If you are an SME with an innovative idea you may want to consider applying to the EU for funding for your business idea.
In recent years hundreds of Irish organisations have received funding ranging in amounts from €50,000 to several million euros. The EU fund, known as Horizon2020, has a budget of €75 billion of which Ireland is targeting €1.25 billion. Many successful Irish applications have come from the medical sciences area but it is noteworthy that sectors such as agri-food and renewable energy have also had success – there has even been a project about the levels of bacteria in beer.
There are many aspects to a successful application but two key themes are absolutely vital – innovation and scalability. Your business idea must be bringing some new product or service or combination of product & service to the market and you need to be able to demonstrate an ability to scale your business internationally – the EU wants global winners!
As a self-check guide you might want to see how you answer the following questions
- Have we identified a significant problem in the market and/or a significant market opportunity?
- Have we identified a credible solution to the problem?
- Is there real innovation in our solution?
- Are the end user benefits of our solution clear andmeasurable?
- As a company, are we ambitious enough and capable of taking our idea internationally, globally?
- Is the potential market big enough?
You should be answering strong “Yes” to each of the above questions. The application process is highly competitive so anything less than a very high quality submission will likely be unsuccessful.
There are 2 key phases to keep in mind.
In phase 1 projects can attract a grant of up to €50,000 (projects are funded up to a level of 70% up to maximum of €50,000) – the focus here is about exploring and assessing the technical easibility and commercial potential of a breakthrough innovation that a company wants to exploit and commercialize e.g. a market analysis. The ultimate objective is to put a new product, service or process in the market and this could be a first or very early step. Note the innovation can be a new service or process and not necessarily a product that comes from a traditional laboratory.
Phase 2 funding is available for innovation projects underpinned by a sound and strategic business plan and the EU has indicated levels of funding €500,000 – € 2.5 million (covering up to 70% of eligible costs, or in exceptional, specific cases up to 100%).
The activities which might be eligible are scaling-up or validation for market replication aimed at bringing the innovation to investment readiness and maturity for market take-up. The outcomes from phase 2 funding should be
→ a new product, process or service that is ready to face market competition and
→ a business innovation plan incorporating a detailed commercialisation strategy and a financing plan in view of market launch.
It is worth mentioning here the importance of having and communicating your capacity as a management team to deliver on your plans. Many applications focus on innovation as if a new idea alone will bring success. It is useful to remember the example of the now forgotten Sony Walkman
– the idea originated with Phillips in Netherlands but Sony’s implementation was far better!
For more detailed information and excellent support and advice contact your local Enterprise Ireland office who have a dedicated and experienced team.
With EU support maybe the next Google or iPhone will start in a small Irish start up – best of luck!
(note: the EU definition of SME is less than 250 employees and less than €50m turnover so the vast majority of companies in Ireland qualify)