rd-tax

Funding innovation in 2026 is no longer a “local” exercise. For global businesses, the fastest route to better cashflow, reduced risk and accelerated scale is a joined-up strategy that blends grants, tax incentives and country-by-country delivery, without losing control of compliance. 

At FI Group by EPSA, we see the same pattern across sectors: where R&D is genuinely global, the funding approach must be global too. 

 

Why a global approach matters in 2026 

Innovation funding is expanding in both complexity and scrutiny. Tax authorities want better evidence, funders want clearer impact, and many schemes now include location rules, collaboration requirements and stricter reporting. 

In the UK alone, the latest published HMRC statistics show £7.6bn of support claimed under R&D tax credits in 2023 to 2024. That scale explains why governance, documentation and “right first time” submission have become non-negotiable. 

Meanwhile, businesses are increasingly expected to “stack” support intelligently, not just chase the biggest headline scheme. 

 

“The finance edge comes from stacking non-dilutive funding from local and international schemes, making innovation risk manageable and more profitable.”

     Fawzi Abou-Chahine, Funding Director, FI Group by EPSA UK 

 

That is the mindset behind a global innovation funding operating model. 

What is a global innovation funding strategy? 

A global innovation funding strategy is a coordinated plan that matches your R&D roadmap to the best available support in each territory, then governs delivery so claims and applications work together rather than collide. 

Two core building blocks: 

• Grant funding: Competitive, non-dilutive public funding (often with specific themes, deadlines, consortium rules and reporting duties). 
• R&D tax relief: A rules-based tax incentive that reduces corporation tax or provides a payable credit based on qualifying R&D expenditure. 

The strategic aim is to combine both, where permitted, while managing interactions such as state aid, “double funding” restrictions and differing definitions of eligible costs. 

How we build cross-border funding innovation in 2026 

FI Group’s approach is deliberately practical: align the funding plan to how the business actually runs, then execute locally with global coordination. Our teams support companies to identify and secure optimal financing conditions for R&D and innovation, from local tax incentives to national and international grants and loans. 

1) Map the R&D footprint and funding “right to claim” 

We start with a clear view of: 

• Where technical work happens (countries, sites, labs, suppliers). 
• Who employs the teams and owns the IP. 
• Which cost categories sit in which legal entities. 
• Which projects are good candidates for grants versus tax incentives. 

This matters because many regimes apply overseas restrictions or location tests. For example, the UK’s merged scheme notes restrictions on some overseas expenditure.  

2) Define the “global project narrative”, then localise it 

Your technical story must be consistent globally, but written to local tests. 

A strong model is: 

• One master technical narrative (uncertainty, advance, competent professional baseline). 
• Local annexes for each country’s definitions, eligible cost rules and record-keeping. 

This becomes vital where administrations require extra disclosure. In the UK, HMRC introduced an Additional Information Form requirement for claims from 8 August 2023. 

3) Build the funding stack by work package 

We split the R&D plan into work packages, then assign the right funding pathway: 

• Foundational research and feasibility: grants (where time-to-cash is acceptable). 
• Productisation and scale: a mix of grants, loans and tax incentives. 
• Manufacturing and industrialisation: location-specific programmes and strategic funds. 

This is where funding innovation in 2026 becomes a portfolio discipline, not a one-off application.

4) Execute locally, govern globally 

Local execution protects eligibility. Global governance protects consistency. 

In practice this means: 

• Local specialists handling country rules, language and funder expectations. 
• A single global governance layer controlling project boundaries, evidence, cost allocations and interactions between schemes. 

This “local delivery, global control” model is central to successful cross-border R&D funding. 

Snapshot: grants and R&D tax incentives across key jurisdictions 

 

Below is a practical snapshot of major grant pools and headline R&D tax incentive rates, using the latest publicly available figures as at January 2026. Funding volumes and effective benefit vary by company profile, sector and project design. 

UK 

Grant landscape, recent indicators 

• Innovate UK runs frequent competitions. A single Growth Catalyst round has offered up to £100m in funding.  
• UKRI reporting shows that in 2024 to 2025, Innovate UK handled over 17,000 applications requesting £9.6bn in total funding.  

R&D tax incentive headline (2026 rules) 

• Merged RDEC expenditure credit rate: 20%.  
• ERIS for loss-making R&D-intensive SMEs: up to 14.5% payable credit on surrenderable loss, with a 186% total deduction.  

Ireland 

Grant landscape, latest published programme data 

• Enterprise Ireland reports 125 in-company R&D support grants approved in 2024.  
• DTIF approvals of €11.4m for two new projects in 2024, with €376m cumulative funding awarded across seven calls.  

