Hunger for subsidies among Polish companies

The SMART path is one of the most attractive competitions under the FENG Programme for 2021-2027. The competition is addressed to projects characterised by a high degree of innovation (at least on a national scale). In the 2nd week of May, the first call for proposals ended. Their number illustrates how big is the hunger for subsidies among Polish companies. In PARP, in the call for micro, small and medium-sized enterprises, 1540 applications for co-financing were received for a total amount of over 15 bn PLN, which is almost 4 times higher than the assumed allocation. The NCBR, which conducts call for large companies, submitted 134 applications for co-financing projects for a total amount of 2 bn PLN, which is almost 3 times more than is available in the competition.

Why is SMART so attractive? First of all, because it is one of the first competitions addressed to a wide range of companies from all over the country. It enables financing of comprehensive projects, flexibly tailored to the development needs of the company. What's more, submitted projects do not have to be linear, i.e. they concern one product or process from idea to market launch. Scopes of activities can include many unconnected modules, which are flexibly selected. It is enough if all needs result from the development strategy of the particular company.

The SMART path allows you to meet many needs, so it is a great opportunity for companies despite the challenges faced by applicants, i.a. extensive, several hundred pages of documentation or changes in documentation during the call process.

Program design

Each submitted application may consist of one to six modules, such as: R&D works, development of R&D infrastructure, implementation of innovations, digital transformation, investments in greening the enterprise, internationalisation or improving staff competences. Within each module, you can qualify specific costs and your own levels of co-financing, depending on the size of the company, the place of implementation of the module, the type of cost. Modules can be combined freely, except for one stipulation: for large enterprises, the research module is mandatory. Companies from the SME sector must choose one of the mandatory modules, which are the R&D module and the implementation of innovations.

R&D module

In the R&D module, funding is intended for research and development. Enterprises can subsidise i.a. staff salaries, costs of using equipment, research materials. Research may be subcontracted. The result achieved after the completion of the work should be a process or product change, innovative at least on a national scale. Companies must demonstrate better parameters or functionalities of the product in relation to those existing on the domestic market. Support may be provided to a comprehensive research process - from the first product concept to the production of a ready-to-implement solution or only a part of the research process. The subsidy in this module is intended for materials, remuneration, research services, equipment leasing. Co-financing may be supplemented with a working capital loan.

Innovation implementation module

This module includes co-financing the implementation in the company of the results of R&D work that the company has at its disposal – which means the introduction of a new product to the offering or the implementation of a new or improved process. Here, too, the minimum level of innovation is the domestic market. Support in this module is provided in the form of a conditional grant, which is partially reimbursable. The greater the success of the project, i.e. the more revenues the company has achieved thanks to the implementation of tasks planned in the module, the lower the repayment. The grant covers a wide range of activities, including the construction or modernisation of facilities and the purchase of equipment. All expenses must be related to the goal of expanding the product offering or changing the production methods. The company will receive a subsidy here for both the construction as well as purchase of production lines and software. Investment financing can be a perfect complement here.

R&D infrastructure module

The scope of this module allows co-financing the creation or expansion of a research and development centre, i.e. a separate organisational unit that will carry out research in the company on the built and purchased infrastructure. The scope of research must be described in the so-called research agenda, which is the plan of the entrepreneur applying for the implementation of this module. Research must lead to the creation of innovative processes or products on a national scale. In this module, both construction costs as well as the costs of scientific and research equipment are co-financed.

Digitalisation module

The module is related to the digital transformation of companies. Importantly, the level of innovation required in it is lower than in those mentioned above. It is enough that product or process solutions are new for the company. In the module, you can incur expenses to increase cybersecurity. Co-financing can be used for many types of costs - from modernisation of facilities through the purchase of equipment, to consulting services.

Greening module

The module allows you to finance a wide range of activities in the field of energy transformation, circular economy, reduction of production emissions, reduction of raw materials consumption or the so-called ecodesign, i.e. designing taking into account the impact of the product or process on the environment. The scope of activities is wide, and the possible eligible costs can be very individual, depending on what the identified needs are and, for example, whether we want to adapt the company to the applicable environmental standards or prepare it for those that are yet to be introduced. What's more, activities in the field of life cycle assessment or product carbon footprint can be subsidised here. The required minimum level of innovation, as in the case of digitalisation, is the level of the company implementing the project, i.e. the solution must be new for the company, not for the entire market in which it operates. The three above modules include both typical investment expenses as well as co-financing of consulting and research services.

Competencies module

The module enables co-financing of the company's staff in thematic areas related to other modules. Therefore, we have the opportunity not only to carry out investments, but also to broaden the knowledge of employees and thus increase the chance of success of the activities planned in individual modules. The subject matter and scope of training should result from the type of modules implemented in the project.

Internationalisation module

This module is a response to the needs in the field of co-financing the process of conquering new foreign markets and promoting products on these markets. It is possible, for example, to co-finance the participation of an entrepreneur in fairs and the costs of obtaining industrial property protection abroad.

It is worth remembering that part of the application for co-financing is the development of a financial model, taking into account the sources of financing the project as well as the assumptions of costs and revenues that will be generated during its implementation.

Who can apply for support and when

The current call for projects submitted by large, small and medium-sized enterprises, as well as micro businesses, started on May 10 and will last until June 30. In 2023 and in the first quarter of next year, several more calls for independent applicants or consortia are planned. Let's hope that as time passes, there will be fewer and fewer unknowns and doubts about the opportunities of the programme, because it seems that it is the optimal programme for companies that think about comprehensive development.