ROLES OF INTERMEDIARIES TO SUPPORT ECO-INNOVATION by MUOVA

ROLES OF INTERMEDIARIES TO SUPPORT ECO-INNOVATION Internal report about intermediary organisations and their needs in relation to support SME’s in eco-innovation development

Research / development team: Deivydas Čepas, Gintarė Boreikytė, Tomas Zmitrevičius

ECOLABNET Network of service providers for eco-innovations in manufacturing SMEs Project number #R077 Ecolabnet project is funded by EU Interreg Baltic Sea Region program, European Regional Development Fund. The project is implemented between 1.1.2019– 30.6.2021. You can find more information about the project on project website ecolabnet.org. Published by ECOLABNET project Lithuanian Business Confederation Gediminas ave. 2/1 – 28, LT-01103, Vilnius, Lithuania

Research / development team • • •

Deivydas Čepas Gintarė Boreikytė Tomas Zmitrevičius

Published: 01-06-2020, Vilnius, Lithuania ISBN: Copyright © Publisher and writers Layout and graphics: VAMK Ltd. University of Applied Sciences Design Centre MUOVA This publication has been produced with the financial assistance of the European Union. The content of this publication is the sole responsibility of the publisher and under no circumstances can be regarded as reflecting the position of the European Union. The content of this publication reflects the authors’ views. The Investitionsbank SchleswigHolstein is not liable for any use that may be made of the information contained herein.

TABLE OF CONTENT 1. INTRODUCTION

2. 2.1 2.2 2.3 2.3.1 2.3.2 2.3.3

INTERMEDIARIES AND THE MAIN CHARACTERISTICS The sample: quantitative data based on the survey The sample: Qualitative data based on the interview Profile of the representatives Type of intermediary organisations Characteristics of the customers & members Industry of represented SME’s

5 5 6 7 7 9 10

3. 3.1 3.2 3.3

ROLE OF EXTERNAL SERVICE PROVIDERS Knowledge about eco-innovation Role of local service providers Performance of local service providers

11 11 12 13

4. 4.1 4.2 4.3

FOCUS WITHIN ECO-INNOVATION SUPPORT Current experience of intermediary organisations Importance of services provided to SME’s Interests of SME’s to receive support in eco-innovation

14 14 16 18

5. 5.1 5.2

EXPERTISE AND ECO-INNOVATION SUPPORT AREAS Expertise provided by Intermediary organizations Importance to support to SMEs in specific service areas of

19 19 20

6. 6.1 6.2

GAPS AND BARRIERS Gaps and barriers of SME’s Challenges faced by intermediaries to support SME’s

22 22 23

CONCLUSIONS

APPENDICES 25 APPENDIX 1 26 Tables 26 Figures 26 APPENDIX 2 Survey questionnaire

27 27

APPENDIX 3 Interview guide

35 35

1. INTRODUCTION

ECOLABNET IS A PROJECT FUNDED BY THE INTERREG BALTIC SEA REGION, AND AIMS TO CREATE A NETWORK OF SERVICE PROVIDERS FOR SUPPORTING ECOINNOVATIONS IN MANUFACTURING SMES IN THE BALTIC SEA REGION.

Eco-innovation is gaining considerable support among researchers, businesses and policy makers as a relevant though not self-sufficient approach to environmental sustainability. This is because, the underlining of eco-innovation such as efficient and effective use of material, energy and human resources, are directly in-line with constantly increasing visions for a circular economy in many EU countries. In this sense companies are challenged to engage in complex process of eco-innovations development. This can be challenging for many small and mediums sized enterprises (SME), because many of them are in lack of essential competence and infrastructures. Therefore, SME’s are in constant need to connect with external support and tackle some of the challenges associated with eco-innovation. Here intermediaries can be seen as generally independent third parties that play an integral part in collaborative activities to support any aspect of the eco-innovation process. They can support SME’s in the various areas and translation of knowledge or technologies from creators to users in a business context. In this sense creators include universities, other research organisations and other businesses.

It is clear that each intermediary organization has different roles and characteristics in terms of knowledge, competences and responsibilities and the way which intermediary work is undertaken. There-

fore, Ecolabnet network aims to presents the key findings and conclusions about intermediary organisations and their experience to support small and mediums sized enterprises (SME) in the field of sustainable eco-innovation development. The main purpose of this research is to identify needs of intermediaries in relation to support manufacturing SME’s on their pathway for eco-innovation development. This also includes viewpoints on needs of SME’s in order to promote successful ecological manufacturing in the future. The overall methodological approach and the core results of this research is based on two different sets of data – a quantitative part based on a survey using a structured questionnaire and a qualitative part based on semi-structured interviews with intermediary service providers (face to face, online, telephone). The qualitative data will add wider understanding and will be qualifying the findings from the survey. The survey and interviews were conducted between September 2019 and January 2020. Study covers intermediaries in six different countries – Poland, Lithuania, Estonia, Sweden, Finland and Denmark. All respondent were mapped based on their relations to the clients and key members as it was impossible to cover the entire range of intermediary actors in the selected regions. The following section describes how data has been collected and analysed based on both datasets.

