What is Support for Productive Innovation?
The Productive Innovation Incentive System aims to support the development and growth of companies, especially micro, small, and medium-sized enterprises (SMEs). Focusing on promoting innovation and modernizing the business landscape, this program offers financial incentives for projects aimed at producing new goods and services or significantly improving existing products or processes.
This Incentive System plays a fundamental role in promoting companies’ competitiveness by encouraging the pursuit and adoption of innovative practices that enhance their productive efficiency and their presence in the national and international markets.
How to Maximize the Support?
However, despite the significant benefits offered by the Productive Innovation Incentive System, the successful execution of these projects is not without challenges. Strategic misalignment, inadequate goal setting, and poor financial management are just some of the common mistakes made by companies embarking on productive innovation projects.
In this context, it is essential for companies to understand not only the opportunities provided by the Productive Innovation Incentive System but also the requirements and responsibilities associated with participating in the program. By taking proactive steps to avoid common project execution mistakes, companies can maximize their potential for success and reap the long-term benefits offered by this Incentive System.
These are the 3 unforgivable mistakes companies make in executing these projects:
1. Lack of Strategic Alignment
It is essential that the project strategy is perfectly aligned with the company’s strategic objectives. After all, the project’s goal should not be innovation for its own sake but to contribute to increasing the company’s competitiveness in the national and international markets. This can be achieved through improved productive efficiency, product or service quality, or reduced operational costs. Without proper strategic alignment, the project risks not delivering the expected results or even deviating from the initially planned course.
In practice, a lack of strategic alignment can lead to situations where innovation projects do not fully integrate with the company’s long-term vision. For example, a company seeking to reduce costs through process automation might inadvertently compromise product or service quality, thus harming its market reputation. Therefore, it is crucial that the innovation strategy aligns not only with short-term goals like cost reduction but also with the company’s mission and core values.
2. Goal Setting
Another common mistake is setting goals that are not in tune with the company’s reality and the project’s potential impact. Often, the goals established during the application process do not adequately reflect the company’s capabilities and resources, leading to a gap between what was planned and what is achieved. It is important to note that the goals set during the application are analyzed in the year following the project, and non-compliance may ultimately lead to the repayment of all received incentives, highlighting the importance of setting realistic and achievable goals from the start.
3. Investment
Regarding investment, it is important to recognize that deviations from the plan are inevitable in many cases. However, effective financial management can help minimize these deviations and ensure resources are efficiently allocated throughout the project. For this, the values defined during the application process should be based on budgets, and the total investment amount should be appropriate to the company’s size. As mentioned earlier, deviations will occur in most cases, whether due to negotiations with suppliers or the economic context, but with baseline budgets, the deviations will always be smaller. It is also important to note that a project execution rate below 70% may ultimately lead to the repayment of the received incentive.
Ensure Financial Support for Your Productive Innovation Project
Increasing the likelihood of successful applications involves ensuring that procedures are monitored and followed. Essentially, preventing and mitigating the chances of errors. Given the complexity and obligations of productive innovation projects, it is important to have a team of experienced and distinguished consultants to support these projects. This is precisely what HM Consultores has proudly been doing for over 36 years.
Director of Incentives and Tax Benefits
