Developing innovation and skills for
smart growth in Europe
The EIB is a major partner in supporting projects to develop innovation and skills for a growing
economy, from financing ambitious large-scale research to backing small, specialised spin-outs or
funding digital networks. In 2014 alone, the Bank provided EUR 13.3bn in finance for this area.
Backing investments that are geared towards innovation, skills and greater competitiveness is part
of the EIB’s mission to support growth and jobs in Europe.
Innovation and skills are key ingredients
for sustainable growth and creating highvalue jobs. They play an important part in
driving growth in Europe and ensuring the
region’s long-term competitiveness. Economic growth and innovation require adequate finance at a reasonable cost. As the
EU bank, we have made this a top priority and are further increasing our support.
The Bank helps finance a European innovation system that stimulates excellence,
backs ambitious research as well as cutting-edge innovation, and funds digital
networks. Targeting such investments is
of particular importance as Europe is lagging behind most other regions in the
world and needs to do more in order to
catch up. The EIB can help secure such
investments and maximise resources
using its catalytic effect.
65bn
EUR
Financing the future
for innovation
and skills
in Europe
(2010-2014)
Innovation requires skills, and high-quality education is a prerequisite for thriving
R&D-intensive and competitive industries. Europe needs educational systems
and a highly skilled labour force to compete successfully in tomorrow’s economy.
We support investments that improve
the quality of education, especially by
upgrading schools and university facilities, by backing vocational and other
training schemes, or through pan-European student loan programmes to
increase student mobility. In this way, EIB
lending in the education sector can help
improve the skill sets of young workers in
the EU and thereby contribute to creating
new employment opportunities.
staff by supporting relevant national programmes and demand-side measures
through tailored student loan schemes.
Knowledge creates economic value and
promotes productivity and growth if it is
13bn
The Bank also supports the European
Higher Education Area (a compatible and
consistent system of higher education)
and the European Research Area (integrating the scientific resources), with tertiary education and academic research
a priority to push the knowledge frontier. This involves financial backing for
leading-edge universities for reforms targeting the quality and competitiveness
of tertiary education at a global level.
The Bank also encourages the mobility
of students, researchers and academic
Skills and Jobs - Investing for Youth
Youth unemployment is one of Europe’s big challenges. In a bid to address
the jobs crisis facing the EU’s 15-24 year olds, the EIB launched the “Skills
and Jobs – Investing for Youth” programme in mid-2013. Some EUR 13bn
in loans was signed in 2014. Since the start of the programme in July 2013,
it has supported the jobs of about 500 000 young people across Europe.
The initiative’s aim is twofold:
• To boost “Jobs for Youth” across the EU by improving access to finance
for SMEs
• To enhance employability via “Investment in Skills”, targeting projects
focused on education, vocational training and student finance.
2
spread through an economy. Thus innovation relies on the transfer of knowledge
and technology from academia to business. Technology transfer initiatives are
an important channel to promote innovation by bridging this gap.
Developing innovation and skills for smart growth in Europe
EUR
Promoting education
and skills
for
youth skills and
employment in EU
Vienna’s cutting-edge
campus
The Vienna University of Economics and Business, the largest business school in the EU, with around
24 000 students, unveiled its ultramodern open space campus in
2013. Backed by an EIB loan of
EUR 250m, it moved from blueprint
to finished article with commendable swiftness.
The campus is at the cutting edge
in terms of what it offers students,
lecturers and researchers. It is constructed from long-lasting materials, 70% of its heating and cooling comes from geothermal energy
and all buildings are equipped with
heat recovery systems with an efficiency rate of 75%.
Innovation and skills
EIB support for innovation and skills in 2014 (in EUR)
Breakdown by pillar
EIB at a glance
As the EU bank, we provide finance and
RDI
6.6bn
Innovation-enabling
infrastructure
2.2bn
expertise for sound and sustainable
investment projects in Europe and
beyond. We are owned by the EU
17%
Member States and the projects we
support contribute to furthering EU
Education
and training
4.5bn
34%
Total
EUR 13.3bn
policy objectives. We are the largest
multilateral lender and borrower
49%
in the world and our 2 300 staff
can build on more than 50 years of
experience in project financing. We are
headquartered in Luxembourg and
have a network of more than 30 local
offices. www.eib.org/innovation
Turning great ideas
into business
Imperial Innovations helps turn
cutting-edge academic research
into successful fast-growing businesses, the majority of which are
in the therapeutics and medtech
sectors. A GBP 30m loan to Imperial Innovations seeks to accelerate the rate of creation and development of new spin-outs that help
tackle global health issues.
