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Unveiling the Future of European Innovation: A Deep Dive into the EIC Work Programme 2024

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The European Innovation Council (EIC) Work Programme 2024, detailed in the document, outlines its comprehensive strategy and components designed to foster innovation within the European Union. Here are the main components and highlights: Strategic Goals and Key Performance Indicators (KPIs): The EIC aims to support breakthrough technologies and companies critical for achieving the green and digital transition, ensuring open strategic autonomy in critical technologies. It has set six strategic goals, including becoming the investor of choice for high potential startups and entrepreneurs, bridging financing gaps for deep tech companies, supporting high-risk technologies, increasing the number of European unicorns and scale-ups, catalyzing innovation impacts from European public research, and achieving operational excellence. Overview of the 2024 Work Programme: The Work Programme organizes its funding and support across three main schemes: EIC Pathfinder: For advanced research to develop the scientific basis for breakthrough technologies. EIC Transition: To validate technologies and develop business plans for specific applications. EIC Accelerator: To support companies in bringing innovations to market and scaling up. Each scheme is augmented with access to Business Acceleration Services, providing expertise, corporates, investors, and ecosystem actors. Main Changes of the 2024 Work Programme: Adjustments, improvements, and simplifications have been made based on feedback and the reduced budget. These changes include the introduction of a lump sum cost model for most calls, reinforced measures against economic security risks, and adjustments in eligibility and funding criteria across different schemes. Key Features of EIC Support: A blend of financial and non-financial support is offered to accelerate and grow EIC innovations and companies. This includes proactive project and portfolio management, a tailored approach to proposal evaluation, policies on open access and Intellectual Property rights, and measures to ensure economic security. Collaboration with the European Institute of Innovation and Technology (EIT): The document outlines the increasing collaboration between EIC and EIT to strengthen the European Innovation Ecosystem, including shared services, the Fast Track process, and the new innovation intern scheme. Outlook for 2025 and Future Years: Future strategies and potential new synergies are discussed, including the possibility of increased budgets for larger investments through the EIC Fund in key focal areas. Glossary and Definitions: The document concludes with a detailed glossary and definitions section, explaining the terminology and acronyms used throughout the Work Programme. These components collectively aim to support the European Union’s strategic objectives in innovation, research, and technological development, emphasizing high-risk, high-gain research, and breakthrough technologies with the potential for significant societal and economic impact. 1. Strategic Goals and Key Performance Indicators (KPIs) In a landmark move to propel European innovation into the future, the European Innovation Council (EIC) has laid out a bold vision with its Work Programme 2024, focusing on identifying, developing, and scaling up breakthrough technologies and companies that are pivotal for the EU’s green and digital transition. This vision is underpinned by strategic objectives designed to ensure Europe’s open strategic autonomy in critical technologies, fostering a vibrant ecosystem where high-potential startups and entrepreneurs can thrive. The programme’s ambition is not just to bridge the financing gaps faced by deep tech companies but to position the EIC as the investor of choice for visionary ideas, thereby influencing the allocation of private assets in support of these innovations. At the heart of the EIC’s strategic vision are six ambitious goals, each accompanied by clear Key Performance Indicators (KPIs) that aim to measure progress and guide the implementation of the programme: Becoming the Investor of Choice: The EIC seeks continent-wide recognition, attracting high-potential startups, entrepreneurs, and innovative researchers, with a special emphasis on underrepresented groups such as women innovators and those from less developed ecosystems. Crowding in €30-50 Billion Investment into European Deep Tech: By addressing the critical financing gap, the EIC aims to leverage its fund to significantly impact the deep tech ecosystem, fostering a climate where private investment flows more freely to support groundbreaking innovations. Supporting High-Risk Technologies: In areas critical for society and strategic autonomy, the EIC is committed to taking calculated risks to support the most promising deep tech opportunities from the earliest stages to commercial scale-up, ensuring Europe’s independence in key technologies. Increasing the Number of European Unicorns and Scale-ups: The EIC is on a mission to nurture the growth of European startups and SMEs to match and surpass their global counterparts, fostering an environment where European innovations can lead on the world stage. Catalyzing Innovation Impacts from European Public Research: By building partnerships across the EU, the EIC aims to commercialize the best ideas from the research base, creating a fertile ground for startups to scale up and make a global impact. Achieving Operational Excellence: The efficiency, agility, and responsiveness of the EIC’s operations are designed to meet the high expectations of applicants, investors, and the market at large, ensuring a smooth path from innovative idea to market success. These strategic goals are not just ambitious targets but represent a comprehensive blueprint for Europe’s innovation landscape, aiming to create a fertile ecosystem for breakthrough technologies that will define the future of the EU’s economy and society. Through a combination of financial and non-financial support, the EIC is setting the stage for a transformative impact that extends far beyond the immediate horizon, ensuring that Europe remains at the forefront of innovation and technology. 2. Overview of the 2024 Work Programme The 2024 European Innovation Council (EIC) Work Programme represents a pivotal stride towards fostering innovation and technological breakthroughs within the European Union. Structured to address the critical needs of the green and digital transition, it leverages over EUR 1.2 billion in funding, orchestrating a comprehensive strategy to empower researchers, startups, and small and medium-sized enterprises (SMEs). Here’s an in-depth look at its structural overview: EIC Pathfinder, Transition, and Accelerator: The Three Pillars The Work Programme is ingeniously segmented into three primary funding schemes, each tailored to different stages of innovation and development: EIC Pathfinder: Dedicated to advanced research, the Pathfinder is the birthplace of scientific exploration aimed at developing the foundational elements of breakthrough technologies. It encompasses both open calls for any field of scientific inquiry and targeted challenges addressing specific, strategic interests of the … Read more

