European Funds for the cooperation of entrepreneurs and scientists

1. Intelligent Development Operational Programme 2014-2020

The Intelligent Development Operational Programme 2014-2020 (IDOP) is the Polish operational programme financing research, development and innovation. It was drawn up on the basis of Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013, as well as on the basis of the Act of 11 July 2014 on the principles of implementation of cohesion policy programmes financed in the financial perspective 2014-2020. The aim of the programme is to improve the innovativeness of the Polish economy as well as to develop cooperation between the science sector and business. A significant amount of 8 613 929 014 euro of European funds has been prepared to carry out these activities.

The IDOP was divided into 5 main thematic segments, called priority axes. Each group is divided into different types of projects and has its own support resources. The priority axes are as follows:

1. Support of R&D works by enterprises
2. Support for the environment and potential of enterprises to carry out R&D&I activities

III.          Support for innovation in enterprises

1. Strengthening research capacity
2. Technical assistance

Within the framework of particular axes, various projects increasing innovation and competitiveness are financed, grouped into appropriate Measures and Sub-measures. Two specific sub-measures focusing on cooperation between entrepreneurs and researchers will be discussed in this article, i.e. Sub-measure 2.3.2 Vouchers for innovation for SMEs and Sub-measure 4.1.4 Application projects.

2. Sub-measure 2.3.2 Innovation vouchers for SMEs

The main objective of this sub-measure is to revitalize and deepen cooperation between the science and economy sectors. The Polish Agency for Enterprise Development (PARP) is the coordinating unit in the process of selecting the financed projects. The funding covers services provided by research institutions to SMEs for the development of a new or significantly improved product, service, technology or new design project.

2.1.        Applicant and service provider

The application for co-financing under Sub-measure 2.3.2 may be submitted by micro, small or medium-sized entrepreneurs within the meaning of Annex I to Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in the application of Articles 107 and 108 of the Treaty. Pursuant to these provisions, the entity conducting business activity, regardless of its legal form, is considered to be an entrepreneur. Micro-enterprises are defined as enterprises which employ fewer than 10 employees and whose annual turnover or annual balance sheet in total does not exceed EUR 2 million. A small enterprise is an enterprise which employs fewer than 50 employees and whose annual turnover and/or annual balance sheet in total does not exceed EUR 10 million. A medium-sized enterprise is an entity with fewer than 250 employees and an annual turnover not exceeding EUR 50 million. The entity applying for co-financing may be only an entrepreneur conducting business activity on the territory of the Republic of Poland confirmed by an entry in the relevant commercial register. The entrepreneur determines in the application itself whether he meets certain conditions to be a co-financing entity.

As indicated above, the purchase of a service aimed at developing a new or significantly improved product, service, technology or a new design project is subject to financing. It should be pointed out here that the effect achieved does not have to constitute a novelty on the global level, but only must be a novelty for the entrepreneur and his activity.

The contractor of such services may be scientific entities within the meaning of Article 2 (9) of the Act of 30 April 2010 on the rules of financing science, which have their registered office in the territory of the Republic of Poland, i.e.:

1) basic organizational units of a higher education institution as defined in the statutes of the relevant higher education institutions, and

2) scientific units of the Polish Academy of Sciences within the meaning of the Act of 30 April 2010 on the Polish Academy of Sciences (Journal of Laws of 2016, item 572, as amended),

3) research institutes within the meaning of the Act of 30 April 2010 on research institutes (Journal of Laws of 2016, item 371, as amended),

4) international scientific institutes established on the basis of separate provisions, operating on the territory of the Republic of Poland,

5) Polish Academy of Skills,

and other, specified in the Act.

2.2.2.     Scope of the grant

In order to successfully apply for co-financing, the value of eligible expenditure indicated in the application must amount to at least PLN 60,000.00. However, this value cannot exceed PLN 400,000.00 – it is the maximum amount covered by co-financing. The intensity of co-financing in this edition amounts to 85% in the case of both micro, small and medium enterprises. It follows that the scale of co-financing is higher than in previous editions of this programme. Accordingly, for the minimum value of eligible expenditure, the co-financing will amount to PLN 51,000.00 and for the maximum amount – PLN 340,000.00.

