SME's are a key part of the economic fabric of the ERMIS regions and it has faced tremendous social and economic transformation over the last two decades, suffering increased competitiveness in the global economy. Despite public sector financial and technical support programs to foster innovation, the return on investments from such initiatives and policies within SME's is often considered insufficient. Yet, SME's represent a vital source of economic growth and innovation for a region as long as they are able to grow to a critical size allowing them to finance their development and market innovations. Today, with the financial and economic downturn and resulting job losses in large enterprises, the Lisbon Strategy’s aims and objectives,notably on the importance of the EU innovative SME sector have become even more acute. More than ever, the innovation capacity of SME's is vital to achieve economic growth again. It is this innovation capacity that is at the core of the ERMIS project.ERMIS partners have access to innovation support structures such as knowledge centres, incubators and venture capitalists. However, the regional innovation performance depends more on the interaction between structures as on their individual performance. Local innovation policies solely dedicated to support specific tools or instruments do not generally induce sufficient dynamic to generate collective performance to support SME growth and competitiveness. ERMIS partners aim to enhance the leverage effect of their local innovation policies and systems by developing an effective systemic approach involving the whole value chain of political and economic actors dedicated to SME's. In other words, ERMIS partners have the "pieces of the puzzle" and this project will help them fit the pieces together more efficiently. The ERMIS objective is to jointly develop effective and transferable governance models for Local Innovation Systems (LIS) dedicated to fostering value innovation in SMEs.To achieve this, ERMIS will exchange effective LIS tools and methods; design & exchange a governance framework and methodology to manage a LIS; design a set of governance and management guidelines; involve public stakeholders outside the project wherever relevant; involve policy makers to validate policy recommendations for implementation in the local and regional policies and Structural Funds. ERMIS will achieve these step by step through pre-modelisation of LIS based on existing research, SWOT analysis, an assessment of partners' LIS performance and a benchmark and a formalisation of "next practice" to prepare the ground for transfers in partner's territories. ERMIS brings together a balanced partnership with public authorities from Spain, France, Italy, Rumania, The Netherlands, Hungary, Denmark, Greece and Portugal. In addition a number of local actors involved in SME support, such as innovation centres, Chambers of Commerce and incubators are partners in the project. Achievements: After a successful launch event in Sophia Antipolis, France (April 2010), the partnership started to define the methodology for the SWOT analysis of partner's Local Innovation System. The Lead Partner, in cooperation with its innovation expert and the hosting partner CASA, organised the 1st Interregional Innovation Workshop, held adjoining to the launch event, where approaches to the concept model of an ideal Local Innovation System have been introduced. As a next step, the Lead Partner started the premodelisation of an ideal Effective Reproducible Model of Innovation Systems "ERMIS", to gather a set of performance criteria with the involvement of Partner5 (Eindhoven Municipality) and Partner14 (Copenhagen Regional Agency Erhvervnet). Based on findings, the Lead Partner's innovation expert together with regional project managers, elaborated a first draft of the premodelisation of an ideal ERMIS and defined a set of performance criteria. The model of ideal Local Innovation System andthe performance criterias were presented and refined at an Innovation experts meeting in September 2010 in Brussels, to adopt a common approach of the methodology. Afterwards, partners started to work on their local SWOT analyses which are based on investigations regarding 1/the definition of SWOT analysis reference framework 2/ the positioning of partners' regions 3/ the analysis of economic performance 4/ the model of development of SMEs 5/and the model of regional governance. After the elaboration of the 9 SWOT from January to June 2011, partners gathered to exchange their experiences gained so far and to evaluate the outcomes of the analysis phase in the framework of the 2nd Interregional Innovation Workshop in Miskolc in Hungary (March 2011). The meeting also served to bridge the previous analysis phase with the knowledge and good practice sharing phase of ERMIS.The major Mid Term event of the project took place in the middle of June 2011 in Coimbra (Portugal) where the catalogueof partners’ collected Best Practices as well as the 1st Draft of Policy Recommendation were presented. Participants also received an overview of different Effective Reproducible Models of Innovation Systems. Following this, the second part of 2011 was spent with partners actually exchanging their experiences to adapt the best fitting solutions into their own practices and decision making. This has been done through intensified transfer of experiences visits: site visits, study tours, workshops involving ERMIS partners and relevant regional stakeholders i.e. incubators; Chamber of Commerce, policy makers. Transfer visits have been carried out in 8 regions of ERMIS partnership: Emilia Romagna region (IT), Sophia Antipolis (FR), Chios (GR), Penela & Coimbra (PT), Eindhoven (NL), Valladolid (ES), Iasi (RO) and Horsholdm (DK). All ERMIS partners organized or at least participated in transfer visits which involved 89 participants and the presentation of altogether 21 good practices.The results were summarized in the transfers of experiences reports prepared by partners which were the basis to elaborate the local/regional action plans. At the 4th Interregional Innovation Workshop in Eindhoven (April 2012), partners and innovation experts laid the ground for the preparation of final outcomes (Charter of Good Practices and Policy Recommendations including an ERMIS) and discussed the adoption of visited Good Practices by partners. As a first result, the Community of Sophia Antipolis has launched a ‘Business Pole’ dedicated to enterprises for which the IPN Incubator model Good Practice have been adopted. CISE also decided to merge 2 Good Practices and to implement a new process at local level to stimulate innovation in SMEs. Miskolc (HU) started to adopt BIOBUS Good Practice in order to support the Geothermal Power sector through an innovative approach.ERMIS main outputs will be gathered in a Tool kit to be presented in Nice at the final conference in November 2012.