On the EIC Accelerator’s 2021 Success Rates (SME Instrument)

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The EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity) has reinvented itself in 2021 with a new submission process, a larger budget and new success thresholds (read: AI Tool Review). The latter is significant since they directly define how much time companies will need to spend on an application and how much time would have been wasted in case of a rejection (read: Companies That Should Not Apply). With the success rates having approximated 5% for many years and them having seen a steep decline in 2020 from 2.7% in January to <1% in October, it is likely that these success rates are now moving towards an all-time high. A previously published article investigated the potential success rates and predicted workloads of the individual stages, namely Step 1 (short application), Step 2 (full application) and Step 3 (face-to-face interview). The analysis looked at the best outcomes for applicants since the analysis directly correlated the success rates with the workload imposed on applicants and concluded that the most selective barriers should be in the beginning rather than in the end to avoid months worth of wasted effort. The 2021 Success rates With many startups and Small- and Medium-Sized Enterprises (SME) having applied to the 2021’s EIC Accelerator either by themselves or via consultants and professional writers, it is now possible to draw conclusions on the overall distribution of the success rates (read: Re-Inventing the EIC Accelerator). Since Step 1 is continually open for submissions, the approval rates are constantly changing but as of May 15th 2021, 67% of companies have passed with 755 out of 1,114. This number is expected to remain relatively constant over the coming months since it is also the threshold the European Innovation Council (EIC) had targeted. Step 2 results have only recently been published and they might not be representative for the coming cut-off’s since (i) the preparation time for applicants was less than 30 days, (ii) it was the very first call with a new application process and (iii) the feedback of the Step 3 interview juries might influence future Step 2 evaluations. Nonetheless, in June, 130 out of 801 applicants were selected for Step 3 which means that 16% of companies were successful in this stage. Note: Out of the 130 interview invitations for the EIC Accelerator’s Step 3, 24 Swiss startups were deemed ineligible due to the recent decision of the Swiss authorities in relation to Horizon Europe (2021-2027). This would yield a 13% success rate in this Stage considering that only 106 companies will participate in the interviews in mid-September. Combining the success rates of Step 1 and Step 2 yields a total success rate of 11% leading up to Step 3, and, considering that the success rates of the interview stage (Step 3) have historically been between approximately 50% in 2018/2019, it can be assumed that the overall success rate will regain a 5% total for the EIC Accelerator. Note: While interview success rates were approximately 50% in 2018/2019, they have oscillated between 30% and 50% in Q4 2019 and throughout 2020. Due to the high budgets and the dropout of 24 Swiss applicants (18% of all invitees) after the Step 2 evaluations, Step 3 success rates could potentially reach 70%, yielding a 7%+ funding rate. Conclusion It remains to be seen how the actual success rates will unfold in Step 3 and how future changes in the submission forms, the official proposal template and in the evaluations (esp. with jury feedback) will affect these thresholds. The budget of €1B for only 2 cut-offs in 2021 is likewise extremely high which means that this 2021 gold rush might be short-lived. One thing is for certain: The EIC Accelerator has never been as accessible as it is today with many great projects having higher chances to receive funding. What remains to be seen is if the EIC stands by their commitment and does not rank proposals against each other but retains its individualised GO & NO-GO methodology. If this is the case then the EIC accelerator could stay as accessible as it is now for the entirety of Horizon Europe (2021-2027) since no amount of applicants or competition would impede an individual projects chances of success. Even though this does seem like the ideal scenario, it remains to be seen if this is feasible. If the GO’s in Step 2 or 3 exceed the budgets then there are only three options: (1) Reject GO applicants based on discriminating factors (i.e. industry, costs, gender), (2) create a waiting list for approved proposals either in Step 2 or 3 (i.e. before the interview or after the interview) or (3) change the back-end evaluation prior to publishing the results to reject otherwise funded applicants retroactively (i.e. making the jury evaluation stricter). One last thing to mention is that some government agencies are forced to completely spend their annual budgets since it is directly related to their allocated budget in the following year so the October 2021 cut-off of the EIC Accelerator might see a surprising number of funded companies if the June cut-off does not spend its available €500M.