R&D tax incentive headline (2026 update) 

• Budget 2026 measures indicate the Irish R&D tax credit increases from 30% to 35%, with a higher first-year payment threshold of €87,500.  

European Union 

Grant landscape 

• Horizon Europe total budget: €95.5bn (2021–2027).  
• EIC Accelerator: grant up to €2.5m, plus equity investment typically €0.5m to €15m.  
• STEP Scale-up: investments up to €30m (as described in EIC communications).  

Spain 

Grant landscape 

• CDTI states its 2025 support volume reaches up to €1.942bn across grants, direct expenditure, venture capital investment and loans with a subsidy tranche.  
• CDTI’s NEOTEC 2025 call: €40m awarded to 130 innovative SMEs.  

R&D tax incentive headline 

• Spain’s R&D tax credit design includes a 25% credit on the average of prior spend and 42% on the excess above that average, with an 8% deduction for certain R&D assets, plus refund mechanisms subject to conditions.  

Singapore 

Grant and public R&D investment landscape 

• RIE2025 plan: S$25bn committed to R&D (2021–2025).  
• RIE2030 plan: S$37bn announced for the next five years.  

R&D tax incentive headline 

• Enhanced deduction of 250% of qualifying R&D expenditure for YA 2019 to 2028 (for R&D carried out in Singapore).  
• For YA 2024 to 2028, an enhanced 400% deduction applies to the first SGD 400,000 of qualifying R&D spend (with conditions).  

United States 

Grant landscape 

• SBIR in FY2023: over 5,000 awards valued at nearly $4bn (per SBA data cited by GAO).  
• SBA’s FY2022 annual report: $4.73bn total obligations across SBIR ($4.12bn) and STTR ($618.3m).  
• SBIR/STTR set-asides: 3.2% (SBIR) and 0.45% (STTR).  

R&D tax incentive headline 

• Federal research credit (IRC §41): 20% of the excess over the base amount (regular method).  
• Alternative simplified credit: 14% of qualifying research expenses above 50% of the prior three-year average.  

South America example: Brazil 

Brazil offers both grant-style support (varying by call and agency) and tax incentives. One widely used incentive is Lei do Bem, which provides an additional deduction of 60% to 100% on eligible R&D spend, equating to a tax reduction of 20.4% to 34%. Activities must be carried out in Brazil.  

 

Mini case study: structuring a US–UK–Spain R&D funding strategy 

Scenario (illustrative): A global industrial software company has: 

• A core product engineering team in the US (platform and AI). 
• A UK team focused on applied R&D and customer-driven prototypes. 
• A Spanish team building embedded integrations and validation tooling. 

A structured funding plan could look like this: 

Define work packages that match each jurisdiction’s strengths 

• US: foundational algorithms, cloud architecture, experimental development. 
• UK: applied R&D, prototype build, pilot deployments. 
• Spain: engineering validation, integration tooling, test rigs. 

Align each work package to the right support 

• US: SBIR/STTR for early-stage technology risk, plus federal R&D tax credit.  
• UK: Innovate UK competitions for collaborative applied R&D, plus merged RDEC or ERIS depending on profile.  
• Spain: CDTI programmes for business-led technology projects, plus Spanish R&D tax credits.  

Create one evidence pack, three compliant outputs 

• One master technical narrative and work package plan. 
• Localised claim narratives and cost treatments (UK, US, ES). 
• A single global R&D cost tracking approach, so evidence is consistent in audit. 

Add a “global bet” 

Where the innovation is truly collaborative and scalable, consider an EU route (EIC Accelerator or Horizon Europe consortia), especially where the Spanish entity can lead EU engagement.

   

Outcome 

The strategy improves cash runway, reduces reliance on a single funding source and increases certainty of delivery, because funding is attached to defined work packages rather than vague “innovation spending”. 

Common CFO challenges in 2026 and how to mitigate them 

• Different definitions of R&D across countries
  Mitigation: maintain a master definition, then localise eligibility tests and documentation. 
• Overseas cost restrictions and subcontracting rules
  Mitigation: map supply chains early and confirm location eligibility before committing spend.  
• Cashflow timing differences (tax credit vs grant reimbursement)
  Mitigation: build a funding calendar and use a blended mix to smooth cashflow. 
• Increased disclosure and audit focus
  Mitigation: treat evidence like a product, standard templates, version control, technical sign-off, and consistent cost allocation. 
• Interaction risk: claiming tax relief on grant-funded costs
  Mitigation: ring-fence funded work packages and maintain a clear funding ledger per project. 

