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SPRI GROUP, COMMITMENT TO BASQUE COMPANIES

The SPRI Group is made up of several public companies directly affiliated to the Department for Economic Development and Competitiveness of the Basque Government and is one of the local government’s main tools, as it manages 75% of the budgets of this Department of the Basque Government. Its objectives are to help improve competitiveness and promote innovation in Basque businesses.

Its activities range from venture capital project financing and supply of land for economic activities to the 40 different funding and service programmes for companies in the areas of investment in technology, innovation, entrepreneurship, information society and internationalisation. This last area is based on SPRI’s large foreign network present in over 60 countries.

As Arantza Tapia, the Minister for Economic Development and Competitiveness, has said, industry is the engine of the Basque economy. Besides contributing 25% of GDP and providing 22% of employment, our industrial fabric, made up mainly of manufacturing companies (19% of GDP), is responsible for many of our exports and is the basis which underpins many advanced services and tertiary activities in the country. Therefore, the Basque Government is firmly committed to backing manufacturing industry, the key for its significance and its proven ability of influence as the main driver for wealth generation and employment, and the main lever of internationalisation and R&D&I. Therefore, we want to support its evolution towards advanced, efficient and sustainable manufacturing, incorporating new technologies and materials, but also towards innovation in design and marketing of its products, services and solutions, new business models and management systems. These are tasks that SPRI will collaborate on and will drive forward as it has done in its previous 32 years.

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INTERNATIONALISATION

The Department for Economic Development and Competitiveness, through the Internationalisation Department and SPRI, continues to drive the processes of internationalisation of enterprises and the diversification of countries and sectors for Basque exports. Our support for processes for marketing abroad can mainly be seen in backing for 264 companies during the past year supported by 502 projects, in 23 events which have brought Basque entrepreneurs together with representatives of companies and institutions of various different countries. We have also extended our presence to more than 60 countries. SPRI, as an agent behind the internationalisation of Basque companies and in deployment of the Competitiveness Plan 2010-2013, carried out the activities below in 2012.

Direct support service for internationalisation Through its overseas network, SPRI has developed internationalisation projects at the request of Basque companies, and provides a support service for solutions that enhance the international management of Basque companies. In 2012, 264 Basque companies were given advice and 503 projects were implemented abroad, representing an increase of 19% compared to 2011, broken down into 546 services. These services fall into the following groups:

Geographical Areas In terms of Geographical Area aimed at, the services are distributed as follows: As for countries, the country where most projects have been implemented are: Mexico with 50 projects, Germany with 40, followed by China with 38, Poland with 33, India with 29, Brazil with 27 and Russia with 25 followed by the United States and Turkey with 23 and Chile with 17.

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In addition to the projects themselves, until 31st December 2012 SPRI worked on answering 1,874 queries and provided specific services related to various aspects of internationalisation.

SPRI Overseas network The network made up of our offices and specialised local consultants is the tool that allows us to support the needs of Basque companies in their process of opening offices abroad. The development of this network has taken shape with the opening of new support structures in countries with great potential for Basque companies, where their unique characteristics require additional support to overcome market access barriers. Thus, it provides continuous coverage with offices and agents in over 60 countries, specialising in commercial introduction and implantation in their respective markets of operation.

Internationalisation Forum, Faro Intergune 2012 Since 2006, the Euskadi Intergune Internationalisation Forum has become a meeting place and an opportunity for Basque companies that are developing internationalisation strategies and projects. The seventh edition of "Faro Intergune Internationalisation Forum 2012" was held at the Alava Technology Park on the 14th and 15th November. This time 258 companies participated, there were 313 attendees and 504 interviews were organized.

Country/Sector-Country Conferences A total of 18 conference days were held to look at specific aspects of projects for access to other markets, as well as sector workshops attended by purchasing managers or technical departments of large companies or foreign groups who presented their purchasing and investment plans to Basque companies. They also presented the procedure for approval as a supplier to these companies, and the conferences were rounded off with individual meetings and visits to their plants.

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Activities for Basque companies in overseas markets The Internationalisation Department has collaborated in the organisation of 3 institutional and commercial missions:

Multisector trade mission to Mexico, with the participation of 60 companies, which took place in February.

Trade mission for institutions and business to India in March, in which a total of 70 companies and 9 clusters and associations participated.

Trade mission for institutions and business to Turkey, in October, with the participation of 54 Basque companies and clusters.

International and multilateral development activities During 2012, SPRI has had a special boost in its generation of business opportunities for Basque companies in projects financed by Multilateral Development Agencies, based on Basque prestige and its record of successful experiences in competitiveness and regional development. In this field, the following activities have been carried out:

On 19th April the bidding day of the African Development Bank, aimed at energy and environment, was held in Bilbao. It was attended by 24 Basque companies.

On 8th May a conference on programmes to support the competitiveness and innovation of the Inter-American Development Bank (IDB) took place, to find out our capabilities and developments in these fields. 120 people attended.

On 30th May there was a conference for sustainable cities by the Inter-American Development Bank (IDB), with the attendance of 107 people.