Looking at Innovation From a New Angle: Changing the Evaluation of EIC Accelerator Proposals (SME Instrument)

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The EIC Accelerator blended financing (grant and equity) has undergone a dramatic transition from its first inception out of the now obsolete SME Instrument Phase 2 in 2019 and its following test phase as the EIC Accelerator Pilot in 2019/2020. With a new application process that includes multiple steps, an online AI platform for the submission and a video pitch, it has changed not only its process but also its outcomes (read: AI Tool Review). With the evaluation and the proposal template having changed alongside this newest iteration, it is clear that what worked in 2020 and earlier phases might not be applicable in 2021. Clearly, the proposal looks different, prioritises a pre-determined structure over a free business plan narrative and defines a specific roadmap that all companies have to adhere to. But the factor that might have the most significant impact on the newest changes of the EIC Accelerator might be the evaluation itself. Moving away from the SME Instrument Phase 2 and EIC Accelerator Pilot The aim of the new Step 1 of the EIC Accelerator is a quality check of applications to identify if the project is of interest to the EU and if it fits the general risk, innovation, team and market criteria. As such, it was initially advertised as being a way of emulating the old Seal of Excellence* which was awarded to 2020 projects with an evaluation score of at least 13 out of 15. Historically, 30% to 50% of all submitted projects between 2018 and 2020 reached this level. The current Step 1 success rates of 60-70% match this threshold rather well although one could argue that the equivalent old score would rather correspond to a 12.5 and not a full 13. Still, Step 1 acts as a threshold that is partially replacing the old scoring but also has a distinctively different focus when it comes to project quality. This quality aspect can be investigated through a simple question: Will resubmissions of 12.5+ scored applications from 2020 automatically do well in the 2021’s Step 1? *Note: The new Seal of Excellence is now only awarded to some companies that reach Step 3 of the evaluation process, namely the interview stage. The 2021 Seal of Excellence is not associated with the Step 1 short application or with any type of scoring but acts as a useful analogy to the previous iterations of the funding program prior to 2021. Transitioning from 2020 to 2021: Thresholds and Quality The EIC has stated that Step 1 is designed to “trigger the interest of evaluators” which means that it is a very surface-level assessment compared to even the old SME Instrument Phase 1. There are only 5 simplified evaluation criteria in Step 1 while the 2020 evaluations had to address 17 very detailed criteria. One could argue that the newest evaluation criteria which directly define the success of projects are now heavily favouring innovation, risk and the market while the old criteria were looking at every aspect of the company and project with equal weights. Without a judgement as to the benefit or tradeoffs of this approach, it clearly impacts what types of projects will succeed and it will likely be very different from what was observed in 2020 as well as the decade before (read: Recommendations for the EICA). Some interesting cases of applicants who have applied to the EIC Accelerator have surfaced whereas a 2020 submission that showed low scores of 10 to 11 out of the maximum of 15 passed Step 1 in 2021 with very positive reviews. What is interesting is that such low scores in 2020 were often treated as a lost cause in the eyes of professional writers or consultancies since it means that either the project lacks the sophistication needed to convince the European Innovation Council (EIC) or the startup or Small- and Medium-Sized Enterprise (SME) does not have a well-thought-out business model or financial planning. Changing the Evaluation Criteria With the first stage being designed to only peak the evaluator’s interest, many projects which would not have been considered for funding in 2020 even if the European Commission (EC) had excess financing available can now easily pass the first stage. How this will change in Step 2 is unclear but what can be said is that the evaluation criteria have changed significantly. In 2020, there were 17 detailed criteria that covered the entire business model ranging from the subcontracting over the partner network to the details of the customer base (read: Companies That Should Not Apply). Questions were highly detailed and covered: Why would customers buy from you? Is your business model able to scale your company? Is the strategic plan for the commercialisation sufficient? Are any IP or licensing issues addressed? Is the product easy to use? … This has been replaced by 13 criteria in Step 2 and only 5 in Step 1. Instead of asking very nuanced questions to the evaluators who have to grade the complete project in increments, the new criteria are simplified and focus on many of the same questions albeit with less detail. Interestingly, the new criteria omit gender equality, broader benefits in the EU and societal challenges. These were explicit in the old evaluation criteria but are now non-existent even though they must be described in the Step 2 application. This is likely due to the new Strategic Challenges and female-CEO quota that is enforced in the back-end and must not be re-iterated in the evaluations front-end. The “Go” Criteria There clearly is a different focus in the new evaluation criteria with a strong preference for the risk, market, innovation and the team with instructions for evaluators being that a Step 2 Go should correspond to what would have been a 4.5 to 5 score under the 2020 rules.** To revisit the anecdote mentioned above, an application with a score of 10.5 would have had average scores of 3.5 for each section which means that it should not stand a chance to … Read more

