Innovation promotion as future strategy
New development of products, procedures and technical services is a necessity for the majority of SMEs, but also a guarantee of long-term market presence, competitiveness and jobs. Grants can be very helpful here.
The path from an idea to a product ready for the market is stony and associated with considerable technical and economic risks. The technical risk can be managed by innovativeness in the company or through joint ventures. And the economic? Are enough resources always available?
Multitude of grant options
Reason enough to occupy oneself with the grants offered by the German federal and state governments in particular for innovations. After taking the industry, technology, region or company and project size into account, different grant funds can be used and linked: for example, subsidies for registering patents, feasibility studies, product development and market entry are possible from different sources and can be combined with each other.
Depending on the company size, industry, degree of innovation and project orientation – industrial research or experimental development – a selection can be made from a multitude of grant options. The first thing to be clarified is the subject congruence, application entitlement, availability of funds and time components.
Grant programme ZIM
The grant programme ZIM (Central Innovation Programme for SMEs) of the Federal Ministry for Economic Affairs and Energy) deserves special mention. In 2011 it was honoured with the "Inventor Oscar,” the Diesel Medal in the category "Best Innovation Promotion.” Rightly, because it is a grant programme open to all technologies and industries and is available nationally. SMEs and companies with fewer than 500 employees can apply. Applications can be submitted anytime up to December 2019 and the processing time is just three months.
Individual projects or cooperation with other companies and/or research institutions from at home and abroad are possible. The costs eligible for grants – max. € 380,000 per project / partial project – are personnel costs, costs for project-related orders to third parties, costs for R&D orders to scientifically qualified third parties and other costs in the form of flat-rate allowances.
The allocations are made as non-repayable allowances in the form of partial financing up to a maximum of € 209,000. After successful conclusion of the development work, the result must also be put onto the market. Here the ZIM programme subsidises the external costs (up to € 50,000) incurred to support the market launch activities up to 50 %.
Grant programme Wipano
If an innovation has been developed, it must be protected. The newly established grant programme Wipano considerably reduces the costs incurred. "Wipano" (knowledge and technology transfer via patents and standards) in particular promotes SMEs in protecting their R&D results for the first time through patents and utility models and simplifies their access to the field of "industrial property rights.” The funding focuses on the entire process of applying for industrial property rights, from examination of the idea to realisation. The funding is subdivided into six segments.
However, in practice a lot of funding is not utilised, since no one in the company feels responsible for this, the subject appears to be too complex or there is not enough time. Of course, a certain amount of effort is required to select grant programmes, prepare the application itself and for administration until the conclusion.
Positive effect of innovation promotion
But how much effort does it require to achieve turnover that then provides you with a profit of € 150,000 for example, which you can in turn invest in development? This is precisely where the positive effect of innovation promotion can be seen: you limit your economic risk, preserve your liquidity, develop new success potential – for your competitiveness, innovativeness, market position and your most important capital, your employees.
My plea: companies should seize this opportunity. The effort required is manageable if you tackle it properly.
The author, partner in the engineering firm wirth & hohl, which also works for several lift technology companies, has many years of practical experience in promoting innovation. He held a talk on the subject at the 2016 Schwelm Symposium.