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EU and UK funding and support from idea, through R&D to sales and international trade
BioPark, Hertfordshire, 19th November 2014
John Christopher
Innovation Adviser
Hi-Tech and Advanced Engineering
+44 (0)7799 060400
© 2014 John Christopher
Finance
© 2014 John Christopher
• Sources of Finance – see Links at www.enterpriseeuropeeast.org.uk
– Friends and Family
– Overdraft facility, factoring or invoice discounting
– Asset Finance
– Loans secured or unsecured
– Enterprise Finance Guarantee Scheme (SFLGS suspended)
– Equity Finance and the Enterprise Investment Scheme (EIS = Tax breaks)
– Venture Capital
• Complimented by
– Grants – see www.j4b.co.uk and www.gov.uk/business-finance-support-finder
– Training Funding
– “R&D Tax Credits” and the “Patent Box”
• See also www.gov.uk/business-finance-explained
EARLY MARKET
DEATH VALLEY
BOWLING ALLEY
TORNADO
MAIN STREET (Early)
MAIN STREET (Mature)
MAIN STREET (Declining)
FAULT LINE
END OF LIFE
Indefinitely Elastic Middle Period
FRONTIER RESEARCH
APPLICATION INNOVATION
PRODUCT INNOVATION
PROCESS INNOVATION
VALUE CHAIN INNOVATION
BUSINESS MODEL INNOVATION
STRUCTURAL INNOVATION
Time
Reve
nue G
row
th
Innovation – Stages of Growth
© 2014 John Christopher
The Innovation Challenge
• Intellectual Property is not well understood by the average SME
• Success at Research or Development stage does not mean problems of scale up or much less market entry are overcome.
• Sources of finance or funding can come from a plethora of sources, or not at all.
• Successive governments re-brand or stop and start support initiatives
• Each initiative has it’s own narrow focus
• There is a strong relationship between Innovation and Internationalisation
but SMEs are unaware of internationalisation support programmes
© 2014 John Christopher
Innovation Support
• Comes in different forms:-
- Information and advice – see www.gov.uk/business-support-helpline
and www.businessinyou.bis.gov.uk
- Academic and research partnerships
- People, knowledge and skills
- Technology networks
- Finance for innovation – project or capital related
- Help to adopt best practice processes
- Market research
- Export support
© 2014 John Christopher
IPR EXPORT
RESEARCH
DEVELOPMENT
MANUFACTURE
SALES COMPANY
The Innovation Process
© 2014 John Christopher
PARTNERS
PARTNERS PARTNERS
PARTNERS
Innovation Support – where are we now
EXPORT
LOGISTICS &
MARKETING
SCALE UP or
MANUFACTURE
DESIGN &
DEVELOP
RESEARCH
BUSINESS IDEA
COMPANY
DOMESTIC SALES
INTERNATIONAL
TRADE
FIND PARTNERS
© 2014 John Christopher
PROTECT YOUR IDEA
PARTNERS
PARTNERS PARTNERS
PARTNERS
Innovation Support – where are we now
EXPORT
LOGISTICS &
MARKETING
SCALE UP or
MANUFACTURE
DESIGN &
DEVELOP
RESEARCH
BUSINESS IDEA
COMPANY
UK INTELLECTUAL
PROPERTY OFFICE
MAS
PROOF OF
MARKET
UK EXPORT FINANCE
UK TRADE &
INVESTMENT
KNOWLEDGE TRANSFER
NETWORKS
Smart (R&D)
GRANTS
INNOVATION VOUCHERS
H2020 (previously
FP7)
EUROSTARS
ENTERPRISE EUROPE
NETWORK
DESIGN LEADERSHIP
R&D TAX CREDITS
GROWTH ACCELERATOR
CARBON TRUST & ECA’s
KTP
ENTERPRISE FINANCE
GUARANTEE
UKTI DSO
WORLD INTELLECTUAL
PROPERTY OFFICE
EUROPEAN PATENT OFFICE
EUROPEAN IPR
HELPDESK
CHINA IPR
HELPDESK
PATENT BOX
ASEAN IPR
HELPDESK
OPEN TO
EXPORT
© 2014 John Christopher
GROWTH VOUCHERS
MERCURSOR IPR
HELPDESK
“UK” grants
* End soon
© 2014 John Christopher
Growth Accelerator BIS £2k Management Development
Growth Vouchers TSB £2k Lottery towards advice
Manufacturing Advisory Service
BIS £3k Patents, tooling, etc, etc
Innovation Vouchers* EValu8 £1k Low carbon transport
Innovation Vouchers UoH £3k match New to UoH
Innovation Vouchers TSB £5k Sector specific
Low Carbon KEEP ARU £1k - £5k 40% of cost - Ends April 2015
MedTech "Smart Money"* ARU £2k6 - £70k Average of £30k
Grant4Growth* via LEP's e.g. £10k Capital grants at 28%
Revenue grants up to 30%
Smart - Proof of Market TSB max £25k 60% funding
Smart - Proof of Concept TSB max £100k 6-18 mths 60% funding
Smart - Development TSB max £250k <24 mths 35% to 45% funding
UK Government support
© 2014 John Christopher
Enterprise Finance Guarantee
GOV £1k - £1m Loan guarantee after SFLGS suspended
Enhanced Capital Allowances
HMRC 100% Offset for ECA registered kit
R&D Tax Credit HMRC 225% SME's
Definition of R&D 130% Large
Patent Box HMRC 10% Corporation tax rate
Export Credits Guarantee Department
80% t/a UK Export Finance
