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Business owners looking for project financing may have heard of Innovate UK and Horizon 2020 as sources of grant funding for innovative projects, but often do not understand the differences between them. In this article, we look at both providers and explain what they have to offer to UK businesses. The question of which is best for your business does not, however, have a simple answer.
Horizon 2020 is the name given by the European Union to its 7-year research and innovation programme. Running from 2014 to 2020, Horizon 2020 has a total budget of nearly €80 billion. Overall, Horizon 2020 is designed to drive the EU’s goal of smart and sustainable economic growth and to create jobs.
Horizon 2020 is also designed to encourage cooperation between businesses and institutions in different member states. In most cases, to apply for Horizon 2020 funding your company must be part of a consortium of organisations from 3 or more member states. The major exception to this rule is the SME Instrument, which we describe later in this article.
All Horizon 2020 funding is offered on a competitive basis. After you submit your application, your proposal is judged by independent assessors. The proposals are then ranked and those receiving the highest scores from the assessors are most likely to be funded. The budget for each competition is fixed, so the threshold for funding varies from one competition to the next.
There are three main categories of funding competitions offered by Horizon 2020: Excellent Science; Industrial Leadership; and Societal Challenges. Within these categories, Horizon 2020 offers multiple funding competitions on very specific projects.
The Horizon 2020 SME Instrument is a scheme under which small to medium-sized firms can apply for project funding on their own, rather than as part of a consortium. The SME Instrument programme includes a number of specific funding competitions, and also has a recurring competition for projects that can fall into the category of “Open Disruptive Innovation” (ODI), in any field of science or technology. There are two competition phases in the ODI programme. Phase 1 offers a fixed sum of €50,000 for a feasibility study, and Phase 2 offers up to €2.5 million for a full project. There are four closing dates for Phase 1 and four for Phase 2 every year.
Innovate UK is the government’s agency for business funding through specific grant programmes. It also helps businesses find research and development partners in industry and academia to develop and commercialise new technologies. Since April 2018 Innovate UK has been part of UK Research and Innovation (UKRI) a new non-departmental public body that brings together Innovate UK, the seven academic research councils, and Research England, which funds university research.
Innovate UK offers an annual programme of grant funding competitions across a number of specific research themes, in line with the government’s overall strategy for industrial development. Recent competition areas include digital health technology, energy innovation, biomedical sciences, and technologies associated with autonomous vehicles and vehicle batteries and charging. In addition, Innovate UK runs two Open competitions each year, which are open to applications relating to any area of technology. Innovate UK is also responsible for administering grant funding competitions from a number of other government agencies.
All the grants offered by both Horizon 2020 and Innovate UK grant are competitive, and your application will be assessed by a panel of independent assessors against applications for the same grant submitted by all other applicants. In most grant competitions only a small proportion of applicants will receive funding and the threshold for funding will vary from one competition to the next.
For both Horizon 2020 and Innovate UK your application must not only explain the nature and advantages of your proposed product or service, but it must include a logical and practical business plan, with each development step explained and properly costed, and detailed projections of expected future revenue. Both Innovate UK and Horizon 2020 (with the exception of the SME Phase 1 competition) will only fund a proportion of your project, and expect you to demonstrate that you have funding in place for the balance of the costs, and also that you can finance work in progress, as you will only receive your grant funds after the work has been done and properly documented. Another common factor is that after you are told that your project will be funded, you will need to sign a detailed funding agreement, and you will meet with a monitoring officer who will keep in contact with you throughout your project’s lifespan.
The first difference that applicants will notice is in the mechanics of submitting your application. While both schemes operate online application systems, Innovate UK requires responses to specific questions within an online form. There is a word limit for each answer you provide. A Horizon 2020 application is more free-form and though guidance is provided as to what you need to include in your application, and how many pages are allowed you can vary the amount of space you devote to each aspect of your application as you see fit. Innovate UK applications are built around a list of 10 standard questions, describing your project and your plans for commercialisation, while a Horizon 2020 application asks for information under 3 general criteria: Excellence, Impact, and Implementation.
In the feedback on an Innovate UK application, you will receive a score out of 100. Assessors can award up to 10 points for the answers to each of the 10 questions, and you are told the average score for each one and you may receive some very brief notes on specific points. Horizon 2020 applications are scored out of 15 (to two decimal places), with up to 5 points available for each criterion. Horizon 2020 scores are a consensus between different assessors, and you will also receive an Evaluation Summary Report. This gives your score against each of the evaluation criteria used in assessing your application, but does not give any individual comments.
Applying for a grant is a serious and time-consuming activity. Each of the two grant-making bodies has its own programme of specific funding competitions, and you need to make sure that the project your company is proposing fits the scope and the criteria of the competition you choose to enter. You also need to find out whether you can apply on your own or if you need to include partners in your bid, and if your company is eligible to apply, in terms of size or business development stage. It is rare that a business needs to make a simple choice between applying for a Horizon 2020 grant or an Innovate UK grant. Many businesses find it useful to consult an expert adviser, such as Myriad Associates, in order to identify the most appropriate grant opportunities.