01 Un Locking The Potential of Business and Societal Innovation en

Business Innovation Observatory
Trend report
Un-locking the potential of

business and societal
innovation; how to scale-up
successful new business
and production models?
September 2013
Enterprise
and Industry
The views expressed in this report, as well as the information included in it, do not necessarily reflect the opinion or position of
the European Commission and in no way commit the institution.
Trend report
Un-locking the potential of business and societal innovation;
how to scale-up successful new business and production models?
Business Innovation Observatory
Contract No 190/PP/ENT/CIP/12/C/N03C01
Author: Ren Wintjes, UNU-MERIT.

Coordination: Directorate-General for Enterprise and Industry, Directorate B Sustainable Growth and
EU 2020, Unit B3 Innovation Policy for Growth.
European Union, September 2013.
Table of Contents
1. Executive summary
The trend of New Business and Production Models
The new policy challenge: demand-side innovation policies
2. New business, organisational and production models
2.1. Overview of five trends
2.2. Description of case-study trends and companies
2.3. Some examples of companies, innovative solutions and success signals
3. Framing the common story: a synthesis
11
4. Key innovation drivers and barriers
13
4.1. Drivers
13
4.2. Challenges faced by trend driving companies
14
4.3. Challenges faced by companies clients
14
5. Policy challenges: improving framework conditions and promoting wider uptake
17
5.1. Existing policies: R&D (supply-side) support
17
5.2. Policy gap: demand-side innovation policy
17
5.3. Policy challenges
18
Towards a more innovative Europe
20
Policy challenges concerning skills shortages and competencies
21
6. Confronting the emerging story with policy literature & good policy practices
21
6.1. Gaps in Innovation System concepts: towards Societal Systems of Innovation
21
6.2. Supply-side innovation policies become less dominant
23
6.3. Demand-side innovation policies
24
6.4. Comparing the case-study results with other studies
25
6.5. Good policy practices
26
7. Policy recommendations
30
7.1. Recommended demand-side innovation policies
30
7.2. The need for new policy models
30
7.3. Possible adaptation of existing policies
31
7.4. Lessons concerning scaling-up of policies
32
Examples of horizontal transfer of policies between regions or between countries
32
Example of vertical transfer of policies between regional/national and EU policy level
32
Examples of joined policy efforts from different policy domains
32
7.5. Selection of concrete policy proposals
33
8. Literature
34
9. Annexes
37
Trend report
1. Executive summary
The objective of the Business Innovation Observatory is to
showcase successful and relevant business innovation
trends. This first Trend report identifies some key issues
among a number of trends in order to better understand
these new innovation practices and how policy can scale up
the successes.
A number of significant and relevant trends have been
identified and analysed in 12 detailed case studies and
discussed at a workshop. This report highlights the common
key issues and comes to recommendations on how to boost
the concerning trends and companies, and increase socioeconomic impact.
The trend of New Business and Production

Models
The topic of this report is New business, organisational and
production models. It refers to successful new ways in which
companies produce goods and services, new ways to
organise and new ways to serve and create markets. Under
this (in short) New Models trend, several trends, models and
practices have been analysed in case studies. Several case
studies analyse how Advanced Manufacturing Technologies
changes the way in which companies produce, e.g. in Smart
Value Chains or by using environmental friendly
technologies. Other case studies address: Public Private
Partnerships, Big data, Workplace Innovations, or on-line
peer-to-peer business models. Although the batch of casestudies includes a variety of trends, models and practices,
several of them are interlinked and overlapping and there
are quite a number of similarities.
One of the similarities (as detailed in the various casestudies) is a large and growing market potential, for
instance:
The global market in terms of revenues for 3Dprinting grew by 29 percent in 2011, and will be USD
6 billion by 2017;
The European gasification industry has a potential of

annual revenues of over EUR 10 billion;
Un-locking the potential of business and societal innovation
The industrial robotics sales market was valued at EUR

6.49 billion in 2011, with an estimated growth of 5%
per year;
Out of the 400 billion annual public procurement at

European level1, it is estimated that only 3.8 billion
can be considered procurement of innovation2;
The total number of organisations that have

implemented mobile work styles will rise from 24
percent in 2012, to 83 percent in 2014;
The potential of online peer-to-peer business models

is substantial, with growth in turnover exceeding 25%.
Based on the commonalities among the case studies a

common story emerges: Innovative and successful trenddriving companies have developed innovative solutions
which address challenges of other companies and society at
large. The case-study companies offer solutions (e.g.
advanced manufacturing technologies, tools for Big Data or
software for organisational changes) to customers. By using
the solutions these (business and public sector) customers
adopt new business and production models. More demand
for, and implementation of these existing innovative
solutions would scale-up the macro-level socio-economic
impact, in terms of both economic competitiveness and in
terms of addressing societal challenges.
Many of the new (business, organisational and production)
models are about organisational innovations, referring to
open innovation, re-arranging value-chains, the importance
of partnerships and the involvement of (end-)users. Users,
partners and other stakeholders have become part of the
New business and production models, as the conventional
boundaries between companies and the external
environment in which they operate become blurred. This is
also evident in the importance for the companies of being
located and embedded in an innovative environment
that is relevant, aware and supportive to the concerning
business and production models, e.g. a region or city with
PwC, London Economics, & Ecorys. (2011) ; Which excludes
public procurement below a certain treshhold.
2
Rigby et al. (2012)
1
Trend report
potential partners, (lead) clients, universities, a pool of high

skilled experts, end-users, access to finance, and relevant
public support mechanisms. Also soft aspects like
entrepreneurial spirit, innovative culture, mentality, and

awareness were mentioned.
Figure 1: A common story emerges
Un-locking the potential of the analysed trends depends to a

large extent on ways to promote the wider up-take of the
solutions and scaling up the use of the New Models. The
major barrier is on the demand-side, in the form of
conservatism, scepticism, and a lack of understanding the
trend, the technologies and the benefits among potential
clients. These clients are mainly other companies, but also
public procurement officers, or consumers (which might for
instance be hesitant to shop on-line). Many companies fear
for disruptive changes and unknown consequences of
adopting new business and production models.
In almost all new models ICT plays a major enabling role.
The multi-purpose nature of ICT keeps extending with its
wider adoption, wider range of applications, and increased
familiarity in using it for any kind of activities. Another
common element is that the new models and solutions are
applicable in many sectors.
A last common issue is the importance of SMEs as drivers
of the trends and the specific challenges they face in trying
to scale-up their business.
The new policy challenge: demand-side

innovation policies
Since the technologies that enable or drive the trend of New
business and production models already exist, scaling up the
success and exploiting the potential does not depend on
additional R&D support (supply-side innovation policy).
It is rather the scepticism and conservatism of potential
customers which forms a barrier to the up-take of the
new production processes and business models. This calls for
more demand-side policy, e.g. by offering opportunities to
demonstrate and proof the benefits of the concerning new
models and involved solutions in a concrete societal context.
Demand-side innovation policies are now needed for
scaling up the New Models trend and the impact in terms
of both socio-economic benefits as well as competitiveness
(Figure 2). The case-studies on Public Private Partnerships
concerning public procurement and demonstrators and
testing units are good examples of such demand-side
innovation policies.
Not only the managers of potential clients have to be
educated (as a respondent has phrased it), but it is also
Trend report
important to inform and educate players of the general

supporting frameworks concerning the trend-specific issues
and to involve them in demand-side policy initiatives. Also
changing the mind-set and increasing the awareness of
business angels, banks, education institutes, students and
innovation agencies, is important for scaling up the

successes of the New Models trend, as it strengthens the
trend-specific framework conditions for this kind of
modernisation of European businesses and society at large.
Figure 2: The new policy challenge: demand-side innovation policy
The future impact from more demand-side policy efforts will

feed-back and generate more demand for the new models
and more growth and competitiveness for the trend-driving
companies. The future growth in demand for and supply of
solutions will not only come from the current trend-driving
companies and their clients. The need for application in other
sectors will generate new entrants. Trend-specific framework
conditions will enlarge the number of trend-driving
companies, and diffuse the new models trend to other
sectors.
Confronting this emerging policy story-line with existing
literature on innovation systems shows that this literature
has become fragmented, emphasizing specific policy models
which are tailored to a specific type of technology, sector or
to a specific societal challenge. An integrative framework
addressing the commonalities of various trends is lacking; a
gap that can be filled with the concept of societal
innovation policy:
Innovation policy is no longer seen as only

instrumental for firms and economic objectives, but
also for coping with societal challenges in noneconomic public policy-domains;
Increased attention for demand-side innovation
policies: raising awareness, promoting diffusion and
absorption, behavioural change, involvement of (end)users, societal transformation processes, and

promoting the up-take of new business, organisational
and production models;
The broadening of the involvement of different

players and sectors, including citizens and the public
sector;
Set societal innovation priorities, organise platforms

and join collective initiatives;
Broadening of support for business innovation

activities. Not only subsidise firm R&D for product
innovation, but also allow subsidies to be used for
adopting new business models and for diffusing and
marketing of societal innovations;
Bundling of initiatives often packaged into a strategic

policy mix consisting of various policy initiatives, for
instance
in
lead-market
initiatives,
Smart
Specialisation Strategies, and European Innovation
Partnerships;
Horizontal coordination between policymakers of

various policy fields;
Trend report
between
level of
project. Such feasibility studies should also be allowed to

look at the feasibility of adopting new production processes
and business models.
The case study on innovative public procurement and the

one on demonstrator and testing units already point at
relevant good practice policies for scaling-up. Other good
practice policy schemes include: Living Labs, award
competitions, demand-driven cluster policies and thematic
platforms, Collective Awareness Platforms, business support
schemes for process-innovation, coaching schemes and
schemes that organise visits among companies.
New types of schemes concern a large variety of

demonstration policies, and policies concerning public
procurement
for
innovation.
Especially
regarding
demonstration initiatives it does not seem appropriate at this
stage to recommend one generic format, since
experimenting with new policy formats and designs seem
more appropriate. This also holds for new funding schemes,
new ways to fund demonstration and up-take of innovations
have to be explored.
Multilevel-governance:
local/regional, national
initiatives.
alignment
and European
The new policy needs do not necessarily have to be met by

completely new policy instruments, since many of the
recommendations can be implemented by integrating
demand-side innovation aspects into the mainstream
(innovation supply/ R&D oriented) policy instruments. The
details of how and what depends on the details of the
various existing policy instruments. However, an important
concrete recommendation is to allow companies within
mainstream business innovation support schemes to use
innovation subsidies not only on R&D for product
innovations, but also for process innovation (implementing
Advanced Manufacturing Technologies), organisational
innovations (changing the business model, implementing
disruptive solutions), and market-innovations (adapting
solutions to other sectors or for internationalisation). Many
mainstream instruments include an option for a feasibility
study, which mostly refers to the feasibility of an R&D
A concrete proposal for a new type of innovation support

instrument is the credit model to overcome resistance
against economically reasonable investments in energy
efficiency. It is suggested to realise the future efficiency
return already in the present earnings and liquidity. For that
purpose, the company should be offered a loan that not only
covers the investment costs but that also pays out a
considerable advance on the increments from energy
savings that are anticipated in the future based on the
investment. Under these conditions, it would be possible not
only to make the investment without putting a strain on
liquidity but even obtain liquidity by making the efficiency
returns already available today. This would draw the
companies attention on the economic potential which can be
tapped by investments in energy efficiency.
2. New business, organisational and

production models
The overarching topic of New business, organisational and

production models is a synthesized name for 5 innovations
trends that have been identified. The identification and
selection procedure involved a review of business literature
and policy documents in order to identify significant trends
with socio-economic relevance, as well as cases of
innovative and successful companies which are part of these
trends.
The identification process for trends and cases studies
involved two different approaches (Figure 3). The first of
these was a top-down approach in order to identify
significant and relevant trends concerning their macro-level
impact. The process involved a review of business innovation
literature and policy documents, an online search for
relevant trends in business-innovation along with the
consideration of current policy and trends related to this as
suggested by the European Commission.
The second, bottom-up, approach was designed to identify at

the micro-level successful business innovation cases where
companies have brought an innovative product or process on
to the market successfully. A wide range of sources was
used including internal and external company databases,
news and press releases, awards and contests, and industry
reports. Company cases were assessed based on early
success signals (press reviews, first fund raising, awards,
acquisition by an MNC, and technology transfers) and late
success signals (performing fund managers, high growth,
IPOs, commercial contracts, and new rounds of fundraising).
Based on the identified trends and the pool of identified
company cases, the topics for potential case studies were
defined.
Trend report
Figure 3: Overview of criteria for identification of trends and selection of business innovation case studies
2.1. Overview of five trends
Big Data
This term describes the exponential growth,

availability and use of information, both
structured and unstructured. Organizations and IT
leaders need to focus on the ever-increasing
volume, variety and velocity of information that
forms big data. Many factors contribute to the
increase in data volume transaction-based data
stored through the years, text data constantly
streaming in from social media, increasing
amounts of sensor data being collected, etc. Big
data concerns determining relevance amidst the
large volumes of data and how to create value
from it.
Workplace
Innovation
Workplace productivity innovation is about new

ideas that facilitate the daily office work and
increase productivity, such as coherently
coordinating
appointments,
the
reliable
management of office documentation or
enhancing workplace environment by moving
away from common workplace convention.
The five trends which are covered by this trend report are:
Advanced Manufacturing Technologies, Public Private
Partnerships, Big Data, Workplace Innovation, and the
Sharing Economy (Table 1).
Table 1: Description of trends
Trend
Description
Advanced
Manufacturing
Technology
Advanced Manufacturing is defined as comprising

production systems and associated services,
processes, plants and equipment, including
automation, robotics, measurement systems,
cognitive
information
processing,
signal
processing and production control by high-speed
information and communication systems.
Public Private
Partnerships
A Publicprivate partnership otherwise known as

a PPP is a government service or private business
venture which is funded and operated through a
partnership of both government authority and
one or more private sector entities. PPPs are
generally recognised to provide the following
benefits: value for money, breadth and depth of
skills brought by the private sector, faster
implementation of projects and reduced
budgetary burdens.
Public private partnerships have taken different
forms for different purposes. We have identified
some key trends in PPP in addition to traditional
infrastructure PPP. PPP for technology
demonstration, for testing robustness of large
scale solutions to fix a societal problem or PPP to
initiate a new market have been registered.
Sharing Economy A transition from ownership towards accessibility

can be observed across a wide variety of
markets. Whereas consumers would traditionally
buy products and become the owner, in an
accessibility-based system consumers pay for
temporary access-rights to a product. Within
these accessibility based business models, there
is a trend towards peer-to-peer platforms that
enable consumers to access consumer owned
property or competencies. Thus, consumers are
referred to as peers in this context. Companies
can facilitate peer-to-peer markets for potentially
all assets or services owned by peers.
Trend report
2.2. Description of case-study trends

and companies
as it is not a trend devoted to a specific sector.

More importantly, it requires an appropriate
adaptation of existing manufacturing processes to
be successful. The degree to which MC should be
used to answer clients needs depends on the level
of customisation required by the client and enabled
by the technology. In other words, some products
require sophisticated customisation while others
only require cosmetic changes to better fit client
expectations. This array of possibilities have
shaped mass customisations current environment,
which provides an opportunity for developing
market niches but also raises barriers to entry and
difficulties in raising funds.
The five trends which are covered by this trend report are:
Advanced Manufacturing Technologies, Public Private
Partnerships, Big Data, Workplace Innovation, and the
Sharing Economy. The case-study trends can be described as
follows:
1.
Advanced Manufacturing Technologies Environmentally friendly technologies and

energy efficiency
The rise of environmentally friendly technologies is
closely linked to the resource-conscious mindset
that has emerged since the global oil crisis of the
1970s. Forty years on, Europe continues to face
similar environmental issues, whether it be
resource depletion, climate change or pollution.
However Europes cultural mindset has changed
and sustainable growth is key priority in the Europe
2020 strategy. In achieving the strategys
sustainable growth objectives, environmentally
friendly technologies and energy efficiency will be
key, as they apply cutting edge knowledge and
non-technological innovations to improve existing
products, processes and business models.
Company cases: ArtBag Design (LV), Combeenation

(AT), Crearmoda (ES), Innosabi (DE), Muses (FR),
MyCustomizer (CA), Najmtek (FR/US)
4.
Company cases: Avantium (NL), Balmart (ES), BFS

Bio Fuel Systems (ES), CPM Compact Power Motors
(DE), Felor (FR), Innowattech (IL), Perpetum (BE),
TruEnergy (BE/UA), Visuol Technologies (FR)/
2.
Advanced Manufacturing Technologies - New

Manufacturing Engineering
Manufacturings increasingly competitive
environment presents Europe with an opportune
moment to further the transition from traditional
to advanced manufacturing. To do so, Europe
ought not to solely focus on product innovation but
must also identify the processes that provide
manufacturing with the means to create the
products of tomorrow at an industrial scale. New
Manufacturing Engineering (NME) has the potential
to contribute to such an agenda, as the trend
draws on the know-how of highly skilled engineers
to develop advanced processes enabling the
manufacturing of high-tech products.
Company cases: Materialise (BE) ATS Automation
(CA/DE), evopro group (HU), Tekpak Automation Ltd.
(IE/UK), CDA GmBH (DE), kringlan composites
(CH),Primoceler (FI), CeNTI (PT), Clifton, (EE) , Zeeko
Ltd. (UK)
3.
Advanced Manufacturing Technologies - Mass

customisation
The impact of mass customisation is transversal,
Advanced Manufacturing Technologies Measurement Technologies & Robotics

In our age of globalisation, European
manufacturers are relocating their businesses to
emerging markets so as to remain competitive.
These emerging markets offer wider profit margins
as a result of lower infrastructure and labour costs.
Manufacturers that remain in developed countries
are placing even greater importance on the use of
automation solutions to differentiate, develop a
competitive advantage and finally remain
competitive. As such, the application of automation
through measurement technologies and robotics is
an important tool in the sustainability of many
manufacturing businesses in the European Union
as it enables them to compete more successfully in
the global market.
Company cases: Asyril (CH), Fluidion (FR),
Intermodalics (BE), Odico (DK), Laytec (DE),
Leosphere (FR), Winterthur Instruments (CH),
ZenRobotics (FI)
5.
Advanced Manufacturing Technologies Smart Value Chains

The advanced manufacturing market is rapidly
changing. While in the semiconductor industry we
see increasingly more buzz on the next
manufacturing technology, i.e. 450mm production,
we also see radical changes in other high-tech
manufacturing markets. Recent research suggests
that the market is moving towards an increasingly
automated world that will continue to rely less on
labour-intensive mechanical processes and more
on sophisticated information-technology-intensive
processes. This trend is likely to accelerate as
advances in manufacturing are implemented.
Trend report
Company cases: Claro Precision Engineering Ltd.

