Funding competition Made Smarter Innovation: Sustainable Smart Factory

UK registered businesses and organisations can apply for a share of up to £20m for digital innovation projects that will improve the resource efficiency and energy efficiency of manufacturing processes in factories.

This competition is now closed.

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Competition sections


Innovate UK, part of UK Research and Innovation, will invest up to £20 million in innovation projects. These will be for innovation in digital technologies to reduce environmental impact within manufacturing processes.

The aim of this competition is to develop digital innovations to improve the sustainability of manufacturing processes. This must result in either reduced material or reduced energy consumption.

Your proposal must deliver sustainable solutions through applying digital technology development to manufacturing processes within a production facility.

Your project must demonstrate the digital innovations that will deliver sustainability improvements.

This competition is split into 2 strands:

  • Strand 1 - Digital innovation with manufacturing data
  • Strand 2 - Digital innovation in manufacturing processes

Your project must apply to either Strand 1 or Strand 2.

In applying to this competition, you are entering into a competitive process. This competition closes at 11am UK time on the deadline stated.

Funding type


Project size

Your project’s total eligible costs must be between £1 million and £8 million.

Who can apply

Your project

Your project must:

  • have total eligible costs between £1 million and £8 million
  • not exceed the maximum grant limit of 50% of your total eligible costs for strand 1
  • not exceed the maximum grant limit of 40% of your total eligible costs for strand 2
  • start by 1 September 2022
  • last between 12 and 24 months
  • involve a single factory or multiple factories
  • include both manufacturing and digital technology capabilities in your consortium
  • be applicable to at least 1 manufacturing sector
  • carry out all of its project work in the UK
  • intend to exploit the results from or in the UK

We encourage projects that cover multiple manufacturing sectors.

If your project’s total eligible costs or duration falls outside of our eligibility criteria, you must provide justification by email to 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 request has not been approved by us you will be made ineligible and your application will not be sent for assessment.

Lead organisation

To lead a project your organisation must:

  • be a UK registered business of any size
  • collaborate with other UK registered organisations
  • involve at least one SME

Academic institutions and research and technology organisations (RTO’s) cannot lead.

Project team

To collaborate with the lead, your organisation must be one of the following UK registered:

  • business of any size
  • academic institution
  • charity
  • not-for-profit
  • public sector organisation
  • research and technology organisation (RTO)

Each partner organisation must be invited into the Innovation Funding Service by the lead to collaborate on a project. Once accepted, partners will be asked to login or to create an account and enter their own project costs into the Innovation Funding Service.

The lead and at least one other organisation must claim funding by entering their costs during the application.

Your project can include partners that do not receive any of this competition’s funding. Their costs will count towards the total eligible project costs.


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 could not use suppliers from the UK.

You must also provide a detailed rationale, evidence of the potential UK contractors you approached and the reasons why they were unable to work with you.

We expect all subcontractor costs to be justified and appropriate to the total eligible project costs. We will not accept a cheaper cost as a sufficient reason to use an overseas subcontractor.

Number of applications

A business can only lead on 2 applications within this competition but can be included as a collaborator in a further 2 applications.

If a business is not leading any application, it can collaborate in up to 4 applications within this competition.

Research organisations can collaborate on any number of applications.

Previous applications

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

We will not award you funding if you have:

Subsidy control (and State aid where applicable)

This competition provides funding in line with the UK's obligations and commitments to Subsidy Control. Further information about the UK Subsidy Control requirements can be found within the EU-UK Trade and Cooperation agreement and the subsequent guidance from the department of Business, Energy and Industrial Strategy (BEIS).

Innovate UK is unable to award organisations that are considered to be in financial difficulty. We will conduct financial viability and eligibility tests to confirm this is not the case following the application stage.

EU State aid rules now only apply in limited circumstances. Please see our general guidance to check if these rules apply to your organisation.

Further Information

If you are unsure about your obligations under the UK Subsidy Control regime or the State aid rules, you should take independent legal advice. We are unable to advise on individual eligibility or legal obligations.

