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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). 

 

In today’s digital economy, data is the new global currency.From proprietary intellectual property to sensitive customer information, the exponential growth in data volume is both a driver of innovation and a magnet for risk. For years, many businesses viewed data privacy and cybersecurity as necessary evils: cost centres dictated by regulations such as the EU’s General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). These were seen as administrative hurdles, not strategic assets.

That mindset is changing rapidly. The average global cost of a data breach reached USD 4.88 million in 2024, marking a significant year‑on‑year increase and highlighting the severe financial and reputational consequences of inadequate protection. But the true cost goes far beyond fines and incident response. Recent research shows that 87% of consumers would not do business with a company if they had concerns about its security practices or recent security and privacy incidents. This convergence of escalating risk and eroding trust demands a fundamental rethink.

 

The question is no longer:
How can we meet minimum compliance requirements?

The strategic imperative today is:
How can we transform investment in robust privacy and cutting‑edge cybersecurity into a measurable competitive advantage that drives sustainable business growth?

 

At FI Group, we see this as the dawn of the Trust Economy. Compliance is the floor; trust is the ceiling. This article explores why a proactive, globally aware approach to privacy and security—one that goes beyond compliance—is the single most critical investment for securing your future, enhancing market positioning, and unlocking new revenue streams.

 

From Cost Mitigation to Value Creation

The rise of cyber threats, from ransomware‑as‑a‑service to state‑sponsored espionage, requires a strategic shift. Every amount spent on advanced security and privacy is not a tax on innovation but an investment in resilience and market leadership.

Pillar 1: Cybersecurity as a Strategic Enabler of Global Operational Efficiency

In a hyper‑connected world, business continuity depends on cyber resilience. The ROI of cybersecurity is best measured by revenue protected, intellectual property secured, and operational efficiency gained.

1. Minimising the Cost of Long Lifecycles

Time is the most expensive variable in a cyber incident. The global average lifecycle for a data breach is 277 days. Longer lifecycles mean higher costs. Conversely, rapid and sophisticated incident response translates into significant savings.

Companies leveraging AI and automation in Security Operations Centres (SOCs) save an average of USD 2 million compared to those without. This is not just a technology purchase; it involves developing and integrating automated detection and response algorithms—activities that often qualify for R&D tax credits globally.

2. Securing the Global Supply Chain

More than 60% of cyberattacks originate via supply chains or third‑party vendors, making supply chain resilience a critical responsibility.

Certifiable cybersecurity is becoming the new standard for B2B engagement.

• Accelerating M&A: Robust cyber due diligence prevents acquiring hidden vulnerabilities.
• Preferred Partner Status: Demonstrating a superior, globally consistent security posture differentiates companies bidding for high‑value contracts in regulated sectors such as finance, energy, and pharmaceuticals.

 

Pillar 2: Privacy as the Foundation of the Global Trust Economy

The fragmentation of data protection laws, from GDPR to emerging US state and APAC regulations, demands a globally consistent “Gold Standard” in privacy governance.

1. Building Enduring Customer Loyalty and Higher CLV

Consumer trust is fragile. Around 34% of consumers globally will abandon a brand if their data is misused, making privacy a direct revenue driver.

• Transparency as a Premium Service: Offer intuitive privacy dashboards that shift privacy from legal compliance to ethical partnership.
• Unlocking First‑Party Data Value: Trusted brands gain access to higher‑quality data, boosting personalisation, conversion rates and Customer Lifetime Value (CLV).

2. Driving Innovation with Privacy‑Enhancing Technologies (PETs)

Privacy regulation is not a constraint; it is a catalyst for innovation. Privacy by Design principles encourage solutions that extract analytical value while minimising exposure.

• Homomorphic Encryption: Enables computation on encrypted data without decryption.
• Differential Privacy: Adds controlled noise for aggregate analysis while protecting individuals.
• Zero Trust Architecture (ZTA): Extends «never trust, always verify» across users, devices, and applications—critical for multi‑cloud environments.

Developing and integrating these solutions often qualifies as technological R&D, making them eligible for global innovation incentives.

 

The FI Group Advantage: Funding the Global Security Imperative

At FI Group, we help multinationals adopt a Beyond Compliance posture while minimising net costs through R&D tax credits, grants, and innovation incentives.

The Innovation–Compliance Matrix: R&D Eligibility

Project Activity	Technical Challenge	Eligible for R&D Funding?
Developing ZTA	Creating proprietary policy engines for continuous authentication	Yes
Data Anonymisation	Novel algorithms for GDPR‑compliant differential privacy	Yes
Next‑Gen Threat Detection	Training ML models for advanced persistent threats	Yes
Post‑Quantum Cryptography	Researching new cryptographic protocols	Yes
Routine Patching	Applying standard updates	No

 

Actionable Roadmap: Four Steps to Global Security Leadership

1. Institute a Global Data Governance Framework
   Harmonise compliance across jurisdictions and map data value and risk.
2. Prioritise Investment in Innovation‑Qualified Security
   Focus on advanced projects such as ZTA and PETs.
3. Cultivate Trust as a Brand Differentiator
   Communicate transparently and track metrics such as CLV.
4. Integrate Security Spend with R&D Funding
   Document technical uncertainty and partner with incentive specialists.