2.3.        Criteria for the assessment

The submitted application is subject to the evaluation by the Polish Agency for Enterprise Development (PARP) on the basis of a number of criteria, both formal and substantive. In order for an application to be examined in terms of quality and substance, it must first be checked against the formalities for correctness of the application.

First of all, it must be assessed whether the application has been submitted to the competent institution and within the appropriate time limits specified in the competition notice. The applicant’s conditions are further verified. The criteria require that the applicant is not excluded from the possibility of applying for the European funds, e. g. by exclusion on the basis of the Public Finance Act, and that the applicant conducts business activity on the territory of the Republic of Poland. The applicant’s classification as a micro, small or medium sized entrepreneur is also subject to evaluation.

The formal criteria also apply to the project itself. PARP is to verify whether the project is implemented on the territory of the Republic of Poland. The duration of the project implementation period is to be examined – it must be within the designated IDOP time frame, i.e. until 31 December 2023, taking into account that the duration of the project implementation cannot be longer than 18 months. This is a deadline – the final moment of the project implementation is to take place within this deadline, together with the submission of all required reports, and not only the actual cooperation between the entities is to be completed.

PARP is obliged to check whether the object of the project does not concern activities excluded from the possibility of obtaining support (e. g. production, processing or marketing of tobacco and tobacco products, games of chance, mutual betting), as well as whether the project has not been started before the date of submitting the application for co-financing. The correct definition of the amounts of support appropriate for a given type of sub-measure is also verified. Another formal criterion is the compliance with the horizontal principles set out in Articles 7 and 8 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council – these provisions are based on the principles of equal opportunities and sustainable development.

The assessment of the above formal criteria is not subject to evaluation. The assessment is limited to determining whether a given point has been met or not. In order for an application to be admissible on the merits, all the formal criteria must be given a positive opinion, i.e. they must be considered fulfilled.

The first substantive criterion concerns the eligibility of the service provider – the fact whether the service provider is a scientific entity within the meaning of Article 2 (9) of the Act of 30 April 2010 on the rules of financing science (Journal of Laws No. 96, item 615 of August 2010 as amended) is subject to verification.

Another verified element is the project’s compliance with the scope of activities and, additionally, the project’s objective should be justified and rational. This means that the application should indicate sufficiently the usefulness of the result for the entrepreneur and the influence on his development. The rationality of the objective in this point is understood as the opportunity to achieve it from the point of view of the current development of technology and science.

The project must be part of the National Intelligent Specialisation – it therefore belongs to one of the categories indicated in the document “National Intelligent Specialisation”, which constitutes an appendix to the Programme for Enterprise Development adopted by the Council of Ministers on 8 April 2014. Evaluation will be made on the basis of the version of the document valid on the day of the announcement of a new call for proposals including sub-measure 2.3.2.

Eligible expenditure provided for in the application must be justified and rational. In this case, the reasonableness of the applied measures is understood as a particular need and a direct connection with the implementation of the project. The applicant is obliged to indicate the necessity of each expense. The rationality criterion refers to the level of expenditure envisaged. It should be noted here that the amount of expenditure cannot be artificially low either – it is supposed to correspond as accurately as possible to the market value. Minor corrections, already made by the evaluator, are possible at this stage concerning the type and the amount of expenditure.

The last of the substantive criteria to be fulfilled concerns the objective verifiability of the project, i.e. whether the product and the result indicators declared by the applicant express the objectives of project implementation.

The other substantive criteria relate the degree of readiness to implement the project result, as well as the involvement of end users in the process of creating a new or significantly improved product.

Contrary to the formal evaluation, the merit assessment is based on scoring pattern. A maximum of 8 points can be scored in the overall merit assessment. The minimum number of points necessary for a positive project evaluation and qualifying for inclusion in the list of projects recommended for co-financing is 5, with at least 1 point required for each of the first five substantive criteria listed.