INTERMEDIARIES AND THE MAIN CHARACTERISTICS

During the conducted research, various types of data the needs of intermediary organisations (including, survey data, interviews, company web sites) were analysed. The following report will involve conclusions and input based on results from survey and interviewed intermediaries who are working to support SMEs in eco-innovation development as well as other actors. There are also a range of ‘institutional and organisational gaps’ that are addressed by intermediaries related to development of new eco-innovations. These include: collaborations with RDI institutions, lack of research and expertise orientation in industry-academic; and, limited funding for development and commercialization of new products. The report shows that intermediaries are often contacted by SMEs to offer relevant support in these areas. This also reflects a lack of competences and knowledge needed to support companies. In advance of a more in-debt analysis, the sample will be described in the following section. The sample sections covers information related to the type of intermediaries as well as the size and industries within which their customers (SMEs) operate and their representation in the sample. 2.1 The sample: quantitative data based on the survey The sample originally consists of 108 responses. In order to analyse the results, the responses were structured in three different data sets, where the number of responses differs depending on various factors. The first data set consist of 108 responses, where first eight survey questions are answered by intermediaries in above mentioned countries (Finland, Poland, Sweden, Lithuania, Estonia, and Denmark). However, not all 108 responses were fully completed and not all represented customers of intermediaries where within the field of manufacturing. The second data set consists of 84 responses, where all responses are fully completed and biggest part of represented customers of intermediaries where within the industry of manufacturing. Fully completed responses indicate that all questions in the survey have been answered.

An additional block of data was created in order to present position of intermediaries that are willing to cooperate and strengthen their future collaboration with SME’s and RDI’s. This data set consists of 55 responses answered by intermediaries in above mentioned countries. A figure illustrating these sets data of respectively 108, 84, and 55 responses can be seen below. ALL RESPONSES FROM 6 COUNTRIES: 108 FULLY COMPLETED, CUSTOMERS IN MANUFACTURING: 84 WILLING TO COOPERATE IN THE FUTURE: 55

FIGURE 1. Sampling of data based on survey responses

TABLE 1. DISTRIBUTION OF QUANTITATIVE DATA ALL RESPONSES

COMPLETED WITHIN CUSTOMERS IN MANUFACTURING

WILLING TO COOPERATE

FINLAND

POLAND

ESTONIA

SWEDEN

LITHUANIA

DENMARK

TOTAL

108

COUNTRY

Due to the different number of respondents in each question, the analysis will be made in staged based on the answers provided in every question. However the biggest focus will be on the second data set with 84 responses, where all responses are originated within the six above-mentioned countries, and where all intermediaries have fully completed the survey, and finally the biggest part of customer of intermediary organisations is within the field of manufacturing. There are reasoning behind the construction of these three levels of datasets - The original application of ECOLABNET targets intermediaries that supports manufacturing SMEs in the field of sustainable eco-innovation development. This lays the foundation for the decision to focus on the intermediaries in this report. Furthermore, when conducting the survey and analysing the results, it has been determined consider focusing on as many responses as possible. This will allow to receive deeper understanding about the specific need and experience of intermediaries in the field.

The table on the top indicates distribution of responses in the six countries spread out on the three levels of data sets. Starting with the data set of 108 responses,

to the data set with fully completed responses within manufacturing of 84 responses.

2.2 The sample: Qualitative based on the interview

data

The main purpose of this part of the study was to receive more in-debt analysis about the experience and role of intermediary organisations in relation to support SMEs in the field of sustainable eco-innovation development. All respondents that have participated in the interviews where selected based on their definitive consent from the surveys phase. Below provided table specifies the total amount of interviews conducted in each country. All interviews were documented into prepared semi-structured English template forms. Therefore, there is a variation in the way the all interviews were conducted. 17 interviews were carried out faceto-face and 11 where done by phone or on-line. Secondly, there is a difference of duration on how long interviews were held. Only 2 interviews have a duration of less than 30 minutes while the rest have a duration of 30 minutes or more.

TABLE 2. DISTRIBUTION OF QUALITATIVE DATA COUNTRY

INTERVIEWS CONDUCTED

FINLAND

POLAND

ESTONIA

SWEDEN

LITHUANIA

DENMARK

TOTAL

Furthermore, there were no coding procedure used to prepare previously mentioned template. So there is a big variation in the length of the summaries of the interviews. Therefore, there is a limitation to the amount of data and input on various questions. All the interviews were conducted with intermediary organisations that work with manufacturing SME’s and covers many different industries. The interviewees typically had a higher management position in the companies (e.g. CEO, head of development department and executive directors). Due to this reason all respondents were able to present the most important information regarding SME need. The following table below indicates distribution of responses in the six countries. 2.3

Profile of the representatives

This section presents some more detailed background information and the characteristics of intermediary organisa-

tions in terms of their types, sectors and the main customers represented. All of respondents that have participated in the study are intermediary organisations form public and private sectors representing different type of SMEs in BSR region. However, not all respondents from the two samples work with manufacturing SME’s. Gathered data represents a segment of intermediaries who in some stage are working to support manufacturing SME’s in a process of sustainable eco-innovation development.

2.3.1 Type of intermediary organisations Within the framework of the research, 108 responses from various business support organisations of different levels and importance in BSR region were analysed. The main part of intermediaries that have participated in the survey are categorized into specific groups. The representation of each group can be seen in figure on the next page.

