The involvement of consultants in the process of
public funding
How are consultants involved in the stages of application and execution of
publicly funded innovative projects and how do stakeholders experience this
involvement?
Hester Siesling - S3522083
h.siesling@student.rug.nl
Supervisors
dr. K.R.E. Huizingh & dr. E.P.M Croonen
20
thJanuary, 2020
Master Thesis Version 1
Word count: 14000
MSc Strategic Innovation Management
Faculty of Economic and Business
2 Abstract
This study investigates the involvement of consultants and the experience of stakeholders with these involvement in the process of applying and executing publicly funded innovative projects. The study explains how consultants can be involved in the public funding process and how this involvement helps applicants. It explains how applicants can use the service of consultants, how management authorities can respond to the use of consultants, and how the expert committee can use the reasons why the applicant involves the consultants in their assessment. Next to that, this study is interesting for consultants, because if they know why applicants need their help, they can respond to these demands. The level of involvement of consultants differ per case, the level of involvement can be low, medium or high. This depends on the knowledge and time applicants have. Knowledge and time are the reasons why the applicants involve the consultants. The experience of the different stakeholders also differs, there are applicants whose projects are accepted who are satisfied with the
consultants, but there are also applicants whose projects were rejected and who blame the consultant for this. Other stakeholders such as the expert committee and the management authority also differ in their experience. The expert committee is negatively biased when consultants are involved in the application process. The management authority recognized the involvement of consultants by smaller companies and reacts to this by working together with the consultants.
Key words: public funding, innovative projects, consultants, stakeholder experience,
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1. Introduction
The economic crisis which started around 2008, had a big impact on companies’ innovation and research and development expenditures. Especially in Europe the investments in innovation decreased enormously (Barbieri, Bragoli, Cortelezzi, & Marseguerra, 2019). To reduce the differences in expenditures for innovation between Europe and its competitors Japan and the United States, new public funding schemes were introduced (Barbieri et al., 2019). Investments in innovation can be promoted by public policies, not only in Europe but also globally were policies introduced to foster innovation (Bellucci, Pennacchion, & Zazzaro, 2018). Policy makers came up with new funding
schemes because companies need innovation to be prepared for the future, innovation is the main ingredient for sustainable competitiveness (Ebersberger, 2010). In the fast-changing world, innovation is one of the most important tasks for companies (Bellucci et al., 2018). Progressively more public funds for R&D are targeted to small innovative young companies because they are considered as very important in the initiative ‘Innovative Union’ of the ‘Europe 2020’ (Czarnitzkia, & Delanote, 2013). However, not every company who wants public funding gets public funding. The innovative project of the company has to be screened by a nominated committee, the company has to compete with other companies and needs a positive assessment by the nominated committee to get funding (Grilli, & Murtinu, 2018). Entrepreneurial teams have often novel innovative ideas but according to Grilli & Murtini (2018) do these teams not have the skills and capabilities to exploit the business ideas. intensive companies can provide these skills and capabilities. Knowledge-intensive companies is the fastest growing market in the service industry, the service these companies provide is the knowledge of their employees, consultants (Miles, 2005).
Consultancy is an extensively researched subject in the existing literature. The focus is mainly on the skills that consultants use to attract and manage the impressions of clients, or the consultant-client relationship (Kitay & Wright, 2003).
Public funding is a common way of policy makers to stimulate innovation but not all companies which are innovative have the skills and capabilities to get through the
assessment process for public funding. These firms can get external help. However, in the existing literature this is not well understood. Most literature regarding public funding focuses on the influence of public funding on innovation outcomes. In this research the focus is on the process which leads to the outcomes, the main focus is on the involvement of
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‘How are consultants involved in the stages of application and execution of publicly funded projects, and how do stakeholders experience this involvement?’
The aim of this study is to provide insights in the involvement of consultants in the application and execution process of publicly funded innovative projects, and the experience of this involvement by stakeholders. This study contributes to the theory by exposing the process applicants have to go through before they get funding for innovative projects. Next to that, it contributes to the literature by focusing on the involvement of consultants in the process of public funding, a not well understood subject in the existing literature. On practical level this study is interesting for different stakeholders in the process of public funding. The study answers the how and why question regarding to the involvement of consultants.
