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Why should I consider Horizon 2020 R&D funding?

There are many reasons why you should consider Horizon 2020 funding, for example:

  • The European Union (EU) makes a very large investment in industrial R&D to support innovation, competitiveness, the ‘knowledge based economy’ and in particular SMEs. Horizon 2020 is the biggest ever EU research and innovation programme, with nearly €80bn of funding available over 7 years (2014 to 2020).
  • EU funds support companies developing long-term innovation strategies.
  • Companies seeking to expand their markets by engaging with partners in other European countries are strongly encouraged. Partners are not competitors but technology providers, user groups, academic collaborators and market access channels.
  • Commission funding de-risks product development.
  • Commission funding broadly steps in at a level where national funding steps out, thus supporting R&D at a level comparable to venture capital, but without the drawbacks.
  • The Commission project evaluation process is rigorous and many funders accept successful Commission funding bids as a form of due diligence and technology validation.
  • Some funders are happy to invest alongside Commission funds, thus successful bids act as fundraising leverage.

Are UK SMEs benefitting?

The answer is YES!

Based on EASMEClick for description data from June 2016, statistics show that 250 UK SMEsClick for description have already received funding through the SME Instrument scheme of Horizon 2020, receiving grants totalling over €110mthis excludes SME funding through the other Horizon 2020 schemes.

In country ranking terms, this places the UK in the top 3. To see which companies have benefited, visit here

Common Myths & Misunderstandings

If you raise £2-4 million of venture capital or business angel funding for a business you’ll expect to provide several hundreds of pages of documentation in the “due diligence” stages; raising a similar amount of funding under Horizon 2020 requires a 70 page application, with clear questions and guidance notes. Commission funding is not bureaucratic, but of course there are rules to be followed.

Many years ago the Commission funded many “blue skies” projects, which seems to have stuck in the minds of many UK business leaders. For more than a decade the Commission’s principal aim has been to support projects relatively close to commercialisation. The linking of many funding calls to TRLClick for description is a good indicator of commitment to near market R&D in technology.

The process of raising Commission R&D funds takes around 9 months, but compare this to VC or business angel funds and you are likely to see similar timescales. The time takes is reasonable and appropriate for the scale of spending and indeed quick if you consider this is public money.

Project collaborations are typically a lead commercial partner, a technical supplier of perhaps IT or specific materials, an academic partner to research some aspect of technology performance and an organisation or body representing end users. Collaborations very rarely contain direct competitors.

Collaborative bids normally require partners from a minimum of three member states. The skills, capabilities and contribution of each partner to the project must be clear BUT there is no requirement to include partners from particular member states.

The Commission have no interest in owning IP from projects they have funded. The ownership of the IP is vested in the partnership. The Commission have a model IP agreement to help partners to decide both ownership and rights to use IP during and after the project. It is up to the partnership to decide who owns any IP generated and in reality a wide range of agreements are acceptable to the Commission.

The first payment from the Commission is in advance of the start of the project. After that claims are entered in arrears, quarterly. The last payment to a project is withheld until the final project report has been submitted and has been accepted by the Commission. It should also be noted that the payments are made to the lead partner who is responsible for distribution to the other collaborators.

Brexit – The official position

It is clear, as evidenced by the 2016 Autumn Statement, that the UK Government sees “Research and development (R&D) as a key driver of economic growth and is a vital part of the government’s Industrial Strategy.”

As far as Horizon 2020 is concerned, the UK’s contribution is seen as extremely beneficial and whilst circumstances may change in future, the UK Government and the EU have made it clear that it is ‘business as usual’ whilst the UK remains a member of the EU and that funding will be protected, vis:

“Until the UK leaves the EU, EU law continues to apply to and within the UK, both when it comes to rights and obligations.”

Informal meeting of Heads of State or Government of 27 EU Member States (29/06/2016)

“The Commission have made it clear that the referendum result changes nothing about eligibility for these [multi-year project] funds [e.g., Horizon 2020]. UK businesses and universities should continue to bid for competitive EU funds while we remain a member of the EU and we will work with the Commission to ensure payment when funds are awarded. The Treasury will underwrite the payment of such awards, even when specific projects continue beyond the UK’s departure from the EU.”

Letter from the Chief Secretary to the Secretary of State for Exiting the European Union (12/08/2016)

“The statement [made by HM Treasury] provides reassurance for applicants to Horizon 2020 projects, confirming that where applications are submitted while the UK remains a member of the EU HM Treasury will underwrite the payment of awards, even when specific projects continue beyond the UK’s departure from the EU.”

Research Councils UK (15/08/2016)

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