FI Group by EPSA insight 

FI Group by EPSA operates internationally with a dedicated incentives and grants capability, supporting businesses to access funding across geographies and industries. Our international team includes over 1,400 experts across 13 countries, supporting 15,000 clients worldwide and securing over €1.7bn in funding annually, which is why many multinational groups use FI Group to coordinate multi-country innovation funding strategies with consistent governance and local compliance.  

Actionable steps for funding innovation in 2026 

1. Build a 12-month “funding map” by country, entity and project. 
2. Prioritise 3–5 work packages that can credibly win competitive grants. 
3. Choose your hubs (UK, Ireland, Spain, Singapore, US) based on where the real technical risk sits. 
4. Standardise evidence collection (technical baselines, test logs, version history, timesheets). 
5. Run a quarterly governance review to prevent double-funding and keep submissions aligned. 
6. Refresh the strategy annually, as rates, thresholds and call themes change. 

 

FAQs 

1) Can we combine grants and R&D tax relief on the same project? 

Often yes, but you must manage interaction rules, particularly whether the grant is considered state aid or restricts claiming on the same cost base. 

2) Which countries are best for innovation hubs in 2026? 

It depends on your footprint and sector. The UK, Ireland, Spain, Singapore and the US each offer distinct mixes of grants and tax incentives.  

3) What is the biggest failure mode in cross-border funding? 

Treating each application or claim as a standalone activity, rather than as part of one governed portfolio. 

4) How do we avoid double funding issues? 

Separate work packages, track funding sources per cost line, and maintain auditable links between technical deliverables and financial records. 

5) What should we do first if we have never built a global funding strategy? 

Start with a footprint map and a shortlist of projects, then design a two-track plan: quick wins (tax incentives) and strategic bids (grants). 

 

Key Insights:

• Innovation is a critical asset for organizations, providing significant competitive advantages.
• Intellectual property (IP) protection is essential for safeguarding innovations and ensuring economic benefits.
• Research and Development (R&D) activities are fundamental for technological advancement and human development.

Innovation stands as one of the most valuable assets an organization can possess. In the contemporary business landscape, intangible assets such as ideas, inventions, designs, and brands have gained paramount importance. This marks a significant shift from the 1970s when tangible goods like real estate, machinery, and automobiles dominated market value. Today, intangible assets, including innovation, are indispensable for generating competitive advantages.

Intangible or immaterial assets, despite lacking a physical form, hold substantial economic value. Innovation, as one of these intangible assets, plays a pivotal role in an organization’s success. Estimates suggest that in the 1970s, tangible goods constituted eighty percent of a company’s market value, with intangible assets making up the remaining twenty percent. Currently, this ratio has reversed, underscoring the growing significance of intangible assets.

While these figures are generalizations, they highlight the critical role of intangible assets in driving competitive advantages for businesses. Among these, innovation is particularly valuable due to its high risk of being copied. Innovation can be broadly defined as a novel change that adds value to a product, process, service, or the operations of a company.

Various forms of innovation include:

• Technological Innovations: New products or components, new manufacturing procedures or tools.
• Aesthetic Design Innovations: Changes in product design without technological alterations.
• Corporate or Product Image Innovations: Enhancements in the perception of the company or its products.
• Organizational, Administrative, or Management Innovations: Improvements in business models or management practices.

Innovations serve as significant differentiators, providing companies with considerable competitive advantages.

 

Innovation is Essential for Human Development

Beyond the previously discussed points, there is a deeper understanding of the significance of innovation for humanity. Innovation in technological development is not merely an accessory mechanism in human life; it is absolutely essential. Without technique or technology, the human species would have already faced extinction.

The history of humanity is replete with examples of how humans, through their intelligence, imagination, and creativity, have generated innovations to face environmental adversities, achieve greater well-being, and ultimately not only adapt to their surroundings but create a «human world.» This involves adjusting the environment to meet the needs and desires of the human species.

In the pursuit of technological development, increasingly sophisticated objectives have been set:

1. Ensuring the satisfaction of both elementary needs to sustain life and those related to «good living.»
2. Achieving that satisfaction with minimal effort.
3. Creating completely new possibilities, producing objects that do not exist in nature, thus creating a «supernature.»

 

In general terms, the process by which humans generate the technology to meet these needs consists of three stages:

1. Recognizing the need.
2. Engaging in introspection or self-reflection, through which they imagine and formulate possible solutions for satisfying their needs.
3. Practically implementing those innovative creations and ideas.

Humans are innovators by nature, and these innovations drive their development. Although it is not the primary focus of this discussion, it is worth mentioning that such development must be sustainable and integral, satisfying the needs of the present without compromising the capabilities of future generations, while being respectful of the environment.

 

But what is Innovation?

Having explained the great importance of innovation for humanity and provided a notion of it, it is time to delve into its definition to understand what truly constitutes an innovation and what ways exist to protect it.