The most common mistakes made when submitting the application for co-financing under Sub-measure 2.3.2 are the lack of confirmation of the application submission in the Application Generator (available on the PARP website), inconsistent description of meeting the horizontal EU rules with the declaration, lack of the full name of the service provider (e. g. the name of the university without taking into account the faculty), overly generalised tasks and actions assigned to them, as well as incorrect selection of the National Intelligent Specialisation. Because of these characteristics, the proposals are rejected by the evaluating body in absolute terms. Taking this into account, in some cases it may be helpful to seek professional legal assistance.

2.4.        Deadlines for the submission of applications

The deadline for submitting the application for co-financing is 8 February 2018. In order to intensify the work, the call for proposals was divided into four stages. After the closure of each of these stages, the applications submitted during the closure phase will be processed immediately, without having to wait for the deadline to expire. The closing dates for each stage are: 8 August 2017,9 October 2017,10 December 2017 and 8 February 2018.

3. Sub-measure 4.1.4 Application projects

Application projects are the undertakings consisting in carrying out R&D works (industrial research and/or development works, which may be supplemented with pre-implementation works), carried out by consortiums with the participation of entrepreneurs and scientific entities. The aim of these projects is to increase the scale of using new technological solutions necessary for the development of enterprises and their competitiveness.

3.1.        The consortium as applicant

The competition aims to select projects that contribute to achieving the IDOP’s goals to the fullest extent possible. The application may only be submitted by consortiums comprising at least one scientific unit within the meaning of “research organization and dissemination organization” as defined in art. 2 point 83 of Regulation 651/2014, provided that it cannot be an entity whose sole purpose is to widely disseminate R&D results through teaching, publication or transfer of knowledge, and at least one enterprise within the meaning of Annex I to Commission Regulation (EU) No 651/2014 of 17 June 2014, registered and operating on the territory of the Republic of Poland.

The consortium may not comprise more than 5 entities, with the reservation that the share of eligible entrepreneurs’ costs in the total eligible project costs is at least 30%. Each consortium chooses a consortium leader from among itself, who is appointed to contact the Intermediate Body within the scope of the submitted application. The Intermediate Body in Sub-measure 4.1.4 is the National Centre for Research and Development (NCBR).

3.2.        Financing

The consortium concerned shall be entitled to submit only one grant application. It is worth noting that the change of consortium leader without any other changes in the consortium’s composition will not entitle to submit a new application.

Unlike in previous years, the funding is not granted only for industrial research and experimental development. Subsidies may also concern pre-implementation work, if it is envisaged in the project, i.e. preparatory actions for the implementation of the results of industrial research and experimental development work – the examples of pre-implementation works include the development of implementation documentation, services of a patent attorney or product certification. Financial support for pre-implementation works may be granted only to the consortia being entrepreneurs within de minimis aid for the support of commercialization of scientific research and development work results and other forms of their transfer to the economy, as well as within public aid for SMEs to cover consultancy services. The costs related to pre-implementation work may not exceed 20% of the total eligible project costs.

The amount of funds allocated for co-financing of projects in the contest is PLN 200,000,000,000.00. The allocation of funds in the Mazowieckie Voivodeship was assessed for PLN 14,252,000.00 – the remaining funds are to be transferred to the less developed regions, i.e. other voivodships. Expenditure under the project will be allocated to specific categories of regions in proportion to the number of voivodships in which the consortium members have their registered offices.

The minimum value of eligible costs of a respective project co-financed under the competition is PLN 2 million, while the maximum is PLN 10 million.

