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A Comparative Analysis: Grants Systems in the United States vs. Funding Programs in Europe

Grants systems (USA) and Funding Programs (EU) are vital mechanisms for funding research, innovation, and initiatives addressing critical societal challenges. In this analysis, we examine the grants system employed in the United States alongside Europe’s funding programs, focusing on Horizon Europe and Life+.


United States Grants System

In the United States, the grants system operates through various federal agencies, including the National Institutes of Health (NIH), the National Science Foundation (NSF), the Department of Energy (DOE), and the Department of Transportation (DOT), among others. These agencies allocate funding through competitive grant programs, which researchers, institutions, and organizations apply for based on specific criteria and priorities. For example, the 2024 US budget allocates $210 billion for federal research and innovation initiatives, distributing funds across these agencies to fuel scientific advancements and technological breakthroughs.

Grants and similar funding mechanisms encompass a substantial portion of discretionary spending in the U.S. federal budget. Discretionary spending, which is set annually by Congress through appropriations bills, includes funding for various government programs, agencies, and activities, including research and development grants.

For instance, agencies like the ones mentioned above, allocate significant portions of their budgets to grants programs supporting research in health, science, energy, and transportation respectively.

However, it’s important to note that the precise allocation to grants programs can vary from year to year based on congressional priorities, changes in agency budgets, and shifting national needs.


Key Characteristics:

  • Diverse Funding Sources: The U.S. grants system benefits from a diverse range of funding sources across different federal agencies, allowing for broad support across various fields and disciplines.
  • Competitive Process: Grants are awarded through a highly competitive process, where proposals are rigorously evaluated based on scientific merit, innovation, potential impact, and feasibility.
  • Flexibility: Researchers have a certain degree of flexibility in defining their research agendas, although alignment with agency priorities is crucial for securing funding.
  • Long-Term Investments: Some grants support long-term research projects, providing stability and continuity for scientific endeavors.
  • Emphasis on Innovation and Impact: The U.S. grants system prioritizes innovation and the translation of research findings into tangible societal benefits, fostering economic growth and addressing pressing challenges.

European Programs

European initiatives, led by the flagship Horizon Europe programme, invest in research and innovation efforts designed to address global challenges and improve industrial competitiveness through the adoption of emerging and disruptive technologies across the European Union (EU) and its partner nations.


Key Characteristics:

  • Strategic Priorities: Horizon Europe, allocated a budget of €95.5 billion for the period 2021-2027, is dedicated to addressing pivotal global challenges, including climate change, cancer, and sustainable development. The program prioritizes collaboration, excellence, and the societal impacts of research and innovation.
  • Structured Framework: In general EU programs operate within a structured framework with defined priorities, missions, and budget allocations. This allows for targeted investments in key areas of concern, such as climate change mitigation and biodiversity conservation.
  • International Cooperation: European programs encourage international collaboration, allowing participation from third countries with strong research and innovation capacities. This promotes knowledge exchange, talent mobility, and the global relevance of European research efforts.
  • Inclusive Approach: Eligibility criteria for participation in European programs are inclusive, encompassing various types of entities, including public and private organizations, as well as entities from associated third countries.
  • Impact Assessment: Regular evaluations of Horizon Europe’s influence on society, industry, and the environment occur biennially. These assessments guide the launch of new work programs, which are shaped by the progress in implementing European policies such as the European Green Deal and the Sustainable Development Goals, stakeholder input, and the immediate, medium, and long-term effects of the projects. European programs emphasize the assessment of expected impacts, including scientific, societal, and economic outcomes.

Comparing both systems

Budget Allocation: In Europe, Horizon Europe’s substantial budget allocation reflects the EU’s commitment to research, innovation, and addressing societal challenges on a global scale. In contrast, the budget for other programs such as Life+ is comparatively smaller but focuses specifically on environmental and climate action initiatives. Similarly, the U.S. grants system prioritizes innovation and the translation of research findings into tangible societal benefits, fostering economic growth, and addressing pressing challenges.

Focus Areas: While both the U.S. grants system and European calls programs prioritize innovation and impact.The U.S. system encompasses a wide range of disciplines, for example energy ($15 B estimate in funding for 2024) or transportation ($60.1 B estimate in funding for 2024) projects depending on the federal agency, whereas European programs exhibit a more targeted approach, aligning closely with EU policy priorities and global challenges. Moreover, it’s noteworthy that EU funding places a high priority on encouraging the involvement of small and medium-sized enterprises (SMEs) and clusters by directly allocating funds to them. In contrast, the US funding system channels its resources primarily through public entities, often in collaboration with well-established corporations However, there are federal grants available in the United States specifically targeted towards small and medium-sized enterprises (SMEs). These grants are often provided by various federal agencies with the aim of supporting innovation, research and development, job creation, and economic growth within the SME sector. For example, the Small Business Innovation Research Program (SBIR), which provides provides funding to small businesses to conduct research and development (R&D) projects that have the potential for commercialization, and the Small Business Technology Transfer (STTR) Program: Similar to the SBIR program, the STTR program also provides funding to small businesses for R&D projects, but in collaboration with research institutions such as universities or federal laboratories. For both programs, which divide into two consecutive phases, the average funding per awardee is generally $1M.

International Collaboration: European programs demonstrate a strong emphasis on international collaboration and cooperation, facilitating the exchange of knowledge and expertise across borders. In comparison, the U.S. grants system primary focus remains on domestic research priorities. However, more recently, US National Science Foundation (NSF) has launched a new Directorate for Technology, Innovation and Partnerships (TIP) with a focus on promoting growth and job creation in the US through “use-inspired” research and development (R&D). This directorate, led by director Erwin Gianchandani, is open to collaborating with international partners, particularly those from countries that share common values with the US. TIP’s collaboration efforts extend beyond domestic borders, indicating a broader engagement strategy for fostering innovation and addressing societal challenges.

Evaluation Criteria: Both systems employ rigorous evaluation criteria to assess the quality, feasibility, and potential impact of proposed projects. However, European programs may place additional emphasis on alignment with EU policy objectives and the achievement of specific societal impacts.

In conclusion, both the grants system in the United States and the funding programs in Europe play crucial roles in funding research, innovation, and initiatives addressing societal challenges. While the U.S. system offers diversity and flexibility across disciplines, European programs exhibit a more structured and targeted approach, closely aligned with EU policy priorities. By understanding the strengths and differences of each system, stakeholders can leverage opportunities for collaboration and maximize the impact of research and innovation investments on a global scale.

IDConsortium has conducted an in-depth analysis of the funding landscapes in the United States and Europe, identifying potential avenues for collaboration. This aims to showcase to European companies that opportunities exist beyond Europe and to encourage the exploration of these new collaboration opportunities. For further information, we invite interested parties to contact us.

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IDConsortium is a consultancy founded in Seville in 2009 with the aim of helping researchers and companies to internationalize and showcase their Research and Development (R&D) by joining international consortia to carry out different lines of research, development and innovation.

To date, it has successfully managed 22 European and national projects, worth more than €88 million in public funding. Currently, more than 250 European and international partners are part of its network.

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