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URBE 2050 has also been launched, an initiative to develop a platform for public-private collaboration in international projects for sustainable urban development. Within this field we have made contact with multilateral institutions such as the Inter-American Development Bank and we have developed a catalogue of Basque Solutions and Suppliers for the sector.

Invest in the Basque Country Attracting direct investments and strategic alliances from outside the Basque Country has become one of the most innovative areas within SPRI. This new service was launched in 2010 and last year 44 projects were handled, of which 40 are now being managed. In 2012 the project for the English mobile accessories manufacturer MobileFun was completed and it opened an office in Bilbao. Moreover, we have consolidated a continuing care service (After Care - Monitoring and Consolidation of Established Foreign Capital Companies) for established companies with foreign capital, to facilitate their expansion and extension, and for tractor companies in the process of internationalisation. Meetings were held with 20 companies. In addition, we continued with the Investors Forum, launched in late 2011, which held its second meeting on 14th

September. This forum aims to analyse and discuss the situation of foreign-funded enterprises established in Euskadi. Furthermore, we made contact with 17 subsidiaries of the biggest multinationals present in the Basque Country to start the Investors Forum, made up of Foreign Capital Companies. This Forum has been a meeting point between these companies and SPRI, to find out firsthand what problems multinational companies located in the Basque Country have. Also in this period, two projects started in 2011 finished: the project to manufacture General Electric electricity meters with the creation of 100 jobs in two years and the project of the English company Fon Lab to share Wi-Fi, which is planned to create 30 jobs in three years.

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A new centre for the Portuguese company Bial for vaccine development was also inaugurated, in which 12 million euros were invested in capital expenditure and 28 million euros are planned for investment in research projects with the creation of 40 jobs (20 of them highly qualified).

Global Training Trainee Work Experience Programme SPRI’s Overseas Network has collaborated in identifying and bringing intermediate organizations into the programme in 10 countries, which have passed on the programme to businesses and helped arrange more than 170 placements for trainees, offered by organizations such as the Centre for Renewable Energy of West Africa (Cape Verde) or the Morocco Investment Agency.

TECHNOLOGY Innovation indicators in the Basque Country have reached European levels. This has been possible thanks to the development of a planned strategy that in the medium term aims to support technology, research and development. Spending on R&D has now reached 2.04% of GDP. As a result, in 2012 we invested 160 million euros to subsidise technological business projects and continue weaving a network of groups and technology centres, both for business and research. In fact around 1000 technology companies have found support in the programmes managed by SPRI. In this framework in 2012, we managed 159,981,000 euros in grants for R&D&I aimed at companies and agents of the science and technology network.

Gaitek

A programme that supports R&D&I business projects for the development of new products that are clearly original and superior to those already on the market. The number of projects is 1,261. Once evaluated, 745 were supported by an amount of 41,900,000 euros. We have helped 780 companies, of which 79% are SMEs.

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Etorgai

A programme that supports integrated projects for industrial research and experimental development of a strategic nature and tractor effect for the Basque Country. During 2012 we evaluated 64 projects, of which 40 have been backed. These projects for cooperation between at least three companies have involved 206 companies, of which 63% are SMEs, for a sum of 39,499,000 euros.

NETs

A programme designed to launch and develop new science and technology businesses, by supporting their funding in research, development and technological innovation. As a result of the activity of 2012, 80 projects were evaluated, of which 68 were backed. Through these projects, we have helped 95 companies, 71 of them SMEs, amounting to 4,000,000 euros.

Technical reports on qualifying for tax rebates

A service that provides a report on the status of business activities such as R&D&I that facilitates obtaining deductions in corporation tax, according to the cooperation agreement signed with the Regional Governments. During 2012, 2,383 reports were issued for 1,100 enterprises.

EEN, Enterprise Europe Network

SPRI is leading the Basque consortium of the European Network for Business Advice and Support for Innovation, the Enterprise Europe Network, co-funded by the European Union. Its activity is aimed at promoting and providing a support service in transnational technology transfer processes and exploitation of results obtained through R&D projects. In developing the technological outreach mission, we have held 11 seminars attended by 1,264 people, we have distributed 260 reports on emerging technologies and have released 11 EEN bulletins for 3,400 subscribers.

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SPRI also coordinates and participates in European Eranet projects, 8 consortia that drive and start up programmes to support R&D&I in businesses between European countries and regions in a coordinated way. An important event among those held is the "Seventh Framework Programme for R&D in Europe and Horizon 2020: New opportunities for cooperation in R&D&I", organized in collaboration with CDTI and Innobasque, with the participation of the European Commission and the NCPs, holding a first brokerage event, with over 500 attendees. Another important event was the European conference Green cars 2012: Challenges and opportunities of global business, with nearly 400 attendees. SUSTEEN The primary goal of the SUSTEEN project (Sustainable SMEs by means of Enterprise Europe Network) funded by the European Commission within the Competitiveness and Innovation Framework Programme (CIP) is to achieve better environmental performance in regional SMEs, allowing them to simultaneously increase competitiveness and sustainability. SPRI has the support of the Basque Energy Agency, EVE, and Ihobe for the development of these activities. During 2012 there was a seminar to publicize the project and two of the three planned workshops aimed at SMEs in the chemical and metal production and processing sectors were held. We have also participated in meetings with all project partners, which took place in Marseilles and Gothenburg.

