MSI: SME resource and energy efficiency – feasibility studies

Overview

Through the Made Smarter Innovation (MSI) programme, Innovate UK, part of UK Research and Innovation (UKRI), will invest up to £15.5 million across the two strands. This is subject to a sufficient number of high quality applications being received.

These awards will be for feasibility studies or industrial research projects.

Scope

The aim of this competition is to explore new industrial digital technologies (IDTs) for manufacturers. The IDTs will improve the sustainability, resilience and productivity of UK micro, small or medium sized enterprise (SME) manufacturers by improving energy or resource efficiency.

Your project

Your project must focus on the innovation of digital solutions relating to one or more of the resource or energy efficiencies listed in the Specific Themes section, and must be:

affordable
easy to use
scalable across SMEs

There is no limit to the number of processes or technology solutions you may address in your proposal and there is no advantage in using more than one.

Energy or resource efficiency innovations that use processes other than that listed will also be considered.

Within the scope section of your submission you must state the theme, industrial digital technologies (IDT), manufacturing industrial sector, what the resource or energy efficiency link is, and summarise how this is innovative or novel.

Outputs

Your project must carry out a feasibility study that research into and develops innovative digital solutions.

Planned outputs from the project must:

show a clear indication of how your innovation might improve energy or resource efficiency in a manufacturing environment
clearly indicate how your innovation will result in a solution that will be sufficiently affordable, easy to use and scalable
have technical, operational, and financial feasibility
include potential patents
include targeted market and scale up plans

Your output at the end of the project must be a proposal for an industrial research project to test the solution and must include:

executive summary
description of product or service
technical considerations
marketplace and financial feasibility
marketing strategy, including a plan to commercialise your proposed product when fully developed
draft specification of proposed product or solution
conclusion and recommendations

Portfolio approach

Our primary selection prioritisation will be scalability and exploitation potential based on review of submission and assessor score of the ‘outcomes and route to market’ question response.

Additionally, we want to fund a variety of projects across different themes, technologies, technological maturities, industrial sectors, locations, project sizes, business sizes and research categories.

Innovate UK call this a portfolio approach.

Specific Themes

Your project must focus on one or more of the following.

Resource efficiencies:

raw material waste
production process waste
packaging waste, including in-process single-use materials
maintenance or servitisation waste, including fluids and components
utilities waste
end of life waste

Energy efficiencies:

boilers and steam
air compressors or vacuum
motors, drivers, pumps or hydraulics
induction or welding
chilling or freezing
spray, extraction or dryers
ovens, kilns or furnaces
heavy machinery or presses

Eligibility

Your project must:

have total costs between £25,000 and £150,000
last between 3 and 6 months
start on 1 April 2026
end by 30 September 2026

Innovate UK encourage projects that include multiple SME manufacturers and manufacturing sectors within the consortium.

Any funded organisation needs to carry out their project work in the UK and must intend to exploit the project results from or in the UK.

Projects must always start on the first of the month, even if this is a non-working day. You must not start your project until your Grant Offer Letter has been approved by Innovate UK. Any delays within Project Setup may mean we need to delay your project start date.

You must only include eligible project costs in your application. See our overview of eligible project costs. For specific guidance, see the eligibility section in this competition.

If your project’s total costs or duration falls outside of our eligibility criteria, you must provide justification by email to support@iuk.ukri.org at least 10 working days before the competition closes. We will decide whether to approve your request.

If you have not requested approval or your application has not been approved by us, you will be made ineligible. Your application will then not be sent for assessment.

Lead organisation

To lead a single application or collaborative project your organisation must be a UK registered SME operating as a technology developer.

More information on the different types of organisation can be found in our Funding rules.

Academic institutions cannot lead or work alone.

To collaborate with the lead the consortium can also contain one or more:

UK registered SMEs operating as manufacturers claiming grant funding on this application
academic institution
research and technology organisation (RTO)
research organisation

Each partner organisation must be invited into the Innovation Funding Service (IFS) by the lead to collaborate on a project. Once partners have accepted the invitation, they will be asked to login or to create an account in the IFS. They are responsible for entering their own project costs in the application.

To be an eligible collaboration, the lead and all other organisations must:

apply for funding when entering their costs into the application
include rationale for the collaboration and describe the structure in your application
ensure any one partner does not account for more than 70% of the total eligible costs

Subcontractors

Subcontractors are allowed in this competition.