The level of co-financing differs for scientific entities and entrepreneurs who are members of a given consortium. This level may amount up to 100% of eligible costs for scientific entities, provided that the project is carried out within the framework of their non-economic activities. Unfortunately, due to such a wide coverage of costs for the scientific unit, the possibility of applying for co-financing in the scope of pre-implementation works was abandoned. The principle is that entrepreneurs are entitled to a subsidy in accordance with the regulations on public aid. These values vary depending on the status of the entrepreneur and the type of research or work undertaken. For example, financial aid of 50% for industrial research and 25% for development work has been earmarked for entities other than SMEs.

A new feature in this edition of the competition is the possibility of entrusting a part of the work to subcontractors. However, the value of the transferred works is limited and may not exceed 50% of the total eligible costs of industrial research and development works incurred in the project by the entrepreneur and 10% of the eligible costs of industrial research and development works incurred in the project by the scientific unit. For pre-implementation works, the limit is 70% of the total costs under de minimis aid incurred by the enterprise.

3.3.        Assessment criteria

The submitted application for co-financing of operations under Sub-measure 4.1.4 is subject to evaluation by the verification unit on the basis of both formal and substantive criteria. Some of the premises are also identical for Sub-measure 2.3.2, discussed above.

Thus, the formal criteria make it possible to assess an application in terms of its submission in the context of the competition itself as well as its completeness. The following formal criteria apply to the applicant. It should be noted that consortium leader and consortium members are considered as the applicant. Therefore, any requirements imposed on the applicant must be met by all consortium members. These criteria concern the possible exclusion from applying for funding, the issue of registration and running a business activity, as well as checking the correct composition of the consortium. The formal premises for the project focus primarily on compliance with the principles of financing, compliance with the policy of equal opportunities and sustainable development. In the case of a positive formal evaluation, the application may be addressed to Phase II of the evaluation. If the application is evaluated negatively, it is rejected, it may, however, be admissible to complete and correct the application once only if it is found that there are formal shortcomings or obvious errors.

The substantive evaluation of the application is divided into two types of criteria. The first type are access (technical) criteria, which are necessary to be met in order to continue the procedure on the application. These are the evaluations concerning the project, its scope in the field of industrial research and development works, and they are a part of the National Intelligent Specialization. The verification also includes the use of intellectual property rights necessary to carry out the work planned in the project, as well as the possibility of proper project implementation. The assessment on the basis of the above criterion is limited to unilaterally establishing whether or not a given condition is fulfilled.

The application is then checked on the basis of the merit criteria, but this time points are awarded for each criterion. Issues such as the adequacy of works to a defined purpose, ensuring proper implementation of the works, novelty of the results (it is worth noting that the result is to be characterized by novelty at least on the scale of the Polish market), market demand for results and profitability of implementation, implementation of results on the territory of Poland and supra-regional character of the project are subject to scoring pattern (assessment based on respective scores). It is possible to be awarded 24 points within the indicated criteria. In order to be granted a positive opinion, the application must be awarded with at least 15 points and reach a minimum threshold of 3 points in each of the first four criteria quoted.

3.4.        Execution of the project and its implementation

The project execution is divided into respective stages of work, which shall not exceed 12 – including at least one stage under experimental development. The individual stages may only be completed by one consortium member. The duration of the project may not exceed three years, at the same time, it may not exceed the final date of implementation of the IDOP, i.e. 31 December 2023.

Subsidies may be granted only on condition that the applicant undertakes to introduce the research results into the entrepreneur’s own business activity by starting production or providing services, granting a licence to use industrial property rights or selling the rights to the research results, within 3 years from the end of the project. The report on the implementation of the test results must be submitted within 30 days of the completion of the implementation. Within one year from the approval of the above mentioned documents by the Intermediate Body, there is prepared the information on social and economic effects resulting from the implementation of research results.

3.5.        Summary

The process of obtaining co-financing under Sub-measure 4.1.4 is subject to a more rigorous evaluation, which results directly from higher financial outlays related to the presented projects. The multitude of criteria and their specific role in the process of verifying an application can constitute a serious barrier for potential applicants. Legal aid may be necessary in certain areas to mitigate the risk of errors and, as a result, to obtain the approval of the decision-making bodies.