(UK), EnvisionTEC (DE/US), HyGear (NL), Nanovia
Ltd. (CZ), Peratech Ltd. (UK), RP2 (NL)
6.
Public Private Partnerships - Large-Scale

Demonstrators & Small-Scale Testing Units
Business innovations have the potential to tackle
the societal challenges of today and become key
contributors to the achievement of the European
Unions 2020 objectives. Yet to realise the potential
of their innovations, businesses require real-life
settings in which their technologies can be
assessed, and facilities in which their prototypes
can be industrialised. The establishing of such
settings and facilities is typically costly and risky,
and may call for public support, often in the form
of public private partnership (PPP). Europe is
increasingly deploying large-scale demonstrators
and small-scale testing units that adopt a PPP
approach. These demonstrators and testing units
meet the validation and industrialisation needs of
businesses, and may lead to Europe realising a
number of socio-economic benefits, including the
tackling of societal challenges, job creation and
economic growth.
Demonstrators and testing units: TIE-IN (DE),
GRID4EU Demonstrator 1 (DE), EcoGrid EU (DK),
Amsterdam Smart City (NL), North West Bicester
(UK), The Neobuild Innovative Centre (LU), The Bio
Base Europe Pilot Plant (BE), The Cleantech
Facilitator (DK)
7.
8.
amounts of data, through analytic and decision

making solutions. Employing this software may
involve a variety of techniques, technologies and
visualisation tools. Today, there is a growing
market of companies offering hardware, software
and professional services solutions. The
applications of analytics and decision making
solutions for big data are widespread, and as part
of the case-study, examples of how different
companies offer various solutions in different
sectors have been provided.
Company cases: AiRPX (FR), DigitalRoute (SE),
Xilopix (FR), Neodata Group (IT), Trendiction (LU),
Wipro Promax Analytics Solutions Pty Ltd (A Wipro
Group Company) (AU), Quiterian (ES)
9.
Big Data - Artificial Intelligence

The big data market is in a nascent stage and is
expected to develop as companies as well as public
bodies seek to enhance their competitive
advantage by better understanding the evergrowing amounts of data. Artificial intelligence
offers the technology and methodology to do so,
and the market for artificial intelligence-based
tools and applications is growing rapidly. Uptake of
this trend can benefit European companies as well
as the EU-economy and labour market, as the
development and management of artificial
intelligence requires highly skilled workers in a
multitude of fields.
Company cases: Path Intelligence (UK), QlikView
(SE), Expertmaker (SE), CogniCor (ES)
Public Private Partnerships - Public

Procurement of Innovation
In recent years demand-side policy measures have
taken the form of product market regulation and
standardisation as well as public procurement for
innovation. Especially in the current economic
climate, it is hard to acquire funding and customers
for (radical) innovations. Both capital investors and
firms prefer to invest their funds in products,
processes and services that have a relatively short
return on investment. Therefore, in such a context,
public procurement could be a valuable instrument
to maintain innovative capacity in an economy.
This however also forms a paradox, as most
governments also have their funds limited as a
results of declining economic growth.
10. Workplace Innovation Solutions for

enhancing workplace productivity
Enhancing workplace productivity entails
improvements to the efficiency of production by
any organisation employing personnel. It is about
new ideas that facilitate the daily office work and
increase productivity, such as coherently
coordinating appointments, the reliable
management of office documentation or
enhancing workplace environment by moving away
from common workplace convention. This trend
study deals with enhancing workplace productivity
through business innovation driven by technology
and ICT and enabling a more flexible work force.
Company cases: AlertSolutions (NL), Ashwoods

(UK), KEMA (NL), PHOTONIS (NL)
Company cases: Novapost (FR), All-Desk (PT),

OfficePod (UK), Better Workplace (CA)
Big Data - Analytics and Decision Making

The big data market is at a nascent stage and is
expected to develop as organisations seek to
enhance their competitive advantage. In doing so,
firms seek to better understand the ever-growing
11. Workplace Innovation - Novel Organisational

Setups and Management Practices
Novel organisational setups and management
practices refer to the organisational innovations
that facilitate company interaction with its
Trend report
environment. Currently there is a clear trend in

organisational setups towards collaborative roles,
stakeholder involvement and openness. This can
take the form of either: an outside-in perspective,
with companies that display high degrees of
stakeholder involvement; an inside-out approach, in
the form of external exploitation of company ideas
in different markets; or a coupled process, linking
both approaches by creating partnerships with
complementary stakeholders with a high degree of
collaboration.
corporate world, consumers have become more

receptive to peer-to-peer business models which
are centred on consumer needs, both as a supplier
and buyer. In order to capitalise on this, companies
emerge that host online marketplaces for
matchmaking between consumers. The manner in
which these companies generate revenue and
impact the economy depend on their commercial
interest. For all of these business models, however,
community building and creating social relevance
is crucial.
Company cases:
Finext (NL), Almende (NL),
BlueThink (IT), Feyecon (NL)
Company cases: Peerby (NL), Thuisafgehaald (NL),

Sorted (UK), Fixura (FI)
12. The Sharing Economy - Accessibility Based

Business Models for Peer-to-Peer Markets
As a result of the economic crisis, available
technology and decreased consumer trust in the
2.3. Some examples of companies,

innovative solutions and success
signals
Table 2: Examples of solutions providing companies

Company
Business innovation
Signals of success
Balmart
Wireless monitoring solutions for

agriculture and water treatment
Active member of Freescale (Motorola) Design Alliance and was awarded

"best company; commercial success stories
BFS Bio Fuel

Systems
Large scale autotrophic technology to

convert CO2 into energy
Extensive media coverage; Ecofira Innovation Award 2009
TruEnergy
Advanced thermal gasification technology

for conversion of organic waste into
energy
Received the much coveted Eureka Label in 2011; Eurec Agency highlighted
the importance of advanced gasification processes
Visuol
Technologies
Smart automated control painting system

for automotive industry
Commercial contracts; SPE best paper award
Nanovia Ltd.
Industrial scale production of nanofibrous

material
Nanovia Ltd is one of the first in Europe having the capacity for industrial
production of nanofibrous material.
RP2
Additive manufacturing process
Business expansion, acquisition activities, client portfolio.
AiRPX
Advanced services based on flight data

processing
Winner of the 13th French national competition for the creation of innovative
technology companies
DigitalRoute
Mediation and data integration solutions
Winners of several awards including the Red Herring Top 100 Europe.
The Ahrens Rapid Growth List and the
Gasell Enterprise awards in 2012
Neodata Group
Real-time digital content delivery platform Acquired a Belgrade-based start-up called Newscurve; Won publicly
for new-media players
financed tenders: SIGMA, GAP.
Novapost
Online services to ease and rethink HR

document management (Software as a
Service SaaS)
Since 2009 growth of over 100% turnover each year; profitable at early
stage; over 100 customers in France and manages over 300.000 empl.
All-Desk
All-Desk is a global marketplace for

offering, finding, booking and
administering short term meeting rooms
and offices.
Finalists of the IT&Web track of the MIT Competition, securing a 100K seed
investment
Fixura
Fixura is an online peer-to-peer lending

platform. It allows both potential lenders
and borrowers to set the specific criteria
against which they want to respectively
lend out or borrow money.
The company is facilitating 4,500 loans, provided by 1,500 different investors

to 25,000 borrowers. Fixura has facilitated over 13 million in loans. Total
interest returned to its investors exceeds 1 million; annual average return
of 10.91%.
Trend report
Company
Business innovation
Signals of success
BlueThink
BlueThink deploys an open innovation

structure with an extensive network of
solver companies that deliver innovative
and tailored business solutions for
customers (seekers).
The company employs ten employees. It has a solver network of over 280
companies, six customers and three on-going projects. The expected revenue
for 2013 is EUR 750,000.
CogniCor
Complaint resolution and negotiation

technology
2012 Most innovative European Startup Award Winner, selected for the
Microsoft pre-incubation programme
QlikView
Business discovery platform, allowing for

associative data exploration
VC funded, entered numerous foreign markets, winners Network Products

Guides 2013 Hot Companies and Best Products Award;
The Learning! 100 Award 2013; and the 2013 Manufacturing Leadership 100
Awards
AlertSolutions
Through public procurement of innovation,

AlertSolutions was able to develop a real
time system for monitoring the structural
integrity of dikes. The company developed
measurement instruments that are
inserted into the dike structure.
The company had to make significant investments in the first years. In 2012,
the company was able to break-even for the first time. It is, however, still
hard to fund R&D based on commercial revenue. The company currently
employs 5 persons, of which 2 on a full-time basis.
TIE-IN
A testing unit in which e-Mobility products and services can be tested and developed.
GRID4EU
Demonstrator 1
A demonstrator in which Smart Grid measurement devices and agents may be tested.
The Cleantech
Facilitator
A web portal from which entities can find facilities for testing or demonstrating their innovative solutions.
The Bio Base

Europe Pilot
Plant
A testing unit in which companies can develop and

scale-up biobased products and processes.
Although there are differences between the trends and

between the case-studies, this report is not aimed at
benchmarking or ranking of the various trends, but rather to
see if there is a common story to tell, based on the possible
commonalities among the case-studies and trends.
There are indeed several striking commonalities. Some of
these common issues originate from the identification and
selection procedure, and actually confirm the quality of the
selection procedure, since indeed all of the case-studies
evidence highly significant and relevant trends with high
macro-level
socio-economic
potential.
Also
the
innovativeness and success of the companies is convincing
as they are indeed innovative and successful companies
and worthy to be show-cased. First signals on some of the
trends and their potential have already been mentioned and
discussed before in other studies, but the large collection of
success-stories show that concrete successes exist in
practice and are promising.
For the case-studies on Advanced Manufacturing
Technologies the underlying trends of new technologies and
methods to increase the advancement of manufacturing is a
long term trend, but the case-studies show that new steps
have been made in developing and applying new tools and
methods that can further boost this trend. Although the
name of this trend suggest that it is all about technological
innovation, the case-studies show that to a large extent the
trend also is strongly related to new organisational models
and new management approaches and new business
concepts, of which some of them are addressed in the
second batch of case-studies which precisely focus on such
new business models.
The overarching theme of this first trend or policy report has
its focus on successful new ways in which companies
produce goods and services, new ways to organize and new
ways to serve and create markets, inside and outside of
Europe. This trend has been labelled New business,
organisational and production models, but we also refer to it
as New business and production models, or New models.
Most case-study companies drive this overarching trend by
offering solutions to customers in the business and public
sector. By using these solutions the customers adopt the
new ways and new models. Some examples are shown in
Figure 4.
10
Trend report
Figure 4: Three examples of trend driving companies
3. Framing the common story: a synthesis

Before turning to the specific drivers (in chapter 4) and the
policy challenges (in chapter 5) this chapter provides a short
overall synthesis of the case-study trends, based on the
commonalities.
Innovative and successful trend-driving companies have
developed innovative solutions which address challenges of
other companies and society at large. The case-study
companies offer solutions (e.g. environmental friendly
technologies, tools for Big Data or software for
organisational changes) to customers. This includes
customers from the business and public sector. By using
the solutions customers adopt new business and

production models. More demand for the existing
innovative solutions would increase the socioeconomic impact. Most of the technologies that enable the
trend of New business and production models, already exist
and scaling up and exploiting the potential does not seem to
rely on many more years of additional R&D investments.
Only in one of the 12 case-studies there is a clear
recommendation for supply-side innovation policy: Promote
R&D in measurement technologies and robots. Proven
technological solutions exist, and European R&D in this field
11
Trend report
is at a high level, but maintaining this good position will help

to meet demand. So even in this particular case-study trend
a lacking supply of technological inventions and innovations
due to the quality or quantity of R&D is not a major obstacle.
A more important obstacle for scaling up of this trend in
Advanced Manufacturing Technologies are conservative
potential customers, and for instance the limited uptake of
automation solutions by SMEs. The recommendation to
educate the market about the benefits of automation calls
for typical demand-side innovation policy measures.
Technologies bring about new ways in organising production

and business and innovation processes. Also in many of the
other analysed trends clients from the private or public
sector and end-users have become part of the production
and innovation processes. They have become part of the
New business and production models, as the conventional
boundaries between companies and the external
environment in which they operate become blurred. In this
respect the business innovation trends analysed in this
report can also be seen as societal innovation trends.
Other case-studies in the overarching trend towards new

models of business, organisation and production are cases of
user-driven innovation, where the involvement of users is an
important source for innovation; sometimes industrial clients,
sometimes end-users or public sector users. The involvement
of users, might even take the form of co-creation. For
instance, the trend of Mass Customisation (which is another
trend in Advanced Manufacturing Technologies) is a
technology enabled strategy to involve end-users in the
design and the production process. Many cases show that
most of the socio-economic impact benefits of the solutions
provided by the case-study companies are generated by the
use of these solutions by clients
The trend analysed in the case study Novel organisational

setups and management practices focuses on this very
trend of organisational innovations that facilitate company
interaction with its environment. Currently there is a clear
trend in organisational setups towards collaborative roles,
stakeholder involvement and openness. This can take the
form of either: an outside-in perspective, with companies
that display high degrees of stakeholder involvement; an
inside-out approach, in the form of external exploitation of
company ideas in different markets; or a coupled process,
linking both approaches by creating partnerships with
complementary stakeholders with a high degree of
collaboration. We see this trend as an underlying trend in
many other of the identified trends.
Figure 5: How the solutions relate to the trends and

impacts
Many of the new (business, organisational and production)

models are about organisational innovations, referring to
open innovation, re-arranging value-chains, the importance
of partnerships and the involvement of end-users. This not
only holds for the trend of New Business models, but also
for the trends in Advanced Manufacturing Technologies,
especially concerning Mass customisation and Smart value
chains. But also the other trends in Advanced Manufacturing
A common aspect from the case-studies, which is linked to

this, is the importance for the companies of being located
and embedded in an innovative environment that is
relevant to the concerning business, e.g. a region or city with
potential partners, (lead) clients, universities, a pool of high
skilled experts, end-users, access to finance, relevant public
support mechanisms. Also soft aspects like entrepreneurial
spirit, innovative culture, mentality, awareness etc. were
mentioned. Linkages with such a conducive and receptive
environment and partnerships with relevant players in this
environment provide access to relevant resources, e.g. in
terms of funding, lead-clients, new technologies, industrial
partners, etc.
Un-locking the potential of the analysed trends is to a large
extent depending on ways to promote the wider up-take
of existing innovative solutions. A major barrier in this
respect revolves around scepticism, fear for disruptive
changes and unknown consequences, and a lack of
understanding the trend, the technologies and the benefits.
This calls for more opportunities to demonstrate and proof
the benefits of the concerning new models and involved
solutions. Public involvement in the form of partnerships for
demonstrating and testing, and in the form of procurement
are part of the overall trend of New business, organisational
and production models, and as it is the case with many of
the analysed trends, they can serve the scaling up of the
other trends, models and practices.
In almost all new models ICT plays a major enabling role.
The multi-purpose nature of ICT keeps extending with its
12
Trend report
wider adoption, wider range of applications, and increased

familiarity in using it for any kind of activities; not only in
companies, value chains and business environments, but
also in personal lives, communities and societies at large.
Another common element in the case-studies is that the new
(business, organisational and production) models are
applicable in many sectors and industries. This is
especially true for the trends in new business models, but
also the trends and solutions of Advanced Manufacturing
Technologies are applicable in a wide variety of industries.
For instance, the impact of mass customisation is

transversal, as it is not a trend devoted to a specific sector.
Also the impact of environmentally friendly technologies is
transversal, as they are not applied to one type of
manufacturing, or one type of market.
A last, but not least important common issue which appears
from the case-studies is the importance of SMEs as
drivers of the trends and the specific challenges they face in
trying to scale-up their business.
Figure 6: Framing the basic story from common elements among trends
4. Key innovation drivers and barriers

