Digital platform innovation in European SMEs REPORT

The report analyses the patterns of digital platform innovation among SMEs applying to the SME Instrument. It aims at understanding how the smallest players of the European economy translate digital affordances into business models and capture value in the digital economy. When we speak of “digital platforms”, we think of large firms, the GAFAs. The study demonstrates a widespread awareness of the digital platform concept as a business model applied by European SMEs to gain momentum and growth. Although easy to start-up, the process of scaling-up a digital platform is far from being easy. The main challenges to scale-up include how to manage external communities and orchestrate them in order to build innovation ecosystems; how to find a profitable business model; and secure funding for growth. These challenges are amplified for firms located in peripheral regions that face additional difficulties in finding complementary resources.

The study explores how European SMEs applying to the SME Instrument (SMEi) funding scheme under Horizon 2020 innovate use the digital platform business model. The study demonstrates a widespread awareness of the digital platform concept as a tool to be applied to gain momentum and growth, taking advantage of the digital affordances. The main challenges to scale-up include how to manage external communities and orchestrate them in order to build innovation ecosystems; how to find a profitable business model; and secure funding for growth. Firms located in peripheral regions face additional difficulties in finding complementary resources.