A global reference for innovation is the Organisation for Economic Co-operation and Development (OECD), which has been working in this field since the mid-20th century.

The OECD has developed various instruments dedicated not only to innovation but also to Research and Development, encompassing the famous acronym R&D. Among the most important documents from the OECD are the Frascati and Oslo Manuals.

The Frascati Manual states that R&D (research and experimental development) «comprises creative and systematic work undertaken with the aim of increasing the stock of knowledge (including knowledge of mankind, culture, and society) and devising new applications based on the existing knowledge.”

To be considered R&D, the activity must meet five basic criteria:

1. It must be Novel;
2. Creative;
3. Uncertain;
4. Systematic;
5. Transferable and/or reproducible.

The term R&D includes three types of activities:

1. Basic research, which consists of experimental or theoretical work undertaken mainly to acquire new knowledge about the fundamentals of observable phenomena and facts, with no intention to apply it in any specific manner.
2. Applied research, which also consists of original work carried out to acquire new knowledge but is directed mainly towards a specific practical objective.
3. Experimental development, which consists of systematic work based on existing knowledge obtained from research or practical experience, aimed at producing new products or processes or improving upon existing products or processes.

The concept of innovation is provided by the Oslo Manual, which defines it as the introduction of a new or significantly improved product (good or service), process, marketing method, or organizational method in internal practices of the enterprise, workplace organization, or external relations.

 

Information as a Strategic Resource

Information, much like innovation, represents one of the most valuable resources within any organisation. It forms the foundation upon which decisions, strategies, and development processes are built. Without reliable, timely, and properly safeguarded information, innovation loses momentum and investment in research and development is undermined. In the context of information security, recognising information as a critical organisational asset means treating it with the same level of care and protection as other strategic resources, ensuring its integrity, availability, and confidentiality. In this way, information not only sustains competitiveness but also enables knowledge to be transformed into innovation and sustainable progress.

 

Intellectual property

Everything that has been discussed highlights the importance of recognizing, encouraging, and rewarding the efforts made by private enterprises in research, development, and innovation (R&D), without which sustainable human progress is unthinkable. This is to ensure that society can benefit from the creativity, ingenuity, and effort of those enterprises.

Consequently, the vast majority of countries and a good number of supranational organizations offer support for the financing of R&D.

At FI Group, we specialize in consulting for the application and management of such incentives. However, it is not only necessary to encourage investment in R&D but also to protect it. The way to protect it is by recognizing Intellectual Property to its creator. The legal protection of Intellectual Property allows companies, universities, public bodies, researchers, inventors, designers, artists, etc., to safeguard their innovative and creative developments and obtain a deserved economic benefit.

 

Why is the protection of Intellectual Property important in R&D?

• It provides recognition and motivation to companies that invest in R&D.
• It ensures a benefit, economic compensation for the investment, and the recovery of the high costs that such activities entail.
• It offers protection and safeguards to prevent third parties, who have not made similar efforts, from taking advantage of the benefits of others’ investments in R&D without any compensation.

 

What are the specific mechanisms of protection?

As previously mentioned, innovations can be classified as follows:

1. Technological Innovations.
2. Aesthetic design innovations of a product (without technological change).
3. Innovations in corporate or product image.
4. Organizational, administrative or management innovations (“business model”).

A preliminary approach regarding the protection of such innovations is the following: Industrial Property titles or registrations generally protect the first three types of innovations, both in Spain and across Europe and LATAM, while the fourth type can only be protected by patent in the US, provided that the new model is considered an invention, i.e., a non-obvious solution. In the rest of the world, new “business models” can only be protected by trade secrets.

 

However, Intellectual Property encompasses a much broader field.

There is no unambiguous definition of Intellectual Property, but the States that developed the Convention creating the World Intellectual Property Organization (WIPO) decided to establish a list of rights related to «literary, artistic and scientific works; performances of performing artists and broadcast; inventions in all fields of human activity; scientific discoveries; industrial designs; trademarks, trade names and designations; protection against unfair competition; and all other rights related to intellectual activity in the industrial, scientific, literary, and artistic fields» (Convention establishing the World Intellectual Property Organization, signed in Stockholm on July 14, 1967; art. 2, point VIII).