In order to come up with possible policy options for scaling
up the successes of the trends, it is important to understand
the various drivers of the trends and the barriers faced by
the trend-driving companies and their clients.
The global market for 3D-printing grew by 29 percent

in 2011 in terms of revenues, and will be worth USD 6
billion by 2017;
The European gasification industry has a potential

annual market (revenue) of over EUR 10 billion;
The industrial robotics market was valued at EUR 6.49

billion in 2011, with an estimated growth of 5% per
year;
Out of the 400 billion annual public procurement at

European level3, it is estimated that only 3.8 billion
can be considered procurement of innovation4;
4.1. Drivers
Among the drivers of the 12 case-study trends the market
growth and further growth potential has often been
identified as most important (see table A in Annex). However,
especially in the cases on new business models and
practices, sometimes the market for the models is difficult
to quantify, since some practices (new ways of doing things)
cannot be sold (nor patented).
Examples of the large and growing potential (taken from the
various case-studies) include:
PwC, London Economics, & Ecorys. (2011) ; Which excludes

public procurement below a certain treshhold.
13
Trend report
The total number of organisations that have

implemented mobile work styles will rise from 24
percent in 2012, to 83 percent in 2014;
The potential of online peer-to-peer business models

is substantial, with growth exceeding 25%
Meeting demand does not only refer to market demand, but

also to serving societal needs. Various benefits of using
the solutions provided by companies are behind the growth
and the remaining potential of the trends, even though the
(potential) clients may not be aware of the full range and
intensity of the benefits. Technologies and solutions are
enabling conditions: without them the trends would not exist
in the first place, but un-locking the potential does not seem
to rely on next generations of technological breakthroughs.
In this respect both the main drivers and barriers of the new
models trend are on the demand-side of innovation.
Another important driver for the market potential is in the
fact that the new models are applicable to a variety of
sectors and industries. The potential market and the various
benefits of the solutions are not limited to one private sector
or industry.
For some trends regulation is promoting the demand, e.g. in
the case of environmental friendly technologies, but in other
cases old regulations and conventional standards rather are
an obstacle to new ways of doing business. At the workshop
another complication concerning regulation was emphasised,
as changing regulations (which could mean less, more or
different rules) can serve as a driver, but the rules should
not change every year, and should be based on a long term
strategy from government.
4.2. Challenges faced by trend driving

companies
In this chapter we focus on the identified challenges faced
by the trend-driving (solutions supplying, or solving)
companies (See also Table B in Annex). This includes the
barriers they have mentioned in relation to their
development and growth, as well as factors they mentioned
as being important in explaining their success. Challenges
and barriers in relation to policy support and framework
conditions are addressed chapter 6.
A main challenge for the (solutions providing) companies is
the scepticism and lack of understanding among
potential clients. The company BFS for instance feels its
innovation of large-scale autotrophic technology to convert
CO2 into energy is not well understood or well perceived by
the public. The company feels that in addition to a lack of
technical understanding, there is also a lack of interest for
such innovative technologies. This is despite the fact that the
4
innovation offers
employment issues.
solutions
to
environmental
and
Besides a lack of understanding, the scepticism is also

fuelled by the uncertainty about the possible disruptive
impact.
Such scepticism is also translated into difficulties in
accessing financing, especially for scaling up. The company
Visuol Technologies for instance, needs financing to build up
demonstrators in order to sell its technology to industrial
clients. Even if viable solutions to address big societal
changes are provided, wider market adoption remains a
challenge.
Other frequently mentioned challenges include: the scalingup phase and its financing; finding relevant partners and
skilled experts; testing and demonstrating the solution;
regulations and internationalisation.
Partnerships are widely seen as important factors in
explaining the success of the trend driving companies.
From the results of the workshop we can add additional
challenge: encouraging traditional industry and large
organisations to move faster, which calls for a new open
approach and promotion of linkages between large and
small companies.
4.3. Challenges faced by companies

clients
The case-studies also provide insights in the challenges
faced by the companies clients (see Table 3), although this
mainly refers to challenges as they are perceived and
reported in the interviews by the solutions providing
companies. More information from potential users and
effective users would provide more in-depth understanding
about the considerations to use or not use the current
solutions, and in the consequences and impact of using the
solutions.
Given the nature of the main challenges discussed in the
former chapter, it is not surprising that the challenges faced
by the (potential) users of the solutions point to the same
issues. A main barrier for the uptake of the technology, new
model, or innovation concerns a lack of understanding of
the trends and the benefits of the solutions offered.
Another barrier is the often mentioned fear for the
disruptive impact on the current business, organisational
and production model.
Rigby et al. (2012)
14
Trend report
Table 3: Challenges faced by companies clients

Trends
Challenges of companies clients

Advanced Manufacturing Technologies
1 Environmentally
friendly technologies
and energy efficiency
Limited understanding of the technological solutions; Clients having a lack of understanding of the new value
chains and the technologies being employed; Environmentally friendly technologies may disrupt value chains
and production lines. In doing so, they might require the fundamental rethinking and redesigning of the clients
manufacturing structures and production flows. Financial considerations as significant upfront expenditures
and long investment horizons are typically required; Adoption can lead to both increases and decreases in
staffing levels; Clients also need to be ensured of the reliability, viability and sustainability of both the
technology and the company supplying the technology.
2 New Manufacturing
Engineering
Adjusting to a higher skill level of employment demand in manufacturing.

Build good and early cooperation with supplying companies.
3 Mass customisation
Mass customisation enables clients to develop their own business.

Integrating an MC strategy implies carefully managing various kinds of change, mostly organisational change.
Management challenges include: supply-chain management, Inventories management, sales projections and
risk management.
4 Measurement
Technologies and
Robotics
Automation solutions are often capital-intensive and best suited for large-volume production, and secondly
they are often complex systems with a single function that makes them highly inflexible. Moreover potential
SME clients have difficult access to finance, poor awareness of the benefits of the solutions; and low technical
competence outside core business.
5 Smart Value Chains
The solutions offered were considered to be potentially disruptive to the value chain.
Requires significant capital expenditures to invest.
The uptake of smart value chain manufacturing solutions requires companies to attract highly skilled human
capital.
New Business Models
Public Private
Partnerships
6 Public Procurement
of Innovation
There is the client perspective of the public organisation purchasing the innovation through a procurement
programme, and the client perspective of market organisations purchasing the innovation.
7 Large-Scale
Demonstrators &
Small-Scale Testing
Units
Increased uptake will largely depend on the success of demonstrated innovative solutions.
The main challenge for users is in assessing the appropriateness of markets.
The solutions will be judged from a partners perspective on their ability to be:
Economically viable, i.e. their ability to develop and survive as a relatively independent economic unit;
Scalable, i.e. their ability to change scale in order to meet growing volumes of demand;
Replicable, i.e. their ability to be duplicated at another location or time;
Visible, i.e. their ability to be seen by various stakeholders; and
Implemented with a clear leadership and governance structure, providing confidence in all stakeholders,
ensuring them that responsibility is integrated into the partnership and its decision making processes.
Developing relevant skill-sets is a challenge for both public and private partners involved.
Big Data
8 Analytics and
Decision Making
There is still a cultural barrier to be overcome before the trend becomes widespread. This is because
embracing data-driven decision making involves moving away from conventional decision making processes.
On the one hand there is a degree of scepticism from the decision makers themselves about this new datadriven decision making. On the other hand, these new solutions would effectively cut out the middle-man and
empower company management to make decisions themselves. Obviously such a disruptive change in process
takes time before the market accepts it.
There are also legal concerns, and concerns about investments in large servers.
9 Artificial Intelligence
Challenges of clients include the long investment horizon of some artificial intelligence innovations, limited
understanding of the potential of the data generated by their organisation, and hesitation towards potentially
disruptive technology.
Workplace innovation
10 Enhancing
workplace productivity
One of the most important barriers relates to the organisational resistance to change induced by workplace
innovations. Resistance with middle management: in order to take a decision managers need to be aware of
the benefits of workplace innovation and often they are unaware of the benefits.
The availability of ICT-infrastructure and equipment on the client side.
A barrier to further uptake is the (conception of the) cost of a transition towards a more flexible workplace.
15
Trend report
Trends
Challenges of companies clients
11 Novel
Organisational Setups
and Management
Practices
Case companies are both the developer/supplier of the organisational innovation and at the same time a client
for the innovation.
Although customers of the case companies do not necessarily take up the innovation under discussion
themselves, they do benefit from its results, and these results can raise awareness and influence them
towards adoption of some of the principles.
The Sharing Economy

12 Accessibility Based
Business Models for
Peer-to-Peer Markets
The lack of trust and familiarity of clients with web-based peer-to-peer platforms.
From a clients perspective it is hard to perceive quality amidst this jungle of advertisement for web-based
marketplaces and communities.
Platforms that facilitate sharing of physical goods or services of low added value are unsuitable for (early)
uptake in for instance rural areas.
This latter problem that hinders clients uptake is exemplified

by Balmarts technology, which is designed for the intelligent
control of the environment in order to improve decision
making and increase agricultural production. Yet in
implementing Balmarts technology, the traditional working
practices of farmers are disrupted, and as a result,
prospective clients have demonstrated a resistance to
technological change.
Various policy interventions also served as a driver or barrier
of the trend on New business, organisational, and production
models. This role of policy will be addressed in more detail
in the next chapter.
We conclude that the main barriers are: fear for disruptive
changes, lack of awareness, and understanding among
potential clients, which was confirmed by the workshop
participants, who have summarised the barriers in one word:
conservative customers (Figure 7).
The workshop participants again added a comment on the

difference between large, existing companies and start-ups.
E.g., large and existing companies are not likely to totally
change their business model, unless they are forced by
competition or certain regulations.
Moreover, given the fact that many potential customers are
conservative, questions the extent to which user/client-driven
innovation (market- or demand-pul) is the answer, and to
which extent we still need some market- or demand-push.
Conservatism was also seen as a more general barrier to the
uptake of innovation at the level of the European society in
terms of people being risk-aversive, technology-aversive,
and not very innovation-minded nor entrepreneurial. This is
for instance also related to skill shortages for the up-take of
Advanced Manufacturing Technologies and New Business
Models, since students rather aim for secure jobs in large
companies.
Figure 7: Main barrier to the up-take of the trends: conservative customers
16
Trend report
5. Policy challenges: improving framework

conditions and promoting wider uptake
The new business, organisational and production models

might call for adjustment of existing policy support and
framework conditions. First the existing policies are
addressed. This is followed by discussing the policy gaps
(what is missing or lacking) and the policy challenges (how to
promote further up-take of Advanced Manufacturing
Technologies and New Business Models.
1.
The need of opportunities to demonstrate, test and

proof the solutions provided;
2.
To educate and raise awareness concerning the

benefits of the solutions and the New Models;
3.
Address SME specific needs better;
5.1. Existing policies: R&D (supplyside) support
4.
Networking, platform and partnership promotion;
5.
Support for the scaling-up phase;
6.
Policies addressing lack of people with specific

skills and expertise;
7.
Support for internationalisation.
A special focus is given to regional and national innovation

policy frameworks. The interviewed firms indeed benefited
most from regional and national support schemes and
regulatory frameworks (table C in Annex). Frequently
mentioned policies include:
1.
R&D grants;
2.
Tax credits, mostly for R&D;
3.
Incubator services;
4.
Networking events;
5.
Soft Loans;
6.
Competition awards and prize-money;
7.
Demonstrator & testing units;
8.
Public procurement of innovation schemes.
Most frequently mentioned forms of public support concern

subsidies and tax-credits for R&D and incubation services. Of
course the companies interviewed regarding the two Public
Private Partnership trends benefited from public funding in
the concerning public procurement schemes and in the
demonstrators and testing-units.
At the workshop it was confirmed that currently most
support goes to R&D. The participating entrepreneurs
concluded that both EU and national research and innovation
funding have a bad reputation, as they are not user-friendly.
5.2. Policy gap: demand-side

innovation policy
The main policy gaps identified in the case-studies (see table
D in Annex) are:
We can conclude that most of the drivers and barriers

discussed in chapter 4 are pointing at the need for more
demand-side innovation policy.
"Instead of supporting the
The existing policy support the
commercialisation of research,
companies have benefited
development and innovation,
from, involved supply-side
demonstrators and testing
innovation
policies
which
units start with the societal
provided funding for R&D. This
problem before identifying
has been very welcome, and
and validating the innovation
will remain important for new
solution. As a result, these
start-ups,
but
there
is
settings are turning traditional
insufficient support (a policy
innovation policy on its head
gap) to enhance the demand
(Case-study 7; large-scale
for and up-take of the
Demonstrators & Small-Scale
concerning
solutions
and
Testing Units)
business models.
The existence of the above mentioned policy gaps have been
confirmed and discussed at the workshop. Especially lacking
are policy schemes which promote the uptake of existing
(but innovative) technologies and practices.
Besides demonstration schemes and public procurement
schemes, an additional gap was reported by workshop
participants concerning the lack of funding schemes for
companies that want to invest in existing Advanced
Manufacturing Technologies: The European Investment Bank
currently has no policy to support uptake in the market,
support currently goes more to research, but there is no
support for customer investment. There is a gap in support
for companies that want to invest in process-innovations, or
in non-technological innovations. An additional gap identified
at the workshop was the lack of policies targeting low-tech
sectors. Since the Advanced manufacturing Technologies and
New business Models are applicable to many sectors, it
17
Trend report
seems indeed relevant not to exclude low-tech industries

from innovation support.
5.3. Policy challenges

When asked to the case-study companies how to fill the
policy gaps (Table 4), they mention three kinds of policy
challenges, which consist of three ways in which the success
can be scaled-up (Figure 8):
1.
from themselves in the past), which can be used to

develop new technological solutions;
2.
Policies which improve the framework conditions

for the trend-driving companies and their
customers (stimulating the growth and start-up of
solutions providing companies and sectors);
3.
Demand-side policies to promote the wider

uptake of the trend by the market; which scale-up
the use of the solutions and the wider societal and
economic impact.
Continuation and improvement of existing supplyside R&D policies (the companies have benefitted
Table 4: Case-study policy challenges

Trends, case-study
policy challenges
1 Environmentally friendly
technologies and energy
efficiency
Develop awareness at the public level, highlighting the benefit of these novel technologies so as to
encourage the uptake of these solutions and reduce public scepticism.
Creation of large-scale demonstrators and small-scale testing units.
Support SMEs bringing environmentally friendly technologies to market.
Simplify administrative processes for public support.
Provide access to finance for companies that adopt environmentally friendly technologies.
2 New Manufacturing
Engineering
Improve access to finance for innovative SMEs and mid-caps.

Improve prospective client awareness of NME processes.
Improve access to relevant highly skilled labour.
Increase access to vocational education and training.
Establishing an enabling business environment. This involves administrative simplification, for example to
support services in the setting-up and putting together of administrative dossiers. Facilitating access to
finance. Facilitating the international development of mass customizers. Supporting entrepreneurship and
favouring an entrepreneurial spirit. Improving communication between entrepreneurs and investors.
4 Measurement
Technologies and Robotics
Promoting R&D efforts in automation solutions for SMEs.

Educating the market about the benefits of automation. Improving support of start-ups. The primary factor to
address would be the administrative burden faced by beneficiaries of public aid.
Stimulate entrepreneurs to actively think of the market opportunities before developing the innovative
technology.
To stimulate the market uptake of innovative solutions in the smart value chain manufacturing industry.
Address the lack of specialised and highly skilled human.
Simplify or shorten the administrative processes for public support.
Provide access to finance for companies trying to upscale and commercialise the innovation.
New Business Models
6 Public Procurement of
Innovation (Public Private
Partnerships)
European governments can introduce a hybrid version of funding development as well as procurement of
innovation, by co-procuring with private sector players, by combining procurement with free access to
university R&D hours and knowledge, by introducing an Envy scoring mechanism for public procurement
programmes, by cutting up tender procedures in several (smaller) separate assignments, and by using
specific methods that can encourage or force tenderees to adopt certain innovations or technologies.
7 Large-Scale
Demonstrators & SmallScale Testing Units (Public
Private Partnerships)
The EU should push for consortia to engage in international partnerships that ensure the diffusion of
innovative solutions to other Member States.
It is suggested that the public sector engages in public procurement activities for demonstrators and smallscale testing units. This will provide a test-bed in which the public sector will be able to tailor new demandside policy.
Demonstrators and testing units are particularly relevant in areas where regional economic growth agendas
support cross-cutting themes.
8 Analytics and Decision

Making (Big Data)
Ensuring appropriate access to finance for big data companies that have a financing shortfall when raising
funds to commercialise new analytic solutions.
Establishing an enabling business environment for data storage, data transfers and communication networks.
Supporting entrepreneurship, leading to the creation of start-ups and SMEs that offer big data analytics and
decision making solutions.
Fostering administrative simplification.
To support big data SMEs in their internationalisation process.
To develop and promote an education system able to answer the specific needs of big data companies.
18
Trend report
9 Artificial Intelligence (Big

Data)
European governments can improve the access to funding of young technology organisations by making it
less difficult to obtain funds for early-stage technological development through seed funds and R&D grants.
Tax reform to promote innovation can be targeted to improve liquidity of technology start-ups by offering
them a tax holiday or the possibility of deferred taxation.
Public procurement of innovation could provide for proof-of-concepts and show good practices to incorporate
in cost-benefit analyses.
Reforming immigration policy to attract highly skilled labour.
Fostering administrative simplification. Reforming employment regulation, to reduce the administrative
burden. Encouraging university-industry interaction. Encouraging mentorships, existing intermediary bodies
deploy mentorship programmes and matchmaking activities. European governments can re-engage in
international discussions on international patents to improve the protection of innovations.
10 Enhancing workplace
productivity (Workplace
Innovation)
A key role for authorities is to address legal/regulatory uncertainties.

