For most companies, product development is an essential part of growing their businesses. However, the process can be costly and risky. This is why many governments around the world offer R&D subsidies for product development. These subsidies are designed to help businesses offset some of the costs of developing new products, making it easier for them to innovate and bring their ideas to market. These incentives can come in many different forms, including grants, loans, tax deductions (e.g. lowered wage taxation) and direct subsidies. In this blog post, we will explore what R&D subsidies for product development are, the guidelines and rules and how to use subsidy consultants to your advantage. We will also touch on some examples of well-known R&D subsidies like Horizon Europe, Eurostars, MIT and WBSO.
Before applying for a subsidy, it’s crucial to thoroughly understand the government’s guidelines and requirements, which can vary depending on the country or region. Familiarize yourself with what the R&D subsidy covers and the standards that must be met. Subsidies often come with specific conditions and metrics for assessing a project’s success, so careful review of the guidelines is essential. These rules are designed to ensure government funds are used effectively and efficiently. Many R&D subsidies require companies to submit regular progress reports and demonstrate that they are meeting key milestones in their product development. Key aspects to consider include:
Governments typically prioritize businesses offering innovative ideas that can deliver economic and societal benefits. High-tech industries, medical technologies, clean energy solutions, and other sustainable projects often receive special attention.
Various R&D subsidies worldwide are available to businesses, very much depending on the country or even the city in which your company is registered. A few of the most significant subsidy programs are Horizon Europe, Eurostars, Small Business Innovation Research (SBIR) Program, Small Business Technology Transfer (STTR) Program and MIT. Below we explain in more detail the specifics of these R&D subsidies.
Horizon Europe is the EU’s flagship research and innovation program, offering €95.5 billion in funding from 2021 and onward. Designed to tackle global challenges like health, sustainability and digital transformation, the program prioritizes projects with significant societal and economic impact. To qualify, proposals must align with Horizon Europe’s focus areas, demonstrate innovation, and involve cross-border collaboration. The subsidy often requires partnerships between at least three entities from different EU or associated countries, a clear plan for achieving measurable outcomes and adherence to strict budgetary and timeline guidelines. At ManGo Product Design, we are open to discuss potential collaborations under the Horizon Europe program.
Eurostars is a prestigious funding program designed for R&D-focused small and medium-sized enterprises (SMEs) looking to bring innovative products, processes or services to market. With support from 37 participating countries, this subsidy encourages international collaboration and is tailored to projects with high commercial potential. To qualify, SMEs must lead the project, work with at least one partner from another participating country, and allocate at least 50% of the R&D activities to their organization. Eurostars provides up to € 500.000,- per project, with funding rules varying by country. At ManGo Product Design, we can assist in guiding SMEs through the Eurostars application process, ensuring projects meet the subsidy’s technical and collaborative requirements.
The Small Business Innovation Research (SBIR) program is a vital funding source for U.S. small businesses driving cutting-edge innovation. Focused on high-risk, high-reward R&D, SBIR offers phased funding to help businesses develop, validate, and commercialize groundbreaking solutions. To qualify, projects must address federal agency priorities, demonstrate strong commercial potential, and be led by U.S.-based small businesses. With grants reaching up to $2.075 million across phases, SBIR is ideal for startups and SMEs in industries like healthcare, energy, and defense. At least two-thirds of the research and development (R&D) for Phase I and 50% for Phase II must be performed in the United States. SMEs are allowed to subcontract to foreign companies for specific tasks or expertise.
The MIT (MKB Innovatiestimulering Regio en Topsectoren) subsidy is designed to support Dutch small and medium-sized enterprises (SMEs) in developing innovative products, processes, or services. This program emphasizes collaboration and aligns with the Netherlands' key economic sectors. Funding is available for feasibility studies, R&D collaboration projects and knowledge vouchers, encouraging SMEs to explore market potential and develop groundbreaking innovations. Costs for hiring a design agency are considered eligible expenses, but they must fall within the overall project budget and subsidy limits. Feasibility projects can receive up to €25,000, and R&D collaboration projects can receive 50% of eligible costs, with a maximum of € 350.000,- per project. Do keep in mind many companies and consortiums apply for this subsidy and the selection process takes months. The MIT should always be viewed as a supplement to enhance a project’s funding, not as the primary financial source. Typically, projects with strong partnerships, innovative value and a clear alignment with Topsectoren and a well written request have a 30% chance of approval.
To maximize the chances of securing an R&D subsidy grant, it’s crucial to present a well-structured, clear, and persuasive proposal. Most funding organizations provide specific templates or detailed guidelines that must be followed. Start with a concise summary of your innovation and clearly outline your objectives. Include a brief overview of your team, highlighting their experience, expertise, and why they are the ideal fit for the project. Next, detail how the subsidy will be utilized, the challenges you anticipate, and the solutions you’ve planned. Emphasize your product’s unique selling point (USP), its relevance in the current market, and its potential impact. Finally, present a robust business plan, including projected revenue and the number of jobs the project is expected to create.
When you’re writing your product design R&D subsidy proposal, it’s important to focus on the innovation and impact of your product. You need to be able to demonstrate how your product will contribute to the overall advancement of your industry. For example, if you’re developing a new medical device, you need to show how your device will improve patient outcomes or reduce healthcare costs. Or, if you’re developing a new piece of AI device, you need to demonstrate how your software will make a task easier or more efficient. The more you can show the potential impact of your product, the better your chances of securing a subsidy.
When you apply for a product design R&D subsidy, you need to provide a detailed budget and timeline for your proposed project. This information should demonstrate that you have a realistic plan for using the funds and completing the project on time. For example, your budget should include information on salaries, materials and overhead costs, as well as any indirect costs. Your timeline should provide an estimate of how long each phase of the project will take and when you expect to complete the project. By providing a clear sense of how you plan to use the money, you’ll increase your chances of securing a subsidy.
Securing subsidies can be a complex and time-consuming process, but subsidy consultants can significantly improve your chances of success. These experts are well-versed in subsidy rules and regulations and specialize in guiding applicants through every step of the process. From ensuring eligibility to managing the paperwork, they streamline the application process and maximize your potential for approval. While hiring a subsidy consultant involves costs, their expertise often pays off by saving time and increasing the likelihood of obtaining valuable financial support. For many companies, this investment proves worthwhile, helping them access subsidies efficiently and effectively. For larger subsidy programs like Horizon Europe, Eurostars, SBIR, STTR, and MIT, leveraging expert guidance is highly recommended. ManGo can connect you with skilled subsidy consultants who can perform a tailored market scan for your specific development and location, providing valuable insights into potential subsidy opportunities.
R&D subsidies for product development can be a powerful resource for companies aiming to innovate and bring new products to market. However, it’s crucial to understand the rules and guidelines, weigh the pros and cons of using subsidies, and determine when engaging a subsidy consultant could improve your chances of success. By navigating these factors effectively, you can maximize the benefits of programs like Horizon Europe, Eurostars, MIT, or one of the many other R&D subsidies to support your development process. At ManGo Product Design, we’ve successfully participated in numerous subsidized product development projects. We’re here to assist you or guide you toward the right resources to achieve your innovation goals.
Do you also want to develop a product and want to explore potential R&D subsidies? Contact us by phone, our online form or send an e-mail to: info@mangoproductdesign.com
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