Empowering SMEs through Innovation

SMEs hiring graduates have greater opportunities of innovating and therefore of growing. Given the importance which these these companies in the EU, they need to be supported in a more determined way in order to develop their potential fully

by Valerio Alessandroni

The authentic backbone of the European economy, small and medium enterprises play a significant role even as regards employment: they offer two out of every three jobs in the private sector, and they contribute to more than 56% of the added value created by enterprises in the EU. According to the “2017/2018 Annual report on European SMEs” by the European Commission, from 2008 to 2017 SMEs contributed to a cumulative increase of occupation of 52% in all sectors, excluding the financial one. However, considering their importance for the EU’s economy, they need a more determined help when they need to tackle the challenges of globalization, of demographic changes, by the establishment of robotics and the increasing circulation of artificial intelligence.

A project created to drive SMEs towards innovation
According to researchers who took part in the SMEthod project (Methodology for efficient segmenting innovating SMEs based on lifecycles, represented sectors and regional characteristics), financed by the EU, innovation is essential to manage these megatrends, and graduates are a precious resource. In detail, the project showed that when SMEs hire graduate, the possibilities of developing innovation culture within the company increase. This, in turn, encourages growth both within the companies themselves and in the trade sector, broadly defined.
Innovation may also contribute to other key issues such as dynamic change: an important segment where SMEs can be groundbreaking is green innovation. The SMEthod project, still ongoing, will help to select SMEs with the greatest innovative potential, and to choose the most efficient types of support which can be provided. After evaluating existing methods to support innovation, SMEthod will suggest an optimized method considering “the company’s life cycle, the industrial segments, the regional characteristics and the innovation cycles”. Then, it will provide a method to segment (group, classify) innovative SMEs to guide the decision process more adequately.

What is the situation in Italy?
To start with, in Italy, to support innovation in the nation’s entire production structure, decree-law 13/2015 defined the notion of innovative SME (any small or medium-sized enterprise characterized by a strong innovative component, irrespective of the level of corporate maturity attained) granting these a sizeable part of the benefits which, just a few years earlier, by means of decree-law 179/2012 (the “Italian Startup Act”), local law-makers had attributed only to innovative start-ups.
In a context, such as the Italian one, where SMEs play a key role in terms of jobs and added value, the expansive drive generated by decree-law 3/2015 embodies the intent of promoting a more innovation-oriented entrepreneurial culture even among latest generation enterprises.

Benefits to encourage digitization
Innovative startups benefit from a dedicated framework as regards such issues as administrative simplification, the labour market, tax breaks, insolvency laws. The best part of these measures is also valid for innovative SMEs, that is, all small and medium enterprises operating in the technological innovation field, irrespective of the date of incorporation or the corporate objective. More recently, in order to favour innovation, the Digitization Voucher instrument has been created; this is a measure for micro, small and medium enterprises which envisages a maximum contribution of no more than 10,000 euros, finalized to the adoption of measures for the digitization of corporate processes and to technological updates. The Voucher may be used to: purchase software, hardware and/or specialized services capable of improving corporate efficiency; modernize labour organization, by means of technological instruments and forms of labour flexibility, including teleworking;develop e-commerce solutions; make use of broadband or ultra-broadband technology or of connections to the Internet by means of satellite connections; realize qualified formative action of personnel in the Ict field.

Promoting the interaction of companies and supporting innovation
As mentioned in the magazine’s in-depth analysis article, as from October 1st the SPIN (Scaleup Program Invitalia Network) program has been launched, with three objectives: encouraging interaction between innovative scale-up companies in Southern Italy and small, medium and large national and international companies, facilitation open innovation processes and accessing new forms of alternative growth financing.
The process involves two phases: in the first, 250 concerns take part in a digital entrepreneurial development program, with a tutor, access to a service platform, use of a self-assessment tool, a report on competitive positioning, access to networking and Open Innovation initiatives.
During the second phase, the best 50 companies selected by Invitalia will access a series of services to become structured regarding such themes as strategy and business planning, organization and governance, funding. Particularly the final process envisages in-class entrepreneurial development, one-to-one meetings and a final “check-up” session with the support of a mentor, revision of the pitch, support in public speaking and a round table with investors to support business matching.

Voucher for Innovation managers: how to fill in applications
As from November 7th companies and corporate networks may begin to fill in applications to receive the Voucher for Innovation Managers. The decree by the Ministry of Economic Development has been published, regulating the ways and means in which applications must be handed in and benefits will be granted. The measure is aimed at supporting the processes of technological and digital transformation of SMEs and corporate networks present on the entire national territory. The application process is subdivided into the following phases: preliminary validation of access requisites to the computerized procedure, as from October 31st, 2019; filling in the application to access the benefits, from November 7th to the 26th; sending the application to access benefits, as from December 3rd.