In summary, the objects that can be protected by Intellectual Property, which correspond to a category of Intellectual Property rights, can be grouped into the following tables, according to their configuration in Anglo-American law and European continental law:

 

Anglo-American Law

Works	Copyright
Performances of performing artists; and broadcast	Related rights
Inventions in all fields of human endeavours	Industrial property
Scientific discoveries
Industrial designs
Marks and commercial names and designations
Protection against unfair competition
All other rights resulting from intellectual activity in the industrial, scientific, literary, and artistic fields

Continental Law (France, Spain, LATAM)

Works	Copyright and related rights (continental law)
Inventions	Patents
Distinctive signs	Trademarks
Designs applied to objects	Industrial models and designs
Plant varieties	Breeder’s rights
Proprietary information — Know-how	Trade secrets

 

We can summarize the above as follows:

• Innovation is a highly asset, not only for its economic worth but also for shaping the way humanity achieves its development.
• R&D (research and experimental development) encompasses the creative and systematic work carried out with the objective of increasing the volume of knowledge (including knowledge of humanity, culture, and society) and conceiving new applications based on available knowledge.
• To be considered R&D, the activity must meet five basic criteria: it must be Novel; Creative; Uncertain; Systematic; and Transferable and/or reproducible.
• The term R&D includes three types of activities: Basic research; Applied research; and Experimental development.
• Innovation is the introduction of a new or significantly improved product (good or service), process, new marketing method, or new organizational method in a company’s internal practices, workplace organization, or external relationships.
• Intellectual property protects various forms of innovation but has a much broader scope, encompassing literary, artistic, and scientific works; performances by interpreting artists and executions by performing artists; phonograms and broadcasts; inventions in all fields of human activity; scientific discoveries; industrial designs and models; trademarks, service marks, and trade names; protection against unfair competition; and all other rights related to intellectual activity in industrial, scientific, literary, and artistic areas.

Key Findings

• Innovation is a valuable asset for organizations and human development.
• R&D activities are essential for technological advancement and must meet specific criteria to be considered R&D.
• IP protection is crucial for safeguarding innovations and ensuring economic benefits.
• Various mechanisms exist to protect different types of innovations.

 

At FI Group, we specialize in consulting for the management of funding incentives for R&D. With 25 years of experience, we operate globally, assisting over 15,000 clients in financing innovation. FI Group is part of EPSA, a leading player in global innovation financing, dedicated to supporting R&D activities.

 

How Space Technology Can Accelerate Net Zero Goals

Space-based technology has become one of the most powerful tools in tackling the global challenge of climate change and decarbonisation. From Earth observation satellites that monitor greenhouse gas emissions to advanced propulsion systems that reduce launch footprints, innovation in space technology is critical to achieving net-zero targets.

For SMEs and scale-ups in Europe and the UK, this sector offers a dual opportunity: driving technological breakthroughs while accessing substantial public and private funding. Yet navigating this landscape requires strategic insight. Each scheme has unique compliance demands, funding structures, and cross-border implications, and CFOs face increasing pressure to align innovation spend with decarbonisation goals while ensuring strong ROI.

This article provides a comprehensive roadmap of the funding available across Europe and the UK, from the European Space Agency (ESA) to Horizon Europe and national schemes. It also highlights the CFO pain points in financing innovation, and explains how FI Group’s “Global Reach. Local Expertise.” approach enables clients to maximise returns while reducing compliance risks.

 

Comparison of Major Funding Programmes

Programme	Budget (2021–2027)	Focus Areas	Typical Funding Size	Relevance to Space Decarbonisation
Horizon Europe	€95.5bn	Climate, Energy, Digital, Space	€500k–€15m	Collaborative R&D, space-enabled sustainability
EIC Accelerator	€10bn (subset of Horizon)	Deep-tech, disruptive innovation	Up to €2.5m grant + €15m equity	Hardware/software scale-ups in climate & space
ESA Clean Space	€180m+ since 2010	Green design, debris mitigation	€50k–multi-million	Clean propulsion, eco-satellites, reusability
LIFE Programme	€5.43bn	Environment & climate action	€1m–€10m	Climate services, space-enabled adaptation
UK Space Agency	£100m+ annual calls	Space science, sustainability	£50k–£15m	National missions (e.g. CO₂ monitoring)
Innovate UK Net Zero	£1bn+ portfolio	Clean energy, mobility, data	£50k–£2m	Satellite data for net-zero mobility, energy

 

What is Space Technology for Decarbonisation?

Space technology for decarbonisation refers to the application of space-based tools and services to reduce carbon emissions, improve resource efficiency, and accelerate the transition to net-zero economies. Examples include:

• Earth Observation: Satellites providing real-time data on emissions, deforestation, and ocean health.
• Green Propulsion: Development of non-toxic, sustainable fuels for satellites and launchers.
• Energy Infrastructure: Space-based solar power and satellite-enabled grid optimisation.
• Supply Chain Monitoring: Using satellite data to verify carbon reduction claims in global trade.
• Climate Modelling: Advanced sensors that feed into predictive models for policymakers and businesses.

