The EU’s flagship R&D funding programme is supposed to be welcoming to small businesses. That’s not how Hugh McGowan found it.
“Hello, have you heard of Horizon 2020?”
“Do you mean NASA’s mission to Mars?”
I explained that, rather than selling space tourism, I was seeking large IT companies to join my ICT innovation consortium to apply for EU funding. The conversation continued:
“Let me get this straight. You want my best IT people to work for three years without profit because it has to be done at cost?”
“Basically, yes.”
You can imagine how that went down.
But I’m getting ahead of myself. I run a small Belgium-based company working at the interface of IT and telecommunications. Fifteen years ago, I spent three years seeking funding across four European countries for what could have been the world’s first open platform for mobile apps.
There is no room here to recount the full misery of the rejections I received from European venture capitalists and national public funds alike. That platform never happened, but instead the work led to the Chinese technology giant Huawei hiring me as its first European R&D staff member for IT.
In 2012, I left Huawei to pursue my own innovation. Two years later, I had specified an IT legacy integration platform based on artificial intelligence and an app to run on it. For R&D support, rather than get back into the bureaucratic obstacle course of national funding, I turned to Horizon 2020—a programme apparently welcoming to small and medium-sized enterprises (SMEs).
After reading hundreds of pages online, I targeted two funding calls. For the platform, there was ICT-30, an Internet of Things funding stream, which requires an international consortium. For the app, ICT-37-SME Phase 1
would fund a feasibility study. This could be done solo.
It requires preparation and cunning to persuade a large organisation to join an innovation consortium with a micro-SME like mine—defined as having fewer than ten employees. IT companies don’t like problems, or risky research projects. You need to make it so easy for them they can’t say no.
So you volunteer to do all the travel; you re-write the memorandum of understanding and non-disclosure agreement until they are happy; you try to calm their fears of bureaucracy; you dangle the carrot of grant funding; and you grovel.
When I eventually persuaded one big company to join, others began to take me seriously. Assembling the whole consortium took six months of work and abuse of all my personal contacts.
Then came a shock. The big fish saw their job as mainly filling in section four of the grant application—the description of participants—plus a review of the funding request. As the smallest fish I was expected to write the entire funding request. With the deadline fast approaching, I worked alone on the funding request for 16 hours a day, seven days a week, for two months.
Any micro-SME writing a Horizon 2020 application faces a subtle problem; it must satisfy reviewers while not scaring away its consortium partners.
Too much focus on basic science and open-ended studies and the big fish get nervous and swim away—as one did. Too little focus on basic science and you won’t get funded. It was a tightrope I had to walk while trying to keep the consortium intact, even as the big fish began fighting among themselves.
In the end, the consortium held together. We ended up with a proposal that I thought was genuinely innovative and relevant to industry, with a sound business case and real prospects for creating jobs and growth. We received a good evaluation but were turned down.
Our plan to use open calls for specific aspects of the project was criticised—unjustly, we feel, as this accounted for less than 10 per cent of the budget. Perhaps I didn’t hit that right balance of science versus industrial relevance. We’ve lodged an appeal but without much expectation. And besides, the ICT-30 budget for 2015 was oversubscribed by a factor of 10.
My application for feasibility study funding from ICT-37-SME was similarly unsuccessful. I learned from the evaluation result that the only way to fill in the forms properly is to first carry out a pre-study.
This means a micro-SME must: learn the ins and outs of Horizon 2020; fund a pre-study; apply for phase 1 funding; do a feasibility study; apply for phase 2 funding; and then run the actual project. Even massive companies abandoned this tortuous approach to IT R&D in the 1980s.
After a year of stress and an estimated €100,000 in costs over the last year, I have regrettably concluded that micro-SMEs in the IT sector are better off steering clear of Horizon 2020. The venture capitalist who smiled and told me that “European funding is like the Premier League”—expensive to play and with very few winners— was right all along.
Today my European project is dead in the water and, like before, Huawei is interested. Plus ça change.
Hugh McGowan is the founder of IT company Eventsys.
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This article also appeared in Research Europe