The public sector should play a role-model, lead by example.
Support the uptake by providing employers grants or other forms of government support for further uptake
by lowering the financial barriers to implement flexible work. Supporting entrepreneurship leading to the
creation of start-ups and SMEs that offer productivity enhancing workplace innovations.
11 Novel Organisational
Setups and Management
Practices(Workplace
Innovation)
There is a need for policy measures that maintain, expand and make existing RDI infrastructure more
accessible for SMEs and start-ups.
Policymakers should come up with measures that ensure the availability of funding for companies deploying
novel organisational setups and management practices.
Other recommendations include, more direct support mechanisms, supporting network building, to ensure a
constant supply of technologically educated individuals and simplifying employment of non-EU residents in
EU-member state countries
Business Models for Peerto-Peer Markets (The
Sharing Economy)
Policy makers could tailor tenders aimed at innovation within start-ups according to the restrictions those
companies face.
European and national subsidy programmes could be tailored to be more in line with this new approach to
entrepreneurship. Policy makers should facilitate the creation of minimum standards for peer-to-peer
markets. Policy measures that facilitate more flexible employment of workers are desirable.
It is hard for sharing economy start-ups to attract talented software developers and programmers. Policy
measures that would make it more attractive for employees to receive company shares, and receive future
dividends on them, could help start-ups attract skilled workers.
In Figure 8 on page 20 these three policy issues are included

as an additional story-line to the basic framework.. On the
left hand-side supply-side innovation policies are located, of
which especially the R&D support for the development of
new solutions by trend driving companies have been
relevant.
The future impact from more demand-side policy efforts will

feed-back and generate more demand for the new models
and more growth and competitiveness for the trend-driving
companies.
Framework conditions refer to the resources the companies

made use of (finance, knowledge, human resources,
infrastructure, etc.) and the specific business and incubation
climate that was beneficial to start-up and grow.
The future growth in demand for and supply of solutions will

not only come from the current trend-driving companies and
their clients. The need for application in other sectors will
generate new entrants, which will enlarge the number of
trend-driving companies, and diffuse the new models trend
to other sectors.
Demand-side innovation policies (located on the right handside in figure 6) are now needed for scaling up the New
Models trend and the impact in terms of both socioeconomic benefits as well as competitiveness. The casestudies on Public Private Partnerships concerning public
procurement and demonstrators and testing units are good
examples of such demand-side innovation policies.
Also the priority setting in Europe (e.g. in its science and

technology policy) is part of the success story. Although it
was not often mentioned explicitly in the case-studies, the
European strategy that research and innovation should
address societal challenges has supported the trends,
especially those concerning solutions to environmental
challenges.
Trend specific framework conditions include for instance

banks which provide funding for demonstration projects or
for investments in new process technologies by customers.
19
Trend report
Figure 8: Bringing policy into the picture: promoting up-take and scaling-up the New Models trend
Legend: Left-hand-side: existing supply-side innovation policy; right-hand-side: demand-side innovation policy
At the workshop 5 the participating entrepreneurs and

policymakers have identified similar policy challenges. The
concrete demand-side policy recommendations are
presented in Chapter 7. Below we highlight the two more
general challenges: how to come to a more innovative
Europe, and how to address shortages in skills and
competencies.
Towards a more innovative Europe
Ease access to current EU and national R&D

and innovation support
Current EU and national research & innovation funding

schemes are not user-friendly, and in particular: not SMEfriendly. This message was also reported by case-study
companies. It was recommended by the workshop
participants to simplify the access to existing public support
for research and innovation. Besides more accessible public
funding it was also recommended to encourage new ways to
5
See :
http://ec.europa.eu/enterprise/policies/innovation/policy/bu
siness-innovation-observatory/files/workshops/wks1-1809-2013-agenda_en.pdf
find funding for innovation, e.g.: crowd funding or Public

Private Partnerships.
Also the importance of a long-term strategy from
governments and European alignment of fragmented
national policies was stressed, for instance concerning
energy. A good strategy would be to develop business
innovations around priority sectors.
Change the mind-set in society
Based on a discussion what the US and Asia do better, it was

concluded that it is not only about funding, but about the
environment, culture & education. The mind-set should be
changed by celebrating entrepreneurship, risk-taking and
engineering skills.
Extend the systemic approach: engage a larger

variety of parties and promote decentralised
innovation hubs
Several of the roundtables have mentioned that for

increasing the dissemination and uptake of the trends in
Advanced Manufacturing Technology as well as in new
business models, it is needed to engage many parties in
20
Trend report
working together. Policymakers should provide a forum for

this engagement between stakeholders. This includes
governmental bodies and knowledge institutes, and
companies from various sectors. It includes parties in the
value chain (from raw resources to the end-user industries),
the innovation chain (from research to demonstrations and
market). An extension to such a systemic approach also
concerns various parties in the industrial chain, ranging from
large companies to SMEs. Inter-relations between small and
large companies were emphasized as being important to
increase the uptake of new manufacturing technologies and
especially for incubation of new business models. Several
workshop participants have stated the importance of the
regional level and promoting decentralised innovation hubs
(smart specialisation). Regional intelligence in this respect
involves identifying where companies are in the complete
value chain (but also the innovation and industrial chain),
and questioning to what extent these chains this be
transferred to and embedded in the regional level? Regions
should develop a long-term strategy, which includes
developing interfaces with other regions, but especially to
use of Regional funds to modernise the industry by
promoting the demand and uptake of business innovation.
Policy challenges concerning skills

shortages and competencies
talent. Both innovative skills and traditional skills are lacking.

Solutions are to be found in engaging schools, in
apprenticeships and in a more free global skills market
(import skills). Concerning New Business Models skills are
both specific and rare. Skills for New Business Models are
specific to each development step. It involves multi-purpose
and multi-task managers, high skilled experts and creative
profiles. The skills needed are also specific to the business
models, e.g. in disruptive IT models, flat organisations or
models which channel creativity. Possible policy solutions
include:
Education programs to develop an entrepreneurship

mindset;
Fostering cooperation between companies and

education institutes, e.g. concerning skills sourcing;
Support Refresher programs within companies or

through business schools;
Visas program for highly qualified profiles;
Voucher schemes for acquiring specific services;
Tax incentives for professional training schemes.
Two roundtable groups at the workshop discussed the issue

of trend specific of skills and competencies. Concerning
Advanced Manufacturing Technologies it is difficult to attract
6. Confronting the emerging story with policy

literature & good policy practices
The main policy issues which have emerged from the

previous chapters will in this chapter be confronted with the
existing policy literature and good policy practices. To what
extent do our results point at a gap in the policy literature?
To what extent are the policy issues new and trend-specific?
This chapter also gains insights from existing good practice
policy instruments.
6.1. Gaps in Innovation System

concepts: towards Societal
Systems of Innovation
The New Models trend and practices as described in the
former chapters may call for new or revised conceptual
frameworks. The concept of Innovation Systems is one of the
most widely adopted concepts. It started with the concept of
national systems of innovation as it was developed in the
1980s by Freeman (1987), Lundvall (1992), and Nelson
(1993). Based on this, various versions emerged, including

regional innovation systems (Cooke 2010), sectoral
innovation systems (Malerba 2002) and technological
innovation systems (Carlsson & Stankiewicz 1991). Soete et
al. (2009) state that one of the shortcomings of these
systems of innovation concepts is the limited attention for
the increase of innovations which do not need particular
leaps in science and technology. The combination, use and
diffusion of known practices has become more important for
innovation and its economic impacts. Also Iizuka (2013)
points at some limitations; she calls for a framework that
incorporates societal perspectives. New players such as endusers and the public sector have to be included. The New
Models trend as show-cased in this report confirms these
limitations.
While the conventional innovation systems approaches
merely focused on the economic impact from innovation,
New approaches also address how innovation systems can
21
Trend report
help in coping with certain societal challenges. Concerning

sustainability challenge several eco-innovation systems
approaches have been developed6. Geels (2004) for instance
speaks of socio-technical systems pointing out that
developing new technologies (e.g. an electric car) and
strategic niche-management (Kemp et al. 1998) is not
enough and that it can take a long time to bring about a
whole system transformation (regime-change). Addressing
environmental challenges asks for a broadening of the
concept of Innovation Systems (Foray et al. 2012), and for
new policy models (Mowery et al. 2010). Literature on social
innovation (Murray et al. 2010) shows how innovation can
also be instrumental for social challenges in society
(including other than green challenges).
Aspects of this new Societal Innovation policy model 7 would

include:
Since the New Models trend is not about only one type of
innovation or one type of societal challenge, it can benefit
from existing insights from several of these models which
are tailored to a specific type of innovation, a specific
technology or sector, or tailored to a specific societal
challenge. However, there is a gap in the policy literature
concerning the commonalities, linkages, overlap between and
integration of the currently fragmented fields. This also
applies to the need to integrate the concerning fragmented
policies. The commonalities among the various case-study
trends show that there is need for an integrated societal
innovation system perspective, as illustrated in Figure 9. A
more demand-side oriented system of innovation that serves
to un-lock the potential of business and societal innovation
by scaling up the New Models trend.
Figure 9: Towards Societal Innovation Systems
Regional
innovation
Service
innovation
E-Society
Ecoinnovation
Societal Innovation
System
Public
sector
innovation
Social
innovation
Business
and
Sectoral
innovation
See Coenen & Lpez (2009) and Cooke (2011) for an

overview and comparison
Innovation policy is no longer only seen as

instrumental for firms and economic objectives,
but also for other (non-economic) societal
challenges, in one or more other public policydomains.
Increased attention from policymakers for
demand-side
innovation
policies,
raising
awareness, promoting diffusion and absorption,
behavioural change, involvement of (end-)users,
societal transformation processes, and promoting
the up-take of new business, organizational and
production models.
The broadening of the involvement of different
players and sectors, including the public sector and
citizens.
Set societal innovation priorities, organize
platforms and join collective initiatives. Since the
various players have their own public or private
motives, objectives, habits and different areas of
scepticism and fear for disruptive changes, it is
important to invest in the collective search for
shared priorities and entrepreneurial visions in
thematic innovation platforms, which can lead to
collective initiatives, e.g. in the form of testing
units and demonstrators. In this respect, the focus
on specific themes, challenges, lead-markets, or
Smart Specialization Strategies has already
increased the systemic nature of the policy
approaches towards a societal innovation
approach.
Broadening of supported business innovation
activities. Not only subsidize firm R&D for product
innovation, but also allow subsidies to be used for
adopting new business models and for diffusing
and marketing of societal innovations.
Bundling of initiatives often packaged into a
strategic policy mix consisting of various policy
initiatives, as it is for instance implemented in
lead-market initiatives and foreseen in the
European Innovation Partnerships (EIPs). This
bundling or packaging of related initiatives can
also be served by aligning the policy initiatives at
the various policy levels (local, regional, national,
European). E.g. in the case of demonstrating and
testing units it was stated that local initiatives are
more sustainable when embedded in a larger
regional strategy.
See also Wintjes, Turkeli & Henning (2013) Societal

Innovation in metropolitan areas.
22
Trend report
alignment
between
local/regional, national and European policies and
initiatives.
6.2. Supply-side innovation policies

become less dominant
The New Models trend as analysed in the previous chapters,
calls for more demand-side innovation policies. Several
authors have already shown the importance of demand for
innovation 8, but supply-side innovation policies are still
dominant in the regional and national policy mix. In this
respect there is a policy gap that has to be filled with
policies that meet the new policy needs.
Over the last few years the innovation policy approach has
changed. The strategy has broadened, became more
strategic and focussed, with more attention to the demandside of innovation and several new missions for innovation
policy have been integrated for
addressing societal
challenges. With EU2020 the role of innovation became
more important and broader. Also the Flagship initiatives and
HORIZON moved away from a dominant supply-side
innovation strategy, by adopting more demand-oriented
policy approaches, and by a research agenda focussed on
societal challenges (Table 5).
Table 5: Proposed research funding for societal
challenges (million Euros, 2014-2020)11
Horizon 2020
Edler (2009) even states that: the demand side has long
been systematically neglected in innovation systems analysis
and subsequently in concepts and practice of innovation
policy-making (Edler 2009, p.2). For many years in Europe a
supply-side innovation target (set in Barcelona in 2002) to
increase the R&D intensity to a level of 3 % as share of GDP,
was the dominant innovation strategy. Policy makers have
for a long time favoured the linear rational and the
arguments on the supply side: an increase in R&D would lead
to more technological inventions and patents which would
lead to more successful innovations and economic growth.
Typical examples of supply-side or technology push policies
are: public funded R&D and R&D tax credits.
One of the explanations for the limited use of targeted
demand-side innovation measures could be that many
governments have historically tended to rely on
macroeconomic policies and framework conditions to support
market demand and to avoid market distortion; Much of the
role of government on the demand side of innovation has
focused on getting prices right (OECD, 2011). Also bad
memories of old industrial policy of governments favouring
or protecting (vested interest in) specific sectors, may have
played a role. Especially the notion that innovation should
address (grand and/or global) societal challenges9 has lead
to an increased attention for demand-side policies. Even the
new EU industrial policy10 (EC, 2010d) puts competitiveness
nd sustainability at the centre. It includes those policies
which target innovative competitiveness, but it also notes
the importance of the competitiveness effects of other policy
fields, e.g. concerning transport, energy, consumerprotection, environment, single-market and trade policies.
E.g. Mowery and Rosenberg (1979).
As it is formulated in for instance the Lund declaration
(2009), the OECD Innovation Strategy (2010) and the
HORIZON 2020 programme.
10
EC (2010) An Integrated Industrial Policy for the
Globalisation Era: Putting Competitiveness and
Sustainability at Centre Stage SEC(2010) 1276. See:
http://ec.europa.eu/enterprise/policies/industrialcompetitiveness/industrialpolicy/files/communication_on_industrial_policy_en.pdf
8
9
Million Euros,
2014-2020
Health, demographic change and wellbeing
8,033
Food security, sustainable agriculture, marine and

maritime research& the bio-economy
4,152
Secure, clean and efficient energy
5,782
Smart, green and integrated transport
6,802
Climate action, resource efficiency and raw

materials
3,160
Inclusive, innovative and secure societies
3,819
The increased need of demand-side measures is also

emphasized in the Innovation Union Flagship (EC, 2010): the
potential of the single market should also be activated
through policies that stimulate the demand for innovation,
moreover it states that a bolder approach associating the
supply and demand sides is needed.
At regional level the supply-side innovation policy measures
are still dominant. One of the main conclusions from the
Regional Innovation Monitor (RIM) annual report 201012 was
that: policies remain heavily focused on the supply-side
despite efforts to support knowledge transfer and
collaboration activities between the research base and
industry. But also at regional level innovation policy there is
a recently increased interest in implementing demand-side
innovation policy elements13.
EC DG Research & Innovation 2020 presentation,

accessible:
http://ec.europa.eu/research/horizon2020/pdf/press/horizo
n2020-presentation.pdf
12
See:
http://ec.europa.eu/enterprise/policies/innovation/policy/
regional-innovation/monitor/
13
Wintjes, Ren (2012), Demand-side innovation policies at
regional level, Regional Innovation Monitor, Thematic
Paper 3. Available at: http://www.rim-europa.eu/
11
23
Trend report
6.3. Demand-side innovation policies

Demand-side innovation policies have been defined by Edler
& Georghiou as a set of public measures to increase the
demand for innovations, to improve the conditions for the
uptake of innovations or to improve the articulation of
demand in order to spur innovations and the diffusion of
innovations14.
The instruments of demand-based policies are broad and
include: public procurement of innovation, direct or indirect
financial support for the purchase of innovations, various
kinds of training, and awareness mechanisms to build up and
broaden absorptive capacity for innovation and the shaping
of conductive regulatory framework conditions.15
The further shift in attention towards demand-side
innovation has also been fuelled by the increased
importance of for instance: service innovation, public sector
innovation, non-technological innovation, and Open
Innovation. Also the horizontal integration of innovation
policy with other policy-fields has enforced the call for
demand-side policies for innovation. The specific demand for
innovation in other policy fields (for addressing societal
challenges) has lead to new priority setting practices, which
some have characterized as a new mission-led approach16.
Demand-side policies serve in this respect as a focusing
mechanism, not only for innovation strategies of companies,
but for instance also for policy fields such as the new
industrial policy, research policy (Horizon), and regional policy
(Smart Specialization Strategies). Here we see a similarity
with the strategies of many of the trend driving companies
from the case-studies, since many of them mentioned that,
although their solutions and technologies are applicable in
many sectors and for multiple-purposes, their success is
largely based on focusing on specific kinds of applications.
Main demand-side policy tools include:
Regulation, including standardization and the

screening of the innovation regulatory framework
Private demand support in the field of tax

incentives and demand-subsidies;
And systemic policies, such as user-driven

innovation platforms, spurring the innovation
uptake across the stakeholders communities, e.g.
through ETPs or EIPs.
Table 6: Demand-side innovation policy instruments