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2. Theory
The main topic in this research is public funding, the focus area in this research are the involvement of consultants, and the experience of this involvement by stakeholders. In the existing literature the involvement of consultants in the process of public funding is not well studied. This chapter gives an overview about what is previously known on the topics.
2.1 Public funding
Public funding is used by governments to stimulate innovation. A company can lower their R&D costs by using public funding (Radas, Anic, Tafro, and Wagner, 2015). Most empirical research regarding public funding for R&D and innovation addresses the effect of policies on a firm’s growth, patenting activities, and the increase of R&D efforts (Blanes, and Blussom, 2004). From these studies we know that subsidies can have a positive effect on total factor productivity only in the long-term (Bernini, Cerqua, & Pellegrini, 2017), and subsidies have a positive effect on the growth of small entrepreneurial ventures (Bertoni, Marti, & Reverte, 2019). R&D subsidies also increase the likelihood of applying for a patent (Bronzini, & Piselli, 2016). Blanes & Bussom (2004) researched which companies participate in public funding schemes. According to their results, firms that have experience with R&D participate more in these schemes than firms which were not already doing R&D. The aforementioned studies are all about the possible outcomes of public funding. This study focuses more on the process instead of the outcome.
Another direction in literature focuses more on the application process for public funding, in this research area the focus is on the factors that influence the application
process. Segarra-Blasco, Garcia-Quevedo, and Teruel (2016) found that factors such as firm size, and the branch the firm operates in can have an influence on the application process. Grilli and Murtinu (2018) who researched ‘selective subsidies’, which means public funding which is granted after a competitive procedure, found that education of project developers influences the likelihood of getting public funding. The degree of novelty, collaborations and the amount of initial capital could also increase the likelihood of receiving public funding (Cantner, and Kösters, 2012). Busom & Fernández-Ribas (2008) suggest that public funding influences the cooperation behavior of a firm (Busom, & Fernández-Ribas, 2008). The
findings described above demonstrate that there are several aspects which can influence the application process. In this study, the public funding scheme is a competitive procedure, not all the companies who apply will get funding. This research focuses not only on the
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2.2 Involvement of consultants
Kitay & Wright (2004) showed a clear boundary, but also an overlap between the client organization and the consultant. They define consultants as “external experts brought
in to provide advice about a specific problem where internal managers are ill equipped or unsure of the best strategy or solution” (Kitay & Wright, 2004, p.6). According to this
definition, consultants are external people who have the task to gather data, diagnose problems and provide advice in a specified period of time (Kitay, & Wright, 2004). This definition is in line with the so called ‘functionalist’ literature in which the client-consultant relationship is defined as a “knowledge-based, helping relationship that is of a contractual,
time-limited character with a well-defined task to solve” (Werr, & Styhre, 2002, p.43). In the
functionalist literature, the client is the controlling party, but the consultant has the superior knowledge that balances the contractual power in the relationship. The client hires the
consultant. The consultant has an external role that results in an objective view with so called ‘fresh eyes’ (Werr, & Styhre, 2002). Werr & Styhre (2002) also mention the ‘critical’ literature direction, which focuses on how consultants can convince a client of their superior
knowledge and the value they have to offer. The critical literature focuses on the consultants’ power. In this research a combination of the definitions of Kitay & Wright (2004) and Werr & Styhre (2002) is used to define ‘consultant’. In this research a consultant is defined as an expert who has a knowledge-based, helping relationship with the client-organization that is of a contractual, time-limited character with a well-defined task to solve.