BUSINESS SUPPORT & DEVELOPMENT ORGANIZATIONS OTHER

FIGURE 2. TYPE OF INNOVATION CENTERS

INTERMEDIARY ORGANISATIONS

ASSOCIATIONS

TRADE & INDUSTRY ORGANIZATIONS CONSULTANTS & EXPERT NETWORKS

RESPONSES

ANSWER CHOICES BUSINESS SUPPORT AND DEVELOPMENT ORGANIZATIONS

22.22%

ASSOCIATIONS

22.22%

OTHER INTERMEDIARIES

15.74%

CONSULTANTS & EXPERT NETWORKS

12.96%

TRADE & INDUSTRY ORGANIZATIONS

11.12%

INNOVATION CENTERS

7.41%

SCIENCE PARKS & TECHNOLOGY TRANSFER OFFICES

3.71%

VENTURE CAPITALISTS AND BUSINESS ANGELS

2.78%

START-UP INCUBATORS OR ACCELERATORS

1.85%

TOTAL

As it is seen in the figure, support to manufacturing, SME’s in the field of sustainable eco-innovation development were provided by different type of intermediary organizations. In regards to the type of intermediaries represented in the sample, the focus will be put on the top 6 organisations, where more than 90% of the sample is represented.

108

First four intermediaries, which represent more than half of the sample is regional business support and development organizations 22%, followed by associations with 22% and other intermediaries with 15%, while consultants & expert networks represent 12%. These four types of intermediaries include 73% of the sample. “Other intermediaries” covers

answers that were either too specific to categorize, such as for example “Cluster”, or answers that were given too few times to categorize in a meaningful way, e.g. “Governmental Agency” which was answered several times. “Other intermediaries” mainly consists of public business support organisations that are can provide significant data in relaxation to the needs of SMEs. The following 17% listed in the table above are trade & industry organizations with 11%, followed by innovation centres with 7%.

groups: micro (up to 9 employees), small (10- 49 employees), medium (50- 249 employees), large (250 or more employees) and a mix of all sizes. The type of SME’s were categorised based on the number of employees the companies. The representation of each groups provided in the following figure. Figure shows, that almost 56% of responding intermediaries work to support small or micro size companies, while following 20% of respondents work with medium size companies. Large companies in the network of intermediaries represent just 3% of the sample. This shows that more than half of all respondents will provide practical input & recommendations and will help to meet the main goal of the study.

2.3.2 Characteristics of the customers & members The main customers (SME’s) of intermediaries can be characterized into five

3% 20%

21%

FIGURE 3. SIZE OF 32% SME REPRESENTED BY INTERMEDIARY ORGANISATIONS

24%

ANSWER CHOICES

RESPONSES

SMALL (10- 49 EMPLOYEES)

32%

MICRO (UP TO 9 EMPLOYEES)

21%

A MIX OF ALL SIZES

21%

MEDIUM (50- 249 EMPLOYEES)

20%

LARGE (250 OR MORE EMPLOYEES)

TOTAL

105

2.3.3 Industry of represented SMEâ&#x20AC;&#x2122;s In order to reach more accurate data results of the study respondents were asked to specify the main industries of their customers represented in the sample. All respondents were able to select more than one category to point out which sectors ranks highest in their networks. The following table shows distribution of responses for each category. Based on the answers provided in the table it can be seen that intermediaries are working with a wide range of manufacturing companies. Quantitative research analysis show that five industries ranks highest among all clients of intermediates: machinery & equipment to-

gether with machinery repair & installation products represents 68%, followed by computer, electrical equipment and optical products with 59%. Companies in other manufacturing represents 53% of all clients, where rubber, plastic and chemical products represent 40%, followed by food products & beverages with 40%. Study also shows that 46% respondents have indicated their clients as not in manufacturing. This shows that some intermediaries are wide profile organizations working with clients from different sectors. The interviews also emphasize that these six industries have the biggest potential and needs to develop eco-friendly products and services in the future.

TABLE 3. TYPE OF SME REPRESENTED BY INTERMEDIARY ORGANISATIONS ANSWER CHOICES Machinery & equipment and Repair & installation Computer, Electrical equipment and optical products Other manufacturing Not in manufacturing Rubber, plastic and chemical products Food products & beverages Motor vehicles, trailers, semi-trailers and other transport equipment Fabricated metal products Wood and products of wood and cork, except furniture Textiles Furniture Printing and reproduction of recorded media Paper and paper products Other non-metallic mineral products Basic metals Basic pharmaceutical products and preparations Wearing apparel Leather and related products Coke and refined petroleum products Tobacco products

RESPONSES 68% 59% 53% 46% 40% 40% 33% 24% 24% 21% 16% 16% 13% 13% 13% 12% 8% 6% 4% 3%

ROLE OF EXTERNAL SERVICE PROVIDERS

External support to SME’s can take various forms and could be delivered by a variety of providers, operating within different sectors and interacting with clients in various ways. In order to analyse the main needs of intermediary organisations in relation to support SME’s in the field of eco-innovation development it is important to identify already existing knowledge and established collaboration with external service providers. Due to this reason, a dataset was compiled (Figure 4, Figure 5) presenting clear results regarding the external experts used to provide consultations in above mentioned area.