This convergence of space, sustainability, and digital technology creates new commercial opportunities but requires significant upfront investment, hence the growing importance of grant funding and R&D tax incentives.

 

Why CFOs Must Pay Attention

CFOs in innovation-driven SMEs face three recurring challenges:

1. Balancing long-term innovation with short-term cash flow
   Developing decarbonisation tech often requires large upfront spend on prototypes, testing, and compliance, with delayed revenue realisation.
2. Navigating fragmented funding ecosystems
   EU, ESA, Innovate UK, and private funds all have different eligibility rules, reporting standards, and audit risks.
3. Avoiding opportunity costs
   Missing out on grants or misaligning R&D incentives across borders can cost millions, not just in lost funding, but in lost competitive advantage.

In a climate where venture capital funding has declined year on year since 2021, grants and tax incentives are becoming the most reliable growth levers for high-tech firms.

 

Funding Opportunities in Europe

European Space Agency (ESA)

The ESA runs multiple programmes aligned with sustainability and space innovation:

• ESA’s ARTES (Advanced Research in Telecommunications Systems) – supports SMEs developing satellite-enabled services for climate monitoring, smart cities, and mobility.
• ESA Clean Space Initiative – focuses on eco-design, debris mitigation, and clean propulsion.
• ESA Technology Development Element (TDE) – funds feasibility studies and prototypes with applications in decarbonisation.

ESA grants often require international collaboration, making FI Group’s network across 13 countries a decisive advantage in forming and managing consortia.

Horizon Europe

With a €95.5 billion budget (2021–2027), Horizon Europe is the EU’s largest funding programme for research and innovation. For space decarbonisation, key clusters include:

• Climate, Energy & Mobility – funding projects in clean aviation, sustainable fuels, and renewable integration.
• Digital, Industry & Space – supporting satellite manufacturing, AI-driven Earth observation, and next-gen propulsion.
• Missions on Climate-Neutral Cities and Oceans – creating opportunities for space-enabled monitoring solutions.

The European Innovation Council (EIC) Accelerator within Horizon Europe also offers up to €2.5 million in grants plus blended finance, particularly relevant for scale-ups in green and space technologies.

Other EU Initiatives

• LIFE Programme (€5.43bn): Focused exclusively on environment and climate action.
• Clean Hydrogen Joint Undertaking (Clean H2 JU): €2bn for hydrogen innovation, often linked with space propulsion and storage systems.
• Digital Europe Programme (€7.59bn): Funding for AI and cybersecurity in satellite data processing.

 

Funding Opportunities in the UK

Innovate UK

The UK’s national innovation agency Innovate UK regularly opens competitions relevant to space and decarbonisation, such as:

• National Space Innovation Programme (NSIP) – supporting space data and climate applications.
• Net Zero Mobility and Aviation Calls – investing in clean propulsion and aircraft electrification.
• Smart Sustainable Plastic Packaging – relevant for supply chains where satellite monitoring validates sustainability claims.

UK Space Agency

Through targeted calls, the UK Space Agency co-funds ESA projects and runs initiatives on space debris mitigation and low-carbon satellite technologies.

 

Combined Approach: R&D Tax Relief + Grants

For UK SMEs, R&D tax relief remains a crucial complementary mechanism. Costs not covered by grants can often be claimed under the merged R&D Expenditure Credit (RDEC) scheme, offering a ~20% taxable credit on qualifying costs. CFOs must carefully structure projects to avoid “double-dipping”, where the same cost is claimed twice under different schemes, a compliance risk that FI Group’s integrated advisory model helps mitigate.

Private and Venture Funding Landscape

While venture capital remains the largest pool of growth finance, the market has cooled significantly since 2021. UK deal volumes have fallen, though average deal sizes remain larger than a decade ago, with deep-tech and life sciences attracting outsized interest.

For space decarbonisation, this means CFOs should see public funding as a hedge against VC volatility. Grants de-risk early-stage projects, making companies more attractive to private investors down the line.

Roadmap for SMEs and Scale-Ups

For SMEs considering entry into the space decarbonisation ecosystem, a structured roadmap is critical:

1. Map Your Innovation Pipeline
   Identify which projects align with decarbonisation priorities (e.g. propulsion, data analytics, monitoring).
2. Select the Right Funding Mix
   Combine grants, R&D tax relief, and where possible, blended finance instruments.
3. Form International Consortia
   Particularly for Horizon Europe and ESA projects, partnerships improve eligibility and competitiveness.
4. Align Reporting and Compliance
   Different jurisdictions have different audit risks; early planning avoids costly delays.
5. Leverage Expert Support
   Engage advisors who understand both the technical innovation and the financial compliance.