Technological Research

Moreover, the Competitiveness Plan for 2010-2013, backed by the Science, Technology and Innovation Plan, has set itself the target of positioning the Basque Country as a benchmark in terms of innovation and technological development worldwide through agents of excellence in the system and their functioning in a coordinated and articulated network, making it possible to reach synergies and providing greater impact and orientation for the

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results of the research carried out. In this line, SPRI is managing the applications received in the following programmes: Saiotek

A programme which aims to support basic research, through projects aimed at scientific and technological specialization of agents in the Basque Science, Technology and Innovation Network. Throughout 2012 there have been 377 projects, 281 of which are being supported, to the sum of 17,300,000 euros.

Emaitek

A support program aimed at the Basque Science, Technology and Innovation Network which aims to develop actions to improve the performance and capabilities of technology centres, through the funding of research projects. This improved performance is achieved through collaboration between technology corporations and technology centres. In the year 2012 the 12 projects presented met the requirements to receive grants totalling 30,500,000 euros.

Etortek

A programme that supports projects in cooperation through the Basque Science, Technology and Innovation Network, necessarily geared to the needs and challenges faced by Basque companies in the medium and long term. Thus, the R&D projects supported have the requirements to create value in Basque companies and promote the creation of new companies in emerging sectors. In all, in 2012 the Etortek programme has supported 9 projects of a total of 26 submitted, amounting to 26,500,000 euros. Hedatu

The Science, Technology and Innovation policy of the Basque Government is a tool that is used to position the capabilities of the agents of innovation within an international context, and serves as a lever for economic growth in the Basque Country. In the Hedatu programme, promotion activity is stimulated in agents of the Basque

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Science, Technology and Innovation Network, to enhance the technological and innovative image of the Basque Country and drive greater levels of research excellence. In this context, the evaluation of the 65 projects submitted has given support to 33 projects amounting to 282,000 euros.

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INNOVATION

In the 2009-2011 period, 24.4% of Basque companies made organizational and/or marketing innovations. Facing the challenge of improving this position, as key factor for the consolidation of Basque business in the current situation and to prepare it to come out of the crisis with greater possibilities of success, SPRI has focused its performance on laying the foundations that will propitiate a shift to the "culture of innovation", promoting a global innovation environment, developing management skills and abilities and promoting consistently innovative organizations. Its efforts are reflected through programmes and services enhancing the development of non-technological innovation (Compite and +Innova) and it has deployed an action plan aimed at training managers, in order to promote the competitiveness of Basque business. In total, through programmes and services, nearly 15 million euros have been invested among 1,934 companies and 257 training and information activities have been organized, which 3,232 people attended.

Compite

A programme that supports Basque companies in the implementation of projects to improve competitiveness, in cooperation or individually, the result of strategic thinking to enable them to achieve, improve and sustain their position against the competition. During 2012, there were a total of 356 applications to Compite, of which 143 were approved with a grant of 5.6 million euros. +Innova Itineraries/Ibilbideak

This programme allows the management team of a small company to carry out a strategic reflection on key competitiveness and innovation helped by an expert consultant, which will allow them to identify areas which will enhance the improvement of their

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competitiveness and increase their innovative capacity. The programme supports two types of action arising out of this reflection: the implementation of training projects that will integrate systematic and incremental innovation in the organisation, and the definition of strategic projects in the field of process, product, organization and market innovation. During 2012, 892 companies applied to carry out an Itinerary, of which 809 were approved with a grant of 2.5 million euros. +Innova Aldatu/Transformation

This programme supports the development of excellent innovation projects regarding strategic rethinking, market innovation and organization and development of innovation capabilities. Projects under this programme represent a significant transformation in the competitive positioning of the company. In the Aldatu call 2012 there were 165 applications, of which 85 were approved, with a grant of 3 million euros.

Cheque+Innova

A newly-created programme which promotes innovation actions and competitive improvement with rapid implementation and impact, tailored to the specific needs of businesses, provided by specialized service providers and approved by SPRI. For the deployment of the programme we have the support of local and provincial development agencies that act as intermediate agents. In the 2012 edition there were 877 applications, of which 790 were approved, with a grant of 3 million euros.

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Directiv@21, Lider21, 21Sarea

The transformation of an organisation begins with the transformation of its people. Directiv@21 is a training process designed for managers and business leaders to acquire and consolidate the skills required for innovation, strategy and change management that allows them to develop their key role in the transformation of companies. Lider21 provides a training day with the management tools necessary for middle managers to lead and mobilize teams of people towards innovation processes. 21Sarea is the social network that facilitates the practical innovation for management teams in innovative organizations. Through this service, events are organized in order to develop management skills in innovation: knowledge processes and meetings between management teams. During 2012 we have organized 76 meetings in which 1,239 people have participated. Training and consultancy programs in collaboration with the EOI and the ESF

Actions performed in different areas (creation of technology-based companies, consolidation of companies, consolidation of technology companies, technology management in the enterprise, sustainable management and energy efficiency, logistics management for SMEs, international management) in which the EOI Industrial Organization School participates as an intermediate of the ESF. For the deployment of the programme we have the support of SPRI organisations: CEIA, BIC BERRILAN, CEDEMI, Zuatzu and the Technology Parks. During 2012, 179 meetings were organized, which 1,965 people participated in.

