Presidency presents declaration on financing innovation
A declaration on financing innovation was signed at a recent conference in Estoril, Portugal; the declaration calls for: a stronger entrepreneurial attitude; measures to improve companies’
ability to attract investors; the right environment for new companies to flourish; and the channelling of savings into young companies.
The declaration resulted from the forum ‘Financing Innovation – From Ideas to Market’, organised by the European Commission and the Portuguese Agency for small and medium-sized enterprises
(SMEs) and Innovation (IAPMEI). The Portuguese Presidency of the EU Council believes that the declaration can be ‘used as a framework in the context of the renewed Lisbon Partnership for Growth
Under four pillars identified as constituting the innovation value chain – from ideas to market, investment readiness, the right environment, savings for growth – the declaration has
recommendations on how to improve on current practice.
‘Successful entrepreneurial economies need a ‘can do’ attitude to transforming interesting and novel ideas and discoveries into new products and services to both existing and new customers,’
reads the Estoril Declaration under the heading ‘From Ideas to Market’. This ‘can do’ attitude requires efficient financial markets, the declaration claims.
Recommendations on how this can be achieved include promoting business formation as an attractive and feasible career choice, and encouraging spin-out activities that commercialise intellectual
property from the research community. A full spectrum of financial and support services designed specifically for SMEs is also recommended.
Under ‘Investment Readiness’, the declaration explains: ‘New and growing enterprises should have access to the right resources, as allocated by a free and competitive market. They have to earn
investors’ interest and commitment by the greater attractiveness of their business’ profile compared to other available investment opportunities.’
The conference recommended that investment readiness is improved by strengthening companies’ abilities to provide sufficient, timely and accurate information to financial providers.
Benchmarking tools could be used to ‘enhance the reputation of the best-performing enterprises, improving their market position and negotiation capabilities’, states the document.
In order to create ‘The Right Environment’, governments should ensure that inappropriate and costly legislative, fiscal or regulatory systems are avoided, reads the declaration.
Under ‘Savings for Growth’ the declaration states that ‘Savings should be channelled and long-term investments mobilised for investment in SME assets, for example through structured finance
instruments. This process should be supported by public risk-sharing schemes whenever needed, to encourage private investment into market failure areas.’
Recommendations for achieving this include recognising the valuable role of banks and venture capitalists, and strengthening links between business angel groups and investors from the formal
sector. The document also highlights a need for a single pan-European stock market of sufficient economic scale, liquidity, technical expertise and specialism in high growth/high potential, new