 

The FI Group Advantage

At FI Group, we turn complexity into clarity for innovation leaders. With over 1,400 experts across 20 countries, we support more than 15,000 clients annually, securing over €1.7bn in funding.

Our advisory goes beyond funding applications. We help CFOs and executives:

• Mitigate compliance risk by ensuring claims are audit-ready across jurisdictions.
• Optimise funding strategy through a single-point-of-contact model.
• Accelerate international expansion, bridging HQ strategy with local execution.

As Dr. Fawzi Abou-Chahine, Funding Director at FI Group UK, explains:

“We support clients to navigate the most competitive EU and UK schemes. Our role is not just to write applications, but to align funding with strategic goals, whether that’s scaling internationally, strengthening IP portfolios, or accelerating net-zero innovation.”

International Landscape: Global Reach, Local Expertise

Innovation does not stop at borders. Space and decarbonisation projects often require cross-continental collaboration, from launch facilities in South America to data analytics hubs in Europe and Singapore.

FI Group’s model ensures that:

• Your HQ sees the full picture, while your teams feel local support.
• Global operations don’t need global headaches.
• We deliver seamless international compliance, reducing risk in multi-country claims.

This capability is critical during M&A, supply chain shifts, and expansions where funding incentives vary widely across jurisdictions.

 

FAQs

What is the main funding source for space decarbonisation projects in Europe?

The European Space Agency and Horizon Europe are the leading sources, with additional opportunities under LIFE, Clean Hydrogen JU, and Digital Europe.

Can SMEs combine R&D tax relief with grant funding?

Yes, but careful structuring is needed to avoid claiming the same cost twice (“double-dipping”). FI Group helps ensure compliance with HMRC and EU rules.

How competitive are Horizon Europe calls?

Horizon Europe success rates average 10–15%, but consortium-based applications led by SMEs with strong partners see higher success.

What are CFO pain points in managing international incentives?

CFOs struggle with fragmented regulations, audit risk, and inconsistent reporting across jurisdictions. Integrated advisory support mitigates these challenges.

Why work with FI Group?

Because we combine global scale with local expertise, securing over €1.7bn in funding annually and offering tailored support for space and decarbonisation innovators.

 

IT innovation isn’t limited to the digital sphere. Increasingly, industrial applications of technology are pushing the boundaries of what’s considered R&D. 

When businesses use technology to solve operational, logistical, or energy challenges in new ways, they’re often venturing into innovative territory.  

Some examples might include: 

 

• AI-powered logistics route optimisation based on real-time conditions
• Development of smart warehouse automation tools
• Creation of new communication devices for confined or hazardous environments
• Software platforms managing energy distribution via smart grids
• Predictive systems for inventory management based on dynamic variables
• Advanced tools for risk modelling and pricing analysis
• User behaviour analytics that predict purchase likelihood or engagement patterns

 

In these cases, the technology isn’t just supporting the business, it’s reshaping how the business operates, opening the door to R&D qualification. 

 

What Exactly Counts as R&D? 

 

At its core, R&D is about creating value through new knowledge or novel applications of existing knowledge.  

Projects generally fall into one of three key categories: 

 

• Scientific Research: Activities that generate new knowledge, whether through fundamental or applied exploration.
• Technological Development: Projects that translate knowledge into concrete solutions, products, or prototypes.
• Technological Innovation: Significant improvements or entirely new methods, processes, or systems, often involving novel technologies or methodologies.

 

While these categories may sound academic, the reality is that many IT and digital transformation projects can fall within their scope. 

 

Where Tech Meets R&D: Common Eligible IT Initiatives 

 

Digital innovation is a fast-moving field, and many solutions that tackle complex challenges could meet the criteria for R&D recognition.  

For instance: 

 

• AI systems used for fraud detection or risk assessment
• Implementation of advanced frameworks to improve software performance
• Blockchain technologies ensuring data transparency and traceability
• Immersive tech applications in industrial or training environments
• Predictive analytics or machine learning models based on real-time data
• Automated asset management and intelligent resource planning
• Cloud-based cybersecurity solutions beyond traditional perimeter defences
• Algorithm development and mathematical modelling for smart engines
• Scalable cloud platforms tailored to new services or users
• Innovative approaches to integrated delivery management

 

These aren’t just examples of digital progress, they’re potential R&D projects with real business impact and tangible fiscal benefits. 

 

Hispanic America as a case study: Tax Incentives in Peru  

 

In a world where innovation drives competitive advantage, research and development (R&D) is no longer a luxury, it’s a strategic position. 

