An audit of an innovative idea before applying for a grant should above all answer the question of whether the planned project genuinely has features of innovation that can be justified technically, commercially, organisationally and financially in the grant application. The entrepreneur should check not only the description of the idea itself, but also the level of novelty, the advantage over existing solutions, the implementation potential, the realism of the budget, the organisational capacity of the company and the ability to demonstrate measurable project effects.
In practice, many projects fail not because the idea is commercially weak, but because it has not been verified in advance against the requirements of a specific grant programme. A research and development project is assessed differently from the implementation of R&D results, and differently again from an investment involving the purchase of off-the-shelf technology.
An audit of an innovative idea should be carried out before choosing a call, preparing the budget and starting to write the application.
What is an audit of an innovative idea before applying for a grant?
An audit of an innovative idea is a structured analysis of a project before a grant application is submitted. Its purpose is to check whether the idea can be presented as innovative, whether it responds to a genuine market or technological problem and whether it meets the conditions of a specific support programme.
Such an audit should not be limited to a general statement that the project is modern. Grant documentation requires specific arguments. It is necessary to demonstrate what exactly is to be changed, what the current state of technology or the market is, how the solution differs from those available and what effects will be achieved once the project has been implemented.
According to the Oslo Manual (OECD/Eurostat), innovation does not have to mean only a breakthrough, high-risk technology. It may relate to a product, process, organisation or marketing, provided that it involves the implementation of a new or significantly improved solution. The minimum criterion of novelty may be novelty to the firm, although in grant programmes the required level of innovation may be higher and depends on the rules of the specific call.
Why is it worth carrying out an innovation audit before choosing a grant?
It is a mistake to start work from a list of available calls without first analysing the idea itself. In such a model, the entrepreneur often tries to fit the project to the programme instead of choosing the programme appropriate to the actual nature of the investment.
The audit makes it possible to determine whether the project should be classified as:
- a research and development project,
- implementation of R&D results,
- a technology investment,
- digitalisation of processes,
- automation of production or services,
- development of R&D infrastructure,
- a project related to energy efficiency,
- an organisational or process project,
- a market-oriented, expansion or export project.
This distinction is of practical importance. It determines the choice of programme, the level of funding, the catalogue of eligible costs, the requirements for technical documentation and the way the project is assessed. The entrepreneur should first assess what the planned investment actually is, and only then check which programme it may fit.
Up-to-date information on support programmes should always be verified on the websites of public institutions, including the portal of European Funds, the website of PARP and the website of NCBR. The call documentation always takes precedence over a general description of the programme.
How to check whether an idea is genuinely innovative?
The first stage of the audit is to establish what the innovation consists of. A marketing description must be separated from a real change in the product, service, process, operating model or way of delivering value to the customer.
The analysis should answer the following questions:
- what exactly is to be implemented?
- is the solution new, or does it merely replace an existing tool?
- does the change have a significant impact on the parameters of the product, service or process?
- does the project concern a product, process, organisation or marketing?
- is the solution new to the company, the market, the country or the industry?
- what competing solutions are currently available?
- how does the project differ from a standard modernisation?
- can the innovation be documented with data, a market analysis or a technology opinion?
- will it be possible to implement and sell the result of the project?
From a grant perspective, it is particularly important to distinguish innovation from a simple purchase of new equipment. The mere purchase of a machine, an IT system or a production line does not always constitute innovation. The innovation may only be the change that this purchase makes possible – for example, the introduction of a new product, a significant shortening of a process, the achievement of new quality parameters or the creation of a service previously unavailable in the company's offer.
Four areas of innovation according to the Oslo Manual
The 2005 edition of the Oslo Manual identifies four basic types of innovation: product, process, organisational and marketing. In the current 2018 edition, the classification has been simplified to two types – product innovations and business process innovations, which also include organisational and marketing changes. However, many programme documents still use the four-way division, which remains a useful starting point for structuring the argument.
Product innovation
Product innovation involves introducing a new or significantly improved good or service. It may include new functions, better technical parameters, higher quality, greater durability, a new application or a significant change in the way the product is used.
The audit should check:
- which features of the product or service will be new,
- whether the change is significant from the customer's point of view,
- whether the product responds to a genuine market need,
- whether it is possible to implement and sell the solution,
- whether the company has the resources to bring the product to market.
Process innovation
Process innovation involves a significant change in the method of production, service delivery, logistics, quality control, customer service or product delivery. In grants, it often occurs in projects related to automation, robotisation, digitalisation, the implementation of IT systems or new production technologies.
