Subprogramme B:
Realisation of Individual R&D Results and Innovative Ideas

1. Objective of the Call

The programme is aimed at promoting the practical implementation of R&D results and innovative ideas and their development into marketable product, including technology and services as well, and providing assistance in their economic utilization. The programme aims to stimulate the applicant to create a product and to found a company producing and utilizing that product. It is a vital point that the product to be developed and the project are based on R&D results or ideas or inventions of natural person(s). Thus the projects to be supported shall start from personal initiatives. The development in the experimental and the near-to-market phases must be done in company.

Further goals to be reached by the supported projects are:

• Establishment of profitable, innovative companies capable of growing and creating employment opportunities
• Expansion of the opportunities for the exploitation of R&D results and innovative ideas, and strengthening the view aiming at this approach
• Boosting the domestic innovation by speeding up the process from the idea to the product
• Intensification of the technology transfer by mobilizing the researchers towards the enterprises and the industry
• Motivating the Hungarian researchers for the practical realization and for commercial utilization of their R&D results

The manufacturing and merchandizing of the products developed are not supported.

2. Program schedule

This is a multi-stage programme. It consist of three consecutive phases that are built on each other. The objective of the phases is to help the applicants to develop their R&D results, ideas or invention to a higher and higher level of innovation.

I. Phase of Project Development (duration: 3 months max.)
In this phase, the natural person who submitted successful proposals shall, in addition to the R&D work to support the feasibility of his/her idea, elaborate a detailed research plan for its improvement and, if the idea is not under legal protection yet, to do the technical, professional and legal job necessary for legal protection.

It is advisable to involve external professionals and institutions familiar with the procedures of supporting the activities in question into the implementation of the R&D work.

II. R&D Phase (duration: from 6 months min. to 12 months max.)
In the second phase, the natural person applicant shall further develop his/her research achievements up to a level, where it is possible to asses the usability of the result from business point of view based on the technological description. In this phase, the research should result in such R&D achievements and proprietary intellectual property (e.g. patent) which, in case of the continuation of the project, can be set under legal protection, and can be used as a basis for the foundation of an enterprise (company) or an enterprise can be involved in their business exploitation.

III. Development Phase (duration: 12 months max.)
In this phase the objective of the R&D activities of the proposer enterprise shall be the creation of the prototype, the experimental production of the product, and testing the technology or the services developed within experimental work conditions.

The instruments and equipments necessary for the pilot production shall be ensured by the applicant from its own resources. The applicant shall produce a business plan on the business exploitation of the prototype being developed as well.

The applicant can enter the phases following the first phase under the following conditions:

• the tasks undertaken in the first phase are accepted by the Agency for Research Fund Management and Research Exploitation (KPI) as fulfilled,
• the project is suggested for continuation by the Jury,
• the president of the National Organization for Research and Technology (NKTH) makes a decision of the further support of the project, based on the presented project proposition and on the recommendation of the Jury.

It is not a prerequisite to have an academic degree to submit a project proposal, but the persons taking part in the project must have the appropriate knowledge, expertise and infrastructure to ensure the successful accomplishment of the tasks set in the project. The applicant is allowed to call in subcontractors and buy services in all three phases of the implementation.

The project can be started at phase I or at phase II. The applicant must submit a separate proposal at each phase containing the plan of the work and cost to be realized in the given phase of the innovation project. If there is a project plan, it is requested to attach a copy of the documents of the legal protection, or that of the patent application. If the applicant natural person will call in an already existing enterprise for the utilization in the phase III, it is requested to attach the following documents as well: a copy of the simplified financial statement of the previous two years sent in to the registry court; the contract between the natural person and the company regulating the relationship between them, the tasks undertaken in the research and development work, the responsibilities and the ownership of the parties.