Demand side
innovation policy
tool
Public procurement Public procurement of innovative goods and

of innovative goods services relies on inducing innovation by
and services
specifying levels of performance or
functionality that are not achievable with offthe-shelf solutions and hence require an
innovation to meet the demand.
Public procurement
of R&D
These programmes support suppliers of

innovations by procuring R&D services.
Governments articulate a specific need, call for
R&D proposals and select among the
competing tenders. Various models for tender
procedures can be used. Most recent
programmes use the PCP (Pre-Commercial
Procurement) approach.
Use of regulations
Use of regulation for innovation purposes is

when governments collaborate broadly with
industry and non-government organisations to
formulate a new regulation that is formed to
encourage a certain innovative behaviour.
Standardisation
Standardisation is a voluntary cooperation

among industry, consumers, public authorities
and other interested parties for the
development of technical specifications based
on consensus. Dynamic standardisation is an
important enabler of innovation.
Demand subsidies
The purchase of innovative technologies by

private or industrial demanders is directly
subsidised.
Tax incentives
Tax incentives can increase the demand for

novelties and innovation by offering reductions
on specific purchases.
Articulation and
foresight
Societal groups, potential consumers and

public and industrial users are given voice in
the market place, signals as to future
preferences (and fears) are articulated and
signalled to the marketplace, including
demand based foresight.
Catalytic
procurement
Catalytic procurement involves the

combination of private demand measures with
public procurement where the needs of private
buyers are systemically ascertained. The
government acts here as ice-breaker in order
to mobilise private demand.
Awareness raising
campaigns
Awareness raising actions, and demonstration

projects promoting private demand have the
role to bridge the information gap consumers
of innovation have about the security and the
quality of a novelty.
Public procurement, including public procurement

of R&D and public procurement of innovative
goods and services;
Edler J. and Georghiou L. (2007). Public procurement and

innovation - Resurrecting the demand side. Research
Policy 36 (2007) 949 963.
15
Evaluating the demand side: New challenges for
evaluation by Edler, J. Georghiou, L.; Uyarra, E.; Blind, K.
in: Research Evaluation 2012, pp.1-15.
16
Gassler, H., W. Polt & C. Rammer (2008) Priority Setting in
Technology Policy: Historical Developments and Recent
Trends. In: C. Nauwelaers & R. Wintjes (eds.): Innovation
Policy in Europe; Measurement and Strategy. London:
Elgar.
14
Short description
24
Trend report
Cluster policies,
support to userdriven innovation,
Sector-,
technology-, or
theme-specific
platforms
Policies that try to influence the development

of the innovation system by stimulating
dialogue between users, producers and other
innovation players, so as to increase their
levels of coordination and cooperation and
promote innovation and subsequent take-up.
Lead market
initiatives
Lead market initiatives support the emergence

of lead markets. A lead market is the market
of a product or service in a given geographical
area, where the diffusion process of an
internationally successful innovation
(technological or non-technological) first took
off and is sustained and expanded through a
range of different policies.
Source: Izsak & Edler (2011, p.11), and Edler 2009
Table 6 provides a more detailed list of instruments. The

concept of lead-markets adds a strategic component to
demand-side innovation policies. Von Hippel (1982 and
1986) introduced the concept of lead users, which he
defined as: consumers whose present strong needs will
become general in a marketplace months or years in the
future (von Hippel 1986, p.792). With innovative
procurement the public sector can also adopt such a role as
lead user.
This lead users concept can also be applied to the regional
level. Regional Innovation Strategies could for instance
include the development of strong needs and thus create a
regional lead-market as a way to construct a regional
competitive advantage. As such, demand-side innovation
policies can fulfil an important role in Smart Specialization
Strategies. At the higher policy levels of the European Union
and of the individual countries, it is more difficult to select
priorities and fields of specialization. At regional level it is
less difficult to accept that the region cannot excel in every
possible field and has to set priorities.
A difficulty in designing demand-side policy instruments is
not to distort market competition. Favouring individual
companies or support the marketing of individual products or
services, is not allowed according to state-aid rules.
Governments may favour green solutions, and promote the
demand for it, but governments should not close the rivalry
among green solutions, or reduce the incentives to search
for even better solutions.
This difficulty is for instance evident concerning innovative
public procurement, but also in large scale demonstration
projects. Demonstrating the success of only one solution at a
large scale, may distort the competition with other solutions.
It should at least be based on testing of several solutions in
concrete societal context. In this respect we can learn from
the concept strategic niche management which is
developed in the literature concerning sustainability
challenges (Kemp et al. 1998). After supporting various niche
initiatives at a decentralized level, in a next phase the best
niches could be picked up by the market, or publicly
supported and demonstrated at a higher, more central level
of governance. Conceptually this kind of policy learning is

also close to the policy approach taken with Smart
Specialization Strategies, Lead market initiatives and
European Innovation Partnerships.
6.4. Comparing the case-study results

with other studies
In order to asses to what extent the results of the casestudies are different, and characteristic for the concerning
new trends, we compare some results with other studies on
policy-gaps/framework conditions and aspects of existing
policies that need to be improved.
In the GPrix survey17 SMEs in various regions in Europe were
asked: What are the specific needs for SMEs to enable them
to participate in innovation support programmes? The main
need identified was procedural simplicity and transparency.
Bureaucratic procedures are a barrier since they impose a
fixed cost on programme participation.
Although the
respondents to this survey involved SMEs in traditional
manufacturing sectors, the same needs have also been
mentioned by many companies in the Business Innovation
Observatory case studies. This suggests that not all policy
needs mentioned by the companies that drive the new
models trends, are specifically related to those trends. In this
respect the need for more simple application procedures
seems a more general need. It is a problem that any region
or country in Europe will have to address as a general
framework condition.
As assessed by the Regional Innovation Monitor the up-take
of dedicated demand-side innovation policy instruments has
increased, but they did not yet have a pertinent and
recognizable place in regional innovation strategy
documents. However, a RIM thematic paper18 has shown that
many relevant new policies at local level of cities in
metropolitan areas have appeared.
This corresponds with the stories of the case-study
companies, which highlight the importance of being located
in a stimulating environment which can drive the concerning
trend: close to R&D infrastructure, a pool of talent, potential
partners (public and private), venture capital, receptive
policy-makers, lead-users, etc. Some of the trends and
companies even benefit from being located in a city with a
relatively high level of familiarity and usage of web-based
and mobile technology.
In this respect, developing Smart Specialization Strategies
could build on those place-based advantages. Local and
regional lead-market type of initiatives can serve to develop
17
18
http://www.gprix.eu/
Wintjes, Ren, Serdar Turkeli and Florian Henning (2013),
Innovation Policy in Metropolitan Areas: addressing
societal challenges in functional regions, Thematic Paper
6. Available at: http://www.rim-europa.eu/
25
Trend report
specialized ecosystems for one or more of the New

business, organisational or production models. Many of the
Smart Specialization Strategies 19 which are currently
developed focus on a few combinations of a sector with a
societal challenge. A coherent package, a mini-policy-mix of
demand-side innovation policy measures which un-lock the
potential of the New Business and Production Models could
also serve to develop lead-regions. Regions where trend
driving companies can flourish can develop into trend driving
regions. As it is phrased in the project European Service
Innovation Centre 20 which promotes the use of the
transformative power of service innovation, regions can
develop into demonstrator regions.
Chesbrough (2010) has looked into the question why it is
difficult for companies to innovate their business model. He
refers the insights from Amin & Zott (2001) and Christensen
(1997) that in the cost-benefit perception of adjusting the
business model that is required to exploit a disruptive
technology the established technology and business model is
disproportionately favoured. According to Chesbrough (2010)
established business models build up a dominant logic of
those involved, which makes a company blind for some
opportunities that do not fit this dominant logic. This is why
McGrath (2010) claims that adopting a new business model
calls for a discovery driven approach instead of a costbenefit analysis. Possible implications for the search for
appropriate policy instruments to increase the adoption of
the New business and production models is that
policymakers should rather support such a discovery and
experimentation processes than subsidizing a cost-benefit
analysis, a feasibility study or other kinds of expert advice.
Concerning the impact of a more widely adoption of the
solutions provided by the trend-driving companies more
insight is needed from the clients of these solutions, in order
to check their claims. Some of these claims can be supported
by evidence from other studies. Lachenmaier and Rottmann
(2010) for instance show that process innovations have a
higher positive effect on employment than product
innovations.
6.5. Good policy practices

Several companies interviewed as part of the case study
Public Private Partnerships - Large-Scale Demonstrators &
Small-Scale Testing Units have mentioned the benefits of
public support in the form of public private partnership (PPP)
within the EcoGrid EU project and the GRID4EU project.
Especially several EU projects have lead to European
exchange and diffusion among similar demonstration
projects, where societal innovations are tested and
demonstrated in a real-life, societal context.
19
20
See http://s3platform.jrc.ec.europa.eu/home
http://ec.europa.eu/enterprise/initiatives/esic/index_en.htm
Two Swedish policies which have benefited companies

interviewed for the case study Big Data - Artificial
Intelligence. QlikTech has been helped by a revolving fund
that provides mezzanine funding and equity investment to
promising innovative companies and the company
Expertmaker has benefited from the bank loans guaranteed
by the Swedish government, which allowed them to borrow
from banks that normally would consider them unfit for the
banks risk profile. With the aim for scaling up the use of
these Big Data solutions, it would be interesting if the same
policies could also be used by the clients of the mentioned
companies.
Quite a number of case-study companies have benefitted
from awards, contests or prizes. Although such awards
have been used as an indication of success in selecting
companies, these awards seem especially relevant as a
validation, signaling and reputation effect for innovations
that address societal challenges, since the involved prize
money is often limited. These awards also serve as kind of
demonstration and diffusion of (formats for) initiatives. Such
awards are frequently used for social innovation initiatives.
The role of such awards for the reputation of those involved
might be similar to the reputation effect that a patentportfolio often has for technology focused companies.
In the case study on public procurement of innovation the
SBIR scheme in the US has been mentioned as a good
example. Concerning public procurement of R&D two types
of programmes exist. One type includes the two older
programmes in the UK and the Netherlands which are
inspired by the Small Business Innovation Research (SBIR)
programme in the US. More recent programmes follow the
EC directive on Pre-Commercial Procurement (EC 2007). The
general process is as follows: government authorities
articulate a specific need for which no current solution is
available, they call for R&D proposals and select among the
competing bids in several phases. The supply-side element
of this instrument is that it supports R&D activities of
suppliers. The demand-side element relates to the targeted
articulation of demand, which is for instance much more
targeted than the research priorities set by national research
councils. During the process, the interaction between the
user and the competing suppliers is restricted (in order to
comply with competition law and state-aid regulations), but
this differs between the various schemes.
Although most programmes which promote Pre-Commercial
Procurement (PCP) are in initial phase and have not yet been
evaluated, a main difficulty of the approach seems to be
that it does not often lead to the commercial phase of actual
public purchasing of the product developed. Therefore, one
of the company case-studies referred to the benefit of
participating in such a scheme as a reputational effect: it
helped as a signal in trying to win other clients. This also
explains why the concerning company recommended to add
as a follow up to the scheme a demonstration activity.
26
Trend report
As stated at the workshop the European Investment Bank

currently has no policy to support uptake in the market:
support currently goes more to research, but there is no
support for customer investment. The EBRD provided us

with some good practices in this respect (see the below
textbox).
Advanced Manufacturing Technologies and long term Investors: the case of EBRD
The European bank for Reconstruction and Development (EBRD) is an international financial institution that supports projects from
central Europe to central Asia and southern and eastern Mediterranean, investing primarily in private sector clients whose needs cannot
be fully met by the market. In the post crisis context, capital investments in manufacturing are being delayed or reduced. The following
examples provide information on specific EBRD investment projects in advanced manufacturing technologies.
Metsa Tissue is a Finish supplier of tissue and cooking paper and EBRD has financed its subsidiary in Poland for investment in
the best available energy efficiency improvements. The provision of longer tenor funding was needed in order to properly
match the long term nature of the investment programme. The Project will replace old and inefficient paper machines, close
down the coal-fired CHP plant and use natural gas boilers for heating requirements and it will increase production capacity by
30,000 tonnes.
EBRD has financed capacity expansion in favour of Getrag Ford Slovakia, at its plant in Kechnec, for R&D expenditures related
to manufacturing of dual clutch transmissions a high-tech complex part needed in production of vehicles. The commercial
lending market was unable to fully support the financial package for corporate technological upgrading. This project will allow
the Company to adapt to the recent market trend of increased automation in newly registered vehicles, offering a state-ofthe-art solution addressing the need of lower fuel consumption and reduced CO2 emissions.
ABS Sisak is an ironworks factory which was privatized and is fully integrated into the Danieli steel-making division of ABS
Italy. The main elements of the on-going corporate restructuring are: a) to focus production on higher value-added products;
b) establishment of local R&D capacity; and c) setting-up an efficient production process and the application of innovative
production technology. EBRD financing was in response to the need to mitigate local risks and the difficulty to obtain long
term financing in Croatia. The EBRD loan will be used for financing the investment necessary to resume operations at the
Sisak plant and to turn it into a state-of-the-art engineering steel making facility.
Source: EBRD, Industry, commerce and agribusiness (ICA) group.
An interesting, new model that was mentioned at the

workshop is the Credit model for energy efficiency
investments21, however it is not applicable to any kind of
energy efficiency investments, but only in specific cases.
In principle, this model is not different from conventional

investment financing; it is just the credit volume that extends
far beyond the norm. In this respect, various features must
be taken into account:
Investments in energy efficiency are often not made, even if

they are completely economically reasonable. Some of the
reasons often given are Amortisation takes too long, not
provided for in the investment budget, Liquidity strain too
high. The problem is often that the efficiency gains do not
appear strong enough at the time of the investment decision.
A required prerequisite for this comprehensive loan is a

regular and reliable cost/income statement that has been
tested by experts (energy system experts). It must be
ensured that the annuities that arise from the loan can be
borne by the return from the efficiency gains.
The credit model briefly described below aims to overcome

resistance against reasonable investments. For this purpose,
VDMA suggests to realise the future efficiency return already
in the present earnings and liquidity. For that purpose, the
company should be offered a loan that not only covers the
investment costs but that also pays out a considerable
advance on the increments from energy savings that are
anticipated in the future based on the investment. This
would draw the companies attention on the economic
potential which can be tapped by investments in energy
efficiency.
The loan can be adjusted in such a way that a large amount
of the cash value of the efficiency return can be paid out
and the remaining efficiency return is enough to manage the
ongoing annuities. In doing so, the model goes essentially
without subsidies.
21
The information is provided by Holger Kunze (VDMA,

European Office, 2013)
Evidence must be provided to prove an investment is

especially energy-saving whatever that means
(development of suitable criteria is a key task). This could be
linked to the achievement of energy efficiency classes (in the
sense of labelling), to the evaluation of the effect of the
investment on the energy balance of facilities (it often
concerns the evaluation of complex systems) by neutral
assessors etc. A vital support would be achieved through the
preparation of benchmarks and key figures by
manufacturers, to which the VDMA assures its involvement.
Various companies have provided the VDMA with specific
realistic examples, including:
Industrial furnaces (flow-through system for

annealing steel strips): Replacement of outdated
burners with highly efficient burners Investment
volume of EUR 2.1 million, annual energy costs
savings of EUR 495,000, amortisation period - about 4
years. Over an assumed term of 10 years, the present
value of savings is almost EUR 4 million. Loan of EUR
27
Trend report
3 million (142 % of the amount to be invested):

Annuity almost EUR 400,000, additional free liquidity
of approx. EUR 100,000 p.a.
Optimisation of hot water pumps. Additional

investment of EUR 84,000, saving of EUR 26,500 p.a.
present value of additional incremental income of EUR
120,000 (term: 5 years). Amortisation in 3.2 years.
Loan of EUR 100,000 (119 % of the investment),
annuity of EUR 23,000, residual free liquidity of EUR
3,400. After 5 years: unencumbered surplus profit
(before tax) of EUR 26,000.
Pumps for district heating. Investment of EUR 67,000,
saving of EUR 32,500 p.a., present value of saving
over 10 years: EUR 260,000. Loan of EUR 134,000,
annuity of EUR 17,300, excess liquidity of EUR 15,000
p.a.
From desk-research some additional good policy practices

have been identified.
Testing and demonstrating societal innovations is different
from technical testing of prototype products or machines in
a fully controlled (dead) laboratory environment. Societal
innovations have to be tested and demonstrated in a living
and social environment. The number of living labs is
increasing very fast, but not always as a new, separate
policy instrument, but for instance as a new element in
existing cluster policy , or centres of excellence, or
technology transfer facilities. Living labs can be described as
user-centred, open innovation systems, which facilitate
collaborative innovation processes of researchers,
companies, users, and public sector that are locally bound,
taking place in an embedded experimental setting.
Often, but not necessarily, living labs are situated in a smart
city context, which makes it an especially relevant tool for
social innovation in metropolitan areas: A Living Lab is a
user-driven open innovation ecosystem based on a business
citizens government partnership which enables users to
take an active part in the research, development and
innovation process22. Niitamo et al. (2006) describes living
labs as Public Private Partnerships in which firms, public
authorities and citizens work together to create, prototype,
validate and test new services, businesses, markets and
technologies in real-life contexts. Real-life contexts both
stimulate and challenge research and development as public
authorities and citizens not only participate, but also
contribute to the innovation process. Living Labs are
22
European Commission Information Society and Media, Unit

