Spinverse founder and Chairman of the board Pekka Koponen and Managing Director Laura Koponen share their thoughts about the year 2021, when two major EU funding programs will be launched. The first funding program is the seven-year Horizon Europe of more than 95 B€ and the second is the European Recovery Package, which will release 750 B€ within just a few years. There are also opportunities for Finnish companies, although the competition will be fierce. Should your company join? Read here Pekka's and Laura's expert advice to companies and their executives.
Why apply for funding?
Finnish companies. especially the large ones, are sometimes being criticized for being reluctant at applying for EU funding for their innovation activities. One of the companies that received the most funding from the completed Horizon 2020 program was Rolls-Royce with an amount of more than 70 M€, when even the best large Finnish companies could only reach a tenth of this. Are we leaving too much of an advantage to our competitors?
The Finnish company that received the most EU R&D support is MetGen, an enzyme manufacturer from Kaarina. It is an SME collaborating with its partners to find ways to replace plastics with wood-based substances by using enzymes. The size of MetGen's project portfolio is 97 M€, of which 62 M€ comes from EU funding and the company's own contribution is 16 M€. With the funding, MetGen has promoted both its product development and market entry with partners.
Valmet, for its part, is the project coordinator for a European project of 37 partners seeking solutions from IoT and artificial intelligence for the better functionality in electronic components used in harsh industrial conditions. The consortium received funding of 28 M€ and is comprised of SMEs, large companies, universities and research institutes from 10 different countries.
Productivity in the health sector is a problem for the whole of Europe and therefore health technologies are heavily funded. Healthcare is enhanced by harnessing artificial intelligence, robotics and patient data pools for healthcare research and preventive patient care. The Finnish flagship project is the Future AI Hospital, led by Helsinki University Hospital (HUS), where Finnish technology players such as Innofactor get opportunities to develop their expertise and export it abroad in cooperation projects.
What is funded?
The European Commission is now working to solve big challenges of our times. These include projects to create new jobs in Europe and to develop new technologies to cut down CO2 emissions. There are also opportunities for companies that focus on promoting digitalisation or projects related to the aging and well-being of the population. COVID-19 is a magic word which may loosen the purse strings of the European Commission. There are many opportunities available, especially for sustainable development projects and innovations.
You can apply for funding for R&D collaboration in large companies when looking for novel know-how and ideas to work for instance with universities. In product development projects, project sizes vary around 5-15 M€. However, funding cannot be obtained for the entire project, but about half has to be financed by the company itself. Small businesses can apply for smaller amounts, for example to bring an innovation to market, to scale their products or to accelerate growth.
How to apply for public funding?
Board members could challenge the company management to understand that innovation funding is an opportunity to develop product development processes or build new facilities.
The public funding application should be able to answer the following questions:
- Why am I the best player in my field?
- Impact: If I receive funding, what will be the visible ROI for owners and Europe? It can be about reducing CO2 emissions, creating new jobs, and so on.
- Implementation: How will this project be implemented?
Funding is often perceived as being a highly bureaucratic undertaking. However, the difficulty for companies in preparing applications is often related to inexperience in planning long-term joint ventures. After all, an application for funding is a carefully crafted plan that includes value chain partners. In any case, it is already needed for the approval of the company’s board of directors. Even evaluating the socio-economic impact is often challenging, even though creating it supports the corporate responsibility agenda.
Board professionals should now make their company executives to consider other sources of funding and ensure that the company has a long-term innovation strategy. If companies do not do it, their competitors certainly will.
The potential of the EU Recovery Fund
Over the course of this spring, we will have more information on the European recovery packages. For many Finnish export companies, the opportunities brought by the 750 B€ to the whole of Europe are more relevant than the share of 2.7 B€ earmarked for Finland.
Read the original Finnish version here (published on 17.02.2021 on Director’s Institute of Finland website).