 

Organisations face a choice: treat privacy and cybersecurity as costly compliance exercises or embrace them as growth drivers and trust builders.

The businesses that dominate the next decade will be the most trusted.

By adopting a Beyond Compliance mindset and funding innovation through R&D incentives, companies secure more than networks—they secure market leadership.

 

Next Steps

Implementing a global Beyond Compliance strategy requires technical, financial, and regulatory expertise. FI Group offers a unified global service to align security investment with maximum innovation incentives.

This milestone highlights the company’s unwavering commitment to leveraging Artificial Intelligence in a secure, ethical, and responsible way, fully aligned with the highest international governance standards. Achieving the ISO/IEC 42001 certification, the world’s first global standard for Artificial Intelligence Management Systems (AIMS), reinforces our leadership in AI governance and compliance.   

 

What is ISO/IEC 42001?

ISO/IEC 42001 establishes a comprehensive framework fr managing AI systems throughout their entire lifecycle, from design and development to deployment, monitoring and retirement. It places strong emphasis on risk management, transparency, human oversight, and continuos improvement. FI Group’s certification demonstrates that responsible AI i not treated as an isolate initiative but as an integral part of its global governance, technology and compliance model.

 

«ISO/IEC 42001 certification refelcts our conviction that Artificial Iteligence must be developed and used with integrity, accountability and trust at its core.»

 

Iñigo Paniagua, Corporate Chief Tech & Digital Officer

 

Why This Certification Matters? 

As AI becomes increasingly embedded in business operations, governance and trust are essential. ISO/IEC 42001 certification provides independent assurance that FI Group:

• Applies robust governance controls across all AI use cases
• Systematically identifies, assesses and mitigates ethical, technical and regulatory risks
• Ensures human-in-the-loop oversight in critical AI-supported processes
• Protects data security, privacy and information integrity by design

This achievement reinforces FI Group’s AI vision: Innovating with Integrity and its corporate commitment to deploying innovation responsibly, transparently and in line with evolving regulatory expectations, including the EU Artificial Intelligence Act and emerging AI assurance frameworks.

 

How FI Group achieved ISO/IEC 42001 Certification?

The certification follows a rigorous, independent audit assessing the design, implementation and effectiveness of FI Group’s AI Management System. Achieving this milestone required cross-functional collaboration across technology, security, legal, compliance, quality and business teams.

Key elements of FI Group’s AI governance framework include:

1. A formal AI policy aligned with compliance, security and data protection principles
2. Clearly defined roles, responsibilities and decision-making structures via an international AI Committee
3. AI risk and impact assessments integrated into every AI use case lifecycle
4. Strong data governance and model management controls, including traceability and auditability
5. Ongoing training and awareness programmes to embed responsible AI practices across the organisation

Rather than treating certification as a one-off exercise, FI Group has operationalised ISO/IEC 42001 through everyday processes, controls and people.

«We translated the ISO requirements into real operational practices, impact assessments, continuous monitoring and documented human review embedded in our daily work.»

 

Albert Martín, AI Governance and Product Owner

 

Impact for Clients and the Market:

For FI Group’s clients, ISO/IEC 42001 certification provides assurance that the internal use of AI supporting client services and operations is governed by a robust, transparent and internationally recognised management framework.

While AI at FI Group is currently used primarily to enhance internal processes, decision-making, efficiency and service quality, the certification ensures that any AI-enabled support functions influencing client outcomes are managed with:

• Systematic risk and impact assessments
• Strong data protection, security and privacy controls
• Defined human oversight in critical processes
• Full traceability and auditability across the AI lifecycle

This governance approach reduces operational risk, strengthens service reliability and reinforces client confidence in how FI Group applies advanced technologies behind the scenes. From a market perspective, ISO/IEC 42001 positions FI Group as an organisation that adopts AI with maturity and responsibility, anticipating regulatory expectations and demonstrating leadership in ethical and compliant innovation, even when AI is not a client-facing product.  

 

Responsible AI governance strengthens trust not only in what we deliver to clients,

but in how we operate as an organisation.

 

Looking Ahead: Continuous improvement and regulatory readiness 

ISO/IEC 42001 certification marks an important step, but it’s not the finish line. FI Group remains committed to the continuous improvement of its AI Management System, applying the PDCA (Plan–Do–Check–Act) cycle to evolve alongside technological advances and regulatory developments.

