Industrial projects involving mobility, renewable energies, digitalisation, entrepreneurship, commerce and tourism, started by Spanish SMEs, including many automatic door companies, will be highly profitable. They will be able to take a good chunk of the €140 billion of funds the NextGenerationEU has earmarked for Spain.
Andrés Pereda is Director of Corporate Development at the Spanish Chamber of Commerce. He says that the NextGenerationEU funds are a historic opportunity to transform Spain’s economy. “A large part of these funds should reach the structure of SMEs, which represent 99% of Spain’s industrial fabric. Their success or failure will be gauged by the extent to which these funds benefit small and medium-sized enterprises.” The Spanish government has drawn up its Recovery, Transformation and Resilience Plan to channel the up to €140,000 million earmarked for Spain. The Plan explains that participation by SMEs in “we especially expect actions aimed at mobility and renewable energies, industrial projects, digitalisation, entrepreneurship, trade and tourism, among others.”
The funds must reach SMEs through calls for tenders, subsidies and grants, and the Strategic Projects for Economic Recovery & Transformation (PERTE). “Regarding calls for grants, it is worth highlighting the Digital Kit Programme. It aims to promote the digitalisation of companies with fewer than fifty employees and self-employed workers. Those companies also represent 51% of employment in Spain. Digital Kit offers direct aid vouchers from €2000 to €12,000, depending on the company's size, to encourage the implementation of digital solutions.”
Regarding the other way SMEs can benefit from the NextGeneration Funds, the PERTE expects companies to sign up with the National Register of Entities Interested in Strategic Projects for Economic Recovery & Transformation. That’s an instrument to register and certify the accreditation of bodies interested in the PERTE, approved by the Cabinet.
Andrés Pereda points out that Spain has made a commitment to the European institutions to meet 43% of the milestones and objectives of the Recovery, Transformation and Resilience Plan by 2022. “The effectiveness of these investments depends on agile management. That’s why information and advice to companies and public-private collaboration will be decisive in achieving the expected goals.”
Amaia Brugos, a consultant at Zabala Innovation, says that NextGenerationEU is an instrument in addition to other European funds (including ERDF, EAFRD, ESF, FTJ) but is also different to any other EU mechanism, as it’s a real pay-for-performance plan. “It’s quantitatively very big, involving some €140 billion allocated from 2021 to 2023, while the other funds add up to just over €40 billion over seven years.” So, “NextGenerationEU offers great funding opportunities for SMEs, as they play a major role in Spain’s Recovery, Transformation & Resilience Plan (PRTR), the government's strategy to channel European funds to repair the damage caused by the pandemic.”
Brugos explains that there are basically two ways for companies to access NextGenerationEU funding: tenders and calls for proposals. “For the first, there are over €5.6 billion that the different central and regional governments plan to tender throughout the first half of 2022.”
And the calls for proposals fall into three main groups: “The traditional competitive (managed by central or regional bodies), non-competitive (aid-in-kind or vouchers, such as Digital Kit), and, finally, strategic, large in size and impact, but always competitive. For example, many of these strategic calls for proposals require participation or impact on SMEs.”
In fact, “if we analyse the 266 lines of action of the Plan planned for the first half of this year one by one, we see that SMEs can benefit from this aid in 191 of them. That adds up to an estimated budget of €16,948.47 million of the more than €24,667 million in total.”
Upgrading the Industrial Fabric
It is important to remember that SMEs also have a prominent role in several of the PRTR’s thirty components. “I would particularly emphasise component 13, which is part of the PRTR’s Lever 5: Modernisation & Digitalisation of the Industrial Fabric and SMEs, Tourism Recovery and Boosting Spain as an Entrepreneurial Nation. It has an estimated total budget of €4894 million and groups together several initiatives aimed at SMEs.”
To access funding for SMEs, this expert recommends, on the one hand, taking a strategic approach to anticipate and filter information. “It’s essential to analyse the expected tenders and bidders if we want to participate in them, for example. As for calls for proposals, it’s important to take into account the requirements and approach of each one. And, as there’s no one-stop-shop for presenting projects, you have to carry out a retrospective needs analysis and a prospective analysis of a medium-term strategy to determine which lines of action fit with which specific calls.”
Finally, Zabala Innovation’s consultant warns that it is crucial to take into account the competition factor. “To be clear that, with finite funding for each call, it’s important to present projects that are not only good but perfectly suited to each programme's objectives, milestones and characteristics, and in the case of clusters, to select the best partners.”