What exactly is KMU-innovativ?

KMU-innovativ is the leading funding programme of the Federal Ministry of Education and Research (BMBF) for SMEs. It is specifically designed to support small and medium-sized enterprises (SMEs) in Germany in the realisation of innovative projects. Research institutions can also be funded if they cooperate with an SME.

The most important key points of the KMU-innovativ funding programme are:
  • Funding is available for projects from ten different areas such as bioeconomy, electronics and medical technology.
  • The funding covers various types of costs such as personnel costs, proportionate investment costs, material costs and costs for contract research.
  • SMEs can receive a funding rate of up to 80% depending on the subject area, company size and co-operation network. Research institutions receive up to 100% funding. In the bioeconomy technology field, even large companies can receive funding of up to 25% in collaborative projects.
  • The project duration is usually 2 or 3 years (depending on the technology field).
  • Companies have the opportunity to submit project outlines on various funding priorities twice a year.
  • The application process is based on a competitive procedure in which the best outlines are invited to submit an application.

infographic-funding programme-kmu-innovativ-overview

The KMU-innovativ funding programme at a glance

 

Please also read our blog article "KMU-innovativ: You need to know about this SME funding programme" for a concise summary.

 

Objectives of the KMU-innovativ funding programme

The programme pursues the overarching goal of strengthening the competitiveness of SMEs and promoting their innovative strength. Financial support is intended to enable companies to carry out research and development projects, implement new technologies and research innovative products or services.

The funding serves as a financial incentive to reduce the risks involved in realising new ideas and to stimulate the spirit of innovation in the German economy. With a clear focus on promoting R&D, the programme helps SMEs to develop their innovation potential and thus operate successfully on the market in the long term.

 

Who is eligible for SME-innovative funding?

To participate in the programme, you must be a small or medium-sized enterprise (SME). According to the EU definition, companies are considered SMEs if they have fewer than 250 employees and either an annual turnover of no more than 50 million euros or an annual balance sheet total of no more than 43 million euros. The EU's SME criteria also apply to KMU-innovativ. They serve to identify companies which, due to their size and structure, require special support in order to realise innovative projects. Regardless of the sector or field of activity, companies have the opportunity to benefit from funding and support services within the framework of "KMU-innovativ" in order to successfully realise their innovation projects.

Medium-sized companies that do not exceed 1,000 employees and an annual turnover of 100 million euros at the time of application (including affiliated or partner companies) can also submit an application. Depending on the field of technology, this is possible as an individual project or as part of a joint project.

Universities and non-university research institutions are also eligible to apply as part of a consortium, as are large companies, regional authorities, associations, organisations and clinics for individual fields of technology.

 

Are there any specific requirements?

Eligibility depends on various factors, including the following:

  • Size and structure: the company must be classified as an SME according to the EU definition, which means that it must fulfil a certain number of employees and turnover or balance sheet total criteria.
  • Creditworthiness: The company must be able to raise its own contribution.
  • Innovation project: As an applicant, you must submit a specific innovation project that meets the criteria of the funding programme or the technology field. This may involve research into new products, the introduction of innovative technologies or the implementation of research and development activities.
  • Application procedure: This is a two-stage application procedure. Firstly, a project outline must be submitted by the respective deadline. The best project outlines will be invited by the project organiser to submit an application. They must go through the application process in accordance with the guidelines of the funding programme and submit all the necessary documents.
  • Compliance with the funding conditions: Companies must ensure that they comply with all conditions and requirements of the funding programme, including using the funding in accordance with the guidelines and fulfilling reporting obligations.
  • Key topics: Innovation projects must be aligned with the main themes of the programme and come from the following technology fields:
    1. Bioeconomy
    2. Biomedicine
    3. Electronics and autonomous driving; High Performance Computing
    4. Medical technology
    5. Information and communication technologies
    6. Interactive technologies for health and quality of life
    7. Climate research
    8. Materials research
    9. Photonics and quantum technologies
    10. The future of value creation

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Eligible costs for KMU-innovativ