3.1

Knowledge about eco-innovation

There are different definitions and understandings regarding eco-innovation development among SME’s. Finding in following figure presents the main words used by respondents in order to describe within their networks regarding eco-innovation.

FIGURE 4. KEY WORDS USED BY INTERMEDIARIES TO DESCRIBE ECO-INNOVATION

Based on data gathered during the quantitative and qualitative study it can be seen that descriptions varies based on specific needs, motivation or performance of SME’s. It is clear that eco-innovation should reduce the impacts of production to the environment. Intermediaries also state that companies seek various eco-innovation initiatives if it will beneficial both to customer, company and environment. It could also be used to overcome the obstacles and challenges faced by SME’s. However, a large amount of companies still have a rather narrow view in terms of eco-innovation and defines it as an environmental issue that could be tackled during the process of business development. Respondents also indicates that eco-innovation development is still an unclear concept to many intermediaries and SME’s. Therefore, it is important to define concrete descriptions filled with content recommendations in terms of specific manufacturing or service development process.

3.2

Role of local service providers

In terms of the role and importance of external service providers used by intermediaries to support SME’s in sustainable eco-innovation development, there are top five categories presented: commercial consultants, universities and research institutions, regional business development organizations, international business development organizations and industry associations.

was followed by regional business development organizations with 56% and had more important role than the other above mentioned external service providers. Importance to cooperate with universities & research institutions regarding the eco-innovation are supported by the findings from the qualitative data as well. Interviewed respondents were asked about their collaboration experience with research and development

FIGURE 5. EVALUATED ROLE OF EXTERNAL SERVICE PROVIDERS Regional business development organizations Universities and research institutions Industry associations International business development organizations Commercial consultants 0%

20%

40%

60%

80%

100%

Priorization 1

0 = not at all important and 5 = extremely important

When we look into collected data (Figure 5) it can be seen that survey results show significant differences regarding the roles of two service providers in their networks to support eco-innovation. However, the remaining part of responses splits almost equally over all other categories. Due to this reason, focus will be set on two groups of responses that includes: a) not at all important or less important and b) important or extremely important. Survey data shows that the bigger share of respondents identified universities & research institutions as extremely important with almost 67%. This category

institutions “RDIs” (both in private or public sectors). Statements like “We have vast collaborated experience with RDIs in the field of innovations”, ”Yes, we work with research and development organizations and universities constantly”, ”We have vast collaboration experience with RDIs in the field of innovations (both on private and public sectors)”, “RDI partners are always invited into open events that we organize, they can network directly with industries during those events” show that intermediaries had or currently have various successful cooperation stories with RDIs and try to act like a bridge between them and SME’s.

Results from the interviews indicates that universities and research institutions are extremely important to SME’s in relation to the latest science-based knowledge they provide for eco-friendly process or material development. However, sometimes services provided by universities can become too theoretical and not suitable enough to use in practice. Universities are not always familiar with current market need. The respondents also state that it is essential to their network and connect SME’s with various service providers. This way companies are guided towards relevant competences and expertise need for their eco-innovation development. Data from the lower end of the scale shows that commercial consultants with 31%, international business development organizations with 27%, and industry associations with 24% had a smaller role when it comes to eco-innovation development. Respondents state that these categories were less important to support SME’s eco-innovation development.

3.3 Performance of local service providers During the quantitative phase of the research, specific data were collected to identify performance of the following service providers. Intermediaries had a chance to rate their experience based on previous work with external service providers in order to support SME’s. The following figure shows distribution the responses. Figure 6 shows that research data don’t make significant differences in relation to the performance of listed service providers in terms of eco-innovation development. It can be seen that all positive and negative responses distributes almost equally over all five categories. However, we could emphasize that several answers stands out a little more than the others. Almost 52% of intermediaries states that universities and research institutions performed good or extremely good. Another group of well performing service providers consists of regional

FIGURE 6. PERFORMANCE OF EXTERNAL SERVICE PROVIDERS Universities and research institutions Regional business development organizations Industry associations Commercial consultants International business development organizations 0%

20%

40%

60%

80%

100%

Priorization 0

0 = not at all important and 6 = extremely important

business development organizations with 49%, followed by industry associations with 49%. Based on qualitative analysis, intermediaries states that the best performance these service providers can be seen through joint initiatives and R&D projects in eco-innovation development. This usually include practical and theoretical activities. In terms of poorer performance, data

shows that commercial consultants collected 24% of all responses. While other groups vary between 12 and 17%. It can also be noted that the large proportion of respondents chose a neutral position and don’t intend to rank these service providers at all. These responses range from 25% to 35% of all respondents in five above presented categories. Moreover, 4% to 16% of respondents stated that they do not have these external service provider in their network at all.

FOCUS WITHIN ECO-INNOVATION SUPPORT

In order to develop the best practices to support manufacturing SME’s in sustainable eco-innovation through intermediary organisations, it is important to identify the main interests of SME’s within the field. Therefore, focus will be made on the current experience and knowledge of intermediaries as well as companies within their networks. All related data provided in the following sections.

4.1 Current experience of intermediary organisations

to eco-innovation development and related support.

