SMILIES final declaration

Towards policies for industrial innovation adapted to Mediterranean islands

Convinced that islands should and can find their place in a European industrial policy in construction and based on: - The Europe 2020 Strategy which has fixed an objective of 3% of Europeans GDP devoted to research and development (public and private investments) and reinforcement of policies encouraging innovation; - The actual and future development of the flagship initiative Innovation Union which plans a refocusing on policies of research, development and innovation on the main challenges of our society (such as climate change, optimal exploitation of resources and energy, public health and demographic change) with a special emphasis on social innovation and which planed also a reinforcement of every link of the innovative chain, from the very first step of fundamental research till the commercialisation; - The ten principles of the Small Business Act on promoting the entrepreneurship and supporting entrepreneurs through, for instance, improvement of administrative and legal environment and better access to financings ; - The framework program for Competitiveness and Innovation that is supporting ecoinnovation and promoting entrepreneurship through various programs, projects and networks ; - The Smart Specialisation concept which encourages a discovery process of local and/or regional skills and potentials for excellence. Policy-makers accompany entrepreneurs in the joint identification of a potential leading sector on which the innovation strategy will concentrate its efforts. Considering that despite of the diversity of insular contexts in the Mediterranean area (archipelagos, island-region, island-state), all the islands have in common insular specificities (territorial discontinuity, cost for provision, difficulty to reach economy of scale, smart specialization) which oblige to consider them as specific territories and specifing markets requiring an adaptation of rules/laws concerning structural funds. After having assessed and verified on the field the following common characteristics of the Mediterranean islands: - their specific potentials (tight economic ecosystems, zero kilometre potential, valuable but underexploited natural and cultural background), - their shortages (in energy and water), - the low qualification, the high seasonality and high dependency of few economic sectors of

Projet cofinanc par le Fonds Europen de Dveloppement Rgional (FEDER) Project cofinanced by the European Regional Development Fund (ERDF)

the employment opportunities they currently offer, contrasting with te education levels especially of their younger population the weaknesses of existing manufacturing production capacities, After having identified, through pilot activities, the need but also the possibility for a specific material economy development in insular territories which could be driven by the following motors: - Renewable energies production and energy savings justifying the development of: o Units of production of alternative energies: a potential validated by several SMILIES pilots on photovoltaic and wind-borne production), o Units for energy production based on waste recycling (illustrated by B-Power and Bio-Mass pilots in SMILIES) o Units for the production of energy saving products (like new building materials illustrated Polimec pilot) and equipments (like new transportation means illustrated by proposals for new electric vehicles production submitted by ICE and Ecomove pilots), allowing a substitution of non renewable energy consuming imported products. High tech niche markets products which require small production units like those identified in yachting (by Pentecoter pilot), and in ICT (by Drones and Informamuse pilots) Products with a high creative profile and exploiting particular skills and know-how (pilots: PIVICCI ; O2 ; Talasli) Innovative production valorising both natural and cultural resources (pilots: Taste Naxos and others) Improvement of already existing production through innovation in terms of packaging and marketing (pilots: MANALIS and others)

Considering the approach implemented by SMILIES project, to which we, as implementing partners, have taken part and which relies on: - Adaptation of innovative agencies and centres dedicated to SMEs support through the adoption of a demand-driven approach based the identification of entrepreneurs needs, - Experimentation of innovative policies based on an individualized response to entrepreneurs needs more than on formal and rigid innovation support entities and procedures, - Targeting niche markets and markets linked to specific insular potentials for exportation and local and specific needs in the internal market (subsitution of importation), - Networking and its benefits. Considering that SMILIES results shape new economic models with a promising potential in the context of a sustainable globalisation emergence, out of the pilot experience implemented in the project, which consisted in the support of entrepreneurs by projects partners through the joint definition of priority actions allowing the
Projet cofinanc par le Fonds Europen de Dveloppement Rgional (FEDER) Project cofinanced by the European Regional Development Fund (ERDF)

development of the SMILIES selected enterprises. Considering that these results allowed also to identify administrative and financial obstacles that limited pilots progress. We, partners of SMILIES project, are reiterating that : Competent European authorities, such as national and regional authorities, should adapt their policies to insular specificities, taking into account their diffcult accessibility, the cost of ressources, the incomplete value chain and the brain drain they face but also valorizing their high quality of life and strong territorial capital. European authorities are invited to take into account current propositions in the framework of current work on an adaptation of the State Aid Regime for islands and a reconsideration of their classification into the regional policy, not only based on their GPD but also on their insular condition and size1. The definition of regional innovation strategies should better match the European mainstream with local needs and also rely on local potentials which are the seeds for an increase of social innovation. The empowerment of networking should be an accelerator of innovation and a palliative against the absence of a full value chain in insular territories. Entrepreneurs and innovation support agencies and entities could join efforts through networks and mutualize market knowledge, communication and marketing tools, offers of services and return of experiences on innovation support methodologies. The reorganization of innovation support agencies and entities should be a pillar of the new approach of light industry innovation, with an emphasis on the simplification of administrative procedures, on the joint identification of entrepreneurs needs for support and on an specific accompaniment to offer an adapted answer to their needs. The simplification of administrative procedures and relaxing of bureaucracy is part of the necessary conditions to encourage local entrepreneurship. Through proactive territorial marketing campaigns targeting public and private financial actors, the financing tools offer, which is often unsufficient or inapropiated, should be improved and adapted to small units. It is interesting to develop particularly seed-capital which is vital for the transformation of an idea into a startup, and risk capital which is essential to accompany the expansion and consolidation of starts-ups. Policies should support the international promotion of local initiatives undertaken by inventive insular entrepreneurs and innovative SMEs, which cannot find through

The CPMR Commission of Islands is currently working on these proposals. More information : http://www.commissiondesiles.org/index.php?act=3,2,,19 Projet cofinanc par le Fonds Europen de Dveloppement Rgional (FEDER) Project cofinanced by the European Regional Development Fund (ERDF)

local clusters, bigger companies and strategic actors, with whom to cooperate. The objective of such promotion should be to allow the inclusion of innovative insular actors to selected remote clusters and their linking, through them, to International and European mainstream market leaders and innovative technology providers located in these clusters. Such links are needed to generate PPP, sub-contracting and commercialisation agreements and/or joint-ventures, with these actors which are so often strategic for start-ups uptake and development (as illustrated by the well known story of Bill Gates first contract with IBM).

SMILIES partners will continue to redefine their strategic vision and to develop their daily activities in line with the above-mentioned recommendations. Through the implementation of the sustainability plans, their participation to European and Mediterranean networks and the dissemination of SMILIES results, SMILIES partners will pursue their efforts to encourage the development of light industry and the empowerment of a dynamic material economy base in islands.

Projet cofinanc par le Fonds Europen de Dveloppement Rgional (FEDER) Project cofinanced by the European Regional Development Fund (ERDF)