Recommendations for Selected Changes on the EIC Accelerator Platform (SME Instrument)

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The EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity) has transformed greatly in 2021 and its new AI tool has been used by thousands of applicants in a matter of weeks. While the previous article pointed out some of its shortcomings and the overall experience, the following article aims to make suggestions for its improvement (read: Reviewing the EIC Platform). From a business perspective, startups and Small- and Medium-Sized Enterprises (SME)’s have to, by necessity, pursue a realistic and business-focused approach to succeed in their venture but if a grant application forces them to create a project analysis that is neither relevant for their business nor to investors or customers then it cannot be a useful approach overall. From the public funding agencies perspective, the great challenge of creating a framework for grant applications is to encourage the right companies to apply but to also have sufficiently high barriers in place that can filter based on factors other than the budget alone (i.e. we do not want to fund you vs. we do not have enough money for you). Many companies look at the EIC Accelerator and immediately dismiss it because it is time-consuming and the chances for success are too low for the current stage of their business. They need to protect their time and resources since what they work on is cutting-edge and has a high risk of failure. There is a risk that competitors are getting ahead and it can often be more valuable for the company to convince risk-averse Angel investors or customers as opposed to spending many months in filling out EIC form fields just to fail because the CEO has the wrong gender, an evaluator does not understand the 1,000 characters on the customer pain or the Technology Adoption Lifecycle (TALC) just makes no sense for their particular commercial model. While many great companies have been funded by the SME Instrument and EIC Accelerator, there clearly is room for improvement for the European Innovation Council (EIC) and European Innovation Council and SMEs Executive Agency (EISMEA). Here are some suggestions as to what could make the process easier of applicants and evaluators: Guidelines and Templates While working with an official proposal template for the EIC Accelerator is now redundant since the EIC platform acts as an on-the-fly guideline, there is still a need for further explanations as to what is needed in each section. What is a suitable gender equality strategy in the eyes of the EIC? Since this is not taught in MBA’s and practically no VC would ever ask this question – what does a DeepTech cutting-edge business working on a disruptive innovation need to display to satisfy the EU? How does the EIC want applicants to quantify their cash flow projections for The Chasm or The Gap between Early Adopters and the Early Majority? How is the space between two market adoption segments meant to be quantified in the eyes of the EIC? What market activities are needed before TRL8 in comparison to market activities in TRL9 as these are mandatory? How should the mandatory project management differ between TRL5-8 and TRL8-9? These are examples of questions that could be addressed in a grant application template or guideline which helps applicants to address questions they, frankly, will never need to answer outside of the European Commissions (EC) funding arms. Being More Reader and Writer Friendly When the EIC announced that it would create an AI Tool and interactive application platform that aims to make everything easier – it seemed like a great idea. Writing a business plan was tedious and took a lot of time which meant that applicants had to spend valuable resources on writing that could have been spent on growing their business or technology. Adding video pitches, a short application as a teaser and integrating an automated AI assessment that screens patent and scientific databases seemed like great news for applicants. For a brief moment, it seemed like many applicants could finally prepare great applications on their own without the reliance on professional writers or consultancies. But this turned out to be a very short-lived scenario. As opposed to making the applications more writer- and reader-friendly, it became even harder to read and to write. Instead of adding more audiovisual content to the applications, heavily relying on graphics and making things easy to digest, the EIC removed all of the images, formatting, hyperlinks and headings to yield an application that is 99% plain text. No formatting. No colour. No graphics. No hyperlinks. No references. Just plain text. More Images The solution is simple: Allow the upload of graphics and illustrations in key sections. Do you have a software with a UI? Upload up to 5 screenshots, please. Do you have a reactor? Please provide photos of the prototype. Do you have an AI-driven infrastructure innovation? Please upload a schematic view that conceptualises your product. Do you have competitors? Please upload a comparison table. Note: There is an auto-generated competitors table on the Step 2 platformin but it only shows checkmarks or crosses – no nuance. It comes as a surprise to many that allowing image uploads was not in the top 5 of features to be added to the EIC Accelerator platform as soon as it was launched. Yes, there is a pitch deck and yes, there is an Annex in Step 2 of 10 pages but there is no guarantee that the evaluators will read the text and then search for a relevant graphic in the other documents. In fact, graphics are supposed to compliment the text as it is being read. They should not be an afterthought. It is hard to believe that the EIC consulted their evaluators regarding the AI platform in any way. No evaluator would have ever supported the removal of all visual support materials just to end up with a 99% plain block of text. Minimize the Text What is urgently needed is to remove text segments that have … Read more

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