3. Activities eligible to be supported

The activities which can be supported as part of the research and development work at a given phase of the project are as follows:

• applied research, experimental development, technological innovation, technology transfer (I, II, III)
• buying R&D and innovation services (I, II, III)
• protection of intellectual property (patent, utility design, trademark, utility model protection) (I, II)
• analyses supporting research, development and innovation activities, feasibility study, preparing research plan (I, II, III)
• market research, preparing business and marketing plans (II, III)
• taking legal and industrial property protection advice (I, II, III)
• financial accountant and tax consultant services (I, II, III)
• attending professional events, presenting results of R&D and products developed (I, II, III)
• international research and innovation cooperation, exchange of ideas (I, II, III)
• enterprise management consultancy services (II, III)
• development of prototype and experimental systems (II, III)
• purchase and rental of scientific instruments and equipments supporting research and development work (II, III)
• preparation of experimental production and business exploitation of prototype, experimental demonstration plant, rental of equipment for pilot manufacturing (III)
• acquisition immaterial assets (software) (I, II, III)

4. Eligible applicants

Natural persons can apply in phase I and phase II of the project. Project proposals can be submitted by natural persons resident in Hungary. The applicant must declare that the R&D achievements or the idea used as the basis of the project proposal are the results of his/her own work, and it is his/her sole property. If the R&D achievements or the idea is a result or intellectual property of multiple persons, the applicant shall obtain the consent of all the other persons for using the intellectual property in the preparation and in the presentation of the project proposal, and attach it to the project proposal.

The project in phase III can be continued provided that the natural person establishes a company with a seat in Hungary and legal entity or such a company is involved into the development and exploitation of the product. This company shall be the applicant in phase III.

5. Financing

The National Organization for Research and Technology provides 1,400 million HUF from the Research and Technology Innovation Fund.

6. Expected number of projects

The expected number of supported project proposals in the individual phases:

• Phase I.: 20
• Phase II.: 10
• Phase III.: 5

7. Form of project funding, duration of the project

The form of the support: grant without repayment obligation. The maximum lifetime at the phases:

• Phase I.: 3 months
• Phase II.: 6 to12 months
• Phase III.: 12 months

8. Evaluation and selection criteria

At appraisal, preference will be given to the project proposal if

• its subject is protected by a patent,
• it is based on personal scientific achievements or idea of a young researcher under age of 35

Aspects of appraisal are as follows:

Phase I.

• Conformance of the project proposal with the goals of the programme
• The professional matter, importance and novelty of the project proposal
• The legal protection of the R&D achievement or patent used as the basis of the project proposal
• The probability that the R&D achievement or the patent will be implemented and developed to a product
• The business opportunities of the product, and the chance of profitable business exploitation
• The project management competency of the applicant, the professional competence and ability of the persons and organizations taking part in the accomplishment of the planned R&D work and other related tasks.
• The reality and foundation of costs planned

Phase II.

• The professional level of phase I (if any)
• The elaboration and feasibility of the work plan. The chance that the R&D achievement or the patent will be implemented and developed to a product
• The project management competency of the applicant, the professional competence and ability of the persons and organizations taking part in the accomplishment of the planned R&D work and other related tasks.
• The reality and foundation of costs planned
• If the applicant submits proposal in phase II only, all the aspects for the entire project (see phase I) will also be considered.

Phase III.

• The professional level of R&D results obtained in phase II
• The elaboration and feasibility of the work plan.
• The chance that the R&D achievement or the patent will be implemented and developed to a product
• The reality and foundation of costs planned
• The capability of the applicant or the company involved into the accomplishment of the project. The professional competence and ability of the persons and organizations taking part in the accomplishment of the planned R&D work and other related tasks.
• The market potential of the product to be developed within Hungary and abroad, based on the feasibility study worked out.
• The level of elaboration of the R&D achievement or invention in respect of practical implementation, and the chance of producing a prototype.

The assessment of the submitted project proposals will be done at each phase of the project by a Jury composed of independent experts. The Jury qualifies and ranks the project proposals. The proposal for decision will be made by the Jury based on the available resources. The president of the National Office for Research and Technology decides on the support of the project proposals, with the recommendation of Jury taken into consideration.

Date of announcement: 09.11.2005
Deadline for submission: 21.11.2005