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Master in Innovation and Knowledge Management

In collaboration with the University of the Basque Country, this Master aims to develop the following basic competencies:

1.- Capacity for the analysis, comparison, evaluation, selection and application of theories and concepts

2.- Provision of the necessary knowledge requiring ability to innovate and resolve conflicts associated with organizational management.

3.- Acquisition of methodological elements and tools related to organizational management.

4.- Ability to work in a team.

5.- Development of multidisciplinary and versatile knowledge and form of work.

6.- Acquisition of skills and abilities when transmitting and sharing information.

In 2012 there were two courses, in which 28 students participated.

GIGA

In collaboration with the Institute of Machine Tools, Meka, and the School of Armoury, this project has developed, and since 2007 it has sought to provide, from the Vocational Training Centres, access for SMEs to innovation and continuous improvement of key processes, providing technical support, tools, methods and training to meet their needs.

During 2012, services were provided to 39 companies.

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INNOCAMARAS

In collaboration with the Basque Chambers of Commerce and the General Council of Chambers of Commerce. Development of diagnostic performances of business cooperation in innovation, plans to support innovation for business groups and other complementary actions to strengthen its competitive position in the markets. The program is co-financed by the ERDF.

In 2012, services were provided to 68 companies.

COOPERATION PROJECT

In order to support the overall strategy "Basque Country Expertise" a collaborative project for the design and monitoring of a business transformation intervention programme has been initiated, based on competitiveness and innovation of SMEs in the Chilean region of Bío Bío. Starting from the initial identification of innovative Chilean SMEs, the ultimate goal is to achieve, at the end of the process, internships in the Basque Country that will generate business opportunities for Basque companies. Innovanet Network The Innovanet Network aims to improve the competitiveness of Basque companies through the implementation of innovation policies, trying to increase the effectiveness of communication channels with the business sector. Thus, the Innovanet Network has tried to lay the foundations to develop, formalise and systematise processes of cooperation between the different actors and institutions operating in the field of promoting innovation and competitiveness in the Basque Country. During 2012, the 147 agents that make up the network have been active at some time during the year, in the various activities conducted: 10 regional committees, 7 working groups, 114 training sessions and outreach in which around 2,296 people participated.

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E-COMMERCE Cheque

A programme aimed at the retail industry which aims to help small businesses in the process of implementing online sales strategies and optimising their business management processes via the Internet. Advice services are made available to businesses, provided by service providers linked to e-business. In 2012, 426 projects were approved to the sum of 918,000 euros.

Innovative public procurement (IPC)

Public procurement is a powerful tool with a multiplier effect in the development of a knowledge-based, innovative and competitive economy. Thus, governments focus their procurement, not only to the fulfilment of its purposes, but also to the promotion of technological development of enterprises, encouraging those that incorporate the most innovative proposals in their offer.

In this context, SPRI this promoted this cross-sector project in the Basque Public Administration, after carrying out the following actions in 2012:

Preparation of two Innovative Public Procurement Guides, aimed at public purchasers (Administration) and suppliers.

Participation in the Advisory Board of a group of several European countries, which the European Commission has awarded the role of single platform for the entire European Union, to work on the implementation of good practices in the field of the IPC.

Meetings and contacts with the CDTI for use of the Innodemanda Programme as a funding tool for R&D projects in companies that are aiming for tenders linked to innovative public procurement.

Identification of institutions/projects potentially interested in the IPC.

Development and definition of a public procurement unit for local business competitiveness, in SPRI, within the governance model of the IPC at the level of the Basque Government, which also defines a unit of transversal public procurement and the sector unit for government public health procurement.

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Innovation Portal Euskadi+Innova

www.euskadinnova.net

Over 150 people from different institutions annually publish more than 1,200 items of news and 1,400 calls for conferences and courses, videos and documents with a single objective; promoting change towards a culture of innovation by developing abilities and management skills and the implementation of ICTs. 23,228 people receive the Euskadi+Innova newsletter weekly. In 2012 it received 594,770 visits and 1,376,286 pages have been viewed. In addition, access to the contents of Euskadinnova with mobile devices has resulted in 47,364 visits.

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INFORMATION SOCIETY

The Governing Council approved the Basque Digital Agenda 2015 at its meeting on 3rd July 2012. The new Plan Euskadi in the Information Society aims to promote and enhance this concept. Its development has involved hundreds of people and we have collected more than 400 ideas that have resulted in 101 initiatives and projects included in the Digital Agenda.