Around the globe, companies are investing in knowledge-based growth to stay ahead of the curve. In Peru, this global trend is taking on a particularly promising form: tax incentives designed to encourage and reward innovation. 

But how do you know if your project qualifies?  

Could your next technology initiative not only advance your operations but also reduce your tax burden? 

 

The R&D Advantage: A Strategic Incentive 

 

The power of innovation to shape sustainable economic development must be recognised, and in the case of Peru, for example, a specific tax incentive has been introduced: 

• Law No. 30309: companies that invest in scientific research, technological development and technological innovation projects can deduct the expenses incurred on their tax return.  

This innovative regulation offers additional income tax deductions to companies that invest in scientific research, technological development or technological innovation. 

It’s not just about rewarding great science or complex engineering, it’s about promoting a culture of innovation in which experimentation, development and improvement are actively supported. 

 

Do you have questions about whether your project can qualify for the R&D criteria? 

 

Here are some questions we suggest you ask yourself: 

– Are you solving a technical problem with no clear solution at the outset? 

– Does it involve a significant advance in either what is being done or how it is being done? 

– Are you experimenting with untested ideas or developing new methodologies? 

– Is there a measurable element of uncertainty or technical risk? 

– Will you generate knowledge that did not previously exist in your company, sector or region? 

– Are you applying existing technologies in innovative ways? 

 

If you can confidently answer ‘yes’ to several of these questions, there’s a good chance your project will qualify, and it may be time to explore your eligibility for R&D tax benefits or other innovation-centred incentives. 

 

With a global vision and clients around the world, FI Group specialises in the technical and legal criteria of R&D classification, monitoring the entire process. Our teams of experts combine technical knowledge and strategic vision to ensure that your projects meet the necessary standards and have the best chance of success. 

 

Remember: your innovation today can generate tax benefits tomorrow. 

The European Commission has published the latest edition of the 2025 European Innovation Scoreboard (EIS), confirming a positive long-term trend in the EU’s innovation capacity. Since 2018, the European Union’s innovation performance has grown by 12.6%, reflecting efforts to strengthen R&D ecosystems, promote public-private collaboration, and accelerate digitalization. 

 

Although the most recent data show a slight slowdown (with an average decline of 0.4 points between 2024 and 2025), the overall outlook remains positive. All Member States have improved since 2018, with especially notable progress in key countries such as Spain, Belgium, Italy, Germany, and Portugal, where innovation ecosystems have continued to strengthen alongside a sustained commitment to public-private collaboration and business-driven R&D. 

 

In Spain, several regions stand out for exceeding the European average: 

Catalonia, the Basque Country, Madrid, Navarre, and the Valencian Community, consolidating themselves as competitive innovation hubs at the European level. 

 

The 2025 Regional Innovation Scoreboard (RIS) presents a mixed but converging picture. Between 2018 and 2025, 233 out of 241 European regions improved their innovation performance, narrowing the gap between the most and least advanced areas. However, 82 regions recorded a decline between 2023 and 2025, highlighting a recent slowdown in some territories and underlining the need to reinforce policies that enhance competitiveness across all regions. 

 

The European Innovation Scoreboard is not just a statistical report; it is a strategic reference tool for guiding public policy, planning investments, and supporting business decision-making. Its integration into the New European Innovation Agenda further strengthens its strategic role, helping to reduce disparities among countries, promote collaboration, and accelerate the adoption of cutting-edge technologies. 

 

It also supports initiatives such as: 

1. The Competitiveness Compass. 
2. The Choose Europe campaign to attract investment and talent. 
3. The forthcoming EU Innovation Law, which will use these indicators to plan reforms and modernize national R&D&I systems. 

 

In a context of growing global competition and the urgent need for sustainable transformation, companies must take advantage of the funding and innovation incentives available. The strengthening of the European innovation ecosystem creates a favourable framework for: 

1. Accessing national and EU R&D&I funding. 
2. Collaborating with research centers and startups.
3. Developing innovative projects that enhance competitiveness. 

 

At FI Group, we have teams specialized in funding programs, offering comprehensive support that covers everything from idea conceptualization, project definition, to fostering collaborations and coordinating proposals.  

 

We accompany our clients throughout the entire project lifecycle, up to the final closure by the administration, including: 

1. Preparation of funding proposals. 
2. Interaction with institutions. 
3. Dossier management. 
4. Project justification. 
5. Audit support. 

 

We turn opportunities into tangible results. With a strong presence across Europe and deep expertise in EU funding programmes, we support businesses in identifying and securing resources for innovation-driven projects.  

If your organisation is looking to enhance its competitiveness through strategic innovation, explore how we can assist you via the EU Grants.  

Talk to our experts and turn your ideas into real impact: Request a Free Audit