You want to develop an innovative product based on artificial intelligence or machine learning. But where to start? And how to finance the necessary research and product development if your own resources are not enough?
This is where support from the Estonian state comes in: several grants from Enterprise Estonia (EIS) can help move your development project to the next phase without your company bearing all the risk and cost. One grant is suitable for testing an idea, another one for creating a working solution, and the third one for conducting more extensive applied research. But which of them best fits your idea?
In this article, we provide a practical overview of three support instruments offered by EIS: the innovation grant, the development grant, and the programme for applied research. We explain which development phase each grant is suitable for, what distinguishes them, and how STACC can support you as a development partner.
Grants as stages of a development project
These grants form a kind of development ladder in terms of both scale and purpose. It makes sense to kick off your initial development with the innovation grant, which provides up to 7,500 euros in funding, complemented by company self-financing. If the result is promising and the need for development increases, you can continue with the development grant, which offers up to 35,000 euros in funding and can cover costs such as creating a working solution or minimum viable product (MVP). If the first version proves viable but achieving commercial success requires more in-depth technology research and product development, the programme for applied research offers up to 2 million euros in support, typically requiring 40–50% co-financing.
Since 2015, STACC has completed 27 projects funded by EIS under the innovation grant, development grant, or programme for applied research, delivering R&D services totalling 4.83 million euros. We have supported clients both in applying for funding and in implementing the projects. In the application phase, we help companies draft the development plan and describe the required technology level and methodology – provided the company already has a defined business problem or a need for a technological solution.
What is the innovation grant?
The innovation grant is designed for small and medium-sized enterprises that want to purchase research and development services to begin developing a new product or service idea.
For example, the grant can be used to conduct a feasibility study, carry out a technological analysis, map and assess existing solutions, perform a preliminary analysis of workflows or datasets, build a data-driven prototype, or test a selected technology in a pilot project. The support allows companies to test early ideas safely and evaluate whether they have potential for further development.
This is especially helpful when a company has an innovative idea but lacks the resources or technical capacity to move forward independently. For instance, you may want to evaluate the feasibility of a new AI solution, analyse your existing data, or test whether a specific technology is suitable before investing in a full-scale development project.
To be eligible for the innovation grant, the company must have a novel idea that falls within one of Estonia’s national RDIE focus areas, and the cooperation partner must be a service provider approved by EIS – for example, a positively evaluated R&D organisation such as STACC.
At this stage, STACC can support you with planning the research and development activities, evaluating suitable technological approaches, and, if needed, building a data-driven prototype or test model.
Full details about the grant’s terms and eligible activities are available on the Enterprise Estonia website.
What is the development grant?
If the idea has already been validated and the direction is clear, but your team lacks the technical skills or resources to move forward, the development grant may be the right choice. This grant supports the next phase of technology development – for example, building a working prototype, testing components, or conducting more advanced product testing.
It is important that the development idea is already sufficiently mature when applying for the development grant. While innovation grant projects generally remain at technology readiness level* (TRL) 2–4, from defining the idea to creating an initial prototype, the development grant enables progression to TRL 4–6, where the technology is tested in a relevant environment and a functional prototype is developed.
* Technology readiness level (TRL) – a 1–9 scale used to assess how mature a technological solution is: from idea and feasibility evaluation (TRL 1–3) to prototype testing (TRL 4–6) and finally to real-world implementation (TRL 7–9).
For example, you have built a basic prototype but need a partner who can help improve its reliability, scalability, or accuracy. Or you’re planning to develop a data-driven solution that needs to be validated before going to market. Perhaps you already have a working solution, but it requires certification, technical refinement, or the integration of a new component – areas where your team needs additional expertise.
STACC can be a valuable development partner in this phase, who helps to:
- define technical goals and tasks so they are well-justified and clearly understood by grant evaluators;
- draft a realistic and technically sound development plan that meets both your company’s goals and the grant’s expectations;
- assess whether your existing data and technical architecture are suitable for further development;
- develop and validate prototypes, including machine learning models and other data-based components;
- test alternative technological approaches to find the best way to solve your business problem.
It is important to note that STACC does not begin development work before the grant is approved. Our role is to help plan what could be developed, not to deliver results during the application phase.
