Blog: Innovate UK and the innovation funding landscape
Research and development is at the heart of the governments’ plans for future economic stability and growth.
Presented in November 2017, the Industrial Strategy promises to transform our economy by investing in what they call ‘five foundations of productivity. These are:
- Places – making communities across the UK prosperous
- Business environments– ensuring Britain is the best place to start and grow a business
- Infrastructure – undertaking a major upgrade to the UK’s infrastructure
- People – providing good jobs and greater earning power for all
And 5. Ideas – ensuring we’re the world’s most innovative economy.
To support the creation of this innovative economy, the strategy promises to raise investment in R&D to 2.4% of GDP by 2027 (it was 1.7% in 2018); to increase the rate of R&D tax credit to 12%; and to invest £725m in new Industrial Strategy Challenge Fund (ISCF) programmes.
The ISCF is administered by UK Research and Innovation (UKRI), a non-departmental public body launched in April 2018 sponsored by the Department for Business, Energy and Industrial Strategy – the publishers of the aforementioned Industrial Strategy.
UKRI brings together seven disciplinary research councils, plus Research England, and the UK’s innovation agency, Innovate UK.
What is Innovate UK?
They work with companies to ‘de-risk, enable and support innovation’, through connecting businesses to partners, customers and investors. Crucially, it also funds innovation projects that have the possibility to become commercially successful.
And it pays off. This is just some of what they’ve achieved since 2007:
Innovate UK funding options
Although access to funding is regularly cited as a barrier to R&D or innovation, there are multiple routes to explore if you’re looking to finance development of a great idea, including through tax reliefs, loans, private equity, crowdfunding, and grant funding.
It’s the latter – grant funding – that Innovate UK specialise in, but the types of projects they finance, the application process, and what happens once funding is received is a little different.
For example, Innovate UK offers early-stage funding that banks and equity investors may avoid and they don’t make any claim on equity or IP created in the innovation.
Applications go through an independent peer review to ensure only the very best ideas are supported.
And the project is continuously monitored and kept on track to ensure that awarded funds are being used to their maximum potential.
Who can apply for Innovate UK funding?
Innovate UK is broadly looking to invest in projects and ideas that will ultimately benefit the UK economy, so applications from UK businesses are welcome, and additional rules around partnering and subcontracting work to those outside of the UK are in place. Beyond that, eligibility gets complicated, with a variety of funding opportunities available each having their own set of criteria.
Competitions vs open grant funding and Smart Grants
There is a comprehensive list of all available funding on their website, here, and you’ll notice that most have strict open and close dates. These opportunities can be referred to as competitions, and they’re typically looking to fund R&D or innovations that tackle a specific problem.
For example, during Covid-19 an Innovate UK competition was launched seeking rapid sanitising technology for ambulances.
These set competitions are focused in scope and applicant eligibility, and are often linked to one of the four Grand Challenges set out in the Industrial Strategy:
- Artificial Intelligence and data
- ageing society
- clean growth
- future of mobility
Outside of these competitions, Innovate UK also have open funding.
Referred to as ‘Smart Grants’, these have broader eligibility criterion, and open in rounds throughout the year. Although there are application deadlines, rounds are consecutive – so when one deadline is met, the next application round becomes live, unlike set competitions that are specific and open for a limited amount of time, once.
Applications can come from any area of technology and be applied to any part of the economy, and although projects that overlap with the grand challenge areas listed above are welcome it’s not a requirement.
How much funding is available through Innovate UK Smart Grants?
There’s a significant amount of funding on the table for those who qualify, apply and win. In the current live round, for example, there’s £25m allocated.
What you’ll actually receive varies dependent on the type of business you are, who you’ve worked with and what your project covers, but 70% of the funding you require could be received from an Innovate UK Smart Grant.
Is Smart Grant funding right for you?
That’s not a particularly easy question to answer without sight of project specifics, but there are many online guidelines for those thinking about applying or funding.
We suggest taking a look at the high-level eligibility criteria below and taking it from there. Innovation advisors like MPA are a quick and easy way to cut through the reams of information available, so if you’d like to know if Smart Grants could be for you, get in touch for a no obligation chat with our grant applications team.
Smart Grant project criteria
You should check the scope and eligibility criteria for each round of Smart Grant applications, but as a starter here are some things to check direct from Innovate UK themselves:
The Smart Grant application process
Smart Grant applications are free to complete online, however, many are put off by the amount of detailed information that is required to complete the application and in understanding the scope of who can apply, and when.
The application process is split into three sections: project details, specific questions, and financial information.
There are around 10 questions, and answers for each can be up to 400 words long plus supporting materials.
How do you win Smart Grant funding?
Each application received in a round is scored, and – simply put – those with the best scores secure the funding.
The chances of success are also dependent on the number and quality of the applications submitted in the round, but you have no way of knowing how good the other applications were. Our advice to have the best chance of winning is to ensure your application is as comprehensive, well researched, and well written as possible.
Why seek application support
There are three key reasons that applicants seek help from professional grant advisors and application writers like MPA:
- to increase the chance of success
- to get a better understanding of all the funding options available and ensure all funding sources are managed effectively
- to access a wider network of support for advice or collaboration
1.Increase your chance of success
Innovate UK smart grant applications are assessed and scored against set criteria, and only the best receive funding.
The lengthy and intense application process can be daunting at first, and we find that many simply give up halfway through without support.
Working with an advisor can help you understand what information you need to include to get you the best score possible, what details are worth spending the time seeking out to include, and how to explain critical information properly.
2.Understand all the options available and manage your funding effectively
There is more than one way to get financial support for your project, and one size doesn’t fit all.
Smart Grants, for example, come with a level of responsibility throughout the lifetime of a project that a client may not be able to commit to.
On top of that, managing multiple sources of funding can be complex.
For example, Smart Grants are almost always considered Notified State aid, so receiving one will have a knock-on effect on how you can claim tax reliefs, like Research and Development Tax Credits.
We have qualified accountants and tax advisors on our team who can ensure that you’re choosing the funding route that matches your ambition, operating model, accounting, and tax position.
3.Networks and support
We are members and partners with a variety of UK innovation networks, like Silverstone Technology Cluster, Composites UK, and Scaffolding Association to name a few, and we have knowledge and contacts that span the breadth of depth of innovation.
We can help you find collaborators, project support, experts, advisors, and like-minded business leaders to ensure your projects have the best chance of success possible.
What to do next
To explore whether an Innovate UK Smart Grant might help support your innovation project, speak to our team of funding experts today for a free, no-obligation review of the best route of finance for you.