You must make sure at all times that the funding awarded to you is compliant with all current Subsidy Control legislation applicable in the United Kingdom.
This aims to regulate any advantage granted by a public sector body which threatens to or actually distorts competition in the United Kingdom or any other country or countries.

If there are any changes to the above requirements that mean we need to change the terms of this competition, we will tell you as soon as possible.


We have allocated up to £20 million to fund innovation projects in this competition.

For strand 1, the total grant funding for your project must not exceed 50% of your total eligible project costs.

For strand 2, the total grant funding for your project must not exceed 40% of your total eligible project costs.

For both strands these limits are regardless of the individual partners’ grant claims. Individual organisations may need to adjust their grant request, for projects to remain within the overall maximum grant limit against total eligible project costs. Research organisation costs must be taken into account to ensure that the total grant applied for does not exceed these limits.

If the majority of 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.

For industrial research projects, you could 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
  • up to 50% if you are a large organisation

For more information on company sizes, please refer to the company accounts guidance. This is a change from the EU definition unless you are applying under State aid.

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.

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 could get funding for your eligible project costs of up to:

  • 80% of full economic costs (FEC) if you are a Je-s registered institution such as an academic
  • 100% of your eligible project costs if you are an RTO, charity, non-profit organisation, public sector organisation or research organisation

Your proposal

The aim of this competition is to develop digital innovations to improve the sustainability of manufacturing processes, resulting in either reduced material or reduced energy consumption.

Your project must apply digital technology development to improve manufacturing processes within a production facility, to deliver more environmentally sustainable production processes.

Your project must focus on developing digital solutions to:

  • reduce the amount of waste or other in-process material losses through the manufacturing steps
  • reduce the energy consumed by a manufacturing process
  • better sequence or schedule the manufacturing operations to reduce material or energy consumption
  • better separate waste materials to facilitate material reuse

Your project must be an innovative development or novel application of data or an industrial digital technology (IDT). This must result in either reduced material consumption or reduced energy consumption.

Your project must estimate the material or energy savings using the Resource Efficiency and Energy Efficiency (REEE) definitions. Savings must be from the manufacturing process, including any savings from reduction material purchases and associated embodied CO2e reduction.

  • Resource Efficiency (RE): a reduction in material wastage throughout the manufacturing processes, including bought in-materials and expressed as Tonnes of material saved and the equivalent embodied CO2e.
  • Energy Efficiency (EE): a reduction in electric, gas or equivalent power consumption expressed in kWh power saved and equivalent CO2e.

Industrial Digital Technologies (IDTs) can include, but are not limited to:

  • AI and machine learning
  • industrial internet of things (IIoT) and connectivity
  • robotics and automation
  • augmented reality and virtual reality
  • additive manufacturing
  • digital twin

Your project must fit into one of the 2 strands for this competition.

Strand 1

Your project must be data centric and can involve significant use of data sets. Industrial digital technologies (IDTs) within this strand can include artificial intelligence (AI) and machine learning.

Data use will be the primary focus of your project, where the data element will be the main driver of the resource efficiency or energy efficiency improvements. You must provide a robust case for your project being data centric for inclusion in this strand. If we deem your project out of scope for this strand it will be made ineligible and will not be assessed.

Strand 2

Your project can have a significant focus on other IDTs, but may still be supported by data sets.

Data use will be secondary to the main technology focus, where the data element is likely to support the resource efficiency or energy efficiency improvements.


Your planned outputs must be:

  • a tested proposal for digital solutions to deliver more sustainable manufacturing processes
  • a deployment within a manufacturing facility or very near equivalent for example a comparable development facility
  • a case study outlining the digital solution, the results of the project, and qualitative and quantitative evidence of benefits identified

We expect, where possible, for you to provide open access to the set-up of the project as a demonstrator of the digital solution.