To apply for the development grant, your company should have:
- a clearly defined business problem whose solution would offer a competitive advantage;
- an idea that falls within one of the RDIE focus areas;
- a reliable service provider as a partner – such as STACC, a positively evaluated R&D institution with experience in executing projects funded by the development grant.
If your project involves data-driven methods, AI components, or analytical capabilities, it’s best to contact STACC already during the planning stage. This allows us to help you refine your idea, define the necessary steps, and prepare you for a successful application.
Details about eligible activities and requirements can be found on the Enterprise Estonia website.
What is the programme for applied research?
The programme for applied research is intended for development projects that aim to create new technologies, methods or solutions and require substantial research and development work to bring them to life. This is not just the next step after prototyping – it’s meant for situations where existing knowledge is not enough and a new, research-based approach is needed.
Applied research focuses on solving specific practical problems through scientific methods. While basic research aims to generate new knowledge in a general sense, applied research seeks to expand or refine existing knowledge in order to develop new methodologies or technological solutions for achieving a defined objective. This may involve combining known approaches or exploring entirely new ones when existing methods fall short.
Applied research projects often also involve experimental development – for example, building and testing a new data model and assessing its impact.
The programme is a good fit for companies that:
- have a large dataset and/or a complex technical challenge that requires testing and developing new scientific or methodological approaches;
- are ready to commit to long-term development (projects typically last 1–3 years);
- are interested in creating a technological edge and have a clear vision of the business impact they want to achieve.
STACC is the most valuable partner at this stage due to our experience in leading research-based development and our ability to take projects to a technological breakthrough that surpasses existing solutions.
The applied research projects are successful when the company can clearly articulate the problem and goal that data and technology should help solve. STACC can help define this as a technical research question, evaluate the scientific novelty, develop the methodology, and design the development process.
To apply for the programme, companies must first go through a mandatory pre-consultation. The purpose of this is to help them put together a strong and realistic project plan. This is where STACC’s strategic role becomes especially important – we help think through key elements before the consultation, such as:
- whether suitable data is available to solve the problem;
- which methods could be used;
- how to measure impact and results:
- what would be an optimal project timeline and division of tasks.
In the case of the applied research programme, the grant amount can reach up to 2 million euros, but it is also possible to apply with a smaller budget – for example, as a small project with funding between 100,000 and 250,000 euros. In both cases, it is essential that the company clearly understands the scope of the project and is ready to prepare it thoroughly.
Overview of support measures
| Innovation grant | Development grant | Programme for applied research | |
|---|---|---|---|
| Maximum funding | up to 7,500 € | up to 35 000 € | 100,000–2,000,000 € |
| Self-financing | 20% | 30% | varies, depends on the project, typically 40–50% |
| Grant share (max) | 80% | 70% | up to 70% (varies)* |
| Suitable phase | Idea testing, feasibility study or early prototype (TRL 2–4) | Prototype development and testing, impact evaluation (TRL 4–6) | Development of new knowledge and methods, research-based problem solving (TRL 3–7) |
| Expected duration | ~2–4 months | ~3–6 months | ~6–36 months |
| Company must have | Business problem, initial idea, data | Business problem, validated idea, data | Clear research question, comprehensive data |
| STACC’s role in project planning | Expert consultation, planning of development activities | Expert consultation, preparation of a detailed development plan | Assessment of scientific novelty, description of research methodology, preparation of a development plan |
* The funding rate under the programme for applied research depends on the size of the company, the type of project (applied research, experimental development, or feasibility study), and the form of cooperation. Detailed funding rates are available on the Enterprise Estonia website.
STACC’s role in successful project planning
To ensure a successful project, cooperation with STACC should start at the right time and under the right conditions.
We add the greatest value when a company has:
- a clearly defined business problem or development need that requires a technological solution;
- a basic understanding of what needs to be achieved and in which areas cooperation is needed;
- willingness to dedicate time to planning and discussions to reach a well-thought-out solution.
It is also important that there is someone in the company with a technical overview or the ability to engage in meaningful collaboration – this accelerates the process and increases chances of success.
Let’s talk about your idea
If you have a data-driven development idea that could qualify for one of the grants above, feel free to contact us. We help you assess which phase your project belongs to, whether it qualifies for support, and how STACC could add real value as your development partner.