The audit should check:
- which process will be changed,
- what the current limitations of the process are,
- which parameters the project will improve,
- whether the change will affect costs, time, quality or efficiency,
- whether the effect can be measured numerically.
Organisational innovation
Organisational innovation involves new methods of organising work, knowledge management, cooperation with partners, process structure or relations with the external environment. It does not always require the purchase of advanced technology, but it should lead to a significant change in the way the company operates.
The audit should check:
- whether the project changes the way the company is managed,
- whether it affects the flow of information or knowledge,
- whether it improves cooperation between teams or partners,
- whether it increases the company's ability to learn and implement new solutions,
- whether the change is of operational, not merely formal, significance.
Marketing innovation
Marketing innovation involves new methods of design, promotion, distribution, customer communication, positioning of the offer or pricing. In grant programmes, this type of innovation may play a supporting role, particularly in implementation projects, internationalisation or the development of new sales models.
The audit should check:
- whether the project changes the way customers are reached,
- whether it includes a new sales or distribution model,
- whether it supports the commercialisation of a product innovation,
- whether it follows from an analysis of the market and customer needs,
- whether it can increase sales, market share or recognition of the offer.
Level of novelty – to the company, the market or the country?
One of the most important elements of the audit is determining the level of novelty. An innovation may be new to the company, new to the market or new on a broader scale. In grant practice, however, you must always check how the documentation of the specific call defines the level of innovation.
Some programmes accept innovation at company level. Others require innovation at least on the scale of the national market, the industry, the region or the European market. A mere statement that the company has not previously used a given solution may be insufficient.
In the audit, it is worth preparing a short comparative analysis:
- what solutions are currently available on the market,
- what parameters competing products or technologies have,
- what limitations exist in current solutions,
- how the project eliminates these limitations,
- whether the advantage is technical, functional, cost-related, organisational or environmental,
- whether the advantage can be documented,
- whether there are external sources confirming the state of the market or technology.
Such an analysis is needed not only to assess the chances of success, but also to prepare a logical justification for the application. The assessment panel should understand why the project is more than a standard modernisation of the business.
Does the project require R&D work?
Not every innovation requires research and development work. Innovation activity may include not only R&D, but also technical, organisational, financial and commercial activities leading to the implementation of innovation. It may also include the acquisition of external knowledge, machinery, equipment, software, training or market preparation.
From a grant perspective, however, the key question is whether the programme finances:
- the research stage,
- the development stage,
- development of a prototype,
- testing and validation,
- implementation of R&D results,
- purchase of fixed assets,
- purchase of intangible assets,
- advisory services,
- activities related to commercialisation.
If the project involves developing a new technology, product or service, the audit should check whether there is research or technological uncertainty. If the project mainly involves purchasing off-the-shelf solutions, it should be assessed whether a more appropriate path would be an investment grant, a preferential loan, a credit instrument from BGK or a regional programme.
Market potential and commercialisation
An innovative idea is not enough if there are no customers, no revenue model or no economic rationale. The assessment of innovative projects often examines commercial potential, the target group, competitive advantages, the feasibility of implementation and the team's ability to carry out the project.
The audit should verify:
- who will be the recipient of the solution,
- what customer problem the project solves,
- whether the customer will be willing to pay for the new solution,
- how the company plans sales or implementation,
- whether there are barriers to market entry,
- what the main customer segments are,
- whether the project has scaling potential,
- whether the projected revenues are realistic,
- what activities will be needed after the project ends.
A well-prepared project should combine innovation with a genuine business rationale. A grant application is not merely a description of a technology. It is also a document showing that public funds will be allocated to a project that is feasible, needed and capable of being settled.
Budget, eligible costs and schedule
An audit of an innovative idea should include a preliminary check of the budget. Even a good idea may have a low chance of funding if the costs are unjustified, incorrectly assigned to tasks or inconsistent with the catalogue of eligible costs.
It is worth checking:
- whether each cost follows directly from the project scope,
- whether the cost is needed to achieve the result,
- whether the cost falls within the catalogue of eligible costs,
- whether the cost is reasonable in market terms,
- whether the budget is consistent with the schedule,
- whether the company has its own contribution,
- whether bridge financing will be necessary,
- whether VAT will be an eligible cost,
- whether the planned purchases require competitive procedures,
- whether the project can be completed within the deadline required by the programme.
Linking the budget to results is particularly important. If an entrepreneur plans to purchase a production line, an IT system or research services, they should be able to demonstrate how the expenditure will translate into the implementation of the innovation. A cost cannot be presented as an isolated purchase item – it should follow from the logic of the project.