According to the qualitative survey data 68% of the sample responded that it is important or extremely important to support their clients within the field of innovation. This shows that more than half of all respondents are willing to promote eco-innovation services among SME’s and act like a bridge between their customers and relevant service providers. However, about 6% of respondents expressed their position that such support is still not at all important or relevant for their network. Remaining 25% of the sample remains neutral when it comes

When it comes to eco-innovation development intermediaries state that SME’s within their networks see this as a beneficial process. Based on the interviews we can also see that many manufacturing SMEs (especially in BIO, and Agro sectors) seek to develop their processes or products in this matter for a number of reasons. Firstly, eco-innovativeness is a chance for companies to improve their image. Secondly, environmental protection and ecology can be a distinguishing feature for many enterprises. Finally, eco-innovation can become a main source of competitive advantage and

33,70%

25%

FIGURE 7. IMPORTANCE TO SUPPORT SMES IN ECO-INNOVATION

68,4%

34,78%

4,35% 2,17%

Priorization 0

0 = not at all important and 6 = extremely important

opportunity to lower cost of company’s operations and switching to a more eco-friendly resources. There are also a number of other factors that could contribute to a decrease in production costs or lifted competitiveness on European market. Therefore, SMEs are willing to search for support via EU initiatives or cooperation with RDI institutions.

mote it. This way each understand them in their own way. Secondly, we can see that today there are still no mandatory laws or regulations regarding sustainability. However, national and regional governments imposes higher demands on the use of more energy efficient products. Therefore, it will have much more important role in the future.

However, conducted interviews shows that these are still a number of SMEs that are not focused on the area of sustainability or eco-innovations. Respondents state that the term and concept of eco-innovation is still unclear both to SME’s and organisations that could pro-

Table on the next page presents the distribution of answers across countries. The different colours represent each importance to support SME’s eco-Innovation, while the numbers indicate how many respondents in each country have chosen that category as their answer.

FIGURE 8. IMPORTANCE TO SUPPORT SMES IN ECO-INNOVATION ACROSS 6 COUNTRIES

1 = not at all important and 5 = extremely important

5 8 6

2 1 1

EST

2 7 8

2 1

Figure 8 confirms that the bigger part of surveyed intermediaries consider such support important or extremely important to their clients of approached SME’s. On the other hand data from Estonian intermediaries shows slightly different results and states that such support is still not important or relevant for SME’s in their network. However, the number of respondents in each country is quite low, therefore it is impossible to draw final conclusions about the importance of such support to SME’s in each country. 4.2 Importance of services provided to SME’s Intermediary organisations support SMEs by providing them with a different type of services, expertise. Provided consultations usually help SMEs to improve their existing products or manufacturing processes. Therefore, it is significant to identify the most important roles of consultants and services offered by intermediaries to support eco-innovation.

Figure 9 on the next page shows that the importance of different services offered by Intermediary organisations varies considerably between a lowest where service is less important to the highest

where services were ranked as important or extremely important.

By far, the most widely-used and highest rated service were: • Fostering networking and partnerships (e.g. providing avenues for firms in eco-innovation) with almost 65%. • Information gathering and dissemination with almost 61%. • Providing access to various resources (e.g. financial, human and knowledge resources for eco-innovation) with almost 59% • Commercialization with almost 59%. • Forecasting and road mapping (e.g. providing avenues for firms in eco-innovation) with 50%. • Process support on how to develop eco-innovations with almost 48%.

The interviews also show that there is a wide range of services offered to support SME’s in regards of eco-innovation and manufacturing. On one side, we can see intermediaries that pays more attention to promote business and science collaboration by organizing various networking and partnerships initiatives (e.g. confer-

FIGURE 9. PERFORMANCE OF EXTERNAL SERVICE PROVIDERS Fostering networking and partnerships Information gathering and dissemination Providing access to various resources Commercialisation Forecasting and road mapping Process support Prototyping and piloting Technical consulting Branding and legitimation 0% 1

20% 2

40% 5

60%

80%

100%

1 = not at all important and 5 = extremely important

ences, workshops, training, seminars). Respondent state that Networking (in any lever) have are one of the main tolls used by intermediaries to support SMEs. Such activities also provide SME’s with general competences and information of relevant “know how” regarding sustainable eco-innovation development, regulations or relevant issues. On the other side, intermediaries are working to provide practical innovation support services and promote access to needed infrastructure or capital for new start-ups as well as already established business. According to the responses provided during the interviews, intermediaries try to connect SME’s (tech-oriented entrepreneurs or board members) with specific service providers that are working to promote eco-innovation development in some level (e.g. business and technology development, patents, legal requirements, sales or even marketing).

Results from the survey and the interviews also indicated that the less important services provided by intermediaries are: • Prototyping & piloting with 43%. • Technical consulting with 42%, • Branding & legitimation (e.g. creating distinct brand and social acceptance) with 41%.

Final group of respondents consists out of neutral positions that varies between 21% to 33% of responses in all above presented categories. However, the importance and ranking of presented services aimed to support eco-innovation may vary based on changing future needs of SME’s. The following section will focus on the interests expressed by SME’s in relation to receive actual support within eco-innovation development.