Imperial Innovations has access
to the intellectual property developed at the UK’s most prestigious
universities, including Imperial College London, Cambridge, Oxford
and University College London.
It supports scientists and entrepreneurs in the commercialisation
of their ideas through technology transfer, intellectual property
licensing and protection, company
incubation and investment.
Developing innovation and skills for smart growth in Europe
3
Bridging investment gaps
to boost competitiveness
Europe is facing the challenge of competitiveness and innovation at a global level.
EU investment in R&D has been below
2% for ten years while in Asia, Japan and
South Korea spend more than 3% of their
GDP on this sector. China invests slightly
more than the EU on R&D, while the
amount spent by the US remains stable
at about 2.8%.
The EIB estimates that, in order to reach
the 3% target for R&D set at EU level,
Europe would need to spend approximately EUR 130bn more per year on R&D.
On top of that, investments of about
EUR 320bn per year are needed for modernisation investments in industry; the
current gap in Europe for catching up
on the latest generation manufacturing
technologies is about EUR 90bn.
This forces us to rethink the role of public investment: how can we help to close
the gap in terms of financing in order
to restore Europe’s global competitiveness?
Accelerating innovation
Europe’s future economic growth and
jobs will increasingly have to come from
innovation in products, services and business models. Bringing new products and
services to market is one of our biggest
challenges and one reason why Europe is
lagging behind.
The challenge of the coming years is to
reclaim lost territory and become again
one of the leading technology providers in the world. The EU remains a world
leader in high-value added products and
in high-tech, especially in the automotive, aerospace, engineering and digital sectors. Technological advances from
life sciences to environmental improvements ensure that the EU’s research and
development sector is leading-edge. The
EIB’s focus on lending for innovation aims
to address this issue as access to finance
helps to ensure that innovative ideas can
be turned into new products and services.
Where does the Bank help? We finance
investments in research, technology
development and innovation across
the board, including joint research
programmes at EU and national levels, research infrastructure, academic
research in public and private universities as well as for downstream actions and
investment in support of manufacturing technology, incubators, science and
technology parks and clusters, to facilitate the transfer of knowledge and expertise between academia and the business
sector.
Backing renewable technology
innovation
Innovation is particularly important in areas where
technology is developing at an accelerated pace
such as equipment for renewables. The EIB is supporting Spanish company Gamesa’s research, development and innovation activities, which are helping
to improve wind turbine technology and cut energy
costs, with a EUR 260m loan.
This is helping Gamesa to shape its current product portfolio by launching new onshore turbines
and developing new offshore wind platforms with
a greater capacity. The project will aid the development of an important renewable energy technology
and strengthen the company’s capacity for innovation
and competitiveness. The funding is set to finance the
creation of some 600 new permanent jobs in R&D during the implementation period, most of which require
a highly skilled workforce.
4
Developing innovation and skills for smart growth in Europe
Innovation and skills
Digital economy the key to
long-term growth
Another ingredient stimulating technological innovation is digital infrastructure.
In particular, internet-based technologies
will continue to be an essential driver of
productivity growth. Digital networks
enabling high-speed internet access have
a strong positive impact on long-term
GDP growth and will contribute an estimated 2.1 million additional jobs in the
EU between 2006 and 2015.
Investing in the digital economy is thus
necessary to support Europe’s growing data traffic and it is also one of the
main goals of the EU’s Digital Agenda.
Increasingly, every business is a digital
business. So high-speed internet, mobile
networks and cloud computing are priority areas for the Bank.
Enhancing mobile broadband
services in Portugal
The EIB toolbox for more value added
Our traditional financing products are medium and long-term loans with
fixed or variable interest rates in euros or other currencies. We finance large
projects with direct loans, whereas we support smaller projects indirectly,
through credit lines to local banks or other intermediaries. The EIB offers
the opportunity to combine its financing with EU grants, depending on the
scope and definition of the project.
