Funding for research and development (R&D): SMART Track

Funding for research and development (R&D): SMART Track

If you are reading this description, you probably already know something about research and development (R&D) projects. You might recall the historical calls for proposals for the so-called Fast Track organized in the past by the National Centre for Research and Development (NCBiR). Our team not only prepared the application documentation for this competition but also implemented its own “corporate” R&D projects. In the current EU financial perspective 2021-2027, the “crown jewel” of R&D competitions, and the successor to the Fast Track, is the SMART Path. If you haven’t had any prior experience with R&D projects, we’re pleased you’ve read this far. From this point, we present the rules of the SMART Path, both for those familiar and unfamiliar with the essence of R&D projects.

Who can take advantage of SMART Track?

Long story short: anyone conducting business activities in the territory of the Republic of Poland, confirmed by an entry in the appropriate register: KRS or CEIDG. There is no requirement or bonus for previous activities. The applicant may belong to the small and medium-sized enterprises (SMEs) sector – in which case the documentation is submitted through the Polish Agency for Enterprise Development (PARP) IT system. In other cases, the organizer of the recruitment is NCBiR. The SME sector enjoys the privilege of a higher level of funding, and within SMEs, the percentage of funding depends on the status of the micro, small, or medium entrepreneur. Complicated? We will explain everything at the meeting. Nevertheless, the SMART Path competition is probably the most “democratic” competition, where both startups implementing their first R&D projects and large enterprises can obtain funding.

We discussed the outline of the third edition of the SMART Path during our webinar:

What can be financed?

And now a slightly enigmatic term appears: research and development work. But let’s take it one step at a time… SMART Track makes it possible to implement the following modules:

• R&D
• implementation of innovations
• R&D infrastructure
• digitalisation
• eco-friendly enterprises
• competences
• internationalisation.

The above modules can be included in a single funding application, making the SMART Path a very practical one-stop shop. Entrepreneurs can build their project from several available modules, adjusting the scope of available funding to the project’s needs. Importantly, an obligatory module that must be included in the application is either R&D or Innovation Implementation (for SMEs) or the R&D module (for large enterprises).

What does this mean?
The condition for obtaining funding under the SMART Path is to conduct research and development work or implement its results. Additionally, the beneficiary can choose to expand the project with additional activities covered by one or more optional modules, such as the internationalization module, which aims to support the company in selling products outside Poland by, among other things, financing the participation of company representatives in international trade fairs. In other words, the SMART Path can enable the purchase of equipment, machinery, or even an entire production hall, as well as help finance the acquisition of software or the salaries of the team working on software development. However, these expenditures must be part of an R&D project carried out by the entrepreneur, its implementation, or part of one of the optional modules.

What is research and development work?

And here we enter the world of R&D, which, despite its rather non-obvious name, is a very interesting way to transition from an idea to a project. There are very few types of activities that cannot be the subject of research and development. Here is the simplest definition of an R&D project: if we have identified a problem in our current or planned business practice and, as far as we can see, there is no solution to this problem within the territory of Poland, this is a good starting point for an R&D project.

We wouldn’t be here if the entire process of defining an R&D project and securing its funding were that intuitive, but let’s start by demystifying the common perception of R&D projects as scientists in white lab coats carefully pouring colorful liquids into test tubes. If the above sounds overly optimistic to you, we recommend looking at the lists of past R&D projects that have received EU funding. Upon your request, we will indicate where to find previously funded projects close to your industry.

Formally, an R&D project for which we would like to obtain EU funding should meet the minimum criteria for an EU project, namely, it should be:

• have a defined time frame
• be unique
• be complex, in addition to having:
• a defined goal
• human and financial resources allocated.

To the above list, we then add the goal of creating new knowledge or inventing a new application. In the case of the SMART Path, research and development work should lead to the development of a product or process innovation at least on a national scale. This goal is achieved through testing and measurements, which in short form the R&D agenda. This is all it takes (if we already have a research team and experience in carrying out R&D projects) and… quite a lot (if we don’t have a team or experience). In both cases, we carefully listen to your starting point and help plan the entire process of creating the R&D documentation.

Magdalena Adamczuk, head of the EU Grants Department at Tax & Tech Kraft, explained how we assist in financing R&D projects, using the example of automation and robotics processes.

How much funding can I obtain for the R&D module?

The competition operates in two editions, one addressed to large enterprises and the other to the SME sector.

The funding pool available for large enterprises amounts to a total of PLN 1.3 billion (in the “open” category and for projects aimed at accessibility), with the maximum funding for a single project reaching up to PLN 70 million.

An even larger pool, totaling over PLN 2.3 billion (in the “open” category and for projects aimed at accessibility), is available for the SME sector. In this case, the maximum funding for a single project is PLN 50 million.

For both the SME sector and large enterprises, the minimum value of eligible costs (i.e., costs covered by non-repayable grants) has been set at PLN 3 million.

And here comes the most important question regarding amounts. What is the required own contribution? There is no single answer. The level of funding for individual expenses within the SMART Path depends on the size of the enterprise and the category of expenditure. Generally speaking, the maximum funding for the research component is 80% of eligible costs, while for the development component it is 60% of eligible costs (regardless of the voivodeship in which the project will be implemented).

Application Deadlines

Applications for the SMART Path are organized annually, allowing you to plan your project and its financing well in advance. In 2024, the application period will start on June 27 and end on October 24. Our experience indicates that preparing a good application requires at least 1.5 to 2 months of fairly intensive work by R&D departments and our consultants. Therefore, it’s best not to wait until the last minute.