Thursday, 7 July 2011

Research for the Benefit of SMEs

The Research for the Benefit of SMEs is one of the less well known areas of European funding. It could be because it’s hidden away in that catch-all area of the Framework Programme, ‘Capacities’. Although the Commission would demur, I’ve always seen the ‘Capacities’ pillar as the dumping ground of FP7. Like a skip for all those schemes that don’t fit neatly into ‘Cooperation’, ‘Ideas’ or ‘People’. Rather than spoil the neat lines of FP7, the Commission added ‘Capacities’ as a miscellaneous holdall.

The scheme does what it says on the tin: it funds research for the benefit of small and medium sized enterprises (SMEs), which make up some 99% of all EU businesses. That’s a substantial group, and is responsible for 54% of the overall value of commercial sector and 67% of the workforce.

Targeting SMEs has both its positives and negatives. It's a good way of encouraging SMEs to prioritise research and development, but HEIs might lose out in terms of funding and intellectual property.You see, it's very much SME-led, and they get the benefit in terms of intellectual property. Moreover, as it's EU funding, it doesn't pay the full cost of the research (it's actually 75%), so you need to be sure that it would benefit you, your research and your department before committing yourself.

So how does it work? Well, an SME (that is, a commercial organisation with less than 250 employers and a turnover of less than €50m) identifies a research need, sets the objectives and contracts out the underlying work to identify the solution to researchers in academia. The SME then owns the intellectual property, although the EC is open to other arrangements.

There are three types of funding:
  • Research for SMEs
  • Research for SME Associations
  • Demonstrations
The first two are bottom up schemes (i.e. the applicant comes up with the idea) which provide funding to SMEs or groups of SMEs (the clue is in the title). For the first scheme, the typical budget is €0.5m-1m and last up to two years; for the second the budget and duration are larger and longer: €1.5-3m and up to 3 years.

‘Demonstrations’ take the project one step further. You’ve got to have had funding from one of the other two schemes already. It provides 50% funding for testing prototypes, scale up studies, or performance verification. It’s not meant for further research and development.

So do have a look at the funding, but don't rush headlong into it without talking to us first about the potential pros and cons. There’s a new call out on 20 July, with a deadline of 6 December. They’ve allocated some €150m for the first scheme, €49.7m for the second, and €20m for the third. Best of all, the success rate is a respectable 20-30%, and the UK has, in the past, got around 20% of the funding.

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