Kitay & Wright (2004) found that consultants can provide their service on different levels. They define consultants as external experts, but they make a distinction between ‘outsiders’ and ‘insiders’. The label a consultant gets depends on how closely they operate with the client organization. This is interesting because this can also be seen as involvement, which is central in this study. A consultant is an outsider when the involvement is based on a market exchange of payment for advice, the consultant is external to the client organization and the client organization buys from the consultant. Kitay & Wright (2004) call a consultant an insider when the consultant has multiple social ties with the client organization, as a result of which the boundaries between the client organization and the consultant become
ambiguous. When a consultant is called an insider, the consultant legally works for a separate organization, but complex ties of knowledge are involved with the client
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consultants either be outsiders or insiders. Kitay & Wright (2004) acknowledge that through a change in the nature of organizational boundaries it is hard to conclude how close a
consultant operates with the client organization. This results in a gray area in the existing literature, shown in figure 1. A not defined area between the outsider and the insider as defined by Kitay & Wright (2004).
Outsider Insider
Low involvement High involvement
2.3 Stakeholder experience
Stakeholders can be defined as “any group or individual who can affect or are
affected by the achievement of the firm’s objectives” (Freeman, 1984, p. 46). Experiences
arise when “a customer has any sensation or acquires knowledge from some level of
interaction with the elements of a context created by a service provider” (Zomerdijk, & Voss,
2010, p.67). In this research the focus is on the experience that different stakeholders have with the involvement of consultants. The different stakeholders in this research are:
applicants, management authority, and members of the expert committee.
Consultants deliver a service. In the last years increasingly more research has been done regarding the process customers go through in order to have a good service
experience. Unfortunately, this research focuses mainly on the experience customers have in for example, shops or restaurants. The experience in these situations are influenced by aspects such as, waiting times and crowding (Chang, & Huang, 2016). When customers have negative experience, their responds can be categorized as attitudinal and behavioral. Disappointment, anger, and satisfaction/dissatisfaction are examples of attitudinal reactions. Complaining, leaving, switching and loyalty/disloyalty are examples of behavioral reactions a customer can have (Jiang, Law, & Gretzel, 2010). This research focuses on the experience different stakeholders have with the involvement of consultants. Next to that this study uses the theory of Jiang et al. (2010) to explain different reactions of stakeholders.
Gray area in the literature
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3. Methodology
For this research, a qualitative method is used because of the lack of existing literature on the subject and the richness of qualitative data. This qualitative research is conducted in order to find out how consultants are involved in the process of applying and executing publicly funded projects, and how this involvement is experienced by different stakeholders.
3.1 Data collection
The data used for this research was collected in 2018 by 3 researchers of the University of Groningen. The interview data was used in addition to questionnaire data to make an interim evaluation of the EFRO project 2014-2020 with a specific focus on the EFRO objectives (Faems et al., 2018; Huizingh et al., 2019). This thesis merely draws upon the qualitative interview data from the previously collected data by the researchers to investigate the proposed research question.
The whole database consists of transcripts of 38 interviews. Interviews were done with applicants of projects which were accepted or rejected, members of the expert committee and, the management authorities. The interview sample was not randomly chosen, the applicants which were interviewed were extreme cases. The researchers did a comparative case study and chose a few relatively high scoring cases and a few relatively low scoring cases for every region in order to compare (Faems et al., 2018).
Most interviews were conducted face-to-face, and some interviews were conducted by phone, they were all semi-structured, which means that there was an interview protocol that was followed by the researchers, see appendix I, and next to the interview protocol they used the outcomes of a questionnaire as input for their interviews. The questionnaire was sent earlier to the interviewees for the quantitative part of the study of the researchers. All interviews were fully recorded. The average length of the interviews was 59,17 minutes. For this research, the original audio files were used to make full transcripts of all the interviews in the database. The transcribed interview data is the input for this research. An overview of the distribution of the interviews is given in table 1, the comprehensive overview of the data set can be found in appendix II. For this research a selection of relevant transcripts is made, table 2 shows an overview of the relevant transcripts for this research.