4.3 Interests of SME’s to receive support in eco-innovation Eco-Innovation can become a key driver for productivity and long-term growth among SME’s. Therefore, it is important to identify SME’s interests to receive support from intermediaries in relation to sustainable eco-innovation development. During this part of the research, intermediaries were asked to indicate the approximate percentage of companies that expressed their interest to receive information or other support regarding eco-innovation within past three years. Respondents also specified how long SME’s have been asking about related support. The distribution of these answers on both number of interested SME’s and duration of time during which they have expressed the biggest interest within the field. Based on the figures provided on the right it can be seen that 22% of intermediaries still have not been approached by the SME’s regarding the any king of support for eco-innovation development in their own networks. The interviews also elaborate that companies usually do not come with questions directly related to eco-innovations. Moreover, some intermediaries state that they con not help SMEs to solve their problems, due to lock of needed competences and experts in this field. Therefore, this could be one of the reasons for relatively low interests of SME’s in some countries. However, such questions more often rise up in various events (e.g. issues related to sustainable business development, new products, market needs, manufacturing technologies).

In the other end of the scale, data shows that 68% of SMEs have been asking for eco-innovation related support from the intermediaries in recent 1-3 or more years. Data also indicates that 56% of

22% 31% FIGURE 10. PERIOD DURING WHICH SME’S HAVE BEEN ASKING FOR ECO-INNOVATION AND RELATED SUPPORT

10%

37% not yet

< 1year

6% 10%

23%

< 30 %

1-3 year

> 3 years

FIGURE 11. NUMBER OF SME’S THAT HAVE EXPRESSED THEIR INTERESTS TO RECEIVE SUPPORT WITHIN ECOINNOVATION

30-50 %

51-70 %

56%

71-90 %

>90 %

intermediaries receives these questions from less than 30% of SME’s within their networks. Still 23% of survey respondents notices that 30-50% of their represented SME’s showed interest in eco-innovation. Similar position is visible from qualitative data results. Respondents claim that more and more SME’s (especially those who perform RDI) are willing to go towards eco-innovations, because it brings various cooperation opportunities.

EXPERTISE AND ECO-INNOVATION SUPPORT AREAS

Intermediary organizations provide SMEâ&#x20AC;&#x2122;s with various competences and services to develop eco-innovation. Therefore, it is important to identify strongest and weakest parts of expertise among the organisations. This will also allow us to understand in which areas organizations work the most and in where exactly they need to extra support.

5.1 Expertise provided by Intermediary organizations The respondents were asked to evaluate their expertise and support services provided by their organization in specific areas. Based on the gathered data, It can be seen that intermediaries evaluated themselves to be the strongest experts in

five following service categories: potential business opportunities were chosen by 60%, to satisfy customer needs were chosen by 54%, cost reduction were chosen by 54%, efficient use of resources were by 53% and meeting stakeholder expectations were selected by 52% of the respondents. As can be seen in the figure below, the remaining types of services.

FIGURE 12. IDENTIFIED EXPERTISE OF INTERMEDIARY ORGANISATIONS Potential business opportunities To satisfy customer needs Cost reduction Efficient use of resources Meeting stakeholder expectations Differentiating from competitors To increase transparency Reduction of environmental impact Strengthening corporate brand image Complicity with legislation Attracting competent employees Attracting capital investments 0%

20% 1 (very weak)

40% 2

60% 3

80% 5 (extremely strong)

100%

When it comes to the weaker expertise, respondents have identified three main categories in which they see themselves as less experienced. These categories are distributed as follows: strengthening corporate brand image were chosen as weak by 35%, followed by attracting capital investments with 34% and attracting competent employees with almost 31%. Figure above also indicates that that the large proportion of respondents chose a neutral position and don’t intend to rank their expertise in provided categories at all. These responses range from 23% to 37% of all respondents in all above presented categories. Remaining categories were either to small to discuss or not suitable for further analysis. 5.2 Importance to support to SMEs in specific service areas of In order to determine which services are the most important to support SME’s and promote their development process, focus will be made on specific services that could be or were provided to SME’s in the field of sustainable eco-innovation. An illustration of these services structure can be seen in the figure below. The following figure shows distribution of responses for each category.

Based on the answers provided in the figure it can be seen that intermediaries provide a wide range of services and competences. When we look into collected data (Figure 13) it can be concluded that a large part of listed services are ranked as important or extremely important to SME’s. Due to this reason, focus will be set on two groups of responses that includes: a) not at all important or less important and b) important or extremely important. Survey data shows that the bigger share of respondents identified four main services areas as extremely important to SME’s. These categories represent more than half of the sample: networking and partnerships with 72%, followed by financial aspects with 71%, business models with 70% and value chain assessment with 67%. Data from the lower end of the scale shows that bio-resins with 36%, 3D printing with 36%, other alternative materials with 32% and bio-composites with 30% were identified as less important support service areas and had a smaller role when it comes to eco-innovation development.