Portfolio approach

We want to fund a portfolio of projects to achieve a balance for the Made smarter innovation funding. We will apply a portfolio approach between regional locations, industrial sectors, digital technologies, project types, strands, project sizes and business sizes.

Specific themes

Your project can only apply to either Strand 1 or Strand 2.

You must apply to the strand which most closely fits your project.

Your project must focus on one or more of the themes within the 2 strands for this competition.

You will be asked in your application which theme or themes your project focuses on.

Strand 1 - Digital innovation with manufacturing data:

  • data capture
  • data visualisation
  • pattern identification
  • autonomous decision & action

IDTs within strand 1 can include AI and Machine Learning.

Strand 2 - Digital innovation in manufacturing processes:

Projects can comprise of any other Industrial Digital Technology (IDT) where the activity meets the scope of the call.

This includes, but is not limited to:

  • industrial internet of things (IIoT) and connectivity
  • robotics and automation
  • augmented reality and virtual reality
  • additive manufacturing
  • digital twin

Research categories

We will fund industrial research projects defined in the guidance on categories of research.

Projects we will not fund

We are not funding projects that:

  • apply for a grant level in excess of the limit for the competition strand
  • include an overseas partner
  • are not showing how both manufacturing and digital technology capabilities are represented in the consortium
  • are not focused on activities for manufacturing production processes
  • are not delivering CO2e or kWh savings from within the manufacturing processes
  • are primarily focused on design, use phase or end of life
  • are general factory infrastructure for example heating and lighting
  • are primarily focused on switching to a different energy source
  • are construction, other than manufacturing activities carried out off-site within a permanent fixed factory
  • are offsite repair and overhaul
  • are activities focused on supply chain connectivity, warehouses, distribution centres or flying factories
  • are projects where the main exploitation route is not within manufacturing
  • 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
  • are 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
1 November 2021
Competition opens
9 November 2021
Online briefing event - watch the recording
28 January 2022 4:00pm
Competition closes
28 February 2022
Invite to interview
14 March 2022
Interviews start
23 March 2022
Interviews end
1 April 2022 5:04pm
Applicants notified

Before you start

You must read the guidance on applying for a competition on the Innovation Funding Service before you start.

What we ask you

The application is split into 3 sections:

  1. Project details.
  2. Application questions.
  3. Finances.


If your online application is successful at this stage, you will be invited to attend an interview, where you must give a presentation. Your interview will take place either online or at a designated location.
Before the interview, by the deadline stated in the invitation email, you:
  • must send a list of who will attend the interview
  • must send your interview presentation slides
  • can send a written response to the assessors’ feedback
List of attendees
Agree the list with your consortium. Up to 9 people from your project can attend, ideally one person from each organisation. They must all be available on all published interview dates. We are unable to reschedule slots once allocated.
Presentation slides
Your interview presentation must:
  • use Microsoft PowerPoint
  • be no longer than 20 minutes
  • have no more than 20 slides
  • not include any video or embedded web links
You cannot change the presentation after you submit it or bring any additional materials to the interview.
Written response to assessor feedback
This is optional and is an opportunity to answer the assessors’ concerns.
It can:
  • be up to 2 A4 pages in a single PDF or Word document
  • include charts or diagrams
After your presentation the panel will spend 30 minutes asking questions. You will be expected to answer based on the information you provided in your application form, presentation and the response to feedback.

1. Project details

This section provides background for the assessors and is not scored.

Application team

Decide which organisations will work with you on the project. Invite people from those organisations to help complete the application.

Application details

The lead applicant must complete this section. Give your project’s title, start date and duration.

Subsidy Basis

Will the project, including any related activities, you want Innovate UK to fund, affect trade between Northern Ireland and the EU?

All participants must complete this section.

Research category

Select the type of research you will undertake.

Equality, diversity and inclusion

We collect and report on equality, diversity and inclusion (EDI) data to address under-representation in business innovation and ensure equality, diversity and inclusion across all our activities.

