Small Business Innovation Research

By project DEVISE

Published on 05 December 2019

Ireland

About this good practice

SBIR aims to drive innovation across all sections of the Public Sector via robust engagement with technology rich companies and organisations, through competitive challenges. SBIR itself is underpinned by a sharing of both risks and benefits between Contracting Organisations and Suppliers.

SBIR falls under the category of pre-commercial procurement (PCP) which involves the purchase of research by a Government entity, which is undertaken with the objective of stimulating innovation that the contracting authority or some other party may benefit from at a later stage, when goods or services are not currently available or developed from the outcomes of the research.

The main stakeholders and beneficiaries are the public sector and the SMEs:
1- Through SBIR the public sector can:
• Identify innovative solutions by reaching out to organisations from different sectors including small and emerging businesses.
• Create new technical solutions through accelerated technology development, whilst risk is reduced through a phased development programme.
• Provide applicants with a transparent, competitive and reliable source of early-stage funding.

2- Through SBIR the SMEs can:
• Compete for each demand driven project in a transparent manner.
• Demonstrate a route to market for their solution
• Focus on specific identified needs, increasing the chance of exploitation as developments are 100% funded – it is not a government grant.
• Retain the intellectual property generated

Expert opinion

For the public sector innovative procurement methods such as this enable to propose challenges to the market that do not have readymade solutions. The idea is to only describe the public sector challenge and not pre-determine how it should be solved. In the end, the solutions developed should meet real needs more accurately than in traditional procurement procedures.

Innovative procurement procedures, that focus on specific needs, can boost innovation among local businesses and lead to the development of new products and services. These products, in turn, have a good scaling and market potential as the challenges for public authorities are often similar across regions and countries. This makes pre-commercial procurement approaches, such as SBIR, an interesting way to enable access to markets for innovative ideas and SMEs. SBIR therefore contributes to the competitiveness of innovative local SMEs.

SBIR is also a good measure of public-private cooperation. The evidence of success on jobs created and retain also speak to the beneficial impact of this measure. This practice is highly replicable in other regions willing to set up innovative procurement procedures that enable local SMEs to innovate.

Mart Veliste

Works at Interreg Europe Policy Learning Platform

Resources needed

2 yearly calls already launched at national level (2017 and 2018).
Call 3 has been launched in 2019 with a budget of 750,000 €.

Evidence of success

20 challenges supported in collaboration with public authorities including; illegal dumping, solutions to rural transport and engaging ‘unheard voices’ in communities.

A survey of 42 SMEs previously awarded shows that 50,000 users are benefiting from SBIR-funded innovations in Ireland. The surveyed companies report 27 new jobs created and a further 88 existing jobs retained. 84% of companies have managed to leverage additional funding as a direct result of the SBIR Challenge.

Potential for learning or transfer

This approach has a lot of potential within the DEVISE project since it can be applied to find and test solutions that provide response to real challenges for the digital transformation of SMEs from strategic sectors.

Example of application: a public body/sectoral agency can launch a challenge focused in providing concrete solutions to the SMEs that are their target beneficiaries. The digital start-ups/SMEs can apply to provide real solutions to that need. The model will support the deployment of this innovative solutions sharing the benefits for both the digital providers and the SMEs receivers of the services.