With KMU-innovativ, various types of costs associated with the innovation project can be eligible for funding. Typically, eligible costs include

  • Personnel costs: The salaries and wages of employees who are directly involved in the innovation project can be claimed as eligible costs. Employees include, for example, engineers, researchers and other specialists working on the development and implementation of new technologies or products.
  • Costs for instruments and equipment, insofar and as long as they are used for the project. If they are not used for the entire duration of the project, the reduction in value is considered eligible.
  • Costs for contract research, knowledge and patents acquired directly or under licence from third parties, as well as costs for consultancy and equivalent services used exclusively for the project.
  • Additional overheads and other operating costs: These include materials, consumables and similar items that are directly required for the project.
  • Travel costs: Expenses for travelling in connection with the innovation project can be funded under certain conditions.

How high are the funding rates?

The amount of funding for an innovation project also depends on the applicant. The funding rates vary depending on whether the applicant is a company or a research organisation:

The following funding rates apply for small and medium-sized enterprises (SMEs) with up to 250 employees and medium-sized enterprises with up to 1,000 employees:

  • 25 % for experimental development
  • 50 % for industrial research

Depending on the field of technology, this funding rate can increase to a maximum of 80%:

  • 10% for medium-sized companies (up to 250 employees and € 50 million turnover)
  • By 10 to 20 % for small companies (up to 50 employees and € 10 million turnover)
  • By 15 % if other criteria relating to the consortium are met.

Start-ups that fulfil the SME definition generally benefit from the same funding opportunities.

Research institutions and universities generally receive a higher funding rate of up to 100% of eligible costs. The higher funding rate reflects the contribution they make to innovation and research. In the case of non-commercial research projects, they also receive a project lump sum of 20% and can therefore achieve a funding rate of up to 120%.

As a general rule, the majority of the funding requested for the overall project should go to the companies. In some fields of technology, a maximum joint funding rate is also defined.

 

The maximum funding amount for KMU-innovativ

There is no fixed upper limit for funding under KMU-innovativ. The maximum funding amount for an innovation project can vary.

To date, the KMU-innovativ funding initiative has approved funding totalling almost 2 billion euros for more than 2,700 individual and collaborative projects. According to the Federal Ministry of Education and Research (BMBF), almost 4,400 small and medium-sized enterprises are involved in these projects.

 

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Two-stage application process

The application process for KMU-innovativ has two stages and starts with the submission of a project outline by the deadlines of 15 April and 15 October. If the outline is evaluated favourably, an application for funding must then be submitted.

The decision for each stage is normally made after a few months. Once you have received your funding decision, you can start your project.

infographic_process-kmu-innovativ-programme-for-sme

SME-innovative application: This is how the application process works.

 

Stage 1: Submitting the project outline

Twice a year, companies have the opportunity to submit their project outlines to various funding programmes. The project outline is a brief summary of the planned innovation project and should contain the most important aspects such as objectives, methodology and expected results (the structure is specific to the technology field and should be adhered to).

After submission, the outlines will be evaluated by the project organiser in order to select the most promising projects. Those companies whose project outlines have been selected will receive an invitation to submit a detailed application. As a rule, you will be informed of the selection 2 to 3 months after submitting the project outline.

 

Stage 2: Submission of the funding application

Companies must prepare a detailed funding application that includes all relevant information about the project. This includes a detailed project description, a detailed financing plan and a timetable for the realisation of the project.

The applications submitted are assessed by expert committees consisting of specialists from science and industry. These review the applications in terms of their scientific quality, innovative content, feasibility and potential to strengthen the competitiveness of companies.

Once the evaluation process has been completed, the successful applicants receive a grant notification that enables them to launch their project. A decision on approval is usually made within 2 to 3 months of the application being submitted.