Going beyond conventional approaches, our new financial products
embrace ways of funding investments in innovation:
• Layered-risk funds, enabling the issuance of direct share tranches and notes
to offer investors different risk-return profiles;
• Equity funds, filling market gaps and piloting new areas;
• Capital market activities, such as the Project Bond Initiative;
The EIB is seeking to give a boost to
the high-speed mobile broadband
network in Portugal with a EUR 110m
loan to NOS. The loan supports investments necessary for the roll-out of
mobile network equipment and systems for the current 3G and new
4G technologies. This has helped to
improve access to broadband services
for consumers, increasing operating
efficiency and reducing costs as well
as fostering competition in the telecoms sector.
The new mobile platform deployed
enabled NOS to start offering mobile
broadband with speeds of up to
150 Mbps across its 4G network,
thereby vastly exceeding the 30 Mbps
EU target for 2020. Especially in rural
areas, mobile networks are often the
only practical solution to achieving full
broadband internet coverage.
• Initiatives such as InnovFin – EU finance for innovators.
Developing innovation and skills for smart growth in Europe
5
EU Finance for Innovators
In 2014, the EIB Group (EIB and EIF)
together with the European Commission renewed their commitment to supporting research, development and
innovation across Europe. A new range
of products has been launched under
InnovFin – EU finance for innovators.
This flagship initiative complements the
EIB Group’s existing financial offering
for research, development and innovation projects.
the lack of available finance on acceptable terms for innovative businesses,
since these types of companies or projects often deal with complex products
and technologies, unproven markets and
intangible assets. In order to overcome
these obstacles, the EIB Group and the
European Commission have joined forces
to provide finance for research and innovation to entities that often struggle to
access financing.
EU Finance for Innovators
and 2020, it is expected that the InnovFin
products will make available more than
EUR 24bn of financing for research and
innovation by small, medium-sized and
large companies and the promoters of
research infrastructure.
Product Overview
Product Overview
ce for Innovators
uct Overview
Innovation requires access to finance at
a reasonable cost. One of the key factors constraining the implementation
of research and innovation activities is
EU Finance for Innovators
SMEs
SME Guarantee
In order to respond swiftly to financing
requests, streamlined procedures have
EU Finance for Innovators
been established to reduce the time
needed to secure financing – from first
contact to signature of contract – to
EU Finance for Innovators
EIB’s due diliInnovFin offers financing options tailored three to six months. The
SMEs
to a wide range of clients from innova- gence process involves the assessment
tive small start-ups to large enterprises of the company’s or project’s eligibility,
SMEs technical and economic
Midcaps
viability and
and public institutions. Between 2014
Midcaps
MidCap Guarantee
SME Guarantee
Large Caps
SME Venture Capital
Large Projects
M
L
SME Guarantee
MidCap G
MidCapAdvisory
Guarantee
SME Venture Capital
Large Pro
MidCap G
MidCap Growth Finance
Advisory
direct products
SME Venture Capital
MidCap Growth Finance
direct products
indirect products
indirect products
Innovative finance meets
innovative pharma
direct products
indirect products
Place and date
Title of presentation
6
Developing innovation and skills for smart growth in Europe
One of the first loans to be signed under
Place and date
InnovFin was with UCB, which was also a firstof-its-kind transaction with its innovative “at
risk co-development funding”
to
Title ofapproach
presentation
supporting the company’s biopharmaceutical R&D. The Bank is providing up to EUR 75m
in a programme designed to share risks and
returns, with payments being contingent Page
on No.
the milestones being reached. This will see the
Bank investing directly in certain selected R&D
programmes in UCB’s significant portfolio of
potential breakthrough medicines. These are at
various stages of development but could help
millions of patients.
Title
Innovation and skills
Developing healthcare innovation capacity
The EIB is backing Richter’s research on compounds active in diseases of the central nervous system, together with the development of biosimilar products, with a EUR 150m loan. The research
being funded is intended to address unmet medical needs and
will also impact the quality of life of certain patients by providing
them with access to otherwise expensive therapies. Richter is the
largest industrial R&D spender in Hungary and the wider Central
and Eastern European region. More than 1 000 people, around
10% of its total labour force, work in research and development.
environmental soundness and the promoter’s financial situation and outlook.
