IT in the frame for euro cash
Small- and medium-sized IT companies will get an opportunity for a financial boost from the European Commission on Tuesday, the first day that initial calls for research project funding proposals will be accepted under the body's Sixth Framework Programme (FP6).
The EC's Framework Programmes (FP) are the only funding arms of EU research policy, with FP6 having specified research areas as well as seven theme-driven components, including one for IST, or Information Society technologies, for various IT and tech-related projects. The €17.5 billion budget for FP6 from 2002-2006 is a 9% increase over the previous FP's almost €15 billion. March-June 2003 will be the first deadlines for proposals.
Such external funding programmes are vital for small- and medium-sized IT firms, industry insiders say, to increase their product development and to establish international contacts in order to survive on the market, especially with the industry's consolidation. In a sector dominated by domestic giants Prokom Software, ComputerLand and Optimus and a bevy of multinationals with local offices, scores of lesser-known players need more capital from outside sources to withstand additional competition expected from the country's EU membership.
"The changing conditions on the Polish IT market will simply force many companies to look more intensively for partners to group themselves within specific projects," said Marcin Marszalek, the chief executive of Zigzag, a Warsaw ISP, which plans to participate in the FP6. EU funding would "be a natural process extending the current process of consolidation on the market," he said.
The EC received almost 12,000 project ideas from firms, universities and research centres throughout Europe in response to its invitation to submit expressions of interest for research in the priority themes for FP6, according to Cordis, the programme's research and development information service. Of the themes, the most applications - almost 2,600 - were received for Information Society projects. Poland tied with Italy as the fourth largest contributor of expressions of interest with 8%, following the UK (17%), Germany (15%) and France (9%).
The EC has earmarked at least 15% of the FP6 programme's funds for SMEs. Most SMEs are largely dependent on such funding to generate new products and technologies, create employment and support larger companies as subcontractors.
"If you're a developer for IBM, then the FP6 is not a good idea because you are not dependent on it" unlike companies that produce their own IT products, said Grzegorz Kołodziej, ComArch's strategic business development director.
Under the FPs, companies and research institutes must find partners and build consortia to develop projects and submit applications for funding. The EC provides 50% of the project's funding up to a total of €750,000 with the rest supplied by the consortia partners.
Mainly Polish research institutes and universities applied for funding under the FP5 since it was perceived as an R&D programme, although it later started attracting Polish SMEs. In the FP5, Central and Eastern European countries represented about 2% of all participants, with Poland accounting for about 22% of that figure, according to Kołodziej.
Some industry professionals said that the participation of Polish IT companies was limited in FP5 due to their lack of knowledge of the programme and because the application and evaluation processes were too rigid. Previous FPs have been criticised for their limited scopes in supporting mainly network-building and research, as well for their complex and bureaucratic implementation policies.
Krzysztof Trojanowski, the project manager for Information Society technology at the programme's National Contact Point office in Warsaw, did not respond to questions by press time.
But the few IT companies that participated in FP5 praised the programme as an alternative source of funding and an opportunity to establish ties with other international firms.
"For the first time someone gave me money to develop my products," said Witold Staniszkis, Sr., the chief executive and majority owner of Rodan Systems, a Warsaw software developer and IT systems integrator, which co-ordinated one project and worked as a partner on two others under the FP5. "This is the only opportunity for financially-aware management to do any R&D on their own."
Kraków-based ComArch was one of the few Polish IT companies that participated in the FP5, and co-ordinated a project called Deepsia, an online purchasing system for SMEs, that it created in collaboration with institutions and companies from Belgium, Portugal, Spain, Greece, the UK and Brazil. The partners received €530,000 from the EC and had to contribute the other half themselves, according to Kołodziej.
ComArch is looking for both consortium partners for integrated projects and for specific targeted projects for FP6, and has already received some expressions of interest.