By aligning its AI governance with global standards today, FI Group is strengthening its readiness for tomorrow’s regulatory landscape while continuing to unlock the value of Artificial Intelligence in a responsible and sustainable way.

 

This certification confirms that innovation and strong governance can and must progress together.

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.

 

Key Insights: 

• Industrial hubs historically thrived due to abundant natural resources, particularly water and energy.
• Modern challenges include rising costs of water and electricity, increased pressure on natural resources, severe droughts, and energy system vulnerabilities.
• Investing in water and energy efficiency through innovation is crucial for sustainable industrial practices and competitive advantage. 

 

Modern industry emerged and flourished in a world shaped by the belief in infinite natural resources. What do Manchester in the United Kingdom, the Manufacturing Belt in the United States, the Ruhr Valley in Germany, the Yangtze River Region in China, the Nile Valley in Egypt, and southern and southeastern regions of Brazil have in common?  

These regions were (and some still are) major industrial hubs in their respective countries. What explains their industrial prominence is the rich and abundant supply of water and other energy sources, in other words, the availability of natural resources. 

In Manchester, along the banks of the River Irwell, one of the world’s first industrial hubs emerged, with a strong textile industry. The city also benefited from nearby coal mines, which fuelled factory boilers and locomotives, driving the Industrial Revolution. 

 

In the U.S. Manufacturing Belt, the St. Lawrence River and the Great Lakes enabled the transport of raw materials and finished goods, while also supplying energy to automotive, steel, and railway industries. The region also had coal and iron reserves, especially in Pennsylvania and Ohio, which supported steel production and thermal energy generation. In the Ruhr Valley, the Rhine and Ruhr rivers supplied steel, chemical, and mechanical factories, essential for furnace cooling, ore washing, and energy generation. In China, the Yangtze River was instrumental in the development of cities such as Shanghai and Wuhan, supporting electronics, shipbuilding, chemical, and textile industries, which heavily depend on water for manufacturing, cleaning, and cooling processes. The region also holds large coal reserves, especially in provinces like Shanxi and Anhui, which supply China’s industrial base. In Egypt, the Nile River was the foundation for the development of textile, food, and petrochemical industries, especially around Cairo. The energy generated by the Nile, particularly after the construction of the Aswan Dam, was essential for the country’s electrification and industrialization. In Brazil, the South and Southeast regions became industrial hubs thanks to major rivers like the Paraguay, Uruguay, and Tietê, which supply numerous cities that evolved into significant industrial centres. For example, São Paulo and Campinas, both in the state of São Paulo, host numerous industries due to their proximity to rivers like the Tietê and Atibaia, supporting sectors such as metallurgy, chemicals, and food, all highly dependent on water for equipment cooling, raw material washing, steam generation, and effluent treatment. Additionally, southern Brazil, especially Rio Grande do Sul and Santa Catarina, has vast availability of water resources. 

Water and energy abundance, whether through rivers or coal mines, was therefore one of the decisive factors for these areas to become economic engines of their countries and continents, especially in water and energy-intensive industries such as textiles, food, chemicals, metallurgy, and pulp and paper. However, the current and emerging scenario presents numerous uncertainties regarding water and energy availability. 

 

A reality that cannot be ignored: The rising cost of water and electricity 

Population growth and the resulting increase in natural resource consumption in these regions, including water resources, as well as rising energy demand, pose unprecedented challenges to industrial activity, which once had seemingly unlimited growth prospects. 

 

These challenges are concentrated in three main areas: 

1. Increasing pressure on natural resources: Industry is responsible for approximately 20% of global freshwater withdrawals, although actual consumption varies depending on the production process. In developed countries, industrial water use can represent between 30% and 60% of total withdrawals, depending on the economic structure and industrial profile. In the United Kingdom, industrial water use accounts for a substantial share of the country’s renewable water resources, estimated at 147 billion m³/year. In China, industrial pollution affects more than 60% of lakes, directly impacting availability for manufacturing use. 
2. Severe droughts and water scarcity: Water scarcity already affects industrial hubs in all the regions mentioned. In Brazil, the water crises of 2001, 2014–15, and 2021 directly impacted industrial production. In Egypt, disputes over control of the Nile’s waters threaten supply to sectors such as textiles and petrochemicals. In the United Kingdom, parts of the country already face seasonal water stress, with direct impacts on the industrial sector, especially in densely urbanised areas and the north of England. 
3. Overload and vulnerability of energy systems Approximately 90% of global thermal and nuclear energy generation consumes water at some stage, while renewable sources such as solar and wind have negligible water consumption. In Europe, the manufacturing industry accounts for 18% of total water use, especially for cooling thermal and nuclear power plants. In Brazil, reliance on hydropower makes the system vulnerable to climate variability, with a projected reduction of up to 40% in water availability by 2040. 