Europe’s Horizon 2020 strategy and in
particular the so-called Innovation Union
aim to increase Europe’s power to innovate. Through the blending of EU budget
funds with EIB Group financing solutions, we are helping to mobilise investment from other parties for the benefit of
innovation across Europe. This builds on
the success of the Risk-Sharing Finance
Facility developed under the seventh EU
framework programme for research and
technological development (FP7), which
financed 114 research and innovation
projects to the tune of EUR 11.3bn and in
addition provided loan guarantees worth
over EUR 1.4bn. InnovFin is set to trigger
a multiple of investments.
Innovative projects supported range
from large-scale research infrastructure,
such as the Sincrotrone free-electron
laser in Italy, pharmaceutical innovation
including UCB in Belgium and Gedeon
Richter in Hungary and tech transfer
with Imperial Innovations, to midcaps
like Finnish Rovio, creator of the popular
Angry Birds game and other small innovative businesses supported by the European Investment Fund.
By lending, combining funds and advising for innovation and skills, together we
can help boost productivity and competitiveness in Europe in order to secure jobs
and growth in the future.
More than a loan – InnovFin advisory
The EU bank seeks to add value beyond providing favourable
loan conditions, by combining funds, attracting additional finance and
providing crucial advice in project preparation and follow-up to make
the projects a success. Past experience has demonstrated that many
research and innovation projects face difficulties in securing access to
finance although their fundamentals are good. Advisory support helps
them to capitalise on these fundamentals and adjust elements such as
governance, funding sources and financing structure, in order to improve
their access to finance.
Developing innovation and skills for smart growth in Europe
7
Developing innovation and skills for smart
growth in Europe
EIF supporting entrepreneurship and innovation
The EIB Group consists of the EIB and the
European Investment Fund (EIF), the specialist provider of risk finance to benefit
smaller businesses across Europe. The
EIF fosters EU objectives in support of
entrepreneurship, innovation, growth,
employment and regional development.
The EIF supports high-growth innovative
SMEs and midcaps by means of equity
(venture capital and growth capital) and
guarantee instruments (guarantees and
counter-guarantees) via a broad range of
financial institutions, using either its own
funds or those available under mandates
given by the EIB (the Risk Capital Mandate, the EIB Group Risk Enhancement
Mandate), the EU (COSME, Horizon 2020
etc.), Member States or other third parties. Complementing the EIB’s product
offering, the EIF has a crucial role to play
throughout the value chain of enterprise
creation, from the early stages of intellectual property development and licensing
to mid and later-stage SMEs.
Brolis Semiconductors specialises in the
design and development of long-wavelength mid-infrared laser diodes and
molecular beam epitaxy technology,
which is applied in the medical diagnostics, dermatology, materials processing,
gas sensors, combustion process control and home-security night-vision sectors. To make their project a reality the
three founding brothers secured funding
from the EIF-backed venture capital fund
“LitCapital”, which operates under the
JEREMIE Holding Fund in Lithuania.
LitCapital saw the potential of the
start-up and gave the brothers financial
backing and advice. The company is now
well-established and provides quality
competitive services and products to a
growing portfolio of clients.
European Investment Bank
98 -100, boulevard Konrad Adenauer
L-2950 Luxembourg
3+352 4379-1
5+352 437704
www.eib.org/innovation
U info@eib.org
European Investment Fund
37B, avenue John Fitzgerald Kennedy
L-2968 Luxembourg
3+352 2485-1
5+352 2485-81200
www.eif.org
U info@eif.org
© EIB Photolibrary, © 2007 - 2012 UCB S.A., Belgium, © GAMESA CORPORACION TECNOLOGICA SA, © WU Vienna, © Astrium / Mathias Pikelj, © H. Lundbeck A/S
© EIB – 02/2015 – QH-01-15-093-EN-C – ISBN 978-92-861-2255-2 – doi: 10.2867/029768 – © EIB GraphicTeam
Lithuanian company develops
semiconductors