The projects submitted to the “Call for Expressions of Interest (Call)” help to form a more accurate picture of the current market, industry and technology conditions and the strategic goals of a company applying to a given IPCEI topic area.

The Ministry of Innovation and Technology expects project proposals from companies registered in Hungary in the following areas:

• Health

After the application deadline an active dialogue takes place with the applicant which consists of hearings and evaluations. Additional documentation and detailed information will then be requested in order to pre-qualify the projects.

IPCEI HEALTH

The Covid19 pandemic has highlighted the importance of the healthcare industry and its operational shortcomings in case of a global emergency. As a result of the pandemic, ad-hoc procurement practices have showcased the importance of short supply chains. Furthermore, it revealed the delicate balance between the health industry and healthcare sector, which has recently been temporarily disrupted in most countries.

The critical role of the healthcare industry has become, which was emphasized in relation to local and global supply chains, and also in government operations. Improvement on some long-existing weak points gained importance, such as pharmaceuticals and pharmaceutical care, improvement of medical devices and the necessary clinical trials and licensing practices related to them, data research and data management regarding treatment needs and manufacturing capacity in order to achieve faster and more accurate designs.

The emergence of modern data services is of the utmost importance in the field of medical care and the antecedent planning as it facilitates not only decision-making processes and logistical tasks but the tracking of treatment efficacy and patient monitoring.

The Health Industry Strategy of The Ministry of Innovation and Technology has identified areas of the health industry that serve as the basis for the IPCEI Smart Health Call:

• pharmaceutical industry
• medical device industry
• biotechnology
• herbal industry
• health tourism
• e- health background industry
• genomics, epigenetic background industry
• bionics

Based on global trends and Hungarian conditions, the healthcare industry provides an ideal foundation for the development of Hungary, as introduced below:

• The healthcare industry meets all the priorities of the national economy, as it has highly innovative and research-intensive areas, high added value, significant, yet partially underutilized foreign market opportunities and a highly skilled, expandable workforce;
• The Hungarian healthcare industry has appropriate facilities, existing and known traditions;
• It is a constantly growing market with a constantly increasing worldwide appreciation;
• Continuous innovation of technologies and continuous reduction of their production costs;
• Rapid and widespread spread of digital technologies, improvement of access;
• Increasing human life expectancy is creating a growing need to improve the quality of the healthy life years, which is expected to be accompanied by ever-expanding solvent demand;
• The need for personalized, fast, home health care;
• The growing need to reduce healthcare spending;
• High income-generating capacity of the sector, high inclination for investment by large international companies;
• The existence of an Electronic Healthcare Service Space ensures the central storage and easy access of patient data, which can later be used for research, analysis and decision support through further development of the system.

The main goals of the development of the health industry are to increase the domestic added value, develop small and medium-sized as well as large companies already operating in the industry, through increasing their competitiveness and encouraging capacity building in innovation.

This call aims to deal with the forementioned situation by identifying companies that plan to implement projects under the Smart Health Innovation Partnership (IPCEI Smart Health).

The four objectives of the IPCEI Smart Health project are:

• Practical implementation of health industry improvements relating to quality of patient care;
• Development of healthcare facilities, infrastructures and services that contribute to currently unmet care needs and respond to a perceived market failure;
• The strengthening of the European Union’s strategic autonomy through the development of innovative production methods,
• Strengthening and expanding the international cooperation of local health industry companies and initiatives. 
  

Project proposals from companies interested in IPCEI Healthcare projects must be realized along the following guidelines:

• Support for modernization and innovation of manufacturing processes in order to reduce the EU's dependence on imports and to increase environmental consciousness in manufacturing processes. The development of production infrastructure will make it possible to increase the competitiveness of the European Union's health industry.
• Improvement of innovative products and software to be used in new supply areas, which predictably will keep increasingly growing in both size and importance, in order to improve the effectiveness and safety of new technologies and to reduce manufacturing costs.
• Developments to support personalized care, precision medicine, medical technology, innovative therapeutic treatments, including projects to promote the interoperability of data generated by medical imaging and other devices.
• Development of strategic (aiding in manufacturing and production) infrastructure and capacities, which increase resilience in case of a potential health crisis.
• Developments and solutions in the field of information technology which benefit healthcare decision-making or aids in the production, development, improvement, research, or logistical processes in the health industry. Furthermore, the creation of databases and digital platforms which in the future will improve available healthcare services, including development, production and distribution.