FIGURE 13. IMPORTANCE OF SERVICES OFFER TO SMEâ&#x20AC;&#x2122;S TO SUPPORT ECO-INNOVATION Networking and partnerships Financial aspects Business models Value chain assessment Recycling Customer insights Branding and communication Life-cycle assessment (LCA) Service design Legislation Material efficiency Product design Other alternative materials Supplier relations Biocomposites Intangible and legal assets (e.g. IPR) Packaging development Certifications 3D printing Bioresins 0%

20% 1 (very weak)

40% 2

60% 3

80%

100%

5 (extremely strong)

GAPS AND BARRIERS

In order to determine the biggest challenges that prevents SME’s from development of eco-innovation, focus will be on the main systemic gaps and barriers identified by intermediary organisations during the survey. It is also important to identify all possible potential challenges that intermediaries might face to support companies. 6.1

Gaps and barriers of SME’s

In terms of the existing systematic gaps and barriers that SME face in sustainable eco-innovation development, it is important to focus on the highest and the lowest survey data points. These factors plays significant role when it comes to development of various support servic-

es for SME’s. During this part of the study respondents were asked to share their knowledge and rate provided options on the scale of 1 to 5. The distribution of these responses provided in the following figure below.

FIGURE 14. POTENTIAL GAPS AND BARRIERS FACED BY SME’S Uncertain return on eco-innovation investment Lack of capital Uncertain demand from the market Lack of in-house expertise Uncertain about market reactions Lack of proven technologies Limited access to external knowledge Legislative demands Lack of suitable tools and methods Capability to collect and process data Lack of alternative materials Integration into product development process Certification costs Internal resistance in the company 0%

20% (Don’t know)

40% 5 (strongly disagree)

60% 2

80% 4

5 (strongly agree)

100%

Based on the data provided in the figure above it can be concluded that uncertain return on eco-innovation investment (82%) is one the biggest barriers that prevent SME’s from eco-innovation. Other top rated categories are lack of capital (67%), followed by lack of in-house expertise (62%) and the uncertain demand from the market (63%) together with uncertainty about market reactions (56%). Provided data shows that respondents both agree and disagree about the importance lack of proven technologies can be one of the main challenges when it comes to eco-innovation development.

are local and foreign market needs. This might influence the development of any innovation (including eco-innovation).

In the other end of the scale, respondents states that internal resistance in the company, lack of alternative materials, capability to collect and process data as well as certification costs are the less difficulties causing factors. However, above provided data also shows that intermediaries are quite neutral about the importance of large amount of categories listed in the figure.

When it comes to the main barriers faced by the intermediary organization to provide assistance for SME’s in eco-innovation development, it is important to mention several aspects.

The interviews also elaborates that lack of capital are one of the biggest barriers face by SME’s when it comes to eco-innovation development. In order to start new development process SME should see the benefit and possibilities of specific innovation. Therefore, second biggest barrier identified by the intermediaries

Part of the respondents also indicate that one of the gaps that could prevent SMES to seek eco-innovation are related to human resources, because new processes need new expertise and professionals. This aspect is extremely important when we talk about new innovations in micro SME’s (say up to 10 workers). 6.2 Challenges faced by intermediaries to support SME’s

First of all intermediaries claim that they face the biggest challenges when they try to promote their customers towards the new as well as international markets. Therefore, intermediaries are in lack of new reliable contacts and networks. Secondly, SME’s always need specific information in order to develop their product, material, services. They need more information / research / studies that could help to know more about eco-innovation development.

CONCLUSIONS

The main goal of the research was to provide a basic overview about the experience of intermediary organisations in their work to support small and mediums sized enterprises (SME) in the field of sustainable eco-innovation development. This report also includes viewpoints regarding the needs of SME’s in order to promote successful eco-friendly manufacturing in the future. It is the second phase aimed to gather knowledge about SME’s that will join the Ecolabnet network The data collected from 5 countries in the Baltic Sea Region confirms that intermediaries usually are one of the main links between SME’s and various service providers. However, a number of SME’s still have a rather narrow understanding in terms of eco-innovation and defines it as an environmental issue that could be tackled during the process of business development. The interviews also elaborates that companies that are willing to start eco-innovation development face difficulties such as: a) Uncertain return on eco-innovation investment (82%); b) Lack of capital; c) Lack of inhouse expertise; d) Uncertain demand from the market; e) Uncertainty about market reactions. Nevertheless, gathered data shows that many manufacturing SMEs (especially in BIO, and Agro sectors) seek to develop their processes or products in this matter for various reasons: a) Eco-innovativeness is a chance for companies to improve their image; b) Environmental protection and ecology can be a distinguishing feature for many enterprises; c) Eco-innovation can become a main source of competitive advantage and opportunity to lower cost of company’s operations and switching to a more eco-friendly resources. Therefore, it is important to provide SME’s with access to relevant tools, knowledge and expertise and promote eco-friendly manufacturing processes.

APPENDICES

APPENDIX 1 TABLES TABLE 1. DISTRIBUTION OF QUANTITATIVE DATA TABLE 2. DISTRIBUTION OF QUALITATIVE DATA TABLE 3. TYPE OF SME REPRESENTED BY INTERMEDIARY ORGANISATIONS

6 7 10

FIGURES Figure 1. Sampling of data based on survey responses Figure 2. Type of intermediary organisations Figure 3. Size of sme represented by intermediary organisations Figure 4. Key words used by intermediaries to describe eco-innovation Figure 5. Evaluated role of external service providers Figure 6. Performance of external service providers Figure 7. Importance to support smes in eco-innovation Figure 8. Importance to support smes in eco-innovation across 6 countries Figure 9. Importance of eco-innovation services provided to smes Figure 10. Period during which sme’s have been asking for eco-innovation and related support Figure 11. Number of sme’s that have expressed their interests to receive support within eco-innovation Figure 12. Identified expertise of intermediary organisations Figure 13. Importance of services offer to sme’s to support eco-innovation Figure 14. Potential gaps and barriers faced by sme’s