The Digital Agenda is being applied in four different zones or strategic areas:

A digital community: the goal is to achieve a population composed of people interacting on the Internet with responsibility and equal opportunity and with high technological ability.

e-Enterprise: the aim is to ensure that Basque companies, regardless of size, can increase their competitiveness and productivity through new-generation ICTs.

Advanced, accessible digital services: so that the Basque Public Administration can provide citizens and companies with high impact advanced digital public services.

Infrastructure: to ensure that Basque citizens, businesses and the administration have access to advanced digital services at lightning-fast speeds, with high levels of security at affordable prices and from anywhere.

SPRI has contributed to the management and deployment of the various initiatives in the ADE2015 at the request of the Basque Government. As a result, it has supported the introduction of ICTs in Basque companies, and especially in 2012, in micro SMEs. In total, 1,628 firms have been supported with 3,869,404 euros. But no less important is the fact that nearly 8,500 people have attended more than 690 seminars and courses organized on new information technology.

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“Hobeki +Digital@” Programme

A programme to support the incorporation of ICTs in SMEs, supporting projects to digitalise processes in different areas of business and the relationship with other companies and the government (ERPs, CRMs, Intranet, Extranet, E-commerce, etc.. ). In 2012 we have supported a total of 823 projects amounting to 2,828,371 euros.

Lankidetza +Digital@ Programme

A programme leading to the incorporation of information technology in commercial and professional associations. 67 projects have been supported in 2012 by an amount of 1,041,033 euros. Mikroenpresa Digital@

A programme that facilitates freelance workers and micro-companies access to information technology and communications, through advice and training in the use of the different services that can be accessed via internet. This has led to improved competitiveness in micro-companies by identifying IT management applications and expert advice on their implementation. It has developed a catalogue of ICT solutions. In 2012, 6,861 ICT solutions were implanted in 738 micro companies. In addition, training both for freelancers and micro-companies in the management of user-friendly ICT tools, such as email, online banking, e-mailings, web development or search for information on the internet has had a total of 2,445 435 people attending 435 courses given during 2012. These courses were taught in the KZgunea centre network.

Enpresa Digitala Centres

A service that promotes training activities through courses, seminars and workshops on new information technologies in the Enpresa Digitala Centres located in the 4 Technology Parks. During 2012, we have organized a total of 210 activities, attended by 5,534 participants with the objective of raising awareness and training.

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Barnetegi Teknologiko

A service that provides intensive training on ICT tools aimed to get to know the value they can bring and increase personal and business productivity in a total immersion format. Open to all business sectors and specific groups with content that is adapted to individual needs, it is intended for professional profiles with leadership functions and managers of small and medium Basque enterprises. Throughout 2012, there were a total of 512 people in the 49 Barnetegis held.

IT Txartela

A system of certification for basic skills in information technology, which objectively accredits a person's knowledge in the use of technology tools and internet user level. The number of tests performed during the year 2012 was 27,684 and the number of IT Txartela cards issued totalled 14,053.

PC Lagun Initiative. www.pclagun.org

A service for overhauling computers donated by businesses and government, reused with freeware to then be allocated to groups at risk of digital exclusion. In 2012 we recycled 1,275 computers using freeware.

Metaposta. www.metaposta.com

This is a mailbox and safe on the Internet that allows you to receive and store documents that are legally valid and important in the lives of people and businesses (invoices, payrolls, bank statements, insurance policies, health information and academic certificates) safely. At the end of 2012 there were 33,756 users of this service.

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STRATEGIC INITIATIVES

BIOBASQUE Agency

It promotes the development of the business sector related to bioscience and increased economic activity by strengthening scientific and technological activities (CICs, corporations and universities) in health activities (BIOEF, Biobank and Biosanitary Institutes) and business (investment, new businesses, attraction of foreign companies, biocompany associations).

It represents the Basque Bioregion, with more than 75 companies

and sales of over 320 million, employs over 3,000 people and it disseminates information to a network of more than 2,000 subscribers.

The Agency co-organized the event Biospain 2012. The holding of

this event in Bilbao has been recognition of an industry which is an economic reality in the Basque Country and which has great potential for growth in the coming decades. The event has been a success in terms of attendance, institutional brokerage, international presence, participant satisfaction, a success which is reflected in the growth of all its main parameters.

Participation has exceeded 760 companies and 1,850 delegates/participants (14% and 30% growth respectively compared with the previous edition)

International participation, with 25 countries represented and 210 companies, has made up nearly 30%, almost doubling the number of Biospain 2010.

The trade fair had 217 exhibitors (48 of them international), 29% more than at the previous fair.

There were 2,775 partnering meetings, an increase of 23%, which also puts Biospain as the fourth partnering event in the world.

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NANOBASQUE Agency

It promotes the integration of micro and nanotechnology in Basque companies to improve competitiveness in key economic sectors and promote diversification of our industry. The companies that make up our "nano-universe", which are about a hundred, belong to fifteen industrial sectors and all are characterized by both intense R&D activity and an international vocation.

