SMEs must go in hot pursuit of research grants to thrive

Is there anything as annoying as getting those stupid emails where you are promised millions if you send an initial few thousand euro to help free up a bank account?

Yet maybe there are times when a deal too good to be true really does deliver and a smallish initial investment will yield much bigger dividends down the road. The closest thing we have to one of these is known as Horizon 2020, the EU’s research budget.

It has billions of euro available to support research taking place in our higher education institutions and in private sector companies, and while the academics have long successfully tapped into this mother lode our SMEs have been slower to go after these funds. There are some signs however that companies are starting to see the value of putting in the effort to win research contracts under Horizon 2020.

Earlier this month, Minister of State for Research Damien English highlighted Ireland's €97 million drawdown from the EU budget during the first nine months of the programme, a figure that included combined funding for both the academic and private sector purposes. About 70 per cent of this activity flowed into academic-driven research but Irish companies claimed about 20 per cent with almost two-thirds of the money going into SMEs willing to invest time and energy in pursuing inhouse and collaborative research.

This money is now supporting research projects in 15 SMEs conducting feasibility studies into some aspect of their businesses. Each of these firms receive about €50,000 to pursue their ideas. Another five companies have managed to break into the big time with much more substantial EU research funding worth roughly €2 million each. This is big research money and you have to be offering something good to attract this support.

The money reaching these companies comes via the SME Instrument, a part of Horizon 2020 that specifically goes to smaller firms. The feasibility studies are known as phase 1 projects, while the next phase-2 tier relates to the larger multimillion-euro awards as made to the five SMEs. Any company may apply for phase-1 or -2 funding but success is dependent on having something worth pursuing in the first place.

Project funding

The question is how does a chief executive decide whether it is worthwhile to bother chasing a research grant. And how does a young company manage to find the cash to get an inhouse research project under way in order to have a project available to move forward for consideration under the SME instrument?

This is like the too-good-to-be-true deal. A company has to show it is willing to invest before the EU will open up the coffers. It needs to have those few thousand euro invested before the SME Instrument funding can flow. But here has to be an idea, a clear view of what will come out of the research before that can happen and that is the hard part.

It is somewhat easier for an academic to identify a research idea and then pursue it, given the scientist does not have to earn a profit to keep a company going. But there are rewards for those firms who take a chance and run a successful research programme.

Enterprise stimulation

The Government and its enterprise agencies, particularly

Enterprise Ireland

, are anxious that companies take a chance and become involved in research activity. It has put programmes in place to help companies get involved. These schemes help companies identify opportunities and to get them ready for the application process. Enterprise

Ireland

spent €3 million in schemes to promote company participation, for example offering travel opportunities to visit other companies involved in similar work or facilitating access to higher education institutions to identify research partners.

The big questions remain however. Does the company believe it has an idea that can be developed into a useful and innovative product or service.? And does it have the capacity to sustain inhouse research.

Many companies will say they have ideas but don’t have the money to pursue them. But a small but increasing number of firms are deciding there is no option and they must innovate if they want to build a client base and thrive. These are the kind of companies Ireland needs if we are to grow our knowledge economy.