Matt Symonds discusses why businesses in the power industry should factor grant funding into their R&D strategies, and asks is there such a thing as free money?
In the power industry, irrespective of energy source or discipline, it is new technologies and advances in research and development that help steer the strategic direction of both independent businesses and, indeed, the UK power industry as a whole. From nuclear power to turbines, emissions control, biomass, solar, cogeneration and traditional fuels, there is a common resolve to create cleaner, more efficient, flexible power solutions. This is the energy that drives the power industry itself, and makes the UK one of the leading forces in this field on the global stage.
However, while this resolve and vigour is certainly to be applauded, there is a danger of businesses becoming so entrenched in their own company cultures and mission statements, and adhering to traditional ways of doing things, that there is a growing tendency for businesses to work in silos.
We are encouraging businesses to stop, look up and take some time to investigate external opportunities that will enable them to advance and fast-track R&D projects, create a broader network and help secure a green light for future investment.
If your business strives to create products, services and technologies to deliver better, cleaner energy solutions for your customers, there is likely to be a government strategy with pots of funding in place, with objectives that match your own…. in short, free money!
Perhaps a stumbling block, and one reason why many private businesses disregard grant funding, is because government organizations and private business are totally different animals. The cultures are alien – one needs to make money, one needs to spend it. It is debatable whether we even all speak the same language due to technical and local government acronyms. Indeed, you may believe you run an engineering or manufacturing business, but you are dubbed an SME.
However, putting what’s lost in translation aside, joint ventures and partnership working, with the fusion of skills and pooling of resources, means that the administrators of these pots of funding have the capital to help your business achieve full potential and get your research and development projects off the ground.
This can have a direct impact on your productivity and bottom line, while also meeting government objectives on improving the UK power industry as a whole. It’s win/win.
So why do so many companies not apply for funding to help finance their R&D? It has better odds than the lottery, there is no interest to be paid and funds are generally non-returnable.
If your company places innovation at the heart of its business strategy, then this is an avenue of opportunity you can’t afford to ignore, and at TBAT we want to help businesses debunk the grant funding myths. Granted, initially it may seem impossible to work through the funding maze, the paperwork may appear onerous, the process may seem long and drawn out and with no guarantee that you will successfully secure the funding you require. Many MDs and FDs ask: it is really worth the punt?
Forearmed is forewarned. If you get the basics right, you’re halfway there. Commonly, grant funding applications consist of a set of questions, a finance form and project plans. The typical TBAT process is four weeks from initial research to completion and submission of the grant application.
Companies will usually receive results from these four weeks after submission, and are then able to start projects around a month after this – so the whole application process is only three months.
Companies should be aware of the pitfalls and obstacles before starting the process to ensure no time or money is wasted. It is important to clearly answer the question asked and ensure the project fits within scope, otherwise it will be rejected, no matter how good the project is. When writing an application, try to see it from the funder’s perspective.
The majority of applications are rejected because the applicant either has not answered the question or has not provided evidence to back up its claims. In some cases the author has not thoroughly detailed their innovation or has provided a poor financial breakdown.
Grant bodies are looking for companies that have a clear idea of what they are hoping to achieve and a sound project plan. Companies must also present as much market and technical information as possible to prove there is a commercial need for the innovation. Judges are looking for new ideas but will also consider the technical risk, whether the innovation is commercially viable and whether your business can actually deliver it.
In addition, be ambitious! Do not be afraid to ask for the maximum amount if the costs can be justified. Grant funding competitions usually have a minimum and maximum project size, and therefore a maximum and minimum grant size. The project plan will usually dictate how much funding is required.
A successful grant application has numerous benefits. It reduces the financial risk to the company and also allows it to deliver a full-scale project without having to cut down sections to be able to fund it. It also helps R&D projects to progress more quickly and fast-tracks innovations onto the market. In addition, it can offer the chance to engage specialist consultants, which may previously have been beyond budget.
A grant can cover all manner of aspects relating to your project including R&D, prototype development, testing, trials, patenting and market research.
Funds come from a variety of sources: central, regional and local government, the European Commission, or various other national and local bodies.
The main UK funding body is Innovate UK, an arm of the government focused on administering grant funding competitions. They release specific grant competitions targeted at a certain industry or technology.Additionally, there is the always-open SME Smart Scheme, which offers funding to SMEs to engage in R&D projects in the strategically prioritized areas of science, engineering and technology, from which successful new products, processes and services could emerge.
Innovate UK has various themed calls throughout the year, typically offering 50 per cent funding and awards ranging from £100,000 ($155,000) to over £1 million. This year Innovate UK is investing up to £5 million in collaborative R&D feasibility studies to stimulate innovation in the extraction and use of conventional fuels. The aim is to improve efficiency, reduce cost and minimize the environmental impact of coal, natural gas and oil. Projects must be business-led and all must involve an SME.
Matt Symonds is Director of UK business consultancy TBAT Innovation Director