Subcontractors can be from anywhere in the UK and you must select them through your usual procurement process.

You can use subcontractors from overseas but must make the case in your application as to why you cannot use subcontractors from the UK.

You must provide a detailed rationale, evidence of the potential UK contractors you approached and the reasons why they were unable to work with you. We will not accept a cheaper cost as a sufficient reason to use an overseas subcontractor.

All subcontractor costs must be justified and appropriate to the total project costs.

Number of applications

Across the two strands, an eligible business can lead on two applications and can be included as a collaborator on a further one application. Successful applicants will be asked to confirm they have the capacity to run multiple projects simultaneously.

If an eligible business is not leading any application, it can collaborate in up to three applications.

All other eligible organisations can collaborate on any number of applications.

Sanctions

This competition will not fund you, or provide any financial benefit to any individual or entities directly or indirectly involved with you, which would expose Innovate UK or any direct or indirect beneficiary of funding from Innovate UK to UK Sanctions. For example, through any procurement, commercial, business development or supply chain activity with any entity as lead, partner or subcontractor related to these countries, administrations and terrorist groups.

Use of animals in research and innovation

Innovate UK expects and supports the provision and safeguarding of welfare standards for animals used in research and innovation, according to best practice and up to date guidance.

Any projects selected for funding which involve animals will be asked to provide additional information on welfare and ethical considerations, as well as compliance with any relevant legislation as part of the project start-up process. This information will be reviewed before an award is made.

You can use a previously submitted application to apply for this competition.

Exclusions

Innovate UK are not funding projects that:

do not support the challenges outlined in the scope of this competition
do not evidence the potential for your proposed innovation to generate positive economic or societal impact
duplicate other UK government or EU funded initiatives already funded
are covered by existing commercial agreements
are not focussed on processes related to manufacturing activities
are not within a controlled manufacturing environment for example, a permanent factory setting
mainly installing currently available technologies and involve minimal innovation
where the main exploitation route is not within manufacturing
activities mainly focused on goods in or warehousing
activities focussed on distribution centres or flying factories
construction, other than manufacturing activities carried out off site within a permanent fixed factory
offsite repair and overhaul
focussed on product design for manufacture and assembly (DfMA)

Innovate UK cannot fund projects that are:

dependent on export performance, for example, giving a subsidy to a baker on the condition that it exports a certain quantity of bread to another country
dependent on domestic inputs usage, for example, giving a subsidy to a baker on the condition that it uses 50% UK flour in their product

Funding Costs

Up to £15.5 million has been allocated to fund innovation projects in this competition across the two strands. Funding will be in the form of a grant.

Innovate UK reserve the right to adjust funding allocations for any of our competitions under exceptional circumstances, for example, in response to changes in policy, portfolio funding considerations, or broader government funding decisions.

If your organisation’s work on the project is commercial or economic, your funding request must not exceed the limits below. These limits apply even if your organisation normally acts non-economically but for the purpose of this project will be undertaking commercial or economic activity.

The balance between your total eligible project costs and the amount of grant awarded must be funded by the organisation receiving the grant.

For feasibility, you can get funding for your eligible project costs of:

up to 70% if you are a micro or small organisation
up to 60% if you are a medium sized organisation

The total funding available for this competition can change. The funders have the right to:

adjust the funding allocations between the two competition strands
apply a ‘portfolio’ approach

For more information on company sizes, refer to the company accounts guidance.

If you are applying for an award funded under State aid Regulations, the definitions are set out in the European Commission Recommendation of 6 May 2003.

Innovate UK may revoke our decision to provide funding without notice if government commitment for this initiative is withdrawn.

Research participation

The research organisations undertaking non-economic activity as part of the project can share up to 30% of the total eligible project costs. If your consortium contains more than one research organisation undertaking non-economic activity, this maximum is shared between them. Of that 30% you can get funding for your eligible project costs of up to:

100% of your eligible project costs if you are an RTO or research organisation

80% of full economic costs (FEC) if you are a Je-S registered institution such as an academic

Eligibility criteria for claiming 80% of FEC funding

Research organisations using the Je-S system must submit their costs through the Je-S system which calculates the 80% FEC figure.
On IFS, only the 80% FEC output should be entered at 100% funding.
Applicants do not need to show the remaining 20% on the finance table.

To find out more see our: Cost Guidance for Academics.

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