The Agency is aware of international efforts to define a regulatory framework on the use of nanomaterials as well as ongoing developments in safety and current industry difficulties in monitoring them, and launched an initiative in 2012 to align the knowledge and infrastructure of scientific-technological agents working in this field and offer support to the industry through a Competence Centre for Nanoscience and Nanotechnology in matters of Environment, Health and Safety.

The future Competence Centre, which aims to become the Basque knowledge node in this area, will aim to support, guide and disseminate R&D&I work done internationally in the areas of Environment, Health and Safety in nanoscience and nanotechnology, fostering the transfer of the results to Basque companies and, ultimately, facilitate the safe use for health and the environment of new developments that will be made.

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BUSINESS PROMOTION

SPRI has made a major effort to promote entrepreneurial culture and encourage entrepreneurship towards new economic activities with future prospects in the medium to long term. Public initiatives to support entrepreneurs have two distinct and essential aspects. On the one hand, economic aid and, secondly, there is a movement towards institutional and social consensus that makes the Basque Country a reference point in entrepreneurship, and thus provides new entrepreneurs with help in the launch of a new business.

Ekintzaile

A programme managed by the Business Innovation Centres, which aims to support the maturing of a business idea and its implementation, provided that it belongs to the industrial sector or services related to industry, and is considered to have an innovative and/or technological basic idea. During 2012, we have supported a total of 116 Ekintzaile projects amounting to 1,838,650 euros. Mini-connect

A programme that aims for the accelerated development of technology-based SMEs with high growth potential and international presence that allocate 5% of their operating expenses to R&D. SPRI has supported 1 project with 100,000 euros.

Succession in SMEs and Handover in Trade

Programmes designed to facilitate succession and generational change in the management and/or ownership of a business to maintain, foster and promote business continuity. The number of projects throughout 2012 has been 263, of which 47 belong to the SME Succession Programme and 216 to Handover in Trade. In total 232 were approved, of which 33 belong to Succession in SMEs, which have cost 225,282.50 euros and 199 to Handover in Trade, with a grant of 400,374.52. The overall grant amounts to 626,627.02 euros.

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Basque Entrepreneurship Service

The Basque Government has acquired the firm intention to encourage entrepreneurial activity. SPRI has taken this cultural change on board by taking responsibility for the creation of the Basque Entrepreneurship Service. Its ultimate goal is to streamline the process of creating new business projects, by reducing red tape and providing all existing routes and tools.

Euskadi Emprende, its brand, consolidated the first activities in 2012 and made the environment conducive to weave a web of knowledge sharing and project development, open to the participation of all those who have something in common in terms of entrepreneurship.

During 2012, the entrepreneur attention number (900 716001), handled a total of 1,387 calls. The www.euskadiemprende.net enterprise portal that provides information, training and interaction, commercial and visibility spaces for new projects, was set up in May and by March 2013 had had almost 100,000 visits, with more than 341,225 page views and 2,453 followers on Twitter. Foro Emprende SPRI has managed to make the Forum Emprende a participatory and innovative meeting place, suitable for relations between entrepreneurs, agents with skills in entrepreneurship, institutions and investors. A place where many future projects will originate, and where the only objective pursued is to encourage entrepreneurial activity. At its third edition, held on 12th September at the BEC, enrolments totalled 3,000 participants and another 650 people followed it on the internet. Thematic workshops, roundtables, conferences and discussions were organized and spaces were set up for informal meetings and presentations of business ideas.

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Euskadi Emprende Workshops These were 10 workshops on entrepreneurship with subsequent online tutoring to compare experiences and doubts, approached from direct experience and practical application working on experiences by equals, supporting the training with examples, simulations and actively encouraging participation. A total of 1,967 registrations were received and 1,936 profiles were generated in the 10 working groups created in this channel.

Cooperate to set up a business programme This programme is aimed at public and private enterprise agents in order to support the development of meetings, conferences and workshops that encourage interaction between entrepreneurs, groups of students, the unemployed and investors. It looks for support for the development of training and entrepreneurial skills training, raising awareness responsibly and giving entrepreneurs useful tools for the good management of their projects. In 2012 it covered a total of 89 activities, with the attendance of 5,576 people at seminars and workshops, and another 424 participants on courses. Business and Innovation Centre

The impetus for business promotion is carried out in coordination with the Business and Innovation Centres (BICs), which conduct promotion and mentoring of new business projects. Similarly, the BICs provide the backbone of a close relationship with universities and vocational training centres, provincial authorities that directly affect the development of new promoters. SPRI, in addition to coordinating the Basque BIC network, designs and carries out specific programmes to provide material support for its own activities. In Gipuzkoa BIC Berrilan, 18 companies were created, creating 138 new jobs within three years and a planned investment of 5,130,000 euros. In Cedemi, 24 companies were created, with 233 jobs and an investment of 6,230.317 euros. In Ceia, 18 companies were created, with 125 jobs and an investment of 3,057,000 euros. Saiolan created 15 companies, creating 209 new jobs within three years and an investment of 15.233 million euros.

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FINANCING

Investments.