All participants must complete this EDI survey and the lead applicant must then select yes in the application question. The survey will ask you questions on your gender, age, ethnicity and disability status. You will always have the option to ‘prefer not to say’ if you do not feel comfortable sharing this information.

Project summary

Describe your project briefly and be clear about what makes it innovative. We use this section to assign experts to assess your application.

Your answer can be up to 400 words long.

Public description

Describe your project in detail, and in a way that you are happy to see published. Do not include any commercially sensitive information. If we award your project funding, we will publish this description. This could happen before you start your project.

Your answer can be up to 400 words long.


Describe how your project fits the scope of the competition. You must ensure that all of the aspects within this scope section are clearly covered in your answer.

You must state which theme or themes your project focusses on, including listing the IDTs within the project.

You must describe how your proposal will contribute to the objectives of the Made smarter innovation challenge, including:

  • whether the project delivers either resource efficiency only or energy efficiency only or both
  • which production processes will the project be focused on
  • the specific digital innovations that will deliver a more sustainable output
  • how the digital innovation will result in an overall reduction in material or energy consumption
  • which manufacturing sectors will be involved during the project
  • the applicability to multiple manufacturing sectors post project, the exploitation phase, including which manufacturing sectors are expected to be targeted
  • how post project outcomes will be exploited by participants to maximise the environmental benefits

Where possible we encourage the provision of demonstrators that last beyond the life of the original project. State whether your project will deliver a demonstrator and explain what this will comprise.

You must describe how your project will contribute to the challenge targets 1 and 2 of the Made Smarter Innovation challenges and where it will support the other challenge targets:

  1. A 30% decrease in carbon emissions (energy efficiency).
  2. A 25% decrease in waste (resource efficiency).
  3. Increase in Gross Value Add to the manufacturing sector.
  4. Increase in the number of jobs requiring digital technology skills.
  5. A 30% increase in productivity.

If your project is not in scope, it will be immediately rejected and will not be sent for assessment. We will give you the reason why.

Your answer can be up to 1200 words long.

2. Application questions

The assessors will score your answers to questions 3 to 13, question 1 and 2 are not scored. You will receive feedback for each scored question.
You must answer all questions. Your answer to each question can be up to 400 words long. Do not include any website addresses (URLs) in your answers.

Question 1. Applicant location (not scored)

You must state the name of your organisation along with your full registered address.

You must also state the name and full registered address of all your partners.

We are collecting this information to understand the geographical location of all participants of a project.

Question 2. Competition Strand (not scored)

You must select which strand you are applying to in this competition:

  • Strand 1 - Digital innovation with manufacturing data
  • Strand 2 - Digital innovation in manufacturing processes

Question 3. Need or challenge

What is the business need, technological challenge or market opportunity behind your innovation?

Describe or explain:

  • the main motivation for the
  • business need, technological challenge or market opportunity
  • the nearest current state-of-the-art, including those near market or in development, and its limitations
  • any work you have already done to respond to this need, for example if the project focuses on developing an existing capability or building a new one
  • the wider economic, social, environmental, cultural or political challenges which are influential in creating the opportunity, such as incoming regulations, using our Horizons tool if appropriate

Question 4. Approach and innovation

What approach will you take and where will the focus of the innovation be?

Describe or explain:

  • how you will respond to the need, challenge or opportunity identified
  • how you will improve on the nearest current state-of-the-art identified
  • whether the innovation will focus on the application of existing technologies in new areas, the development of new technologies for existing areas or a totally disruptive approach
  • the freedom you have to operate
  • how this project fits with your current product, service lines or offerings
  • how it will make you more competitive
  • the nature of the outputs you expect from the project (for example report, demonstrator, know-how, new process, product or service design) and how these will help you to target the need, challenge or opportunity identified

You can submit one appendix. It can include diagrams and charts. It must be a PDF, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 5. Team and resources

Who is in the project team and what are their roles?

State which organisations within the project will lead on manufacturing capabilities.

State which organisations within the project will lead on digital technology capabilities. In some circumstances the 2 roles could be the same organisation.

