Author: Jessica Kehayes
Global forces driving public funding
Is public funding:
A) A way for businesses to gain funds for critical initiatives without giving up equity
B) An incentive package for governments to build a sector or industry
C) A way for businesses to be recognized by a large and credible stakeholder
D) An opportunity for government to encourage policy priorities
E) All of the above?
If you answered E, then that is a good guess. With thousands of public funding calls worth billions of euro across the EU, public funding can be an incredible opportunity for a business. Understanding what trends are driving public funding priorities and how SMEs can position to align with these trends is important for unlocking the flow of funds.
Increasingly, public funding is guided by the larger trends or “global forces” in the world that dominate political and social discourse. These global forces influence policy decisions, priorities and allocations resulting in a diverse set of public funding opportunities. Below is a “cheat sheet” of which global forces are pushing public funding forward and how your company can take advantage, and also check out our Swedish and Finnish funding sites for more.
Trend #1 Global growth shifts & new markets
More and more markets are available around the world. By 2025, 4.2 billion people will be part of the consuming class with rapidly improving standards of living and a remarkable transformation for the global economy.
Ezra Greenberg, Martin Hirt, and Sven Smit have suggested that the discussion has shifted from BRIC (Brazil, Russia, India, China) to focus more clearly on Asia, Southeast Asia and Africa. Three geographic entities — India, China, and Africa — are experiencing an urbanization that is empowering populations that exceed one billion people, and a fourth, Southeast Asia, is driving growth with a population of more than half a billion.
This is further amplified by consumers buying online across markets and the increasing ease with which digital products can move from market to market. Growing and attracting customers in these new markets, creating partnerships, and sharing knowledge is a large priority of public funding.
Some of the enthusiasm and growth is certainly tempered by the discontent created by this economic globalization, which has played out around the world. The gains are not evenly spread. Huge growth for some often means losses for many others. People cannot be easily retrained, moved or redistributed for work elsewhere. This has opened another avenue for public funding to respond, albeit more slowly.
Public funding response:
We see a two-fold public funding response to the rapid growth of markets in parts of the world that did not have a consumer class previously:
(1) Funding for internationalization. The EU and other public funding agencies co-finance feasibility studies and international expansions to reduce business’ risk in international growth and increase competitiveness. Funding mechanisms include NOPEF, the EU Regional Development Fund and country-specific support such as Enterprise Estonia` s Development program, Development Voucher grant (Estonia), Explorer (Finland), Tempo (Finland), Finnfund (Finland), Finnpartnership and Ely-keskus development grant (Finland), AUI (Sweden) and Swedpartnership (Sweden). Click here to view our successful International Growth projects.
(2) Funding to reduce wealth disparities and invest in rural regions, which encourages more even investment and social cohesion across populations. Mechanisms include the European Regional Development Fund, Leader grant and Ida-Viru County Industrial Investment grant (Estonia) and Regional Capacity and Development funds (Sweden).
Trend #2 Technological & industrial shifts
The second global force affecting public funding is the huge demand and potential for highly innovative products and services with increased personalization and customization. In addition to the geographic expansion noted in trend #1, there is a vast increase in niche markets. There is a trend toward spending more on services than goods, increasing focus on lifestyle purchases and seeking options that fit specific, personalized needs. This creates a sense that any item, no matter the niche, is obtainable. This shift is to focus no longer on products but platforms and ecosystems and an expanding use of automation and artificial learning.
Public funding response:
Funding for research and development to create and further develop new innovation, products and services. Funding mechanisms include the EU’s Eurostars, Fast Track to Innovation, and SME Instrument, and many nationally based innovation programs such as IPF (Sweden), Bio Innovation (Sweden and Finland), Estonian-Norwegian Cooperation Program, Enterprise Estonia`s Development program (Estonia), Ely-keskus (Finland), Business Finland R&D grants and loans (Finland), and Into (Finland).
Trend #3 Culture & changes in societal responsibility
Perhaps the biggest of the trends is the continually shifting views of culture and societal responsibility. Countries are rapidly becoming much more diverse, leading to a sense that they feel different and look different. Regions and countries have responded differently to the challenges of integration and changing populations. Growing uncertainty, unrest and inequity (real or perceived) leads to the increasing importance of institutions and governments. It heightens the need for global and regional institutions to fund projects that build networks, promote greater equality, tackle large cross-border challenges, and create better living conditions for all. Businesses of all sizes have a role to play in developing a better world and operating with societal interest in mind.
Public funding response:
Public funding calls for businesses are increasingly designed to encourage alignment with broader societal goals. Public funding is designed to support projects that can explicitly meet national and international (EU and UN SDG) outcomes, including funds for environmental goals, creating regional networks, spreading wealth and building capacity. The European Social Fund, the European Regional Development Fund, Climate-KIC Accelerator, BioInnovation, LIFE program, EEA and Norway Grants Fund for Regional Cooperation are just a few that are available, and most national applications have an explicit requirement to align to broader development goals. Excedea can advise you in finding the right match, aligning your business project with relevant outcomes and developing your application.
Questions for your business to consider:
- Are you reaching a new market – or a newly arrived customer base within your home geography?
- Are you forging connections into new markets not commonly reached?
- Do you have an innovation that addresses core functionalities toward customization?
- Do you have an idea to develop a collaboration or expand your ecosystem to integrate new technologies?
- Does your business contribute to and measure outcomes related to the SDGs?
- Is your business involved in network building?
If you answered “yes” to any of these questions, contact us to discuss how public funding can support your goals.