“Good projects get good funding” IRD – Industrial Research and Development Contract.

1. Lisbon, 27th November 2012. Blue Economy – Offshore Platforms and Opportunities “Good projects get good funding”IRD – Industrial Research and Development Contract. Håkon Hauan Director Innovation Norway, Madrid

2. Industrial Research and Development Cooperation between Norwegian and Foreign Companies • Innovation Norway is a government agency uniquely empowered  to unleash entrepreneurship and cultivate a thriving culture of productive innovation. This presentation highlights the purpose and scope of the financial program designed to foster Industrial Research and Development (IRD) cooperation between Norwegian and Foreign Companies Guidelines for Foreign Companies acting as demanding customers

3. 1. Introduction • This guideline is addressed to foreign companies interested in becoming the demanding customers of Norwegian companies with new products or solutions not yet available on the market. Innovation Norway offers a support program that makes grants available to Norwegian companies, especially small and medium sized enterprises (SMEs) that develop new products or services for foreign or other Norwegian companies. The support is based upon a contractual cooperation (IRD contract) where the foreign company acts as a demanding customer to the Norwegian company. The foreign company must have a need for the new product or solution and the Norwegian company must meet the requirements set forth by the foreign company. The cooperation must be a real partnership where both parties contribute with resources and competence. • IRD contracts between foreign companies and Norwegian SMEs are implemented as grants to the latter. • There are no contractual relationships between Innovation Norway and foreign companies in connection with IRD projects. • In 2012 alone, Innovation Norway will spend about MEUR 40,- on new IRD contracts. • The benefits for foreign companies entering into IRD projects with Norwegian SMEs are two-fold: • significant reduction of project cost and financial risk • opportunity to collaborate with Norwegian SMEs with unique skills and knowledge in the relevant product areas

4. 2. Industrial Research and Development Contracts • An Industrial Research and Development Contract is a contractual agreement between a Norwegian company, preferably a SME, and a foreign or Norwegian company to collaborate on development of new “state-of-the-art” products, processes or services. • The partners in an IRD contract are: • Supplier company - which should be a Norwegian SME. • Client company (customer) - either a foreign or Norwegian company. The client company shall participate in the project to enable the supplier company to develop the product or service that would satisfy its requirements. • The outcome of an IRD project may vary, but these results are typically: • A product or prototype as the first version of a unit that can either be marketed as a product in its own right or as a component of a larger system. • Software for which there is an independent business idea and that can be marketed as a separate product or service. • A system integration, with significant new capabilities. • A new production process.

5. 3. Supplier Company (Applicant) • The supplier company is responsible for submitting the application to Innovation Norway for IRD support on behalf of the whole project. The grant is given to the Norwegian supplier company to cover up to 45%, or if an EEA bonus is applicable, up to 60% (see explanation below) of that company’s development cost. • Companies eligible for grants are normally Norwegian SMEs with the competence and ability to develop new products or services not currently available in the market. • The Norwegian companies must fulfil the SME criteria as defined in the state aid regulations of the European Economic Area Agreement (EEA). • The maximum amount of government support to companies is limited according to the EEA Agreement - which applies the same state aid and public funding rules as in the EU. • The European Union (EU) state aid rules define an SME as an enterprise having less than 250 employeesand less than 50 MEUR in annual turnover.

6. 4. Demanding Customer • As a demanding customer to the supplier company, the client partner is expected to participate actively in the development project by contributing to the specifications, being an important reference client and strengthening the market potential for the product developed by the IRD project. This means for example access to new market channels and strategic partners. The client partner must have sufficient resources (competence and financial) to manage its part of the IRD project.

7. 4. Duration of IRD projects The IRD program can support development projects from the pre-study phase up to and including the industrial prototype/pre-commercial phase. Normally 1-3 years. It may also include testing and monitoring of whether the prototype meets specifications.

8. 6. Commercialization of the Products/Services from IRD Projects • The aim of the IRD program is also to ensure that the product/service will be properly and professionally marketed. Consequently, it is of no interest to Innovation Norway to support projects that do not have clear market objectives. Market opportunities in addition to the business of the client partner is of great importance while considering support to IRD projects. The supplier company is expected to submit a business plan that shows how marketing and sales will take place. The client partner may contribute both as a marketing channel and as an important reference for the supplier, as illustrated in the figure: Client company Market Also with respect to dependency between supplier and client partner we must follow national and EU-regulations Project Reference Supplier company Market

9. Thank you for your attention Concept: www.GATEWAYinnovation.com