Background information on the IPCEI Call for Expression of Interest

State aid framework - Legal basis

The legal basis for the grant is approval decision of the European Commission.

“Important Projects of Common European Interest (IPCEI)” is a special instrument for state aid (grant), in accordance with EU regulations, of strategically important projects based on transnational cooperation and serving the European common interest.

In essence, IPCEI project grants are funded from the national budget, but must be approved by the European Commission in advance. This allows for increased aid intensity, as up to 100% of the funding gap can be eligible for subsidization.

The objective of the investment program into the five future technologies (batteries, microelectronics, hydrogen, cloud, health) is to ensure the support of economic and social innovation in the long term, and for Hungary and the European Union to consolidate and develop their position along the strategic value chains, in accordance with the requirements of the power and ecological transitions and the resilience of the value chains. IPCEI aims to support significant and large-scale, cross-sectoral and high-innovation, strategic projects across the Member States that address significant scientific and socio-economic challenges at the European level. Given that they would not be feasible under other frameworks due to the increased technological and financial risks of the project, they require a joint, coordinated effort and transnational public and private investment from several Member States.

Based on the IPCEI communication, the eligibility criteria of aid are the following:

• A stand-alone project, precisely defined in terms of project objectives and implementation conditions, including its participants and funding, or an integrated project that is a set of coherent projects, similar in structure and work program, with the same purpose;
• The project contributes in a clear and identifiable manner to one or more EU objectives, it is essential for the European Research Area, the 2030 climate and energy framework, the trans-European transport and energy networks, and for key EU initiatives and strategies, and it has a significant impact on the Union's competitiveness and sustainable growth;
• The project serves a common European interest as part of a European value chain;
• The project involves several Member States and is co-financed by the beneficiary;
• The project benefits must not be confined to the financing Member States but extend to a significant part of the Union;
• The benefits of the project must not be limited to the undertakings or to the sector concerned but must be of wider relevance and application to the European economy or society through positive spillover effects;
• The project complies with EU environmental, energy security and internal market standards;
• R & D&I projects must be of a major innovative nature or provide an important added value in R & D&I in the light of the- state -of -the -art in the sector concerned;
• Environmental, energy and transport projects should make a significant contribution to the internal market;
• It is not a requirement, but seen as a positive indicator in the assessment if:
  • The project allows the participation of a broad range of Member States and partners representing a variety of sectors, types, company sizes, etc.;
  • The governance structure of the project involves the Commission — or any legal body to which the Commission has delegated its powers — and several Member States;
  • The Commission and the Member States are involved in the formation of the project management structure;

Compilation and submission of the preliminary application and the application

A preliminary application and a subsequent application must be submitted for each project.

For the assessment of the preliminary application, a 1–2-page presentation of the project proposal is needed, which includes:

• details of the applicant, industry, and field of activity;
• which of the 5 subject areas the application targets;
• market failure and raised issues;
• the solution offered;
• the cross-border elements of the project and its European significance.

The purpose of the preliminary application is required because Hungarian companies are unfamiliar with IPCEI constructions and only projects appropriate for the IPCEI framework will be subject to a deeper analysis. If the preliminary application is approved by the Ministry of Innovation and Technology, the company must also submit its application.

The application must be comprehensive and contain the following:

• Introduction of the applicant(s):
  • name of the company,
  • address,
  • type of organization (corporate group, mid-capitalization company, SME),
  • activity, description of activity,
  • contact details (surname, first name, position, e-mail address, telephone number).
• General description of the project:
  • name of the project,
  • background information, introduction of user needs and target markets,
  • description of the required work and use case,
  • the current state of the technology, proof of the innovative nature of the application, that is:
  • tasks required to overcome identified barriers,
  • the place of implementation of the project,
  • the contribution of the project to policy goals,
• showcase of potential partners and resources mobilized for the implementation of the project,
• if relevant, the partnership aspects of the project
• presentation of the planned schedule –
• a brief presentation of the business strategy and a preliminary business model,
• presentation of the budget and financing plan,
• amount of aid required,
• justification of the incentive nature of the requested State aid,
• indication of applying for an IPCEI leadership role, or just direct partner participation,
• a description measures planned for the protection of knowledge to be created under the project but not intended for sharing,
• presentation of the initiatives planned as a result of the project in the long term, including:
  • the possible effects of the project on the company;
  • the extent to which the project has a structuring role in the applicant's medium and long-term strategy.

