The President of the NRDI Office encouraged businesses to “take courage to innovate and apply” as they can get 60% funding for their development ideas. He also disclosed that the projects funded from the research fund set up because of the coronavirus crisis “are all performing well, such as the Hungarian manufacturing of the Favipiravir medicine which proved to be effective against the coronavirus in Asia”.
Portfolio: The government has approved the programme strategy of the National Research, Development and Innovation Fund. This includes a HUF 53 billion call package. What are the main elements of the package and what lessons have been learn from previous calls?
Zoltán Birkner: By approving the programme strategy, the government greenlit this year’s plans for the competitive funding of the entire research, development and innovation (RDI) segment, which means a total budget of HUF 145 billion. This provides funding to basic and applied research, including priority topics for the economy and society, and the stimulation of business innovation. Most of the calls forming part of the recently opened HUF 53 billion package focus on supporting innovation. The Support for Market-Driven RDI Projects call is targeting innovators that have a clear vision for the final outcome of their innovation, that is, the creation of a new product or service. Importantly, the applicants have to partner with universities, research institutions and international partners, and cooperate with other RDI performing businesses. The main message of the call is, therefore, that we expect applications that are based on professional collaboration and will result in new marketable products or services.
Did you manage to get the message through? How was it received by the stakeholders?
This year’s call was surrounded by very high expectations, which could be felt even after the opening. This year, we have made it even more simple to apply: the submission stage has been broken down to two steps. First, only the technical description and the financial plan of the projects are required, which demands much less effort from the applicants than the submission of the complete documentation. The latter is only required from applicants who have a chance of success based on their project ideas. This encourages even the smallest entities to participate.
How did that affect the interest of applicants?
In less than a week the applicants requested over HUF 100 billion in total, and we have made this figure available at our website, updating it in real time. This is important because we reminded the applicants when the call was opened that we would close the application window when the requested funds exceeded the total budget by two and a half times. The excitement shows that the market really needs a funding scheme like this, so we are planning to reopen it in September.
So, will there be another chance for stakeholders to apply?
I consider it my personal mission to give some kind of support to all viable, market-oriented, useful innovations. So, the funding scheme is already on the drafting table, but the details are still under negotiation. My goal is to finance the next round of the call from new sources, without having to reassign funds.
Who will be eligible to participate in this second round? Those who have missed out on the previous one, or who were rejected in the preselection step?
The call will be fully open to competition again.
Next to the “Support for market-driven RDI projects” call, another funding scheme has been launched named “SME Start Innovation”. What is this about and who are the target audience?
Every year, there are around 1,000 businesses that are competent in innovation and experienced in the application for funds. Our goal is to attract new participants to the innovation ecosystem; entities that have not received RDI funding in recent years. Our SME Start Innovation call offers HUF 10 to 20 million for the implementation of good ideas in a simplified application procedure. They are beginners in innovation for now but can later become central players in the innovation ecosystem. A micro-enterprise, for example, can be made more competitive, more efficient and more profitable by enabling it to upgrade its technologies or hire new professionals. These funding scheme offers a 60% funding intensity, that is, a HUF 30 million project would get HUF 18 million in funding from the state. Funding requests are admitted as long as the HUF 20 billion budget lasts.
What are the experiences so far? How open are businesses to spend on improving efficiency and transforming organizational processes when many of them are preoccupied with daily survival?
Surviving the crisis and thinking about efficiency go hand in hand. Perhaps, this makes the call not so overwhelmingly attractive, but it is continuously available and there is no need to close it as a matter of urgency, like we did in the case of the call for market-driven innovations. This way the applicants can think over their options and their chances. It is very important that everyone should take courage to innovate and apply for funds. Our goal is to get this idea through to the smallest settlements and the smallest businesses of Hungary.
Can small companies and startups expect more funding opportunities? Whether under the SME Start Innovation call or in any other form?
I’ve made a special point of boosting the Hungarian innovation system and this requires new participants. Perhaps, this is not the weight class that will achieve ground-breaking innovations but a HUF 10 to 20 million funding opportunity for development can be a great help for most Hungarian SMEs. The formula is simple: they need us, and we them.
What were the main directions in helping the innovation ecosystem in the past four month of the coronavirus crisis?
At the initiative of László Palkovics, Minister for Innovation and Technology, a COVID Fund was set up to finance readily available domestic innovations that can help to fight the coronavirus. This HUF 3 billion fund is managed by the NRDI Office. Around 100 project ideas were submitted, and a few dozens of them were selected for funding very quickly, and all of them are performing well. The Hungarian manufacturing of the Favipiravir medicine, which proved to be effective against the coronavirus in Asia, is a good example here.
As for the NRDI Office, we have rapidly taken action in four areas to ensure the sustainability of the funding system. Perhaps the most important was to accelerate the disbursement of advances: over ten billion forints were paid out in a month which was a great help to businesses. Second, we eased the administrative burden on beneficiaries. The third action was to extend the project periods so that beneficiaries can rearrange their schedules. As the fourth action, we facilitated the flow of information by launching a new communication channel called RDI HOTLINE. But we also launched a new professional programme, the COVIDEA ideas and startup contest, which has become so popular that a recent ministerial decision has doubled its original budget.
What was the benefit of these actions for the Hungarian innovation ecosystem?
It was fantastic to see how incredibly fast market players, that had difficulties in coming to terms with each other, partnered up in times of trouble. We have witnessed the creation of a completely new and purely Hungarian developed ventilator, the start of drug and vaccine development, or the elaboration of a scientific measurement method from scratch.
Will the COVID Fund be enough to finance the many promising projects?
All funds have been committed but the government has greenlit a completely new fund called “Investing in the future”. The aim is to translate the research results achieved in the first round into a commercially viable product. In the meantime, HUF 7 billion has been earmarked for admitting new ideas within the programme strategy, in continuation of the COVID Fund.
According to your previous communications, HUF 62 billion out of this year’s HUF 62 billion RDI budget will be disbursed to the beneficiaries already in this year, so that much new RDI money will enter the economy. According to your present knowledge, will this change in any way?
The amount remains unchanged because the HUF 40+12 billion funding is already available in the market. As the budget of RDI calls have increased significantly compared to the previous years, to HUF 145 billion, universities and research institutes will have much more room for manoeuvring. As for the business sector, the vast majority of funds under domestic and international calls, as well as a huge part of the COVID Fund have been disbursed to market actors. For universities and research institutions, we have recently announced the new integrated form of the Thematic Excellence Programme and the Excellence Programme for Higher Education Institutions, with a total budget of HUF 44 billion.
The government has made it clear many times that it considers it a strategic goal to increase R&D expenditure to 3% as a percentage of the GDP by 2030. What does it take to achieve this goal?
We have to increase public R&D expenditures, gradually raise the annual budget of the NRDI Fund and make the utilisation of RDI funds more efficient. The next programme strategy is already on the drawing board, and I am optimistic about it. The aim is the same: to increase R&D expenditures to 3% as a percentage of the GDP by 2030. But this is not an end in itself. We do all this to propel Hungary to the top five most livable country in Europe by the end of the decade.