solutions enables to tune developed solutions to concrete customer needs. When public buyers don’t have themselves advanced testing environments to test innovative technologies, cooperating with experimentation spaces such as living labs or test beds can help public buyers overcome this issue. Cooperating where relevant also with regulatory and/or certification bodies enables these bodies to learn already during the PCP about the potential impact of emerging innovations and adapt where needed the regulatory/certification process to accommodate smooth arrival of those innovations on the market. Testing the compliance of innovation solutions by a transnational buyers’ group in cooperation with regulatory/certification entities of different countries can also facilitate early identification of potential implications of ensuring the compliance of emerging innovations with regulations in a cross-border context.

This topic complements calls for PCP Actions foreseen in other Horizon Europe 2025 work programmes, by tackling challenges that are not addressed by or that cut across the scope of PCP action topics in other work programmes^[1]. It is open to proposals for PCP actions in all areas of public sector interest requiring innovative solutions linked to the EU strategic priorities. It is open both to proposals that require improvements mainly based on one specific technology field, as well as to those that require end-to-end solutions that need combinations of different technologies.

The aim is to leverage PCP to encourage the development and to provide a first customer reference for the piloting, installation and validation of breakthrough innovations. Involvement of procurement decision makers is thus needed to ensure that end solution(s) are adopted by procurers, increasing the societal impact of the R&D activities. Therefore, procurers should declare in the proposal their interest to pursue deployment of solutions resulting from the PCP in case the PCP delivers successful solutions and indicate whether they will (1) procure successful solution(s) as part of the project during or after the PCP procurement, (2) launch after the project a separate follow-up procurement after the PCP to buy such type of solutions, (3) adopt successful solutions without the need to procure them (e.g. in case of open source solutions), (4) foresee financial or regulatory incentives for others to adopt successful solutions (e.g. in case the final end-users of the solutions are not the procurers but for example citizens).

In these four cases, the procurers can implement the project as a fast-track PCP (see general annex H). In the first case, the procurers must foresee the budget in the proposal to purchase at least one solution during the project (either as part of the PCP procurement budget or as part of the budget for subcontracting, purchase of equipment or other costs). In the second case, the procurers should include in the proposal a deliverable that prepares the follow-up procurement to purchase such type of solution(s) after the PCP procurement. In the first and third case, the procurers must foresee sufficient time during the project to deploy and validate that the solutions function well after installation. In the fourth case, the procurers can use financial support to third parties to provide financial incentives to final end-users to adopt the solutions, with a maximum budget of EUR 200 000.

The project funded under this topic should demonstrate a greater degree of ambition in terms of innovation level and/or deployment scope. The selection of the third parties to be supported under the grant will be based on an external review by independent experts of the proposed work, under full responsibility of the beneficiary consortia.

[1] For an overview of PCP actions in other work programmes see: https://research-and-innovation.ec.europa.eu/strategy/support-policy-making/shaping-eu-research-and-innovation-policy/new-european-innovation-agenda/innovation-procurement/horizon-europe-funding-pcp-and-ppi_en