EMCC European Monitoring Centre on Change

National Innovation Fund (NIF): Strengthening the technological capacity of SMEs

Bulgaria
Phase: Anticipation
Тип:
  • Access to finance
  • Fostering innovation
  • Support of SMEs
Last modified: 14 October, 2020
Име (на собств. език):

Национален иновационен фонд: увеличаване технологичния капацитет на МСП

Име на английски:

National Innovation Fund (NIF): Strengthening the technological capacity of SMEs

Coverage/Eligibility

Applicants, whether they are companies or research institutions, should be registered under the Bulgarian commercial law. Companies or research institutions from Bulgaria and/or EU could apply as partners.

The fund finances projects in all economic areas except agriculture, fish industry and forestryProjects for full development of ready-to-market products, services or processes are not eligible.

Projects for full development of ready-to-market products, services or processes are not eligible.

Main characteristics

The main aim of the National Innovation Fund (NIF) is to promote research and development of enterprises and foster cooperation between science and business.

The fund supports two kinds of projects:

  • Research and development projects, focused on the technological development of new products, processes, services, or on a significant improvement in existing products, processes or services. Maximum grant - BGN 500,000 (€255,646);
  • Projects for technical feasibility - Explore the possibility of future realisation of a research project. Maximum grant - BGN 50,000 (€25,565).

Minimum duration of the project must be not less than three months from the date of entry into force of the contract. Maximum duration may not exceed 12 months from the date of entry into force of the contract.

Aid intensity:

  • For industrial research - 50%.
  • For experimental development - 25%.

Aid intensities for industrial research and experimental development may be increased by:

  • 10% for medium-sized enterprises;
  • 20% for small enterprises;
  • up to 15%, subject to effective cooperation with a research and dissemination organisation and/or other undertaking.

The maximum aid intensity is: 80% of the eligible costs.

One of NIF's purposes is to partly subsidise the costs for acquisition and/or maintenance of industrial property rights by SMEs. 

 
At each project session, the NIF sets priority economic sectors.

In November 2015, the Council of Ministers adopted an innovation strategy for smart specialisation of Bulgaria 2014-2020. This strategy defines priority areas for the new programming period:
  • Mechatronics and clean technologies;
  • Information and communication technologies and informatics;
  • Wellness industry and biotechnology;
  • New technologies in the creative and recreational industries.

The fund was created in 2005 under the decision of the Council of Ministers, implementing Measure 1 of the National Innovation Strategy. The National Innovation Fund runs under the administration of the Bulgarian Small and Medium Enterprises Promotion Agency and the Ministry of Economy and Energy.

Funding

  • National funds
  • European funds

Involved actors

National government
Funding.
Други
Partnership with universities; run by the Bulgarian Small and Medium Enterprises Promotion Agency, with the Ministry of Economy and Energy.

Effectiveness

The National Innovation Fund executed 9 project sessions until the end of 2018 with a total budget over BGN 48 million (€24.54 million) and 455 signed contracts since its creation in 2005. According to a NIF report of 2013, in the 6th project session, 80% of the beneficiaries are SMEs. 36 contracts (about half of the project proposals) were signed, amounting to BGN 353,000 (€80,486).

From the 9th session onwards there has been a change of evaluation rules, whereas the financed costs for fixed tangible assets were reduced from 60% to 50%, in order to encourage investments in intellectual work and not in ready equipment. For the same reason the costs of hired services were reduced from 25% to 10%. Another change aiming at improving the quality of project proposals was to increase the necessary points needed to receive financing - from 60 to 70.

The 10th session carried out in 2019 included 23 projects for a total amount of BGN 5.580 million (€2.853 million). The 10th financing session covered research and development activities in the enterprises among the above fields, as follows: 12 project proposals in the field of information and communication technologies and informatics, and nine in mechatronics and clean technologies. The remaining projects are in the field of wellness industry, biotechnology and new technologies in the creative and recreational industries.

Strengths

According to a press release by the Ministry of Economy in 2018, the instrument has been very successful and it is promoting more innovation in the Bulgarian economy.

Weaknesses

The latest report of BSMEPA was issued in 2014. There is no recent report on the effects of this initiative.

However, one of the critique points in the programme was the long documentation processing period. In 2018, the Ministry of Economy amended the rules and shortened the application approval period. In 2020, the Ministry initiated further reform discussions with specialists in the field. The goal is to achieve more transparency in the activities for evaluation, financial management, monitoring and audit of project proposals, equality of applicants. 

Examples

Bulgarian Academy of Sciences - in the framework of project № D-1 Improving the competitiveness of SMEs through technology transfer of research products (January 2003 - December 2003) an Internet-based exchange for innovation and technological transfer has been developed. Using that platform, more than 10 projects financed by the National Innovation Fund were executed.
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