R&D Tax Credits
© 2014 John Christopher
• R&D Definition for Tax Purposes – for instance:-
- a project must achieve an advance in science or technology through the resolution of a scientific or technological uncertainty
- or make an appreciable improvement to an existing process, material, device, product or service through scientific or technological changes
- see www.hmrc.gov.uk/manuals/cirdmanual/CIRD81900.htm
• Previously a company must have at least £10,000 in eligible R&D costs to apply
• Two schemes (SME’s may be able to claim under either)
– SME’s can deduct 225% of qualifying expenditure on R&D activities when calculating their profit for tax purposes
– If SME’s have losses in the accounting period, they may be able to claim payable tax credits in cash
– Large company scheme - rate 130%
• See – www.hmrc.gov.uk/randd and “R&D Tax Credits” document on Links page at www.enterpriseeuropeeast.org.uk
NOTE: SME Definition
EU support
COSME (Competiveness of SMEs) is the EU’s new business support programme towards smart, sustainable and inclusive growth
Package includes:
• A network of organisations to provide free support to help SMEs grow through international and collaborative innovation
- Enterprise Europe Network
- SME IPR help-desks.
• Targeted financial support in the shape of:
- Equity facility for growth (EFG): investment in SMEs in expansion phase
- Loan guarantee facility (LGF): guarantees to cover loans for SMEs
- These are available via UK/EU financial/banking institutions, with own brand financial products (not promoted or labelled as EU funded):
See www.access2finance.eu
© 2014 John Christopher
© 2014 John Christopher
Enterprise Europe Network
• European Information
- VAT, EU Policies and Directives, CE Marking, Standards, EU Legislation
• Advice on how to trade more effectively in EU Markets and Internationally
• A European policy-feedback service, including business consultation
• IPR advice and guidance
• Guidance on accessing European funding
- Eurostars, Horizon 2020 (previously FP7) and the SME Instrument
- Signpost to R&D Grants, VC’s, etc.
• Partnering Services
- Commercial, research and technology
- Over 14,000 Business Opportunities; search or e-alerts
- Looking for Agents/ Distributors/Joint Venture Partners
- R&D and Technology Collaboration Opportunities
• Visit www.enterpriseeuropeeast.org.uk
© 2014 John Christopher
Global reach – not just Europe
© 2014 John Christopher
54 countries 600 partners 3000 staff
http://een.ec.europa.eu/about/branches
EU Funding for Innovation
© 2014 John Christopher
• Horizon 2020 (previously FP7) has different types of projects inc:-
– Collaborative Projects – research projects carried out by a consortia from different countries and with partners from industry and academia
– Networks of Excellence – designed for research institutions
– See http://ec.europa.eu/programmes/horizon2020
– UK National Contact Point:
Steve Bradley [email protected] Tel 07501 463314
• EUREKA
– Europe wide network which aims to support R&D SME’s.
– UK National Contact Point:
Graham Mobbs [email protected] Tel 07824 599585
• The Eurostars Programme
– 60% funding for SME’s assessed twice a year, next deadline 5th March 2015
– See www.eurekanetwork.org/activities/eurostars
Success stories
• Omnisense Ltd - real time location – www.omnisense.co.uk
– Published a Technology Offer with Enterprise Europe
– Opened dialogue with three prospective partners before selecting Spanish company, Sensing & Control
– During partnership negotiations agreed to develop a Eurostars proposal
– Successful application resulted in €1.3 million project over 24 months
• Sentinel Oncology Ltd - drug discovery – www.sentineloncology.com
– Registered user of Enterprise Europe e-alert service
– Responded to R&D Partner Request from Sweden
– Agreed to submit joint Eurostars application with Swedish SME, Biovica
– Successful application resulted in €1 million project over 23 months
© 2014 John Christopher
Other EU Funding
© 2014 John Christopher
• Creative Europe
– Has a budget of €1.46 billion to assist the cultural and creative sectors
– See http://ec.europa.eu/culture/creative-europe
• Erasmus+
– Funding up 40% to €14.7 billion for Education, Training and Youth
– See http://ec.europa.eu/programmes/erasmus-plus/index_en.htm
• Health for Growth
– Grants of up to 60% for activities that improve or protect human health.