Describe or explain:

  • the roles, skills and experience of all members of the project team that are relevant to the approach you will be taking
  • the resources, equipment and facilities needed for the project and how you will access them, particularly in the light of any continuing COVID-19 restrictions
  • the details of any vital external parties, including subcontractors, who you will need to work with to successfully carry out the project
  • the current relationships between project partners and how these will change as a result of the project
  • any roles you will need to recruit for taking into account the impact of COVID-19 restrictions on the team structure

Explain any steps you have taken to strengthen the equality, diversity and inclusion within your project team.

You can submit one appendix. This can include a short summary of the main people working on the project to support your answer. It must be a PDF, up to 4 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 6. Market awareness

What does the market you are targeting look like?

Describe or explain:

  • the markets (domestic, international or both) you will be targeting in the project, and any other potential markets
  • the size of the target markets for the project outcomes, backed up by references where available
  • the structure and dynamics of the target markets, including customer segmentation, together with predicted growth rates within clear timeframes
  • the target markets’ main supply or value chains and business models, and any barriers to entry that exist
  • the current UK position in targeting these markets
  • the size and main features of any other markets not already listed

If your project is highly innovative, where the market may be unexplored, describe or explain:

  • what the market’s size might to be
  • how your project will try to explore the market’s potential

Question 7. Outcomes and route to market

How are you going to grow your business and increase your productivity into the long term as a result of the project?

Describe or explain:

  • your current position in the markets and supply or value chains outlined, and whether you will be extending or establishing your market position
  • your target customers or end users, and the value to them, for example why they would use or buy your product
  • your route to market, particularly if COVID-19 has changed market dynamics
  • how you are going to profit from the innovation, including increased revenues or cost reduction
  • how the innovation will affect your productivity and growth, in both the short and the long term
  • how you will protect and exploit the outputs of the project, for example through know-how, patenting, designs or changes to your business model
  • your strategy for targeting the other markets you have identified during or after the project

If there is any research organisation activity in the project, describe:

  • your plans to spread the project’s research outputs over a reasonable timescale
  • how you expect to use the results generated from the project in further research activities

You must download the impact table template and upload when completed, as an appendix to this question. It must be an Excel Spreadsheet, no larger than 10MB in size and the font must be legible at 100% zoom.

Question 8. Wider impacts

What impact might this project have outside the project team?

Describe, and where possible, measure the economic benefits from the project such as productivity increases and import substitution, to:

  • external parties
  • customers
  • others in the supply chain
  • broader industry
  • the UK economy

Describe, and where possible, measure:

  • any expected impact on government priorities
  • any expected environmental impacts, either positive or negative
  • any expected regional impacts of the project

Describe any expected social impacts, either positive or negative on, for example:

  • quality of life
  • social inclusion or exclusion
  • jobs, such as safeguarding, creating, changing or displacing them
  • education
  • public empowerment
  • health and safety
  • regulations
  • diversity

Question 9. Project management

How will you manage the project effectively?

Describe or explain:

  • the main work packages of the project, indicating the lead partner assigned to each and the total cost of each one
  • your approach to project management, identifying any major tools and mechanisms you will use to get a successful and innovative project outcome
  • the management reporting lines
  • your project plan in enough detail to identify any links or dependencies between work packages or milestones, taking into account the possible impact of further COVID-19 restrictions

You must submit a project plan or Gantt chart as an appendix to support your answer. It must be a PDF, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 10. Risks

What are the main risks for this project?

Describe or explain:

  • the main risks and uncertainties of the project, including the technical, commercial, managerial and environmental risks, providing a risk register
  • how you will mitigate these risks
  • any project inputs that are critical to completion, such as resources, expertise, data sets
  • any output likely to be subject to regulatory requirements, certification, ethical issues and so on, and how you will manage this

You must submit a risk register as an appendix to support your answer. It must be a PDF, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 11. Added value

What impact would an injection of public funding have on the businesses involved?

