November 26, 2018
Small and medium-sized enterprises may receive, through the SME instrument of the Horizon 2020 framework programme of the European Union, more than EUR 2 million to commercialise their products or services. It’s just that too little of it is sought. Our lawyer, Sanna Häikiö, explains what an applicant for EU funding should know.
There is more funding available for the purpose of company growth and internationalization than often realized. It is worthwhile for Finnish companies to check the Horizon 2020 framework programme by the EU. Through the programme, funding may be sought for the development, introduction, and commercialization of new technologies, products, and services, for example. The funding decisions favour applications that emphasize impressiveness, that is, the ability to create new jobs, growth, and competitiveness in Europe.
There are, however, some twists to getting the money source open, worth checking into. It may be the deciding factor of the future of your company.
Through the Horizon 2020 framework programme by the EU, as much as EUR 80 billion will be awarded to all the stages of the innovation process between 2014 and 2020, and as of 2021 in the subsequent framework programme, Horizon Europe, the total sum will be EUR 100 billion according to the preliminary plans of the Commission. Finland is continuously contributing to this fund, so it is in our interest to learn how to apply and use this money.
Horizon 2020 includes several funding instruments for research and innovation. SMEs may take part in joint projects with other partners or apply for funding to develop and commercialise innovations alone through the so called SME funding instrument. Under this instrument, per funding from EUR 500 000 up to 2.5 million may be acquired for the commercialisation of a product or service.
The funding may cover as much as 70 to 100 percent of the project costs, depending on the project form and status of the beneficiaries.
Don’t forget the partnership application
The basic idea behind EU funding is to enhance and strengthen Europe’s global competitiveness by awarding funding for both basic research and access to the market. When funding is applied for partnership projects, in other words, the forces of different actors are joined, the outcome is more definite. Companies, universities, and research institutes are encouraged to collaborate. Jointly applying for funding increases the chances of getting it. In Finland, many of the consortiums/joint projects are coordinated by, for example, the Technical Research Centre of Finland, VTT.
In partnership applications, it is worthwhile to be watchful from day one so that the diverging interests of, for example, a commercial company and tax-funded university, do not lead to problems at any stage of the process. Combining interest is often a challenge in which a specialist may be of big help.
Beat bureaucracy and seek help
It is true that applying for Horizon 2020 funding is tedious regardless of the funding instrument, and that the funding terms and conditions are in places difficult to understand. However, this drives applicants away for no reason. The package is not too large to digest when it is dealt with phase by phase in cooperation with a specialist and enough time is reserved to process it.
I’ve seen this in my previous work at VTT, when giving legal support for various jointly funded EU projects. I was also involved with fine tuning the funding terms of the Horizon 2020 programme in the expert team of the EU Commission and drafting the DESCA model consortium agreement of partnership funding projects.
Enough time should be reserved for the preparation of the application. In Finland, state-coordinated guidance for EU projects is available in particular from Business Finland’s EUTI. What matters is that the applicants really want to see the matter progress and give their time to the process.
The processing of the applications in EU bodies takes its time. Depending to some extent on the project type, the average processing time is from two to five months from submitting the application. When funding is granted, the drafting of agreements starts in the partnership projects between both the Commission and the consortium partners in accordance with the funding terms appended to the funding decision. At this stage, too, an expert’s help may be of utmost importance.
Don’t lose your IP
Experience shows that the more carefully IP issues have been reviewed in the funding application the better are the success opportunities of the application.
At all the stages of the process, care must be taken that the applicant’s IP rights do not go down the drain. In various kind of joint projects, in particular, this threat must be taken seriously. If, for example, several companies, a research company and a university seek funding together as a large consortium, all parties disclose their own IP. In these situations, a detailed agreement must be reached on how other parties may use each other’s IP, and who owns the outcome that the project yields. A SME operating alone under SME instrument must not grant a free right to use its immaterial rights to anyone.
Our lawyer, Sanna Häikiö has wide experience in various EU funding related matters and she helps customers in all EU-funding related questions and supports companies to seek funding.