– Calls to start in 2014
– See http://ec.europa.eu/health/programme/funding_schemes/index_en.htm
• Life+
– Environmental and Climate related funding – calls open in May or June 2014
– See http://ec.europa.eu/environment/life/about/beyond2013.htm
The EU’s new Programme for Research and Innovation Horizon 2020
Commencing in 2014 with 3 strands:-
1. Collaborative Research – target R&D topics
2. Eurostars – target R&D intensive SME’s
3. SME Instrument - New
- Targeted funding at all types of innovative SMEs
- Only SMEs allowed to apply (single company support possible)
- Highly competitive
- Market-oriented, EU dimension
- Bottom-up, addressing societal challenges and/or key enabling technologies
- Grant-based staged funding
• EEN role to provide Account Management and Coaching……
• See http://ec.europa.eu/programmes/horizon2020/ and www.h2020uk.org
• See latest webinar held on 3rd March – http://ec.europa.eu/research/sme-techweb/index_en.cfm?pg=horizon2020-workshop
© 2014 John Christopher
SME Instrument
• Designed to help fill a financing gap for business innovators with international ambitions
© 2014 John Christopher
Phase 1: Concept and feasibility assessment
Phase 2: R&D, demonstration,
market replication
Input: Idea/Concept: "Business Plan 1"
(~ 10 pages) 10% budget
Activities:
Feasibility of concept Risk assessment
IP regime Partner search Design study
Pilot application etc.
Output: elaborated "Business plan 2"
Input: "Business plan 2" plus description of activities under Phase
2 (~ 30 pages) 88% budget
Activities: Development,
prototyping, testing, piloting,
miniaturisation, scaling-up, market
replication, research
Output: "investor-ready Business plan 3"
Lump sum: 50.000 €
~ 6 months
Phase 3: Commercialisation
1-3 (5) M€ EC funding
~ 12 to 24 months
Promote instrument as quality label for
successful projects
Facilitate access to private finance
Support via networking , training, information,
addressing i.a. IP management,
knowledge sharing, dissemination
SME window in the EU financial facilities (debt
facility and equity facility)
Possible connection to PPC (and PPI?)
No direct funding
10% success 30-50% success
H2020 - SME Instrument
© 2014 John Christopher
SME Instrument Calls
• Industrial Leadership:
- High risk ICT innovation (Open disruptive innovation?) - 30/13
- Nanotech or other advanced tech for manufacturing and materials - 17/6
- Space research and development - 4/2
• Societal Challenges:
- Diagnostic devices and biomarkers - 44/19
- Sustainable food production and processing - 7/2
- Seas and oceans (Blue growth) - 3/1
- Secure, clean and efficient energy - 23/10
- Greener and more integrated transport - 26/10
- Eco-innovation and sustainable raw material supply - 13/5
- Urban critical infrastructures - 6/2
- Biotechnology-based industrial processes - 3/1
+ In 2015 - Mobile e-government applications
- SME business model innovation X/Y Phase1/Phase2 awards/round
© 2014 John Christopher
SME Instrument – in summary
• Open to all SMEs ….providing they fit the criteria
• You will be compared to the best – so have a strong case
• Expect a high rejection rate …….e.g.12% met threshold and 6% got funded
• Further reading:-
- The SME Instrument pages on EEN East website here
- The further linkages to national and EU websites
- Read the SME Instrument Guide here
• Next submission cut off dates:-
- Phase 1 – 18/06/2014, 24/09/2014 next 17/12/2014…..
- Phase 2 – 9/10/2014 next 17/12/2014…..
© 2014 John Christopher
Contact us
• Enterprise Europe East of England
Visit www.enterpriseeuropeeast.org.uk
Call 0845 641 9995
• Information service contact:
Mathilde Murphy, European Information Manager
01707 398024
• Innovation and partnering contact:
John Christopher, Innovation Adviser
07799 060400
© 2014 John Christopher
