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Horizon 2020, which replaces the EU’s FP7 research funding mechanism, started last year. €79 billion of funding is available over the next five years. The research programme is the biggest the EU has ever run and is themed around three central topics: science, industry and societal challenge.
Steve Alexander, financial national contact point for Horizon 2020 at Innovate UK, says: “There are a lot of changes to the programme. It’s more focused on innovation closer to the market, on the impact of research. There’s a big push towards exploitation of ideas in the market. There’s also been a lot of simplification of the processes.”
Work packages in Horizon 2020 have been made less prescriptive so people can fit their projects more easily into the framework. A single set of rules across all three packages has been developed and a time of 8 months has been targeted from application to funding award. There are fewer controls and audits for the programmes and participants are now able to claim VAT back on expenditure.
Another major difference is the allocation of funding for SME's. Around 20% of Horizon 2020’s €79 billion budget, around €3 billion, has been allocated to go just to SMEs. This funding is available through a dedicated route in Horizon 2020 called the “SME Instrument”. According to the EU, to qualify as an SME you have to employ less than 250 people and have a turnover of no more than €50 million.
Jane Watkins, National Contact Point for SME, Innovate UK, has more than ten years experience of European Framework funding programmes. Although the amount of funding seems large, Watkins says it should be remembered it is spread over 6 years and competition for funding is strong. “The main difference with FP7 is that you have to be closer to the market with your project, TRL level six or more. But the topics are very broad in what they are trying to achieve. There must be a European dimension to your project. A lot of projects have fallen down on this already.”
The start of the process for an SME is the writing of a 10 page “Dragon’s Den” style business plan to develop an idea into a concept. The EU will give you €50,000 and conduct a feasibility study for this during a six month period. The second phase two can be worth between €0.5 million and €3 million and take up to two years. The SMEs must draft a more detailed 30 page business plan and produce a prototype during this phase. There is no funding available for the final phase, where the expectation is that the research is commercialised. Other sources of funding are expected to be developed by the SMEs, although the EU will provide “support and networking opportunities… mentorship and access to risk finance.”
Another large difference with FP7 is that there is no deadline to apply for funding. It’s a continuously open call, with cut off dates every quarter. You can also only submit one proposal at a time.
Out of 2600 projects that have applied in the last year, 155 projects have been funded. “Filling out the SME questionnaire isn’t not the easiest process. There has been problems and the Commission admits this. In terms of information available it is like a labyrinth.” Watkins says.“But there are some key things to read and if you read the instructions and the proposals you will increase your chances of success significantly.”
The most promising statistic, she adds, is that out of the first years applicants, 68% had never applied for EU funding before.
The other funding mechanism for SMEs in Europe is the Eurostars programme, which allocates grants of up to £360,000 through their country’s relevant government funding agency . Graham Mobbs, Eurostars operations manager for Innovate UK calls Eurostars “the simplest EU programme ever devised.”
“The project can be anything that has a civilian application. Everything from sensors in a satellite to a system that gets rid of the smells from fish and chip shop fryers,” says Mobbs.
Eurostars aims for a short lead time from application to award of 14 weeks. However, there are a number of rules and requirements. At least one European or international partner, either from Canada or South Korea is required. The project must be under three years in duration and its output introduced to the market in two years after completion. Normally companies have to have been registered for at least 12 months. Larger companies and academic research bodies can participate in a project, but must find alternative funding.
There has been three calls so far, £3.6 million a year plus funding from the European Commission. Mobbs says: “The annual budget is as long as piece of string. The beauty of Eurostars is that you get paid in your own currency, as if it is a domestic project.”
Tips:
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Focus on market opportunities
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Be convincing when talking about your company
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Talk confidently about your company
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Don't aim for a low level of information
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Include a concept for your idea's commercialisation
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Don’t bother applying if you are just trying your luck