In the case of IPCEI projects, the working languages are English and Hungarian, thus, preliminary applications and applications must be submitted in both English and Hungarian. The preliminary applications must be submitted in an electronic format to the Ministry for Innovation and Technology at ipcei@itm.gov.hu until 30 November, which will be followed up with the applications.

Incomplete preliminary applications and applications not eligible for assessment will not be judged and must be resubmitted.

Types of applications / expected projects

This call for expression of interest enables the state to identify those players and projects that address the objectives identified as a priority by the acceleration strategy. It expects significant, innovative projects of a size, at any stage of maturity, with or without a partnership, that enables value creation at the Hungarian and / or European level.

In order for the authorities to be able to assess the interest expressed by the private actors, the applicants' proposals must meet the following expectations:

• The project
  • must have an innovative aspect to ensure the long-term development and implementation of products, technological processes, or innovative services,
  • it must be consolidated as a priority, connecting the solution provider and the market, or at least present a sustainable economic model with identified markets;
  • it should include the development of a competitive industrial offer with a significant innovative component.
• The applicant must carry out the project at a site in Hungary, enabling the development of an industrial supply with a high degree of immunity from extraterritorial regulations outside Europe which guarantees compliance with the GDPR.
• Applicant should focus on partnerships: they should identify Hungarian and European partners who can participate in a complementary or synergistic way in the activities of development during the project; in the case of academic actors, the project must be eligible for co-financing by one or more companies; however, it is also possible to present strictly individual projects.
• State aid can only be granted if the applicant can convincingly demonstrate that the project cannot be financed or implemented without state aid under market conditions. The applicant must demonstrate, taking into account the technical and economic risk, a funding gap that justifies the necessity and appropriateness of state aid.
• The applicant must be able to demonstrate previous work in the relevant field and provide evidence that the project differs significantly from the current state of the technology.
• The applicant must demonstrate the measures it has already taken or intends to take to ensure the protection of information mobilized under the project not intended to be shared.
• Training (initial or further training) / competence development projects must demonstrate their ability to meet the labour market needs of the healthcare industry sector.
• The applicant is obliged to pay full investment costs (CAPEX) in Hungary and is obliged to keep these investments in Hungary.

Projects in the mass production phase, with the exception of the first industrial deployment phase, and in the commercial use phase are not eligible.

Candidates applying to participate as project leading companies in an IPCEI must explicitly indicate their intention. Unlike general state aid rules, the IPCEI framework allows Member States to cover R & D & I costs up to the first industrial deployment, which allows the development of new products or services with strong innovation intensity or even the introduction of a fundamentally innovative manufacturing process.

For those applying as project leading companies in an IPCEI, the following are of particular importance:

• The technical project must represent technological breakthrough compared to the current state-of-the-art in the field and present solutions that contribute to the creation of a Hungarian and /or European value chain.
• The applicant must make dissemination commitments in the context of the financing of the work: the project must enable the knowledge acquired to be widely disseminated, regardless of whether it is protected by a title or intellectual property rights. Dissemination must take place throughout the European Union, beyond the project partners. The mechanisms for disseminating knowledge should be described in detail. Results protected by a title or intellectual property rights shall be disseminated under fair, reasonable and non-discriminatory conditions on market terms.
• The project will focus on R&D and may include the phase of the first industrial deployment of new technologies developed under the project (“the first industrial deployment refers to the expansion of experimental facilities or new equipment and facilities, and the testing phase, including the post-pilot phase, but not mass production or commercial activities. ").
• The project must be developed in partnership and demonstrate collective work with structures in other countries participating in the IPCEI. Projects may only be financed by the Hungarian authorities if at least one other EU Member State participates, and the scope of the project meets the criteria of Article 3 of the IPCEI communication.

