This document discusses the need for "light and fast" funding instruments in EU innovation policy to better support disruptive web-based innovation. It provides examples from Italy, the UK, and US of small, simple prize-based programs that have successfully funded innovative projects. While some object that such programs are not allowed, too labor intensive, or lack critical mass, the document argues these objections can be addressed by integrating small, challenge-driven funding into existing programs, using peer support networks, and focusing on ex-post evaluation of results rather than ex-ante requirements. It recommends the EU adopt similar light and fast funding mechanisms to better support innovative web companies and technologies.

1. “Light and fast” funding for innovation:
Making EU innovation policies fit for the web
David.osimo@tech4i2.com
@osimod
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2. Background
• Europe’s lagging behind in web competitiveness
• FP7 projects fail to generate substantial market
impacts
• Most innovative web companies don’t participate
in FP7
• Horizon2020 and Digital Agenda for Europe
mention the need for “light and fast funding
instruments”, but concrete measures focus on
administrative simplification only
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3. Questions
• Is it necessary that future EU innovation
policy include light and fast funding
instruments, and why?
• Is it feasible to adopt these instruments in
the government context?
• How could they be designed?
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4. An Impact Assessment Approach
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5. The problem
• ““there are major barriers to involve the
most innovative and growth oriented SMEs”
(Aho 2008)
• “Framework Programme contains limited
countervailing activity that would stimulate
disequilibrating, disruptive technologies and
innovations that can unseat the established
players and unleash the development of new
industries” (Arnold 2011)
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6. The reasons: an
innovation policy
designed for
capital-intensive
R&I
(cfr. IBBT Ghent Manifesto 2009)
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7. The objective of “Light and
Fast”, and its objections
• Light and fast instruments are not allowed by
financial regulations
• They are much more labour intensive for the
funding agency
• They lack a critical mass to generate disruptive
innovation on the market
• They lack rationale for EU-level intervention
since they are most effective at regional/local
level
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8. 3 cases of light and fast
instruments
• The Principi Attivi initiative of the Puglia
Region (IT)
• The Global Security Challenge (UK)
• US government Challenge.gov service (US)
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9. Principi Attivi
• the Puglia Region Government launched and managed in-house a €10MLN call
for proposals for micro-projects (up to €25.000)
• strong “licence to experiment” by its management . Not funded by SF because
of legal limitations
• Restricted to informal groups of young people could participate
• Very open, non prescriptive definition of the priorities
• Simple application process (max. 13 pages form)
• Open, peer-to-peer helpdesk that enabled the horizontal networking of
participants
• 420 projects (involving 1279 young people) were funded out of 1500 proposals.
Only 5% of proposals did not reach their goals but more than half changed their
objectives throughout the process
• 80% of the projects are still active three years after the call has ended
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10. Global Security Challenge
• The TSWG co-funds the Global Security Challenge, organised by
OmniCompete. Now in its 6th year.
• prizes are a minor part of the total funding of the agency. In the case of
the Security Challenge, about 1% of the budget is devoted to it
• Open, non prescriptive participation, simple application form (1/2
hour)
• Any security-related innovative product can be submitted, global
participation
• Prize grants totalling $500,000 USD are available to the winners.
• Top contenders from previous competitions have subsequently raised
over $80 million in new capital. Several products have then been
bought by the final customers
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11. Challenge.gov
• Following a revision of legislation, any gov agency can organise
inducement prizes and a dedicated platform is set up
• Government agencies can post “challenges” that can be met by any
citizens
• The proposer of the best solution receives the prize money, typically
around 50.000 Euros
• Not only apps contests: e.g. NASA competition for writing “algorithm
to fly three small SPHERES satellites around the cabin of the
International Space Station”.
• All federal agencies but two have used the platform to launch prizes
• So far 38 million dollars in prizes have been distributed, including a 18
million dollars prize for Solid State Lighting
• Growing interest: new COECI created at NASA
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12. Answering the objections
• Objection 1: they are not allowed by financial
regulations
Unproven, but in any case regulations can be
adapted (e.g. America Competes Act). “Light
and fast” instruments call for regulatory
intervention or at least regulatory
clarifications and guidelines that help
convincing administrators of the legitimacy of
the acts.
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13. • Objection 2: they are much more labour intensive
for the funding agency
All project officers confirmed the need for
continuous, in depth interaction with project
managers in order to fine-tune the ideas, but
also underlined how this additional cost was
highly beneficial for both the research team
and the funding agency (similar to VC
approach)
Innovative peer-to-peer solutions can also be
used to reduce the workload
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14. • Objections n. 3: they lack a sufficient critical mass
to generate disruptive innovation on the market
Untrue. Web-based innovation do not require
strong initial investment. The GSC has
attracted world-class participation and
generated innovation with relatively small
funding. Key is using “light and fast” as only
the first step.
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15. • Objections n.4: small funding lacks a rationale for
EU-level intervention since they are most effective
at regional or local level
Untrue. Inducement prizes such as
Challenge.gov show that global and federal (in
the US sense) geographical coverage is
meaningful and effective also for relatively
small amounts of funding. The wide
geographical scope is needed to raise the
quality of the proposals, their visibility and
the knowledge flows, not only because of the
size of the investment.
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16. Answering the initial questions
• WHY? Current funding instruments are
“ineffective by design” in delivering web
innovation
• IS IT FEASIBLE? light and fast funding
instruments are applicable in the government
context, not only in the private and non-
profit sectors. There are examples that show
this feasibility
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17. HOW to do it?
• Integrate (not substitute) existing funding
with: Small funding, short project time, simple
application process, open themes, multi-stage
funding
• Institutional change / clarification necessary
• Management change: “license to experiment”,
move to ex-post evaluation of results
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18. Final recommendations
1. the integration of inducement prizes in Horizons 2020, with a 1%
funding for each applied research priority to be distributed as prize
2. the institution of a small projects assignment for each funding
priorities, with maximum funding of 25000 Euros, small partnership,
also for informal groups and simplified submission and evaluation
mechanisms.
3. the re-orientation of application-oriented research work programmes
into open and challenge-driven funding model, not rigidly divided
between priorities and disciplines
4. the launch of a peer-to-peer support network for project proposals
to be used also in the monitoring and evaluation of on-going projects
5. The move towards a stronger ex-post evaluation of projects and of
administrators, even after 5 years of the finish, with results of the
evaluation being publicly available and being used to future evaluation
of both project officers and project proposals.
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