 

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Advice on all aspects of KMU-innovativ

If you are interested in the KMU-innovativ funding programme and are seeking the support of a business consultancy, you should pay attention to the following when selecting your service provider:

  • Comprehensive advice: Rely on advice that covers all aspects of the funding programme. From the initial idea to the project concept through to the application and project implementation, you should be supported by your funding consultancy in every step of the process.
  • Expertise and experience: An experienced consultancy firm has a wide range of expertise in the field of innovation funding. The experts know the requirements of the funding programme and can develop tailor-made solutions for the individual needs of their clients.
  • Efficient process: With professional help, the application process can be organised smoothly. Potential risks are minimised and the chances of success when applying for the funding project are maximised.
  • Network and cooperation: A good management consultancy brings its clients together with potential cooperation partners for joint innovation projects. Pay attention to a large network of potential partners from industry and research.

You are welcome to take advantage of our expertise as an experienced innovation consultancy and get advice on KMU-innovativ in a free initial consultation.

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Success factors for the approval of funding

 In our experience, there are a number of success factors for a positive decision on the outline and also on the application.

  • Firstly, these include the quality and innovative content of the submitted project. Innovation projects that offer clear added value for the economy and society and develop innovative solutions or technologies have a better chance of receiving funding.
  • The technical and financial feasibility of the project as well as the experience and expertise of the companies and research institutions involved are also assessed.
  • The strategic orientation of the innovation project, its contribution to strengthening competitiveness, the benefits for the location and the sustainability of the planned innovation play an important role. If the project has a long-term impact, it is more likely to be funded.
The decision to approve funding is based on a comprehensive assessment by expert committees, which evaluate the submitted projects based on these criteria and select the most promising projects.

 

Frequently asked questions (FAQ)

Is the KMU-innovativ funding programme open to all topics?

The KMU-innovativ funding programme is not open to all topics. However, KMU-innovativ covers a wide range of topics in so-called technology fields. They aim to drive innovation in various sectors. The technology fields covered by this funding programme are as follows:

 
Are there any deadlines that need to be observed when submitting an application?

There are two deadlines per year: project outlines can be submitted by 15 April and 15 October. These deadlines are fixed and provide planning security.

 

How long does it take on average for a funding application to be processed?

The procedure for the KMU-innovativ funding programme is considered fast. The binding deadlines for the submission of outlines and the prompt processing mean that applicants can plan well. They receive notification quickly: according to the BMBF, it takes 2 to 3 months in each application stage to receive feedback on whether a positive decision has been made.

 

What documents must be provided in the application process?

In the application procedure for KMU-innovativ, companies and research organisations must provide a number of documents. The application procedure consists of two stages and is divided into a project outline and a funding application:

The project outline comprises 10 or 12 pages in which the planned project is described in detail. It contains the objectives, methodology and expected results. The outline also includes a financing plan, a timetable for the implementation of the project, information about the partners involved and their competences as well as an exploitation concept. Depending on the subject area, further subject-specific chapters may be required in the project outline.

In the funding application, the contents of the project outline are concretised and a separate application is submitted by each project partner on a cost basis (AZK application) or expenditure basis (AZA application). The application contains a detailed description of the idea and innovation, a detailed work plan including resource and milestone planning, a detailed financing plan including explanations, a realisation plan for each partner and a description of the need for the grant.

 

Is it possible to cooperate with other companies or research institutions when submitting an application?

Yes, co-operation with other companies or research institutions is possible. Joint projects can not only increase innovation potential, but also reduce risks and costs for the companies involved. In addition, collaborations can help to bundle different competences and resources in order to successfully implement complex innovation projects.

 

What conditions are associated with the funding?

The funding conditions of the programme stipulate a number of obligations. These include, for example, adherence to schedules and budgets, regular reporting on the progress of the project and the use of the funding in accordance with the established guidelines. In addition, specific documentation and transparency requirements may be imposed to ensure that the funding is used properly and that the objectives of the project are achieved.

 

Is reporting necessary during the course of the project?

Yes, during the project, companies are obliged to report regularly on the progress of their project and to keep comprehensive documentation on all activities. This includes, for example, interim reports that summarise the current status of the project as well as milestones and results achieved. In addition, it may be necessary to document all relevant data and results and keep them available for later evaluation or review.

 

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