5 8 9 11 12 13 15 16 17 18 18 19 21 22

APPENDIX 2 Survey questionnaire ECOLABNET SURVEY FOR INTERMEDIARY ORGANISATIONS Welcome to ECOLABNET questionnaire. Ecolabnet project aims to create a support network for SMEs to develop eco-innovations. The role of intermediary organisations (or service providers) in supporting the development of eco-innovations in SME companies is vital. In order to create an efficient network, we need input from intermediary organisations. Your input and views on eco-innovation are important to us as is your experience with SMEs. Please answer to the questions below based on your experience in providing various services to SMEs. Definition of eco-innovation: “Eco-innovation is any form of innovation aiming at significant and demonstrable progress towards the goal of sustainable development, through reducing impacts on the environment or achieving a more efficient and responsible use of natural resources, including energy.”

COMPANY INFORMATION 1.

Name of your organisation __________________________________________________

Country of the organisation _________________________________________________

Year that your organisation was founded? ___________________________________

What type of intermediary organisation are you? • • • • • • • • • • • •

Innovation centre Technology transfer office Science park Business / Start-up incubator or accelerator Venture capitalists / Business Angels Local / city business support organisation Business development organization Trade organization Industry organization Consultant Association Expert network

DETAILS OF COMPANIES IN YOUR NETWORK 5.

What is the size of majority of companies * in your network? • • • • •

Micro (up to 9 employees) Small (10-49 employees) Medium (50-249 employees) Large (250 or more employees) A mix of all sizes

Please describe the main fields of industry of companies in your network. - Select as many options as applicable. • Food products

• Furniture

• Coke and refined petroleum products

• Wearing apparel

• Machinery and equipment

• Other non-metallic mineral products

• Beverages

• Other manufacturing

• Chemicals and chemical products

• Leather and related products • Basic metals

• Motor vehicles, trailers and semi-trailers • Tobacco products • Basic pharmaceutical products and preparations • Other transport equipment • Textiles • Rubber and plastic products • Computer, electronic and optical products • Electrical equipment

• Repair and installation of machinery and equipment • Wood and products of wood and cork, except furniture • Fabricated metal products • Not in manufacturing • Paper and paper products • Printing and reproduction of recorded media

THE ROLE OF EXTERNAL SERVICE PROVIDERS 7.

How important is the role of the following external service providers in your network? Please indicate below where 1 = Not at all important and 5 = extremely important. Please select an answer for all the rows.

Commercial consultants

1 O

2 O

3 O

4 O

5 O

organizations

International business development organizations

Industry associations

Universities and research institutions Regional business development

Other (please specify) 8.

Based on past experience, how would you rate the performance of the foll owing service providers in your network? Please indicate below where 1 = Very poor and 5 = extremely good. Please select an answer for all the rows.

We do not have this service provider 5 in our network

Commercial consultants

Universities and research institutions O

Regional business development organizations

International business development organizations O

Industry associations

Other (please specify)

IMPORTANCE OF ECO-INNOVATION

How important is supporting SMEs in eco-innovation for your organisation? Please indicate below where 1 = Not at all important and 5 = extremely important.

o 1 o 2

10.

o 3

o 4 o 5

Intermediary organisations can support SMEs in many different ways. How important are the following roles in eco-innovation support services for your organization? Please indicate below where 1 = Not at all important and 5 = extremely important. Please select an answer for all the rows.

Commercial consultants

1 O

2 O

3 O

4 O

5 O

Universities and research institutions

Regional business development organizations

International business development organizations

Industry associations

Other (please specify)

ECO-INNOVATION RELATED SUPPORT

11. How long have the companies in your network been asking for eco-innovation related support from your organization?

Not yet

< 1 year

1-3 year

> 3 years

12. In the past three years, how many of the companies in your network have expressed their interest to receive information or support on eco-innovation?

< 30% o

30-50%

51-70%

71-90%

> 90%

THE LEVEL OF EXPERTISE

13.

How strong is the expertise your organisation has in providing the following to the companies in your network? Please indicate below where 1 = Very weak and 5 = extremely strong. Please select an answer for all the rows.

BARRIERS

14.

In your experience, what are the gaps/barriers in the existing system that prevent SMEs from developing eco-innovations? Please indicate below where 1 = strongly disagree and 5 = strongly agree. Please select an answer for all the rows.

ECO-INNOVATION SUPPORT AREAS

15.

How important is it to offer support to SMEs in following areas of eco-innovation? Please indicate below where 1 = Not at all important and 5 = extremely important. Please select an answer for all the rows.

16.

May we contact you in the future in relation to eco-innovation * support issues?

• Yes, for personal interview • Yes, for more information and upcoming events • No, thank you

CONTACT INFORMATION

17.

Your name ________________________________________________________

18.

Email address ____________________________________________________

19.

Phone number ___________________________________________________

ECOLABNET survey for intermediary organisations Thank you! Thank you for taking time to participate in this survey. Your responses are appreciated. For more information on the project, please visit: ecolabnet.org â&#x20AC;&#x192;

APPENDIX 3 Interview guide