Process and organisational innovation
Process and organisational innovation are often closely linked, and we can support both as elements of the same project.
- Process innovation is the implementation of production processes and distribution methods that clearly differ from your company's previous processes and methods. This includes costs associated with significant changes to technology, equipment and software.
- Organisational innovation involves innovation in your company's business model, work processes or forms of collaboration.
Companies that have completed a development project, such as developing a new product, often need to adapt their other systems to manufacture it. Before you can launch the product, you need to put a new organisational structure or production process in place. This is critical to a successful product launch and is often costly and demanding. These adaptations can be defined as process and organisational innovation.
What does this cover?
The activities covered relate to a new business model. This may stem from the launch of a new product or service, or from a transition to more environmentally friendly production methods.
We can fund process and organisational innovation when it is important for strengthening your company's competitiveness. The project must represent a significant step forward for your company, and we must avoid contributing to unfair competition between Norwegian companies.
Process and organisational innovation is particularly important when transitioning to more environmentally friendly operations, for example from a linear to a circular business model. This type of transition will affect large parts of your business, so you need to carry out thorough assessments and analyses before making a decision. Significant changes to your current business model require changes to production and documentation, a new customer follow-up system, and appropriate training for your employees. Activities related to environmentally friendly process or organisational innovation may qualify for grants under the Environmental Technology Scheme.
What is not covered?
- Introducing new equipment without linking it to an innovation initiative
- Routine improvement processes, such as LEAN
- Minor changes and adaptations to the existing production process
- Custom-made deliveries for individual customers
- Implementation of new IT systems (SAP, CRM, etc.) unless it forms part of a process innovation
- Investments in new or replacement individual equipment or components in an existing production process
- Standalone inventory management systems that are not part of a process innovation
- Adjustments to price changes
- Discontinuation of current production due to changes in the market
What can we fund?
The following costs may be included in the approved basis for funding:
- Your own hours/staff costs
- External services required to carry out the innovation (consultancy support)
- Depreciation or rental costs for components, instruments and equipment, based on the period and extent of their use during the project
- Purchase of intellectual property rights required for the project
Please note that funding for process and organisational innovation is subject to GBER 29 under the State aid regulations. To qualify, you must be a small or medium-sized enterprise. Large enterprises are eligible only in exceptional cases.
Some examples
A supplier has entered into an agreement with a customer to develop a new system for inspecting and cleaning large water pipes.
The supplier will develop the technology, and the customer will use it in its own operations. The new solution is automated and differs significantly from the current manual method. This means the pilot customer's staff will need training in entirely new ways of working.
The parties work closely together to develop and test the product, and both the supplier and the customer can apply to us for funding to cover their costs. In the first phase of the project, this will involve research and development related to both the product and the process. In the second phase, the customer can apply for funding to cover the cost of implementing the new method in their own business, including staff training, developing manuals and procedures, and making significant organisational changes.
A manufacturing company (Company A) is struggling with product dust or shavings that cannot be used directly in the finished product. Today, the dust is sent to landfill or used as filler in cement or asphalt.
One possible solution is for another company (Company B) to process the dust so that Company A can reuse it as a raw material in its production. In this case, Company A must contribute to the development of new technology at Company B to ensure that the raw material meets the required quality standards. Company A must ensure efficient logistics for transporting the dust and returning the processed raw material. It must also ensure that the new raw material does not damage production equipment when reintroduced into the production processes or reduce the quality of the final product.
Most of the activities and costs in this project are incurred by Company A. Company B is primarily a supplier that receives the dust and processes it on behalf of Company A. Many of the activities carried out by Company A involve adapting to the new production method. Both the associated internal and external costs may be included in the eligible cost base.
A manufacturing company with several production sites sees an opportunity to increase profitability by remotely operating a small site from a larger one at weekends. If something unexpected happens, the smaller site shuts down safely, and the operators arriving for work on Monday morning restart the facility. This type of operational change may be necessary both to maintain profitability and to make shift scheduling work at smaller production sites.
The innovation here lies in moving from manual to automated (integrated) operations. This requires the implementation of control systems, testing and employee training. The cost basis may include the implementation of control systems, licences during the project period, training and system testing.
An innovative supplier to the oil and gas industry has mainly produced to order. Its deliveries have largely consisted of a small number of highly specialised products with a relatively high cost structure. Its machinery is extensive, advanced and capital-intensive. For some time, the company has been looking to enter other markets, as its machinery can also produce parts and equipment for a broad range of land-based industries, the maritime sector and the aquaculture industry. The customers it has been targeting for some time purchase large volumes of highly standardised products.
The company explains why this transition represents a significant step forward in innovation. It also describes the substantial changes it needs to make to its workflows, including adapting its production equipment, warehouse and logistics systems, and developing quality and documentation requirements. The transition may also require employee training. We can help fund these activities.
A company has developed a new product using marine raw materials. It now needs to implement a new production process to increase output and profitability. This process is entirely new to the company, with no previous experience to draw on. The equipment itself is available off the shelf, but must be assembled in a new way to make it suitable for the end product.
When installing the equipment, the company must establish various sub-processes, including drying, pressing, evaporation, separation, filtration and packaging. The company will then test the equipment over a period of time and train its employees. Some trial and error will be needed before the entire process is implemented and ready for regular production.
The entire project can be defined as innovation in the production process. The equipment purchased is standard, but must be assembled in a new way to suit the company's product. Although the investment itself is not covered by process innovation, the costs of assembling the equipment, restructuring and training employees to use and fine-tune it, and making it work for the company's purposes may be included in the eligible costs for process innovation and qualify for funding from us.
A company has long produced plastic straws and disposable cutlery, among other products, and will be affected by the EU ban on these single-use items, which will take effect in 2021. The production equipment for these items was specially designed for this purpose, so the company will face significant costs either to adapt the machinery for other production or to dispose of it.
This type of market change and the company's discontinuation of its current production cannot be defined as innovation and is not eligible for innovation project funding.