The Basque Venture Capital Management Company (Gestión de Capital Riesgo del País Vasco SGECR, S.A.) has a mission to invest in enterprise development in the Basque Country, and is responsible for managing funds through minority and temporary shareholdings of SMEs, new or expanding, unquoted non-financial and with a viable future project. These contributions confer economic and financial stability on businesses. They also provide an incremental value in collaboration with the management of a company, through the development of strategic plans and management plans. Throughout 2012 it has prioritised enabling financial instruments to sustain the activity of Basque companies. 174 projects have been approved for aid of 1,437,258 euros. 15 investments have been made of 19.065 million euros and 11 disinvestments of 13.779 million euros were carried out.

Companies managed

The entities managed by the Basque Venture Capital Management Company, as of December 2012 were:

Ezten - Venture Capital Fund. Capital managed: 101,742 thousand euros

Ekintzaile XXI - Venture Capital Fund. Capital managed: 5,419 thousand euros

Suztapen - Venture Capital Fund. Capital managed: 21,874 thousand euros

Elkano XXI - Venture Capital Fund. Capital managed: 4,516 thousand euros

Seed Gipuzkoa - Venture Capital Company. Capital managed: 7,590 thousand euros

MONDRAGON Business Promotion SPE - SA Business Promotion Company. Capital managed: 60,000 thousand euros

MONDRAGON Innovación SPE, S.A. - Business Promotion Company. Capital managed: 6795.60 thousand

Socade, S.A. - Capital Development. Capital managed: 30,050 thousand euros

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Specialisation, Managed Capital and Shareholders

Capital investment in new start-ups. Participants: SPRI 79.31%,

Basque Government 5.99% and Basque Institute of Finance, 15.64%.

Capital investment in innovative companies with intensive and extensive use of new information technology and in the biotechnology sector. Participants: Basque Government 81.55%, SPRI 18.45%.

Capital investments in consolidated or developing companies. Participants: SPRI 47%, Financial Institutions 51.76%, Other 1.24%.

Capital Investments in high-tech companies. Participants: SPRI 18.50%, Basque Government 41.59%, Financial Institutions 35.29%, Other 4.62%.

Capital investment in innovative and technology based start-ups in the province of Gipuzkoa. Participants: Regional Government of Gipuzkoa 50%, Ezten, FCR 50%.

Participation in developing companies related to the Mondragon group. Participants: SOCADE 20%, MONDRAGON Investments 16%, Financial Institutions 62%, Other 2%

Participation in high technology and/or innovative companies related to the MONDRAGON group. Participants: SOCADE 49.44%, Caja Laboral 49.44%, MONDRAGON Investments 1.12%.

Participation in the capital of large projects considered strategic by the Basque Government. Participants: Basque Government 40%, Regional Governments 60%.

Resiste

A programme that establishes an aid system for hiring financial advisors in order to proceed with the restructuring of financial liabilities. During 2012, 14 projects were approved for an amount of 403,829 euros.

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INFRASTRUCTURES

Following the guidelines of the Business Competitiveness Plan 2010-2013, the Department of Infrastructure in the SPRI Group aims to provide Basque companies with a diversified offer of business areas, infrastructure and technology best suited to the type of economic activities in the Basque Country.

The objectives of the infrastructure department are territorial cohesion, public expenditure rationalization and efficiency, in order to act as agents of proximity for finding out space requirements of Basque companies, participation and simplification of the management and definition of areas set aside for economic activities.

At the end of 2012, following the process of reorganizing and improving governance, coordination and organization of the group, it concluded with the merger of the Industrialdeak companies, leaving the composition of the Infrastructure Department with three Technology Parks, an industrial land management company (SPRILUR) and 12 Industrialdeak interinstitutional companies (1 in Álava, 4 in Bizkaia and 7 in Gipuzkoa).

SPRILUR SPRILUR aims to make industrial plots of land, modular premises and offices available to companies with a clear objective of promoting the installation of new business initiatives and the relocation of others to perfectly conditioned areas for the development of their economic activities. SPRILUR bases its activity on three lines of action:

