Innovative Approaches to the SME sector A Microsoft’s perspective

1. Innovative Approaches tothe SME sector A Microsoft’s perspective Wilfried Grommen General Manager, Business Strategy Microsoft EMEA wilgrom@microsoft.com July 12th, 2006 WIPO INSME seminar

2. Today’s themes ICT as an enabler A knowledge economy Access to Finance Microsoft in CEE

3. Building a knowledge economy Knowledge Economy Productivity Innovation Learning S US T A I N A B L E D E V E L O P M E N T Realizing Potential … of individuals, businesses, communities, nations Growth

4. The role of software: economic impact Our business model Develop low-cost software Provide a platform for other developers Respect intellectual property rights

5. The role of software: economic impact IT Market size EU + 3 (2005) ICT Spend (2005 - 2010) $350 billion 6% annual growth ICT-related employment (2005 - 2010) ICT-related tax revenues (2005 - 2010) IT Producers (Hardware & software) Local channel & service firms Local end user IT organisations $179 billion 7.9 million 9.4 million

6. The role of software: productivity

7. The role of software: productivity Serbia Development Centre Croatia Podravka Rights Management Czech Rep Ukraine Latvia Slovakia Baltic States Croatia Slovenia Hungary Ahold Central Europe IT Infrastructure Ministry of Finance Budget management Croatian Railways Mobile ticketing Euro Media Web-based business Government eTax Eurovaistines ERP & Accounting Ministry of Finance Budget management Government eProcurement eVision Information Systems AutoCont a.s. Slovakia Rix Technologies CITUS grupa & KING-ITC SONEX SISTEMOS UAB Everest consulting Hermes Softlab 7

8. Creating skilled workers and educated citizens By 2010 training and access to technology for: 250 million Worldwide 20 million in Europe Partners in Learning Initiative launched in 101 countries Unlimited Potential Slovenia 22 CTLCs Croatia 21 CTLCs Czech Republic 26 CTLCs

9. Sparking innovation Intellectual property is a basis for differentiation IP-based business models attract further investment (E.g. Agreement SCC) Remove the value of IP and the incentive to innovate disappears E.g. Development Center Belgrade R&D in universities & companies Re-investment Into R&D Intellectual property (IP) Taxes, profit Products Sales

10. Helping SME’s access to grants: EUGA Challenges EUGA Contribution Improve relevance between EU Grants and SMB needs • Building Consortiums to support Governments in defining the most appropriate Grant Programs: • IT Players (Intel, HP,…) • Telcos • Banks • Chambers of Commerce, Business Associations 45% Awareness among SMB • EU Grants web portals • 19 EU countries with local content and language Selection of the Right Grant … out of 10.000 available • Web Based tools • Grant database permanently updated • Friendly Search Engine • Grant Alerts Complexityandtime required to fill a Grant Application Low Application Rate: 4% of SMBs apply for Grants… … and when applying, 25% success rate… …So only 1% of the available funds are leveraged • Personalized Free Consultancy Support through: • Local Agencies covering 19 countries • 350 consultants supporting users: Preparing “application package” : Business Plan, Project Memorandum, Investment Justification, etc Submitting the “Application Package” on behalf of SMBs Follow-up the application until resolution, approval and payment

11. True Public-Private Best Practice EU Brussels: Gunter Verheugen (EU Vice-president and Commissioner DG Enterprise) “I am extremely grateful to Microsoft for EUGA” More than 100 Consortium Members engaged in 19 countries Quote from Jose Manuel Barosso (Feb 2006): “Developing Europe as an innovative, knowledge-based economy is the key that will open the door to a competitive Europe.” “Innovation is forward-looking. It plays to our strengths. It is a key driver for competitiveness, and in particular to maintain competitive advantage in a global economy.” “Access to finance….is a prerequisite for making the most out of innovation.” The first goal of the Competitiveness and Innovation Programme is “to free up obstacles for SMEs, including…..access to finance” “SMEs are the best vehicles for job creation – we know that innovation is the best way to create jobs. The SME innovation potential is underexploited. Better access to …..finances can all help SMEs on the road to innovation.” Dr. Mitterlehner Austrian Chamber of Commerce Vice General-Secretary and Austrian Member of Parliament Osuuspankki Bank Telekomunikcja Polska

12. EUGA projects update • EUGA fully operating in 19 countries in EMEA • Projects: 908 grants application projects • Total Projects Investment: $460M • 113,832 SMEs stand to benefit • 95,000+ people should be trained Mar 06 April 06 1000 $ 908 835 projects (+ 73) In preparation 534 495 projects (+39) Filed 374 340 projects (+34) - 28 projectsrejected UK UK Austria Austria Czech / Slovakia Czech & Slov Hungary Hungary Belgium Belgium Greece Greece France France Poland Poland 200 projects approved Portugal Portugal Denmark Denmark Netherlands Netherlands Spain Italy Italy Finland Finland Ireland Ireland Germany Germany Sweden Slovenia

13. Microsoft in Central & Eastern Europe Across the entire EMEA region Microsoft has: Over 250,000 partners 33,000 Independent Software Vendors (ISVs) 97,000 Resellers & System Integrators (RSIs) Over 12,000 employees Offices in 61 countries

14. In closing Working with governments Helping businesses Preparing society Collaborating with local partners

15. Thank you