It is important to emphasize, especially for candidates applying as leading companies for the IPCEI,that this role, if they are ultimately selected, also means accepting the significant restrictions that apply to them:

• organization, coordination, and management of the partner consortium (references in this area may be requested during the selection phase);
• participation in the creation of a joint program (the Chapeau text) under the supervision of the participating Member States, involving all selected companies from all Member States;
• drawing up a specific application with all the participating Member States for authorization by the Commission as part of the notification procedure under Articles 107.3 (b) and 108 of the Treaty on the Functioning of the European Union (TFEU);
• submitting all documents in English (notification, then report).

Eligibility criteria

Eligibility conditions

1. The application

• - it must be sent in time, in electronic form to the Ministry of Innovation and Technology by e-mail at the address: ipcei@itm.gov.hu;
• the application must be submitted in the complete required form (see: compiling and submitting the application).

2. The applicant

• The applicant can be:
  • A company with its registered office in Hungary (including public-interest groups, corporate groups, associations, industrial or commercial institutions);
  • research institutes;
  • a consortium of one or more companies and / or one or more research institutes
• The applicant must be connected to the healthcare industry value chain in Hungary and Europe in an authentic, clear, and identifiable manner.
• The companies which are under founding procedures are also eligible. In such cases the application must be submitted by prospective owners.
• The applicant must not be subject to any obligation to repay any aid based on a decision addressed to Hungary to recover aid deemed illegal and incompatible taken by the European Commission;
• The applicant must not be under scrutiny according to the European regulations (GEBR, 651/2014);

Proposals that do not meet the eligibility criteria will be excluded from the selection process without the possibility of appeal.

3. Selection procedure and criteria

Eligible applications will be evaluated, and the best ones selected on the basis of the following criteria:

• relevance to general European Union objectives and expectations;
• socio-economic impact and expected benefits;
• the innovative nature and added value of the developed products or services;
• the ability to strengthen strategic autonomy in the most critical areas for sovereignty and European competitiveness;
• linking to the challenges of protecting the nation's scientific and technical potential;
• the quality and relevance of the proposed partnerships;
• the quality of the presented economic model as well business and financing plan;
• environmental effects and, if any, positive effects from an ecological point of view;
• linking to the challenges of protecting the nation's scientific and technical potential.

In addition, for projects with a territorial component, the involvement and support of the local communities concerned is favoured during the selection process.

The National Research, Development and Innovation Office, in close co-operation with the Government, checks the eligibility of applications and carries out an examination of projects as part of the selection procedure. Regional public offices may also be involved to provide advice on expediency, especially for projects with a strong territorial dimension.

In the case of eligible projects, the examination will be carried out according to the technological, economic, policy, legal and expediency criteria of the applications in order to pre-screen the applications.

Based on the opinion of the committee, the Ministry of Innovation and Technology decides which applications are accepted. If necessary, applicants may be invited to a second hearing or they can raise questions in writing after the hearings.

Confidentiality and communication

The Ministry of Innovation and Technology ensures that documents be transmitted under the call in compliance with the strictest confidentiality obligations and be only disclosed within the framework of MIT's expertise and management. All application materials must be treated with the utmost confidentiality.

The state reserves the right, if necessary, to provide information on the general goals, challenges, and results of the program, using anonymous examples and respecting trade secrets.

Finally, the beneficiaries of state aid under this IPCEI are subject to transparency and reporting obligations to the Government and the National Research, Development and Innovation Office, which are necessary for the ex-post evaluation of projects.

Contact and request for information

Ministry of Innovation and Technology and the National Research, Development and Innovation Office staff are available to assist applicants in preparing their applications.

For information on the administrative process (drawing up the application, online tasks, the amount of state aid), please contact our colleagues by email at: ipcei@itm.gov.hu or by phone:

• Konrád Keresztes +36 30 746 8587
• Bence Volosinovszki +36 30 117 5695
• Géza Kovács-Dobák +36 30 570 3274