Organisational capacity of the company to implement the project
The audit should assess whether the company has the resources necessary to implement the project. Assessing institutions analyse not only the idea itself, but also the applicant's ability to implement it.
The main items to check are:
- the team's experience,
- technical competences,
- management competences,
- access to infrastructure,
- financial capacity,
- experience in implementing projects,
- the possibility of cooperation with partners,
- access to technology suppliers,
- preparedness to maintain project documentation,
- the ability to maintain the results after the project ends.
In innovative projects, links with the external environment are also of great importance, including suppliers, customers, research units, technology partners and advisory institutions. It is worth showing where the company obtains its knowledge, how it limits technological risks and which relationships help it implement the new solution.
Intellectual property and rights to the solution
Before submitting the application, you should check whether the company has the right to use the technology, documentation, R&D results, software, technical design or know-how that will be used in the project.
The audit should verify:
- who owns the idea,
- whether there are agreements with the creators or contractors,
- whether the solution may infringe the rights of third parties,
- whether a licence is needed,
- whether patent or utility model protection is possible,
- whether the R&D results will belong to the applicant,
- whether agreements with subcontractors secure the rights to the results,
- whether the project requires a state-of-the-art analysis.
A lack of clearly defined rights to the solution may hinder the assessment of the project, its implementation, commercialisation and subsequent settlement. In the case of technology projects, it is worth considering a consultation with a patent attorney or a lawyer specialising in intellectual property. Patent databases and information on protection procedures are made available by the Patent Office of the Republic of Poland.
Risks of an innovative project
The audit should identify risks that may reduce the chances of obtaining funding or hinder the implementation of the project after the agreement has been signed. The aim is not only to find weaknesses, but to prepare measures that mitigate the risk.
The most common risks are:
- an insufficient level of innovation,
- no data confirming the advantage of the solution,
- an unclear target group,
- overly optimistic sales forecasts,
- no own contribution,
- an underestimated budget,
- an overly short schedule,
- a lack of technical competences in the team,
- unresolved rights to the technology,
- costs inconsistent with the call rules,
- a lack of consistency between the project description, the budget and the indicators,
- difficulties with subsequent settlement of the project.
When analysing innovation, what matters is not only inputs and activities, but also the objectives, obstacles and effects of innovation. In grant practice, this means demonstrating what the project is intended to change, what barriers it addresses and what measurable results will be achieved.
What documents should be prepared before submitting an application?
Before starting work on the application, it is worth preparing a basic information package. This makes it easier to assess the eligibility of the project and shortens the time needed to prepare the documentation.
The minimum set of data should include:
- a description of the innovative idea,
- a description of the current technological or market problem,
- a description of the planned solution,
- an indication of the type of innovation,
- an analysis of the level of novelty,
- a comparison with competing solutions,
- a list of planned expenditure,
- an estimated net and gross budget,
- a planned schedule,
- a description of the project team,
- sources of financing for the own contribution,
- an analysis of potential customers,
- preliminary forecasts of sales or operational effects,
- information on intellectual property rights,
- data on State aid and de minimis aid,
- technical documents, quotations or specifications.
More advanced projects may also require a research agenda, a state-of-the-art analysis, an innovation opinion, a business plan, a financial model, technical documentation, a risk analysis, letters of intent, agreements with research institutions or documents confirming the feasibility of implementation.
When might an innovative idea be unsuitable for a grant?
Not every project should be financed with a grant. Sometimes a better solution is commercial financing, leasing, a preferential loan or preparing the project in stages for a future call.
Warning signs include:
- the project consists solely of a standard purchase of equipment,
- no significant advantage over existing solutions can be demonstrated,
- the company has no own contribution,
- the project is not organisationally ready,
- market data are lacking,
- the schedule is unrealistic,
- the costs are too general,
- the project does not fit the objectives of any current programme,
- the company is not ready to maintain documentation and settle the project,
- the legal or technological risks are too high.
In such a situation, it is worth first refining the concept, gathering data, carrying out a market analysis, putting the budget in order and only then returning to the search for the right call.
How can dotacje-online.pl help with an innovative idea audit?
An audit of an innovative idea before applying for a grant helps reduce the risk of choosing the wrong programme, misclassifying costs and preparing an application that does not meet the assessment criteria.
As a first step, you can use the free grant search engine with an AI Assistant, to check available calls from across Poland and international EU calls for the planned project. For projects requiring an individual assessment, it is worth considering grant advisory services.
If you are planning to apply for funding for an innovative project, it is worth verifying in advance the eligibility of the investment, the level of innovation, the available calls and the possible level of support.Contact an expert
Author: Dariusz Kozakiewicz
EU funding expert