O. Debande, L. Piovesan European Investment Bank

1. Science Parks as a tool for the development of the knowledge economy. A financial institution perspective O. Debande, L. Piovesan European Investment Bank Brussels, November 18th 2010

2. European Investment Bank Who we are The European Investment Bank is the European Union‘s long-term financing institution. The Bank acts as anautonomous body set up to finance capital investment furthering European integration by promoting EU policies. • The EIB is owned by the 27 EU member states • The EIB is a policy driven, non-profit institution following sound banking principles • The EIB has a subscribed capital EUR 232.4bn • The EIB raises its funds on the capital markets (2009: EUR 73 bn) • The EIB signed loans amounted to EUR 79 bn in 2009 • The EIB has marked RDI financing as priority policy objective

3. Six priority objectives • Within the Union: • Cohesion and convergence • Small and medium-sized enterprises (SMEs) • Environmental sustainability • Knowledge Economy • Trans-European Networks (TENs) • Sustainable, competitive and secure energy

4. Risk Capital 1 CIP Resources (SME) 2 RSFF (SME / MidCap) 3 4 Investment Loans • Facility: High Growth Innovative SME Scheme (GIF), Ecotech • Purpose: IP financing, technology transfer, seed financing, investment readiness • Target Group: VC Funds, Business Angels • EIF Product: Fund-of-Funds • CIP Guarantee schemes • Growth financing for SMEs • Formal VC Funds, CLOs • SME guarantees (loans, microcredit, equity/mezzanine, securitisation • RSFF • RDI financing • SMEs/MidCaps, Banks, PE Investors (sub-investment grade) • Loans (incl. Mezzanine), Funded Risk Sharing Facilities with Banks (Investors) • Investment Loans • RDI financing • MidCaps/Large Corporates/Public Sector Entities (investment grade) • Loans, Guarantees Bank Loans and Guarantees Formal VC Funds Seed/Early Stage VC Funds Business Angels Entrepreneur, friends, family Later Stage Counterparts Seed / Start-Up Phase Emerging Growth Phase Development Phase EIB Group Involvement in RDI FinancingEIF & EIB Financing for Company Life Cycle

5. Knowledge Economy • A competitive, innovative and knowledge-based European economy • Job creation and sustainable growth • Loans signed: EUR 17.1 bn in 2009 EUR 86.7 bn since launch in 2000

6. RDI projects Industrial RDI (pilot plants, labs, research activities) Prototypes Research organizations Large Infrastructures Science parks, incubators Specific global loans for innovative SME’s RDI promoters Industry (direct) Research organizations Universities Science Parks Specialized intermediaries Nat’l/Reg’l RDI support systems Networks & trade associations Multitype consortia Partners (Commission /Eureka/Foundations) Some examples

7. What can be financed by the EIB? ELIGIBLE COSTS • Facilities: project capital expenditures for tangible assets; • Activities : project capital expenditures for intangible assets, research staff cost, incremental working capital needs and otherrelated operating expenses. Year 1 € 20m Year 2 € 10m Time Year 3 € 30m R&D budgets typically cumulated over 3 years (investment programme) Total € 60m MAX. EIB LOAN Up to 50% of total project cost. € 30 m

8. Industry-science links are of growing importance in the innovation process An efficient science-industry interface involves: • Co-operation (e.g. joint laboratories); • Efficient bridging institutions and platforms, e.g. incubators, science parks, intermediaries, clusters; • A diversified base of innovators, with a greater role for small technology-based firms, thanks inter alia to a supportive financial system; But also: • Well-functioning markets for knowledge; • Social and professional networks; • Flows of graduates from science to industry (Cfr: D. Pilates, OECD, 18.05.2006)

9. Science & Technology Parks (STPs)EIB Experience • Eight projects : 1.7 bn EUR investments, close to 800 M EUR loans • Projects located in EU (Finland, Germany, Italy, Spain) and Mediterranean (Tunisia) countries. • Individual loan size : mostly 30-100 M EUR • Under long-term financing of research infrastructures - Loan Term : mostly 12-20 years • Loan structure : bank intermediated or guaranteed Which are the critical factors that make a Science park a successful tool in support of the innovation process?

10. STPs: a tool for the Knowledge Economy? Lessons Learned • STPs: a growing phenomenon – where are we? • STPs role in the changing innovation process – what is needed are not more but better STPs • Better planned • Better managed • Better linked to “Universities” A few key lessons - not always being applied for a variety of reasons: local context, poor management, limited sharing of experience

11. Which are the characteristics of a well planned STP? • Suitable location • Availability or capability to attract skilled workers • R&D intensity • Economic environment • Regional /national policy in support of innovation • Clear long-term vision, shared by sponsors and management • Careful selection policy • Self- evaluation of performance • Flexible physical facilities • Design • Multiphase development

12. What do we mean by a well managed STP? • A professional management team: • With a business background and an understanding of the areas in which on-park companies are operating • A proactive marketing strategy • Focused on providing high value –added services • Smart networker • Regional • International

13. When does the link with « University  » work? • Necessary? Definitely not sufficient! • Co-location (i.e. on-campus vs. off-campus) • Presence in the shareholding structure of the STP • Active participation in the management of the STP • So what matters? • A research oriented University with an entrepreneurial culture • Careful selection of tenant companies • An incubator well integrated within the STP

14. Thank you!www.eib.org