Describe or explain:

  • whether this project could go ahead in any form without public funding and if so, the difference the public funding would make, such as a faster route to market, more partners or reduced risk
  • the likely impact of the project on the businesses of the partners involved
  • why you are not able to wholly fund the project from your own resources or other forms of private-sector funding, and what would happen if the application is unsuccessful
  • how this project would change the nature of R&D activity the partners would undertake, and the related spend

Question 12. Costs and value for money

How much will the project cost and how does it represent value for money for the team and the taxpayer?

In terms of the project goals, describe or explain:

  • the total eligible project costs
  • the grant you are requesting
  • how each partner will finance their contributions to the project
  • how this project represents value for money for you and the taxpayer
  • how it compares to what you would spend your money on otherwise
  • the balance of costs and grant across the project partners
  • any subcontractor costs and why they are critical to the project

Question 13. Sustainability Impact

What CO2e and kWh savings will your project lead to?

Explain your assumptions and show your working in how you have arrived at these figures.

Clearly describe your overall CO2e and kWh saving assumptions during the project.

In addition, clearly describe your overall CO2e and kWh saving assumptions for the 3 years after the project.

You must download the sustainability table template and upload when completed, as an appendix to this question. It must be an Excel Spreadsheet, no larger than 10MB in size and the font must be legible at 100% zoom.

Your application must only be based on the expected savings from within the manufacturing process, or direct upstream material supply savings. It cannot take into account savings further downstream.

For context, in addition to the direct savings in the sustainability table template, you can outline any Scope 1-3 emission reductions as a result of your project.

3. Finances

Each organisation in your project must complete their own project costs, organisation details and funding details in the application. Academic institutions must complete and upload a Je-S form.

For full details on what costs you can claim see our project costs guidance.

Background and further information

The Made Smarter Innovation programme is investing £147m to accelerate the development of game changing digital manufacturing ideas.

The aims are to deliver a resilient, flexible, more productive, and environmentally sustainable UK manufacturing sector, as well as to develop new technologies that can be exploited commercially across manufacturing worldwide. This will be achieved through the creation and novel application of digital technologies.

Customers’ needs are changing fast and problems with the availability of supplies mean supply chains need to adapt, becoming more effective, flexible, resilient, and sustainable.

The Made Smarter Innovation Challenge has a range of objectives that we need to ensure are delivered. Within this competition we have stated the objectives that relate to this competition scope. We require applicants to demonstrate how they will contribute by describing how the project meets these objectives and completion of the impact table.

For estimation of CO2e savings, applicants may wish to refer to published guides such as ‘Greenhouse gas reporting: conversion factors 2021’

For further information on greenhouse gas emissions classification, including Scope 1-3 emissions, applicants may wish to refer to internet resources such as:

Find a project partner

If you want help to find a project partner, contact the KTN.

Support for SMEs from Innovate UK EDGE

If you receive an award, you will be contacted about working with an innovation and growth specialist at Innovate UK EDGE. This service forms part of our funded offer to you.

These specialists focus on growing innovative businesses and ensuring that projects contribute to their growth. Working one-to-one, they can help you to identify your best strategy and harness world-class resources to grow and achieve scale.

We encourage you to engage with Innovate UK EDGE, delivered by a knowledgeable and objective specialist near you.

Contact us

If you need more information about how to apply or you want to submit your application in Welsh, email or call 0300 321 4357. Our phone lines are open from 9am to 11:30am and 2pm to 4:30pm, Monday to Friday (excluding bank holidays).

Innovate UK is committed to making support for applicants accessible to everyone.

We can provide help for applicants who face barriers when making an application. This might be as a result of a disability, neurodiversity or anything else that makes it difficult to use our services. We can also give help and make other reasonable adjustments for you if your application is successful.
If you think you need more support, it is important that you contact our Customer Support Service as early as possible during your application process. You should aim to contact us no later than 10 working days before the competition closing date.

Need help with this service? Contact us