"We tested the waters (with FP5), and we went through an internal process and came up with several projects to build a consortium around," Kołodziej said. "We will send proposals to the EC that are related to our core competencies, which are aimed at pushing the company forward in terms of research and development."
The EC's Framework Programmes (FP) are the only funding arms of EU research policy, with FP6 having specified research areas as well as seven theme-driven components, including one for IST, or Information Society technologies, for various IT and tech-related projects. The €17.5 billion budget for FP6 from 2002-2006 is a 9% increase over the previous FP's almost €15 billion. March-June 2003 will be the first deadlines for proposals.
Such external funding programmes are vital for small- and medium-sized IT firms, industry insiders say, to increase their product development and to establish international contacts in order to survive on the market, especially with the industry's consolidation. In a sector dominated by domestic giants Prokom Software, ComputerLand and Optimus and a bevy of multinationals with local offices, scores of lesser-known players need more capital from outside sources to withstand additional competition expected from the country's EU membership.
"The changing conditions on the Polish IT market will simply force many companies to look more intensively for partners to group themselves within specific projects," said Marcin Marszalek, the chief executive of Zigzag, a Warsaw ISP, which plans to participate in the FP6. EU funding would "be a natural process extending the current process of consolidation on the market," he said.
The EC received almost 12,000 project ideas from firms, universities and research centres throughout Europe in response to its invitation to submit expressions of interest for research in the priority themes for FP6, according to Cordis, the programme's research and development information service. Of the themes, the most applications - almost 2,600 - were received for Information Society projects. Poland tied with Italy as the fourth largest contributor of expressions of interest with 8%, following the UK (17%), Germany (15%) and France (9%).
The EC has earmarked at least 15% of the FP6 programme's funds for SMEs. Most SMEs are largely dependent on such funding to generate new products and technologies, create employment and support larger companies as subcontractors.
"If you're a developer for IBM, then the FP6 is not a good idea because you are not dependent on it" unlike companies that produce their own IT products, said Grzegorz Kołodziej, ComArch's strategic business development director.
Under the FPs, companies and research institutes must find partners and build consortia to develop projects and submit applications for funding. The EC provides 50% of the project's funding up to a total of €750,000 with the rest supplied by the consortia partners.
Mainly Polish research institutes and universities applied for funding under the FP5 since it was perceived as an R&D programme, although it later started attracting Polish SMEs. In the FP5, Central and Eastern European countries represented about 2% of all participants, with Poland accounting for about 22% of that figure, according to Kołodziej.
Some industry professionals said that the participation of Polish IT companies was limited in FP5 due to their lack of knowledge of the programme and because the application and evaluation processes were too rigid. Previous FPs have been criticised for their limited scopes in supporting mainly network-building and research, as well for their complex and bureaucratic implementation policies.
Krzysztof Trojanowski, the project manager for Information Society technology at the programme's National Contact Point office in Warsaw, did not respond to questions by press time.
But the few IT companies that participated in FP5 praised the programme as an alternative source of funding and an opportunity to establish ties with other international firms.
"For the first time someone gave me money to develop my products," said Witold Staniszkis, Sr., the chief executive and majority owner of Rodan Systems, a Warsaw software developer and IT systems integrator, which co-ordinated one project and worked as a partner on two others under the FP5. "This is the only opportunity for financially-aware management to do any R&D on their own."
Kraków-based ComArch was one of the few Polish IT companies that participated in the FP5, and co-ordinated a project called Deepsia, an online purchasing system for SMEs, that it created in collaboration with institutions and companies from Belgium, Portugal, Spain, Greece, the UK and Brazil. The partners received €530,000 from the EC and had to contribute the other half themselves, according to Kołodziej.
ComArch is looking for both consortium partners for integrated projects and for specific targeted projects for FP6, and has already received some expressions of interest.
"We tested the waters (with FP5), and we went through an internal process and came up with several projects to build a consortium around," Kołodziej said. "We will send proposals to the EC that are related to our core competencies, which are aimed at pushing the company forward in terms of research and development."