1. ITS OWN INDUSTRIAL ESTATES, managing a hundred business areas

2. INDUSTRIALDEAK PROGRAMME, shareholding and management in 12 companies with a majority and five with a minority.

3. SPECIFIC PROJECTS, promotion and revival of strategic initiatives.

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About a hundred business areas distributed around the three provinces have adequate infrastructure for the needs of Basque business. SPRILUR manages a large part of them directly and another fifty are handled by 12 Industrialdeak companies at a local level, which have SPRILUR as a majority shareholder. It also has a minority share in Burtzeña Enpresa Parkea, SA (Barakaldo), Gasteizko Lurra Industry, Inc. (Vitoria-Gasteiz), Ibarzaharra, SA (Sestao) Urdulizko Industrialdea, SA (Urduliz) and Garaia Polo Innovation (Mondragón). Sustainable management Sprilur's commitment to sustainable development has been a determining factor in the performance of its business areas, applying criteria of respect for the environment and energy efficiency both in the processes of urbanization and in the building. A relevant point in this aspect of management is that the production income of photovoltaic power in their business areas came to 600,000 euros from 2008. In addition, nine business areas have this type of renewable energy production, avoiding the emission into the atmosphere of more than 600,000 kilograms of CO2 per year. The joint investment by the Basque Energy Agency EVE and Sprilur in photovoltaic facilities was 3.3 million euros. With the production data that are being obtained, the amortization period of the Sprilur Group's facilities, originally planned for 14 years, could be reduced to 11. European cooperation projects After the completion of the MITKE-Managing Industrial Territories in the Knowledge Era project, in 2011, Sprilur and three other public state land management companies agreed to collaborate in carrying out a benchmarking study to analyse the competitive factors and the definition of development of land for economic activities in certain European Union countries (Spain, Holland, Germany, France and the UK/Ireland).

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In addition, in 2012 Sprilur started a new project for the promotion of joint activities with The CUB-Communite Urbaine de Bordeaux Aquitaine region, with support from the Aquitaine-Basque Country Common Cooperation Fund. During this year, the two entities analysed the reality of urban and business areas in both territories where, in fringe areas, spaces for urban and socio-economic activities converge. SPRILUR industrial estates

In 2012, SPRILUR invested a total of 9,197,287 euros in its own industrial estates, including the activity in the Strategic Land Fund. This investment volume refers mainly to:

Development and construction works on two buildings in the Ballonti II industrial estate, in Ortuella, with an estimated investment of 5 million euros.

Completion of the development works in Alava on the Kanpezu Industrial Estate, jointly funded by contributions from the FES Strategic Land Funds of 300,000 euros.

Advance payments to suppliers amounted to a total of 3 million euros for the Arangoiti Industrial Estate in Güeñes.

Both the Ballonti project and the Güeñes one will provide new promotions to market in the first half of 2013.

To date, SPRILUR has managed more than 50 industrial estates and currently has 28 industrial areas, geographically distributed as follows: 4 in Alava, 11 in Bizkaia and 13 in Gipuzkoa. Investments by province in 2012 were €671,939 in Alava (including contribution to projects integrated in FES-Funds) €7,992,434 (including the same contribution) and €532,908 in Gipuzkoa.

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Despite industrial infrastructure demand by Basque companies continuing to slow down, turnover in 2012 was 12,256,591 euros. Associated with this figure, SPRILUR has sold a total of 16,800 m² from 5 companies.

In this regard, we must mention the sale made to the Administration of the Basque Country for 7,464,029 euros (9,406 m²) in the Matsaria Industrial Estate in Eibar. In the project for moving companies from the Txonta district of Eibar to complete its regeneration and rehabilitation, the transfer to the Basque Administration of 14 premises and 40 parking spaces in this municipality of Gipuzkoa was agreed on.

The main goals achieved in 2012 are:

Corporate Reorganization. The process, as it was defined, culminated in 2012, so that the final situation of the Sprilur Group is 12 subsidiaries with the following geographical distribution: 1 in Alava, 4 in Bizkaia and 7 in Gipuzkoa.

Reduction of operating costs. This meets 13% of the planned initial target by 20% for external services and staff costs for all the companies of the General Infrastructure Department in 2012, compared to 2008.

Human Resource Reallocation. With a strategy of internal functional readjustment, functions have been rethought and the sales area has been reinforced.

Sales Effort. It has been a priority of the company, and despite the circumstances it has exceeded budgeted targets.

INDUSTRIALDEAK

The Industrialdeak companies operate in a local area. Sprilur has a majority stake in them, together with Regional Governments and Municipal Councils. They are: Alava

Arabako Industrialdea, S.A. Bizkaia

Abanto Zierbenako Industrialdea, S.A.

Arratiako Industrialdea, S.A.

Bizkaia Sortaldeko Industrialdea, S.A.

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Busturialdeko Industrialdea, S.A. Gipuzkoa

Beterri Kostako Industrialdea, S.A.

Bidasoa Oarsoko Industrialdea, S.A.

Deba Bailarako Industrialdea, S.A.

Goierri Beheko Industrialdea, S.A.

Lanbarren Parke Logistikoa, S.A.

Urolako Industrialdea, S.A.

Tolosaldeko Apattaerreka Industria Lurra, S.A. The investment made by the Industrialdeak companies in 2012 was 4,055,196 euros. Due to the economic recession, some of the investments made during the year were allocated to the repurchase of premises and industrial bays, exercising the right of withdrawal clauses established in the sales contracts. Another project that required investment in Gipuzkoa was the continuation of the extension works of the 2nd phase of Apattaerreka in Tolosa, which was begun in 2011. In addition, the redevelopment of the Mijoa II industrial estate in Mutriku was completed with the building of 5,200 square metres for modular buildings. For its part, the Industrialdea of Hernani, currently managed by Beterri Kostako Industrialdea, SA, celebrated its 25 years of existence with 16 million euros of investment in 2012 in two industrial estates. In Bizkaia, improvements were made on previously completed projects in Gizaburuaga (Okamika I - II) and in Abanto (El Campillo).