F4 New Infrastructure Paradigms and Experimental
Facilities. Living Labs for user-driven open innovation. An
overview of the Living Labs methodology, activities and
achievements:, Accessible:
http://ec.europa.eu/information_society/activities/livinglab
s/docs/brochure_jan09_en.pdf)
therefore environments for experimentation in which

technology is given shape and (end) users are considered
co-producers of the concerning innovations23. Since these
Living Labs are rather new policy instruments, not many
evaluations and impact assessments exist.
For Collective Awareness Platforms (CAPs), the EC is
pushing the research agenda and has a dedicated website
where CAPs are broadly described as ICT-based platforms
that support the creation of distributed situational
awareness, i.e. bottom-up, up-to-date and relevant
knowledge (situational awareness) that is generated by a
collective/community, rather than selected players, through
open access (distributed) and shared through ICT networks
(platforms). Fundamental elements are user-generated
knowledge, distributed (rather than central) control of
internet, and the society/community (rather than
individuals/businesses) as key agents. ICT play a central role
by leveraging network effects to create (social) innovations,
by combining social media and data from internet sources. A
local-level CAPs example is the London Datastore
(http://data.london.gov.uk). Next to being aimed at opening
up data held by the Greater London Authority (GLA) for open
use, this platform is aimed at providing a community for
developers that use this data to create IT tools and apps
(applications) for public use. CAPs could also be a useful
instrument for instance for Big Data, sharing economy, work
place innovation, etc.
Technology Financing is a good practice policy from
Baden-wrtemberg24. This scheme could facilitate the uptake
of Advanced Manufacturing Technologies. Companies can
use this scheme to finance new plants and machinery. The
technology loans can also be used for costs of adaptation or
development of new markets. The programme has been
developed for small and medium-sized enterprises (SMEs)
with a maximum of 300 employees. Fundable costs are:
costs for plants, machinery and equipment; cost of
operation-specific adaptation developments; costs for a
project manager in the initial phase; expenses for market
development; as well as introduction of new products; and
cost of external market analysis, demonstration projects and
pilot manufacturing series. This is a scheme that is
specifically relevant for process-innovation, e.g: for clients of
the solutions concerning advanced manufacturing.
An increasing amount of regional innovation policy
instruments provide support to export of innovations and to
internationalisation of innovative firms. For example, the
Export and Internationalisation Offensive in the Fields
Ballon, P., Pierson, J. and S. Delaere. Open Innovation

Platforms for Broadband Services: Benchmarking
European Practices. Proceedings of 16th European
Regional Conference, Porto, Portugal, September 4-6,
2005.
24
http://www.l-bank.de/lbank/inhalt/nav/unternehmen/
23
28
Trend report
of Eco-Energy and Eco-Technology 25 . This project

supports enterprises and individuals that are partners of the
Upper Austrian eco-energy cluster or the Upper Austrian
networks for environmental technologies and energy
efficiency. The supported projects must have a strong focus
on export. Support is provided in the form of grants for:
patent applications and certification; the adaptation of
products; specific market research and visits to specific
events on the relevant new markets; training of employees
with regard to the new markets; visits to trade fairs;
consultancy; and marketing. Projects are supported with up
to 40% and a maximum of 50,000 per project and eligible
firm. Before a proposal is submitted, potential applicants can
ask for advice at the Upper Austrian Energy Saving
Association. To develop the required export strategy,
potential applicants can make use of the export consultancy
services offered by the Export Centre Upper Austria.
production model. Such schemes are for instance existing for

companies which struggle with design issues. During a
Design Pressure Cooker 27, a design expert works in one
intense day (under high time-pressure conditions) with the
companies on solutions. Letting-in external experts in this
way often has an eye-opening impact. Also a voucher
scheme28 could be designed to support companies with
adopting new business and production models.
There are also schemes that organise for visits among
companies that have implemented new production
processes. Companies that still hesitate can visit a company
that has applied for instance certain advanced
manufacturing technologies. This kind of real-life
demonstration often works better than showcasing on an
international trade fair, since also the drawbacks and
disruptive aspects can be addressed.
The Flanders Action Plan on Public Procurement of

Innovation is a scheme with a horizontal approach to precommercial procurement of R&D. This implies that the
regional government buys innovation from companies and
knowledge institutes in 13 different policy areas. It can help
government to identify public demand and define purchasing
needs, thereby enhancing the public commitment to procure
innovative solutions from the private sector. Innovation
platforms can contribute to the involvement of stakeholders
and exchange of information between the demand and
supply side through the process of decision making, market
consultation and technical dialogue. One of the lessons
learned is that the procedures for pre-commercial R&D
should take into account legal obligations linked to contracts
and be kept open and transparent in order to be non
discriminatory26.
For supporting users of the New Models solutions in
implementing new business (organisation and production)
models, we can think of the relevance of various coaching
schemes. For instance the Strategic Innovation Scheme
which facilitates the development of an innovation strategy
in SMEs. The approach is as follows: a consultant organises
strategic sessions in a company, facilitates the management
team of an SME to make an assessment of the current and
future situation and to (re-)develop their business strategy:
put priorities, make choices and implement these choices. As
such, a large number of individual SMEs are facilitated at
micro level.
Another format which could be applied for supporting users
of the New Models solutions is to have an external expert
and coach organise one or a few days to find solutions to
barriers in developing a new business, organisation or
27
vorhabenbestehenderunternehmen/technologiefoerderprogra
mm.xml?ceid=100221
25
http://www.rimeuropa.eu/index.cfm?q=p.support&n=13589&r=AT31
26
See also OECD (2011, p115)
http://www.syntens.nl/eu/Documents/Microsoft%20Word
%20-%20stakeholder%20ENG%20_2_.pdf
28
See for a general description of Voucher schemes:
http://www.technopolisgroup.com/resources/downloads/Innovation_Voucher_for
_OECD.pdf
29
Trend report
7. Policy recommendations
This chapter provides recommendations at various policy
levels with the aim of scaling up the successes of the New
Models trend.
7.1. Recommended demand-side

innovation policies
In line with the recommendations from the case-study
companies most recommendations from those participating
in the workshop concerned the following demand-side
innovation policies:
Use public procurement as first customer more

widely;
Open data / access to business from government

(generates start-ups with new business models;
Use innovation awards to provide credibility;
Promote
participation
standardisation;
in
international
Good demonstration centres or schemes which

can be used to demonstrate technology under real
conditions;
Give grants to companies to cover the costs of

installing initial production or technology centre; In
order to avoids distortion of competition a public
company could be considered
Raise awareness; Communication, interaction,

demonstration and engagement with others is what
raises awareness. For instance between National and
Regional Authorities and Private initiatives; organise
matchmaking on offers and needs.
Increase inter-relationships of SMEs with large

companies which trigger the (demand for and)
incubation of new business models.
Provide tax benefits for clients who buy existing

solutions for advanced manufacturing. This kind of
modernisation makes best use of existing R&D
findings.
Launch a credit system for the customer to generate

efficiency gains at the beginning of the investment. In
this cost neutral scheme (it is not a subsidy)
companies that buy and use new process technology
get up-front the money for the investment that will be
saved and paid back, e.g. from a reduced energy bill.
Allow innovation subsidies to be spent on nontechnical innovations. In this respect companies

from low-tech industries should not be excluded from
application for support.
Initiate capacity building on workplace and

organisational innovations, and on the involved
disruptive processes.
Assist companies in analysing their needs;

analysis and coaching can trigger the need for
innovation in companies. SMEs need information in
their own language.
Support internationalisation; Demand beyond

national and EU borders is important for the growth of
companies and can accelerate the dissemination of
new business models and advanced manufacturing
activities.
7.2. The need for new policy models

New business and production models call for a new way of
designing and implementing policy. The policy rationale
consists of a new approach, not supply-driven, but more
demand-driven. The rationale behind public support for R&D
activities (the innovation/technology supply-side) is based on
the idea that the societal return is larger than the sum of the
individual benefits for companies. The same rationale applies
to public support for the New Business and Production
Models and innovation practices. Concerted efforts of a
wider set of players in society are needed to un-lock the
potential of societal innovation.
We noted a gap in the Innovation Systems literature, since
the current conceptual models are tailored to a specific type
of innovation, a specific technology or sector, or tailored to a
specific societal challenge. However, the commonalities
among trends in the New Business and Production Models
show there is a need to address these commonalities,
possible linkages, overlap between and integration of these
currently fragmented fields and policy models.
The new policy model can be labelled societal innovation
policy, which comes down to the following recommendations
Innovation policy should no longer only be seen as

instrumental for firms and economic objectives, but
also for other (non-economic) societal challenges, in
one or more other public policy-domains.
Policy makers should invest more in demand-side

innovation policies: raising awareness, promoting
30
Trend report
diffusion and absorption, behavioural change,

involvement of (end-)users, societal transformation
processes, and promoting the up-take of new
business, organizational and production models.
Broaden the involvement in innovation initiatives of

different players and sectors, including the public
sector and citizens.
Set societal innovation priorities, organize platforms

and join collective initiatives. Since the various players
have their own public or private motives, objectives,
habits and different areas of scepticism and fear for
disruptive changes, it is important to invest in the
collective search for shared priorities and
entrepreneurial visions in thematic innovation
platforms, which can lead to collective societal
initiatives.
Broadening of business innovation support: not only

subsidise firm R&D for product innovation, but also
allow subsidies to be used for adopting New business
and production models and for diffusing and
marketing of societal innovations.
Bundling of initiatives often packaged into a strategic

policy mix consisting of various demand-side policy
initiatives. By aligning the initiatives at multiple-levels
of governance (local, regional, national, European)
these packages of policy-mixes can include support
from the various policy levels., and allows for scalingup of local policy initiatives to European policy
initiatives.

local/regional, national
initiatives.
alignment
and European
between
level of
7.3. Possible adaptation of existing

policies
The need for new policy models does not mean that all
existing policy measures become obsolete. We therefore
make suggestions on possible changes, e.g. by specifying
which policy design features could be added to the existing
instruments, as we have already done when drawing lessons
from several good practices.
According to a discussion paper of DG ENTR-Unit D2 (2009,
p.9) many clusters shift from a research-driven approach
towards a more user-driven approach, where the leading
edge lies in the co-creation of values with the customers and
in new forms of business cooperation. This may be true for
some cluster policies, but certainly not for all. Many cluster
policies could be adapted by including more demand-side
innovation activities. Examples of clusters that have adopted

more demand-driven policy instruments such as living labs,
demonstrators or testing-units, can be found for instance in
Finland, The Netherlands, Sweden, France, UK, Spain, and
Austria; and the number of new initiatives of this type are
increasing considerably.
One of the most common types of direct support of private
demand for innovations is the possibility in many supplyside (R&D) programmes to use a part of the subsidy or
grant for purchasing of innovations, e.g. machinery.
Especially in many Central and East European Countries this
kind of direct subsidy of demand for innovations from
companies is often included in their basic and generic (nonsector specific) instruments to promote research and
innovation in firms. Modernisation and increasing
productivity is often the overall objective. These kinds of
schemes could also support the take-up of Advanced
Manufacturing Technologies or any of the other new models
of business, organisation and production. Many of these
main-stream innovation support programmes are however
focussed on R&D for product innovation.
The recorded shift in the use of EU Structural Funds from
supply side support towards business innovation support is
promising. Also the fact that many mainstream instruments
for direct business support now also allows to use a part of
the concerning subsidy for prototype-testing and marketing,
but testing and marketing of societal innovations is
different and more complex. Besides testing technological
solutions in a clinical lab environment, the New Business and
Production Models need to be tested and demonstrated in a
real-life societal context, for instance in Living Labs, or a
Smart Cities context.
Not only the managers of potential clients have to be
educated (as a respondent has phrased it), but it is also
important to inform, educate and involve players of the
general supporting frameworks concerning the trend-specific
issues. Also increasing the awareness of business angels,
banks, education institutes and innovation agencies, is
important for scaling up the successes of the New Models
trend.
More horizontal coordination between various policy domains
are needed, e.g. for the first plan to implement the European
Innovation Partnership on green building many DGs are
involved. A similar need for horizontal coordination exists at
the national and regional level.
Support for enhancing workplace productivity/mobility could
for instance come from joint efforts of the involved
ministries, including the ministry of transport since it also is
helpful in reducing traffic jams.
31
Trend report
7.4. Lessons concerning scaling-up of

policies
Examples of horizontal transfer of policies
between regions or between countries
An example of a Collective Awareness Platform at
international
level
is
Urban
Eco
Map
(http://urbanecomap.org), which is a global platform aimed at
creating peoples awareness to take eco-conscious decisions
at local level by providing them with suggestions for
concrete actions to take in order to reduce their carbon
footprint. On the website, people can for instance look up
emission levels in their neighbourhood, explore their own
priority portfolio and receive recommendations for concrete
steps to reduce carbon emissions that take into account their
preferences. Many more examples are listed by the European
Commission on its dedicated website for CAPs .
The European Clusters and Regions for Eco-Innovation
Network Plus (ECREIN+) builds on the results of the ECREIN
project (See also http://www.ecreinetwork.eu/). ECREIN
focuses on increasing the awareness of existing financial
instruments at the European, national and regional levels
with the ultimate aim of becoming the main network for
regional support of eco-innovation. ECREIN+ takes this
forward by defining regional eco-innovation policies and
practices with a wider application across European regions,
including Green Public Procurement, technology transfer,
cluster policies and eco-parks. The knowledge generation
regarding eco-innovation policies and practices includes:
market analysis for environmental goods and services, how
institutions can be improved in order to support ecoinnovation, and how efficiently such innovation policies
function. The direct beneficiaries of the project include public
administrations and business support institutions, with R&D
institutions and small and medium sized businesses being
the final beneficiaries29.
Another example is the European Service Innovation
Centre30 which develops practice in supporting regions with
large scale demonstrators concerning service innovation, and
to diffuse the models and lessons from the demonstrator
regions to other regions.
A final example concerning horizontal policy-learning is:
Working Towards Sustainable Energy Communities
throughout Europe (SUNFLOWER)31. The objective of this
project in the framework of Intelligent Energy Europe, is to
create conditions that attract investment in renewable
energy sources: projects that have potential, but are not
http://www.rimeuropa.eu/index.cfm?q=p.support&n=15298&r=BG34
30
http://ec.europa.eu/enterprise/initiatives/esic/
31
http://www.rimeuropa.eu/index.cfm?q=p.support&n=15316
29
attractive to the industry. It has also been implemented in

