Unclaimed fortune in EU coffers

Millions of pounds in aid from Brussels is going begging because British technology firms are simply not aware that it is available. The EC Framework programme is aimed at encouraging small firms to collaborate with larger businesses and academics in order to share ideas for research and development projects.

The scheme pairs the resources and financial strength of large corporations with the agility and flexibility of small firms, and adds the cutting-edge research skills of academia to develop products and ideas.

It was launched in the early Nineties and the current round of lucrative funding -- called Framework Six -- has been responsible for allocating more than 3.5 billion a year to a mixture of projects run by small and medium businesses, as well as large corporations.

But it has emerged that British technology firms have been missing out on their share of the spoils.

The UK allocation in the IT category has been less than 12 per cent of the total while German companies have cornered 21 per cent. This is not favouritism -- it is just because many British businesses simply have not applied.

Zarlink Semiconductor made its first application for a share of the funding in 2003. It joined partners, including a German medical technology firm and a Belgian hearing implant company, to apply for aid for several projects.

The microelectronics division of the firm, based in Caldicot, Monmouthshire, received more than 500,000 for one project alone. Its first tranche of funding meant that it could treble its research team.

Martin McHugh, Zarlink's business development head, says: "We had been vaguely aware of the opportunities, but from the outside the projects looked cumbersome and bureaucratic.

"By aligning with the right partners, it became easier. We are currently preparing for Framework Seven and know the people to work with, which projects are suited to us and how we will structure our bid."

Small and medium enterprises can apply for one of seven categories of funding. The next round of handouts, Framework Seven, which starts in January, will offer even greater financial support.

Aid for Framework-funded projects across Europe ranges from 70,000 to 21 million.

Peter Walters, of the Department of Trade and Industry, advises businesses on preparing applications. "Read the available guidelines carefully, then talk to potential partners and the National Contact Point, who will guide you through the process," he says. "But start early."

Firms must demonstrate that they can fund half of the costs of each project. It is important that they vet their potential partners because if one party defaults on its commitment, the remaining members of the consortium may be held liable.

Small companies can find partners and academic links through a website and advice lines.