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SME’s participation in EU sponsored projects

SME’s participation in EU sponsored projects. Tomasz Cioska. Outline.

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SME’s participation in EU sponsored projects

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  1. SME’s participation in EU sponsored projects Tomasz Cioska

  2. Outline PLAZMATRONIKA’s access to the Fifth Framework Programme for Cooperative Research GROWTH project on utilisation of asbestos residues as an example of opportunities and problems for Polish SME’s related to the participation in EU sponsored projects

  3. SAFE project - characteristics • Project acronym: SAFE • Purpose: development of safe techniques for asbestos abatement and elimination works (waste treatment and elimination) • Partners: INERTEC (coordinator), SOLDATA, BBRI (Belgium Building Research Institute), CMS, SMH, Plazmatronika, InVerTec, RWTH • Plazmatronika’s task: development of the pre-industrial microwave cavity • Contract signing date: 14 June 2001 • Kick-off meeting date: 9 July 2001 • Estimated eligible costs: 2,854,815 € • Maximum community contribution: 1,747,663 € • Plazmatronika’s share: 245,841 €, 50% EU’s participation: 122,920 € • Timing: 36 months

  4. Opportunities • Gaining intercultural experience through cooperation with European partners and institutions • Practical preparation for every day work in EU business and institutional environment before formal access of Poland to EU • Organisational experience • EU-imposed formal project management rules • strict internal accounting and controlling procedures • Additional funding for technology development • Opening European markets for SME’s products through cooperation with EU partners

  5. Possible difficulties • Lack of adequate cooperation with Polish authorities and institutions • Unfavourable climate for Polish hi-tech companies in Polish scientific circles • Complexity of EU procedures • Strict project management and accounting requirements imposed • Difficult communication with European partners (cultural differences) • R&D Companies’ subordinate position in structuring projects

  6. Filing procedure • The complexity of procedure making the filing of applications and reporting an art in itself • Necessity to train in house staff • scarcity of resources in SMEs • lack of appropriate coaching • Lack of qualified institutions providing overall assistance to SMEs interested in taking part in a EU sponsored projects • Long-lasting process (1.5 years)

  7. Filing procedure ctd. • Lack of information on the advance of the procedure • Binding terms imposed only upon the applicants, not the EU authorities • One sided contract with EU (joint and several liability of partners) • Incoherence of project and general accounting rules

  8. Project Management • Necessity to introduce strict internal accounting and controlling procedures for project settlement purposes only may be too costly and burdensome for SMEs • Lack of flexibility in changing the allocation of funds and changing project execution schedules troublesome in case of elaborating prototype technologies, which, by definition are, unpredictable

  9. Partners • Difficulty in obtaining equal financing conditions with Western partners for Polish SMEs • Unequal financial standing of Polish SMEs and Western partners • Business culture differences • Unwillingness to specify the principles of future use of technologies developed in the consortium agreement • Polish R&D Companies’ subordinate position in a project • Low manmonths • Inadequate infrastructure • High participation costs vs. uncertain outcome

  10. Polish taxes and law • Unstable tax and legal environment in Poland making difficult the planning of expenditure several years in advance • The scope of the problem: • VAT (22%) • CIT (28%) • PIT (19%-40%) • Social Security (19%) • Unclear and changing situation as to the tax status of EU funding • frequent changes of official interpretations • known cases of retroactive payment of taxes by beneficiaries of EU funding

  11. Thank you for your attention!

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