 

Investing in water and energy efficiency as a competitive and cost-reducing strategy 

Investing in Research, Development, and Innovation (R&D&I) projects proves to be the most sustainable and efficient solution for industry to adapt to a scenario full of uncertainties. Through innovation, global industry can develop the resilience needed to continue fulfilling its core mission: enhancing human well-being through sustainable industrial practices. 

 

There are many paths to follow: 

1. Technological perspectives for water efficiency and water reuse: Industrial water reuse is one of the most effective strategies to reduce dependence on potable sources and minimise environmental impacts. Technologies such as ultrafiltration, reverse osmosis, and electrodialysis allow for the treatment and reuse of effluents in processes like cooling, equipment washing, and steam generation. According to the International Energy Agency (IEA), reuse practices can reduce water demand by as much as 60% in sectors such as pulp and paper, food, and petrochemicals. In addition to lowering operational costs, this practice contributes to water security and regulatory compliance, especially in regions with seasonal scarcity. 

•  Industry 4.0 Technologies: The use of smart sensors, Internet of Things (IoT), supervisory software (SCADA), and Artificial Intelligence enables real-time monitoring of water consumption, loss detection, and process optimisation. Technical studies published by industrial associations and research institutes indicate that industries adopting automation and digitalisation can reduce water consumption by up to 50% and increase environmental compliance by 30%. Mining, sanitation, chemical, and food sectors are leading this transformation. 

 

2. Technological perspectives for energy efficiency energy management systems (EMS): EMSs enable continuous monitoring of energy consumption, waste identification, and data-driven decision-making. According to the Energy Efficiency Roadmap from the Empresa de Pesquisa Energética (EPE), a Brazilian federal government agency responsible for energy efficiency studies, implementing EMSs can generate savings of up to 20% in energy consumption, with a return on investment (ROI) in less than two years. Sectors such as metallurgy, cement, food, and pharmaceuticals have widely adopted this solution, gaining competitiveness and sustainability. 

•  Artificial Intelligence and Digital Twins: AI and digital twin applications allow for simulation of energy scenarios, consumption pattern prediction, and predictive maintenance. These technologies increase system reliability and optimise energy use in real time. According to the IEA, the use of AI in industry could reduce global energy consumption by up to 10% by 2040. Automotive, technology, and pharmaceutical sectors are leading this adoption, with gains in efficiency and emission reduction. 

 

The examples above are part of a technological repertoire accessible to industries, although their application to specific contexts depends on structured projects and studies based on best project management practices to achieve the desired results. These examples represent just a portion of the available technological solutions. Through R&D&I, industries across various sectors, especially those with high water and electricity demands, can achieve excellent results in water and energy efficiency. 

 

Innovation incentive mechanisms must be part of Industrial Project Planning 

Innovation support mechanisms, such as R&D Tax Credit and Innovation Funding, should be strategically incorporated into industrial planning. These instruments not only financially enable water and energy efficiency projects but also act as catalysts for technological transformation. According to the OECD Science, Technology and Innovation Outlook 2021, innovation projects can have 30% to 70% of their costs subsidised through public policies, depending on the country and sector involved. This allows initiatives that were previously economically unfeasible to be implemented and, moreover, to gain scale, technical depth, and measurable environmental impact. 

Beyond financial aspects, these mechanisms offer significant managerial benefits. Structuring projects based on innovation incentives requires greater clarity on objectives, metrics, and expected outcomes, strengthening innovation governance. Industry gains greater visibility over its technological portfolio, enabling more precise decisions on resource allocation, investment prioritisation, and risk assessment, especially regarding the study and selection of technologies to be invested in. This is particularly relevant in areas such as water and energy efficiency, where returns may be challenging to quantify yet remain strategically vital. 

In a global scenario marked by increasing water scarcity, energy volatility, and regulatory pressure, investing in innovation is a crucial factor for cost reduction and margin improvement, providing industries with a competitive edge essential for a global supply chain increasingly sensitive to environmental and climate factors. Industries that recognise the hidden costs of inefficiency and anticipate them with structured projects and innovation investment will be better prepared to lead the transition to a sustainable, resilient, and data-driven economy. 

 

Key Findings:  

• The article highlights the historical reliance of industrial hubs on abundant natural resources and the modern challenges posed by rising costs and resource scarcity.
• It emphasises the importance of investing in water and energy efficiency through innovation to ensure sustainable industrial practices and maintain competitive advantage.
• Key technological solutions include water reuse, Industry 4.0 technologies, Energy Management Systems, and Artificial Intelligence.
• The article also underscores the role of innovation incentive mechanisms in supporting these investments and enhancing industrial resilience.