The Support Programme for Industrial Innovation (SPII) by the Department of Trade and Industry (DTI) is designed to promote technology development in South Africa’s industry, through the provision of financial assistance for the development of innovative products / processes. SPII is focused specifically on the development phase, which begins at the conclusion of basic research and ends when a pre-production prototype has been produced. This incentive was designed to provide financial assistance for the development of commercially viable, innovative products and / or processes and facilitate commercialisation of such technologies.
Projects where SPII contribution is not significant (at least 20 % of total project costs).
Beneficiaries: South African private-sector enterprises. Specific provisions apply under the different schemes.
Benefits:
- Product Process Development Scheme – Provides financial assistance to small, very small, micro-enterprises and individuals in the form of a non-repayable grant. A percentage of ‘qualifying’ costs incurred in the pre-competitive development activities associated with a specific maximum of a R2 million grant.
- Matching Scheme – A percentage of ‘qualifying’ costs incurred in the development activities of a specified development project. Maximum of a specified R5 million grant.
- Partnership Scheme – The levy-based grant is based on a percentage of sales over a fixed number of years. The levy percentage and repayment period are established at the time of the grant. Minimum contribution of R10 million.
The SPII offers two schemes, namely the Product Process Development Scheme and the Matching Scheme.
The Product Process Development Scheme under the Support Programme for Industrial Innovation
It has a maximum fund limit of R2 million and is non-repayable. Allocation of funds is linked to BEE status. The BEE status of the company applying for the funds dictates the amount of finance that can be provided:
- 0 % to 25 % BEE shareholding: 50 % of qualifying costs can be funded.
- 25, 1% to 50 % BEE shareholding OR > 50 % ownership by women / people with disabilities: 75 % of qualifying costs can be funded.
- More than 50 % black ownership: 85 % of qualifying costs can be funded.
Non-qualifying costs and projects:
- Production and commercialisation related;
- Marketing and administrative costs;
- Product / process development for a single client;
- Basic and applied research;
- Projects which, at the time of development, are 70 % complete; and
- All costs incurred prior to submitting a duly-completed application.
The Matching Scheme
Provides financial assistance in the form of a non-taxable, non-repayable grant of 50 % of qualifying costs incurred in pre-competitive development activity associated with a specific project to a maximum of R5 million.
The scheme does not provide support to projects that are:
- more than 50 % complete at the time application;
- receiving funding from other government grants;
- projects of a military nature, unless they have substantial commercial or civilian application;
- projects where technology is licenced from a third party and the licence agreement restricts the commercial application; and
- government-funded institutions do not directly qualify for support but may participate as sub-contractor(s).
Criteria for SPII support:
- Development should represent significant advance in technology;
- Development and subsequent production must take place within South Africa;
- Intellectual Property to reside in South African registered company;
- Participating businesses must be South African registered enterprises;
- Government-funded institutions do not directly qualify for support but may participate as subcontractor(s); and
- No simultaneous applications from the same company.
Qualifying Costs:
- Personnel-related costs;
- Travel expenses (defined maximum);
- Direct material;
- Capital items and tooling;
- Software (not general);
- Documentation;
- Testing and trials;
- Licencing costs;
- Quality assurance and certification;
- Patent costs; and
- Subcontracting and consulting.
Contact us for more information on how you can access the Support Programme for Industrial Innovation.