Moura (PT), NorthYork (UK), Kilkis (Greece), and various Czech
regions32. The project has been structured around three
priorities: political commitment, market stimulation and
environmental awareness. The aims are: to generate interest
towards energy plants powered by renewable energy; to
attract investors to the region and raise the number of
partnerships between the renewable energy industry and
local authorities; to promote entrepreneurship by training
graduates and young businessmen interested in the field;
and to raise the awareness of local communities. To what
extent this policy initiative is a good practice is not clear, but
in the case-studies the concept of communities often has
appeared in several ICT-based models. Horizontal linkages
between communities can speed up the diffusion of the
concerning models and practices.
Example of vertical transfer of policies

between regional/national and EU policy
level
An example of a top-down, vertical transfer of a policy
format is the EU format for Pre-Commercial Procurement
that has been developed by the European Commission in
2007, and has served as a sort of standardisation of the
format. There are however several other legal tender
procedures, including: competitive dialogue, Forward
Commitment Procurement33, negotiated procedure, design
contest, and framework agreement. Each of these
approaches has specific advantages and disadvantages
according to the specific situation34.
Concerning a vertical linkage between different policy-levels
we recall the recommendation concerning demonstration
and testing initiatives to seek for embeddedness of local
initiatives in regional or national strategies, as it makes the
local initiatives more sustainable and effective.
Examples of joined policy efforts from

different policy domains
Since many of the trends involve multiple sectors and policy
domains it is important to coordinate policy efforts and
share policy lessons among relevant stakeholders.
The Energy Research Scheme is an example of a policy
scheme that is funded by two ministries which are from
different policy domains: the ministry of economy and
ministry of environment. Each has its own societal
objectives. The Ministry of Economy has an interest in
boosting competitiveness and the other ministry in
32
33
34
See also: http://www.sunflowerproject.eu

http://ec.europa.eu/enterprise/policies/innovation/policy/
lead-market-initiative/files/conference/230316_en.pdf
For a comparison between the different procedures, see
Sloth (2011) and Mller (2009).
32
Trend report
addressing environmental challenges. In addition to research

oriented tracks, there are also tracks for supporting
participants in market development. The co-funding from the
ministry of environment has lead to a more demand-driven
approach. For example: with the aim to achieve
environmental impact the scheme allows for sub-contracting
to non-european partners, which is still not very common in
supply oriented schemes because they rather not support
R&D in competing countries. For achieving the environmental
objectives a not-invented-here syndrome is not very
effective, so a more open innovation approach was adopted.
Concerning joint efforts from different stakeholders we can
think of sponsoring of initiatives from various ministries, e.g.
in the case of policy to promote work-place mobility.
The European Innovation Partnerships are an example of the
involvement of various DGs from the European Commission.
7.5. Selection of concrete policy

proposals
The new policy needs do not necessarily have to be met by
completely new policy instruments, since many of the
recommendations can be implemented by integrating
demand-side innovation aspects into the existing
mainstream (innovation supply/ R&D oriented) policy
instruments. The details of how and what depends on the
details of the various existing policy instruments. However,
an important concrete recommendation is to allow
companies within mainstream business innovation support
schemes to use innovation subsidies not only on R&D for
product innovations, but also for process innovation
(implementing Advanced Manufacturing Technologies),
organisational innovations (changing the business model,
implementing disruptive solutions), and market-innovations
(adapting
solutions
to
other
sectors
or
for
internationalisation). Many mainstream instruments include
an option for a feasibility study, which mostly refers to the
feasibility of an R&D project. Such feasibility studies should
also be allowed to look at the feasibility of adopting new
production processes and business models.
New types of schemes concern a large variety of
demonstration policies, and policies concerning public
procurement for innovation. Many of the recent pilot

initiatives have however not been evaluated, which makes it
difficult to identify best practices.
Especially regarding demonstration initiatives it does not
seem appropriate at this stage to recommend one generic
format, since experimenting with new policy formats and
designs seem more appropriate. Moreover, we have
concluded that it is beneficial to link demonstration
initiatives to other policy initiatives, e.g. after a national PreCommercial-Procurement project, or as an integrated part of
a regional Smart Specialisation Strategy. This implies that
the concrete design features of demonstration schemes
have to be adapted to such specific purposes, which again
calls for more policy experiments.
The same actually also holds for new funding schemes. New
ways to fund demonstration and up-take of innovations have
to be explored.
A concrete proposal for a new type of innovation support
instrument is the credit model to overcome resistance
against economically reasonable investments in energy
efficiency, as proposed by VDMA, and explained in Chapter 8.
It is suggested to realise the future efficiency return already
in the present earnings and liquidity. For that purpose, the
company should be offered a loan that not only covers the
investment costs but that also pays out a considerable
advance on the increments from energy savings that are
anticipated in the future based on the investment. Under
these conditions, it would be possible not only to make the
investment without putting a strain on liquidity but even
obtain liquidity by making the efficiency returns already
available today. This would draw the companies attention on
the economic potential which can be tapped by investments
in energy efficiency. The already available incentives for this
type of investment would be strengthened; the model should
be highly appealing for companies.
The loan can be adjusted in such a way that a large amount
of the cash value of the efficiency return can be paid out
and the remaining efficiency return is enough to manage the
ongoing annuities. In doing so, the model goes essentially
without subsidies.
33
Trend report
8. Literature
Amit, R., and C. Zott (2001) Value creation in e-business.
Strategic Management Journal, 22, pp. 493520
Braun, A., V. Grimm, S. Korte, S. Rijkers-Defrasne, R. Wintjes
(2011) Innovation and Industrial Policy, ETEPS Study for
European Parliament's Directorate A Economic and
Scientific Policy Department. European Parliament, Brussels.
Available
at:
http://www.europarl.europa.eu/committees/en/itre/publication
s.html?id=ITRE00001
Carlsson, B. and R. Stankiewicz (1991) On the nature,
function and composition of technological systems, Journal
of Evolutionary Economics 1, 93 118.
Cooke (2010), Regional innovation systems: Development
opportunities from the green turn. Technology Analisys and
Strategic Management, 22, 831-844.
Cooke, P. (2011) Transition regions: Regional-national ecoinnovation systems and strategies. Progress in Planning 76,
p.105-146.
Coenen, L. & F.J. Diaz Lpez (2009) Comparing systems
approaches to innovation and technological change for
sustainable and competitive economies: an explorative study
into
conceptual
commonalities,
differences
and
complementarities. Paper no. 2009/12. CIRCLE, Lund
University.
Chesbrough, H. (2010) Business Model Innovation:
Opportunities and Barriers, Long Range Planning, Volume 43,
Issues 23, AprilJune 2010, Pages 354-363
European Commission (2007). Pre-commercial Procurement:

Driving innovation to ensure sustainable high quality public
services in Europe. Commission Staff Working Document.
SEC(2007) 1668.
European Commission (2008), 'Regions 2020; An
Assessment of Future Challenges for EU Regions'.
Commission Staff Working Document. DG Regional Policy,
Brussels.
European Commission (2009). Fostering user-driven
innovation through clusters. Discussion paper prepared by
DG ENTR-Unit D2 support for innovation.
European Commission (2009). Lead Market Initiative for
Europe. Mid-term progress report. Commission staff working
document. SEC (2009) 1198.
European Commission (2009). Bridging the Valley of Death:
public support for commercialisation of eco-innovation. Final
Report.
European Commission (2010). Communication Europe 2020
Flagship Initiative Innovation Union COM(2010) 546 final,
6.10.2010.
European Commission (2011). Horizon 2020 The
Framework Programme for Research and Innovation.
Brussels: COM(2011) 808 final.
European Commission (2011). Compilation of results of the
EC survey on the status of implementation of Precommercial procurement across Europe.
Christensen, C. (1997) The Innovator's Dilemma. Harvard

Business School Press. Cambridge, MA
European Commission (2011), A resource-efficient Europe

Flagship initiative under the Europe 2020 Strategy,
COM(2011) 21.
Edler J., L. Georghiou, E. Uyarra, K. Blind (2012) Evaluating

the demand side: New challenges for evaluation by in:
Research Evaluation 2012, pp.1-15.
European Commission (2011) New Practical Guide to EU

Funding Opportunities for Research and Innovation.
Edler J. and Georghiou L. (2007). Public procurement and

innovation - Resurrecting the demand side. Research Policy
36 (2007) 949 963.
European Commission Information Society and Media, Unit
F4 New Infrastructure Paradigms and Experimental Facilities.
Living Labs for user-driven open innovation. An overview of
the Living Labs methodology, activities and achievements:,
Accessible:
http://ec.europa.eu/information_society/activities/livinglabs/do
cs/brochure_jan09_en.pdf)
European Commission (2007). A lead market initiative for
Europe Explanatory Paper on the European Lead Market
Approach: Methodology and Rationale. Commission Staff
Working Document. COM(2007) 860 final SEC(2007) 1729.
European Commission (2012), Intelligent Energy Europe III

in Horizon 2020, final consultation report. DG Energy.
European Commission (2012), A Stronger European Industry
for Growth and Economic Recovery, Communication Update,
COM(2012) 582 final
European Commission (2012), The Smart Guide to Service
Innovation, How to support SME Policy from Structural
Funds, Guidebook Series. Directorate-General Enterprise &
Industry, & Directorate-General for Regional Policy.
European Commission (2013), State of the Innovation Union
2012 Directorate-General for Research and Innovation
2013 - Innovation Union.
34
Trend report
Foray, D., D. Mowery, R. Nelson (2012) Public R&D and

societal challenges: What lessons from mission R&D
programmes? Research Policy, Vol. 41, 10, pp. 1697-1702
Freeman, C. (1987). Technology Policy and Economic
Performance: Lessons from Japan, Pinter: London.
Gassler, H., W. Polt & C. Rammer (2008) Priority Setting in
Technology Policy: Historical Developments and Recent
Trends. In: C. Nauwelaers & R. Wintjes (eds.): Innovation
Policy in Europe; Measurement and Strategy. London: Elgar.
Mller, L., ed. (2009). Exploring Public Procurement as a

Strategic Innovation Policy Mix Instrument. Report from the
EU Project OMC-PTP on public technology procurement.
VDI/VDE-IT, Berlin.
Murray, R., Caulier-Grice, J. & Mulgan, G. (2010): The open
book of social innovation. London: NESTA. London (Social
Innovation Series: Ways to design, develop and grow social
innovation).
Geels, F. (2004) From sectoral systems of innovation to

socio-technical systems. Insights about dynamics and
change from sociology and institutional theory, Research
Policy 33, 897920.
Nauwelaers, C. and R. Wintjes (2003), Towards a new

paradigm for innovation policies?, in B. Asheim, A. Isaksen, C.
Nauwelaers, and F. Ttdling, Regional innovation policy for
small-medium enterprises, Cheltenham, UK and Lyme, US :
Edward Elgar.
Iizuka, Michiko (2013) Innovation systems framework: still

useful in the new global context? UNU-Merit Workingpaper,
#2013-005
Nelson, R (1993). National Innovation Systems:

Comparative Analysis . New York: Oxford University Press.
Kemp, R., Schot, J., & Hoogma, R. (1998). Regime shifts to

sustainability through processes of niche formation: the
approach of strategic niche management. Technology
Analysis & Strategic Management, 10(2), 175-198.
Niitamo, V.-P.; Kulkki, S.; Eriksson, M.; Hribernik, K. A.: Stateof-the-art and good practice in the field of living labs,
Proceedings of the 12th International Conference on
Concurrent Enterprising: Innovative Products and Services
through Collaborative Networks, Milan, Italy, 2006, 349-357.
Lachenmaier and Rottmann (2010). Effects of innovation on

employment: A dynamic panel analysis. International Journal
of Industrial Organization, 29, 210-220.
OECD (2011). Demand-side innovation policy. OECD

Publishing.
Available
at:
http://dx.doi.org/10.1787/9789264098886-en
Leitner, Karl-Heinz, Jeff Butler, Giovanni Cerulli, Theo

Dunnewijk, Franziska Kampik, Andrea Kasztler, Huub Meijers,
Bianca Poti, Meirion Thomas, Eva Trier, Stig Sliperster, Ren
Wintjes & Jan Youtie (2011), Analysis of the evolution of the
costs of research trends, drivers and impacts; Final Report
to the European Commission, DG Reserch and Innovation.
PwC, London Economics, & Ecorys. (2011).

procurement in Europe Cost and effectiveness.
Lundvall, B. A., eds. (1992). National Systems of Innovation:

Towards a Theory of Innovation and Interactive Learning.
London: Pinter.
Lundvall, B.-. (2010) National Systems of Innovation
Towards a Theory of Innovation and Interactive Learning,
New York: Anthem Press.
Mowery, D-C. and N. Rosenberg (1979). The influence of
market demand upon innovation: a critical review of some
recent empirical studies. Research Policy 8.
Mowery, D. C., R. Nelson & R. Martin (2010) Technology
policy and global warming: why new policy models are
needed (or why putting old wine in new bottles wont work).
Research Policy, 39 (8), 1011-1023
McGrath, R. (2010), Business Models: A Discovery Driven
Approach, Long Range Planning, Volume 43, Issues 23,
AprilJune 2010, Pages 247-261
Malerba, Franco (2002) Sectoral systems of innovation and
production. Research Policy, 31, 247264
Public
Rigby, J., P. Boekholt, A. Semple, J. Deuten, R. Apostol, S.

Corvers, and J. Edler (2012) Feasibility study on future EU
support to public procurement of innovative solutions:
Obtaining Evidence for a Full Scheme. Final report to the
European
Commission.
Available
at:
http://ec.europa.eu/enterprise/policies/innovation/policy/leadmarket-initiative/files/meeting-procurement-feb2012/studyeu-support-public-procurement-innovative-solutions_en.pdf
Soete, L., B. Verspagen and B. ter Weel (2009) System of
innovation, UNU-MERIT Workingpaper series no. 2009-062,
Maastricht: UNU-MERIT.
Sloth, M. (2011). Pre-commercial Public Procurement for ITS
innovation and deployment; WP2 Analysis of public precommercial procurement models and mechanisms.
Available
at:
http://www.ertico.com/assets/Activities/P3ITS/P3ITS-D2.1Analysis-of-public-Pre-Commercial-Procurementv1.8.pdf
Walendowski, J., H. Kroll, T. Stahlecker, E. Baier, R. Wintjes, H.
Hollanders (2011), Innovation Patterns and Innovation
Policy in European Regions - Trends, Challenges and
Perspectives; 2010 Annual Report Regional Innovation
Monitor. DG Enterprise, Brussel.
Wintjes, Ren, Serdar Turkeli and Florian Henning (2013),
Innovation Policy in Metropolitan Areas: addressing societal
challenges in functional regions, Regional Innovation
35
Trend report
Monitor, Thematic Paper 6. Available at: http://www.rimeuropa.eu/

Wintjes, R., S. Turkeli and F. Henning (2013, forthcoming),
Societal Innovation in Metropolitan areas. UNU-Merit
Workingpaper.
Wintjes, Ren (2012), Demand-side innovation policies at

regional level, Regional Innovation Monitor, Thematic Paper
3. Available at: http://www.rim-europa.eu/
36
Trend report
9. Annexes
Table A: Main drivers of the trend
Trends
Drivers of the trend

1 Environmentally
The need to be compliant with environmental and pollution regulations is the main driver of the trend.
High estimations of potential markets; e.g.: the European gasification industry has a potential annual market of over
EUR 10 billion.
Being located in a region with potential partners and pool of talent as well as good links with research centres is
important for the companies which provide solutions.
The introduction of new standards, eco-incentives and requirements helps to frame the market and the relations
between stakeholders, whether public or private entities.
The companies have very few competitors operating within their respective industries.
2 New Manufacturing
Engineering
Market growth and potential: 3D printing is expected to continue its trend of double-digit growth, as forecasts
anticipate estimate that the 3D printing market will be worth USD 6 billion by 2017, and USD 10.8 billion by 2021.
The benefits of: reducing operating and capital costs; improving product quality and consistency; increasing
production output rates; increasing manufacturing flexibility; reducing waste and pollution; and saving space in high
value manufacturing areas.
Among the drivers supporting the trend, mass customizers consider the access to an enabling business environment
the most important.
Application areas for mass customisation exist in all sectors. It is a horizontal, non-sector-specific, cross-industry
trend. It has significant potential, with wide applications and major benefits for end-users.
Changes in mentality and consuming habits: increased demand for customised goods; increased on-line shopping
habits; and confidence.
Crowd-sourcing techniques help integrating consumers right from the beginning of the product design process. In so
doing, consumers feel more engaged in the brand strategies of products they like.
4 Measurement
Technologies and
Robotics
The industrial robotics market was valued at EUR 6.49 billion in 2011, with an estimated growth of 5% per year.
The need for European manufacturing to increase productivity and gain a competitive advantage.
The uptake of the trend relies on the success of start-ups bringing new developments and innovation to market.
Proof of concept improves access to finance.
The solutions are applicable in many industries.
All interviewed companies benefitted from the presence of centres of excellence established in their relative fields, or
from the background of their key employees at nearby universities or research centres.
Market growth: The global market for Additive manufacturing (3D-printing) grew by 29.4 percent in 2011 alone,
comprising a 1.7 billion USD global market.
Demand driven approach enables quick results for trend driving companies.
Solutions supplying companies noted that it was relatively easy to gain market share or internationalise at the
beginning. The innovative solutions set them apart from competitors in such a way, that large customers found the
companies themselves.
Successful uptake of smart value chain manufacturing is mostly driven by market demand.
New Business Models
Public Private Partnerships

of Innovation
The market potential: annual public procurement at European level is estimated at 400 billion. Of this 400 billion,
it is estimated that 3.78 billion can be considered public procurement of innovation at the European level.
Companies can realise competitive advantages through public procurement.
Increasing need for more efficiency in the public sector.
The increased role for policymakers in Europe in addressing societal challenges.
Increased awareness of the benefits of demand-side innovation policy measures.
Regulation and needs of end-users drive market uptake.
Public procurement of innovations makes innovative companies less reliant on external funding.
Public procurement can facilitate access to conventional markets.
7 Large-Scale
Demonstrators &
Small-Scale Testing
Units
The market potential and socio-economic impact.

The public and private benefits of partnerships.
Public sector funding, since the eight selected demonstrators and testing units would not have come to fruition had
the public sector not offered financial support to the private sector.
Big Data
8 Analytics and
Decision Making
The benefits of data-driven analytics and decision making solutions. What the solutions of the analysed companies
have in common is that they help improve business performance through a better understanding of data and the
ability to make more relevant and timely decisions. Impacts for clients are: empowered decision making, increased
revenue and reduced costs.
37
Trend report
Trends
Drivers of the trend
A growing market: The big data market is in a nascent stage and is expected to develop as companies as well as
public bodies seek to enhance their competitive advantage by better understanding the ever-growing amounts of
data. Artificial intelligence offers the technology and methodology to do so, and the market for artificial intelligencebased tools and applications is growing rapidly.
10 Enhancing
The total number of organisations that have implemented mobile work styles will rise from 24 percent in 2012, to
workplace productivity 83 percent in 2014. That is a compound annual growth rate of 86 percent. Only 9 percent of organisations do not
have plans to adopt mobile work styles.
Drivers are the socio-economic effect of enhancing workplace productivity and the productivity enhancements.
Positive employee perceptions on flexibility, productivity and reduced commuting.
Offering cost reductions of operational cost of organisations adopting the innovation.
The environmental benefits.
11 Novel
and Management
Practices
There has been a shift in corporate philosophy from creating shareholder value to creating stakeholder value.
Rising complexity of technology demands collaboration between companies specialised in various aspects of a
technology.
Another driver of the trend is the shift towards a service economy, and associated service innovation since this often
involves organisational and relational changes within supply-chains or networks.
The impact of the type of innovation described in this case study is not limited to a particular industry or market. The
companies that were sampled do not show much overlap with regards to the markets they supply. The market
potential is difficult to measure.
There are competitive advantages to be gained through novel organisational setups and management practices.
The Sharing Economy

Business Models for
Due to its wide applicability, the potential of online peer-to-peer business models is substantial, with growth
exceeding 25%.
Start-ups can benefit from the uptake of the sharing economy trend because it provides them with opportunities for
entrepreneurial activity in a wide variety of markets.
The economic crisis is a driver with high unemployment rates and dropped purchasing power of consumers people
are in need of ways to earn money and are seeking ways to save money on their daily needs. Decreased consumer
trust in the corporate world.
Available technology, especially ICT. The public is getting more and more familiar with online activities and shows
growing trust in online transactions.
Table B: Challenges faced by trend driving companies

Trends
Challenges mentioned by trend driving companies

1 Environmentally
friendly
technologies and
energy efficiency
Access to finance;
Scepticism in the region or countries towards new technologies;
The absence of an established track record or a market accepted proof-of-concept;
It is crucial that environmentally friendly technologies demonstrate scalability;
Environmental or energy efficiency considerations may not be sufficient selling points. The products need to meet or
exceed consumer expectations in terms of quality and cost.
Choosing a location with possible partners and pool of talent.
2 New
Manufacturing
Engineering
Access to finance for innovative SMEs. SMEs interviewed belief that Europe has created a business and innovation
environment that is skewed towards large enterprises and universities.
Making potential clients aware of New Manufacturing Engineering competences.
To have a good cooperation or partnership, companies should come together at a very early stage.
Adjusting to a higher skill level of employment demand in manufacturing.
3 Mass
customisation
The key phase - and the main barrier of the trend - is the scaling-up stage and its financing. It follows the stage of
prototyping and precedes a more massive business industrialisation.
The importance of multidisciplinary skills.
Need for market testing and prototyping.
Data is needed to define what customers want and assess solutions. These data management challenges may be
related to crowd-sourcing tools.
Customisation induces higher costs which have to be overcome by revenues.
Internationalisation: Markets targeted by mass customizers are often global or require fast international growth to
guarantee first-mover margin.
Choice of the right customisation: Need to have a clear understanding of clients needs and how to integrate them
into existing manufacturing processes.
4 Measurement
Technologies and
Robotics
Proof of concept improves access to finance. Low uptake of automation solutions by SMEs in the manufacturing
sector. The technologies can be used in several different automation solutions, but the companies deliberately chose
to focus on a single application, which appears to be a successful strategy.
38
Trend report
Trends
Challenges mentioned by trend driving companies
5 Smart Value
Chains
Access to finance is critical for companies trying to capitalise on the market uptake.
The analysed companies did not faced particular difficulties in raising funds for starting up and for developing the
innovation.
A demand driven approach, providing an innovative solution to a clear market demand enables quick results.
Although regulation was generally not found to drive the innovative trend in smart manufacturing nor significantly
hinder it, some of the analysed companies noticed increasingly more pressure from regulation.
Some companies found it difficult in the early days to move from relatively low production for relatively few clients to
high volume production for more clients.
Up scaling requires significant capital expenditures to invest in the necessary machinery.
One critical success factor for all companies was having access to a highly skilled workforce, for some it remains a
challenge.
New Business Models

6 Public
Procurement of
Innovation
Conservative clients can be risk-aversive. As a company has put it: Developing new solutions pose a risk to end-users.
It is therefore key to proof your innovation in practice, which is a process that takes time.
Companies need to be able to deploy a demand-driven approach to innovation.
Tendering procedures can form a barrier for public procurement.
Having access to a highly skilled and specialised workforce is considered to be crucial.
Challenges with regards to internationalisation.
A main challenge from the public perspective is to comply with state-aid rules, as distorting competition should be
avoided.
Diversity of regulations within Europe.
Regional aspects can drive the development and commercialisation of publically procured innovations.
7 Large-Scale
Demonstrators &
Small-Scale
Testing Units
The need for public sector funding.

Private entities are challenged by resistance to change, particularly from the public sector.
25% of EU Member States still do not have demand-side policies on their policy agendas.
The need for international partnerships.
Involving SMEs in PPPs is an important challenge.
Developing relevant skill-sets.
Big Data
8 Analytics and
Decision Making
Access to finance is the most important factor for the development plans of firms interviewed for this case study. The
majority of companies offering big data analytic and decision making solutions are in their nascent stage. The lack of
companies with a successful track record suggests that access of finance is a challenge since investors are prudent.
Proximity to a technical school and IT companies are important to facilitate the development of big data companies.
The firms that develop big data analytic and decision making solutions have a tendency not to solely rely on a
regional or national market but to internationalise rather rapidly.
Entrepreneurial culture and a skilled labour force is important.
The regional knowledge infrastructure: higher education and research institutions in fields specific to the industry,
technology transfer organisations and shared technology platforms, as well as sector specific courses or training in
the region.
Data privacy and security.
9 Artificial
Intelligence
Challenges include a highly educated workforce, scalability of developed solutions and public support programmes
fostering innovation.
10 Enhancing
workplace
productivity
Access to finance is essential for scaling up.

The importance of partners in the start-up phase.
Building a critical mass of consumers in an early stage.
11 Novel
Organisational
Setups and
Management
Practices
The
availability
of
partners
that
are
willing
to
get
involved
is
a
key
driver.
Creation of synergies between different players is another key challenge.
Companies deploying technology centred novel organisational setups effectively make use of existing R&D&I
infrastructure.
Availability of skilled and motivated workforce is key.
Case companies are both the developer/supplier of the innovation and at the same time a client for the innovation.
The nature of this type of innovation makes it difficult to sell on a market.
The Sharing Economy

12 Accessibility
Based Business
Models for Peerto-Peer Markets
Being resourceful in finding funding sources for sharing economy ventures.

Internationalisation looks promising for peer-to-peer platforms, but there are legal obstacles.
Lack of clarity on whether conventional industry laws apply to peer-to-peer markets.
Success and adoption rate of peer-to-peer business models is dependent on the culture of local markets.
No substantial partnerships with other industry players have been established.
The companies all show some form of differentiation strategy that distinguishes them from competing peer-to-peer
business models.
Companies in the sharing economy largely rely on programmers and software developers.
39
Trend report
Table C: Existing policies the companies benefitted from

Trends
Existing policies
1 Environmentally
Enterprises interviewed in this case study are usually looking for support in financing; legal advice; networking
activities; nurturing cooperation between stakeholders; knowledge transfer; and going international. Most of the
companies underlined the added value of incubators and accelerators.
2 New Manufacturing
Engineering
It was generally accepted among interviewees that the EU plays an influential role in financing research and
development (R&D), but fails to provide sufficient financing for making technologies market mature, commercially
produced, and/or internationally distributed.
Public support has different components, such as: direct grants, organisation of forum and industry fairs, support
in networking and support to incubators and accelerators.
4 Measurement
Technologies and
Robotics
The companies interviewed benefitted from a range of support measures including business incubation services,
government subsidies, tax credits for private investors and R&D activities as well as research grants. The
technologies were developed within a research or academic context through public funding, national or EU funding,
and in some cases the funding was from a public-private partnership.
While different types of funding were identified across the analysed business cases, there was a remarkably low
percentage coming from public funding. Peratech Ltd. benefited from FP6 funding, HyGear from Innovatiekrediet
from the Dutch government and FP funding and Nanovi Ltd. from EU Structural funds.
New Business Models

of Innovation
Public procurement of innovation has meant for the companies in this case study the facilitation of access to
conventional markets and making them less reliant on external funding. Feedback from the public procurer and the
end-users to the innovating company was very helpful.
7 Large-Scale
Demonstrators &
Small-Scale Testing
Units
The demonstrators and testing units would not have existed without financial support from the public sector
It is less difficult to get supported if the field in which the demonstrator or testing unit operates is part of a
broader national or regional agenda. For instance: The e-Mobility Competence Centre, Dortmund is tied to North
Rhine Westphalias Master Plan for Electric Mobility.
Big Data
8 Analytics and
Decision Making
The companies interviewed benefitted from a range of support measures including business incubation services,
government subsidies, tax credits for private investors, and tax credits for R&D activities, and research grants.
The companies interviewed benefited from support measures such as soft loans and small research grants. Startups can use any funds they can acquire for the development of their technology.
10 Enhancing
workplace productivity
Some of the firms benefitted from financial subsidies, grants or business competition awards (angel investors,
government loans without interest,). This depended on the regions they were located in. The companies
interviewed benefitted from a range of public support measures including business incubation services,
government subsidies, and tax credits for R&D activities, and research grants.
11 Novel
and Management
Practices
Depending on the type of service or product delivered, companies deploying novel organisational setups effectively
make use of existing R&D&I infrastructure, incubator programmes, partnerships with universities and other
technology companies.
The Sharing Economy

Business Models for
The companies in this case found various sources for funding their peer-to-peer platforms, ranging from
government subsidies, angel investments, prize money, accelerator/incubator funding, founder capital and
donations from NGOs. Companies faced barriers in acquiring support from existing support organisations.
Table D: Policy gaps from the case-studies

Trends
Case-study policy gaps

1 Environmentally
The market needs to be better educated as to the benefits from these new technologies.
Support needed for implementing environmentally friendly technologies since they are often disruptive.
There is a need for opportunities to demonstrate proof of concept (viability of these technologies).Demonstrators
and testing units play a crucial role
There is a need for more specific and tailored support systems for SMEs trying to bring these technologies to
market.
Support systems and regulations should be delivered on time, kept in place and enforced.
40
Trend report
2 New Manufacturing
Engineering
Many companies which offer advanced manufacturing processes are facing obstacles in increasing market
awareness of product and service potential. More support is needed to promote the technologies.
Policy initiatives and funding for skills development should take into account the growing need for skills at the
interface of technologies, e.g.: concerning laser technologies and 3-D printing techniques.
Lack of policies increasing the availability of apprenticeships or bringing advanced manufacturing processes into
the classroom.
Impulse and incentivising regulation. Support in networking, such as (1) involving public players in innovation
platform meetings (2) organisation of travels to meet investors and potential partners, and (3) networking with
large companies and foreign partners. Promoting demonstration projects and participation in the experimental use
of products. Financing for investment and development.
4 Measurement
Technologies and
Robotics
An obstacle for many of the companies is the administrative burden in order to obtain public support. Companies
like Odico and Laytec did not apply for public funding because they felt the costs outweighed the benefits.
Market uptake is favoured by a clear demand driven approach. When an innovative solution is developed as a
reaction to existing demand, the potential for a good and swift market uptake is higher. There is a need for
opportunities to demonstrate proof-of-concept.
Access to finance, especially at the start-up and up-scaling stages.
Improved access to public funding, long bureaucratic procedures often need to be tackled. The gap between the
availability of and demand for highly skilled engineers needs to be addressed.
New Business Models

of Innovation
Gaps in policy are noted in assessment and monitoring of public procurement programmes; discouraging upfront
investments for participating in public tender and calls that are often broadly defined; the extent to which they
offer companies the opportunity to test their innovation in a real world context; and the difference in difficulty of
acquiring public support for incremental innovation as compared to radical innovation.
7 Large-Scale
Demonstrators &
Small-Scale Testing
Units
Small-scale testing units fear a shortfall of public funding to cover costs upon going-live.
The cost of pursuing public sector financing is high, particularly at the European-level.
There is an obvious need to locate demonstrators and testing units in regions that offer competitive advantages for
the cross-cutting theme in question.
Big Data
8 Analytics and
Decision Making
Education: there is a need for more interdisciplinary training and the development of specialists with
complementary areas of expertise and skill sets;
Data Protection: it is highly important that sensitive data is handled securely and is not leaked in accordance with
the Data Protection Directive (95/46/EC).
Policies focusing on improving the overall business environment and favouring entrepreneurship.
9 Artificial
Intelligence
Early-stage start-ups find the tax burden heavy, and could benefit from tax holidays.
As artificial intelligence technology is cutting-edge, proof-of-concepts and cost-benefit analyses are not easy,
public procurement of innovation could provide for proof-of-concepts and show good practices in cost-benefit
analyses.
Immigration policy and employment regulation hinder hiring highly skilled staff.
Technology start-ups at times are isolated in academia, unconcerned with industrial exposure.
Mentorship: Guidance and advice from experienced entrepreneurs is invaluable for technology start-ups that often
do not think big enough or have not defined precisely enough why they run a business.
Artificial intelligence technology companies find themselves involved in international patent disputes and legal
battles.
10 Solutions for
enhancing workplace
productivity
A long-term policy perspective is lacking; A lack of advice and guidance for improvement projects, which involve
social partners and civil society.
In order to better understand the conditions under which workplace flexibility leads to productivity gains, pilot
projects on innovative workplaces are needed. Policy approaches to increasing the uptake should take cultural
differences and country-specific barriers into account. The market needs to be better educated as to the benefits
and costs from new technologies regarding workplace innovation.
11 Novel
Organisational
Setups and
Management
Practices
The availability of partners is of key importance. All companies or organisational parts focus on a specific part of
the process or function, and require collaboration with other parties to develop innovations or successfully conduct
certain business functions. For all companies interviewed in this case study, the creation of synergies between
different groups players is a key challenge.
The Sharing Economy

12 Accessibility
Based Business
Models for Peer-toPeer Markets
Regulations and support measures that are suitable to facilitate and coordinate B2B or B2C transactions, are not
always applicable to the newly created C2C market. There is a need for tailored policy frameworks.
The existing government infrastructure aimed at supporting entrepreneurship (e.g. chambers of commerce and
innovation agencies) does not possess the required knowledge to aid internet start-ups.
41

01 Un Locking The Potential of Business and Societal Innovation en

Uploaded by

Copyright:

Available Formats

01 Un Locking The Potential of Business and Societal Innovation en

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

01 Un Locking The Potential of Business and Societal Innovation en

Uploaded by

Copyright:

Available Formats

Business Innovation Observatory

Un-locking the potential of

Author: Ren Wintjes, UNU-MERIT.

European Union, September 2013.

The trend of New Business and Production Models

The new policy challenge: demand-side innovation policies

2. New business, organisational and production models

2.1. Overview of five trends

2.2. Description of case-study trends and companies

2.3. Some examples of companies, innovative solutions and success signals

3. Framing the common story: a synthesis

4. Key innovation drivers and barriers

4.2. Challenges faced by trend driving companies

4.3. Challenges faced by companies clients

5. Policy challenges: improving framework conditions and promoting wider uptake

5.1. Existing policies: R&D (supply-side) support

5.2. Policy gap: demand-side innovation policy

5.3. Policy challenges

Towards a more innovative Europe

Policy challenges concerning skills shortages and competencies

6.1. Gaps in Innovation System concepts: towards Societal Systems of Innovation

6.2. Supply-side innovation policies become less dominant

6.3. Demand-side innovation policies

6.4. Comparing the case-study results with other studies

6.5. Good policy practices

7.1. Recommended demand-side innovation policies

7.2. The need for new policy models

7.3. Possible adaptation of existing policies

7.4. Lessons concerning scaling-up of policies

Examples of horizontal transfer of policies between regions or between countries

Example of vertical transfer of policies between regional/national and EU policy level

Examples of joined policy efforts from different policy domains

7.5. Selection of concrete policy proposals

The trend of New Business and Production

The European gasification industry has a potential of

Un-locking the potential of business and societal innovation

The industrial robotics sales market was valued at EUR

Out of the 400 billion annual public procurement at

The total number of organisations that have

The potential of online peer-to-peer business models

Based on the commonalities among the case studies a

potential partners, (lead) clients, universities, a pool of high

entrepreneurial spirit, innovative culture, mentality, and

Figure 1: A common story emerges

Un-locking the potential of the analysed trends depends to a

The new policy challenge: demand-side

Un-locking the potential of business and societal innovation

important to inform and educate players of the general

innovation agencies, is important for scaling up the

Figure 2: The new policy challenge: demand-side innovation policy

The future impact from more demand-side policy efforts will

Innovation policy is no longer seen as only

Un-locking the potential of business and societal innovation

absorption, behavioural change, involvement of (end)users, societal transformation processes, and

The broadening of the involvement of different

Set societal innovation priorities, organise platforms

Broadening of support for business innovation

Bundling of initiatives often packaged into a strategic