Table 1: Overview dataset Role
Region
9 Low carbon: 1/2 East Total: 8 Low carbon: 3/8 Accepted: 7 Low carbon: 2/7 Rejected: 1 Low carbon: 1/1 Total: 2 Total: 1 11 South Total: 5 Accepted: 4 Rejected: 1 Total: 2 Total: 1 8 West Total: 5 Accepted: 4 Rejected: 1 Total: 2 Total: 1 8
3.2 Reliability and validity
An important detail of this research is that the interviews were conducted by
Professors Faems, Huizingh & Croonen in 2018. The transcripts of the interviews were made in September and October of 2019 by Hester Siesling and Kilian Logchies. The most
important outcome of this division of work in the data collection is that this can be positively interpreted, because the professors are more experienced researchers than the students. The professors are more knowledgeable and aware of the required ethics and academic quality to collect valid and reliable data. However, because a significant part of the data collection was done by other researchers, are the students not able to accurately judge the validity and reliability of that particular section of the data collection.
The amount of interview data that was used in this research is positively related to the accuracy and reliability of the results of this study. A result of the exceptional number of interviews used in this study is that due to time constraints there was no further room for additional sources of data and therefore triangulation was excluded as a method of research.
Another factor that has improved the reliability and validity of this research is that the transcribing and the subsequent coding of the data has been done in Dutch, the language used in the interviews. This helps avoid biases which could have manifested due to
translation and possible cultural differences (Benítez et al., 2018). After the whole draft was finished, the citations were translated to English.
The usage of (semi-structured) interview protocols in the data collection contributed to the validity of the interviews (Blumberg et al., 2014). Another benefit of using the
semi-structured interview protocols, according to Qu and Dumay (2011), is that underlying reasons of interview responses can be assessed by “modifying the sequencing, pacing and style of
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3.3 Data analysis
Coding is the method chosen in this research to ‘clean’ and organize the dataset. Through coding, data can be structured in categories, these categories form an information base. When the information base is established, it can be used to search for patterns in the data (Gläser, & Laudel, 2013). According to Gläser and Laurel (2013), codes can be derived in two ways, from theory or from the text itself which means from the dataset. Because of the scarcity of theory on the subjects of interest in this research, the latter method is used, the codes are derived from the text itself which is also called inductive coding (Yi, 2018). This method was also chosen to have a broad view, the theory of Kitay & Wright (2004) could be used but this narrowed the scope immediately. After coding all the data, groups of
statements are made, this helps to look for connections between the statements. So, coding will function as a data-labeling methodology to draw conclusions from the data (Miles, and Huberman, 1994).
The whole database consists of 38 transcripts, but not all these transcripts are relevant for this study. The first step in the process of organizing the data was to analyze all the 38 transcripts to see if they contained information about the involvement of consultants. Only if they contained information about the involvement of consultant, they were marked relevant for this study. In total 19 of the 38 transcripts contained information about the involvement of consultants. These 19 transcripts were selected to investigate further. The second step in the process was identifying the relevant data per interview, I started as recommended by Gläser and Laudel (2013) with four main themes: application, execution, experience and others. In three interviews the word consultant was mentioned but without further information. Because of this the interviews were not further investigated. In total 16 transcripts were further investigated.
Table 2: Coding
Case Application Execution Experience Others
11 12 X Applicant X Applicant Pre-application included 15 Consultant works
part-time for client
19 X Applicant X Applicant Pre-application included 20 X Applicant 21 X Applicant X Applicant X Applicant Pre-application included 22 X Management authority 24 X Applicant X Applicant 25 X Applicant X Applicant 28 X Applicant 35 X Applicant 36 X Applicant Pre-application included
Table 2 shows the results of the first round of analyzing. During the process, pre-application appeared as a stage which was mentioned frequently. This stage was added, which made the process; pre-application, application and execution. Experience could be divided into experience by applicants, the management authority, and members of the expert committee. In the second round of analyzing, the tasks of consultants, the level of
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4. Results
The results from the interview data are grouped into two main categories, these categories are: ‘involvement’ and ‘stakeholder experience’. These main categories also have
subcategories in order to make the results more coherent. The tables 4 till 9 show
summaries of the used cases. Furthermore, the citations from the interviews are used in this chapter, these citations are anonymized. The case numbers correspond with the overview in appendix II and the excel file. An overview of the original citations is added in appendix III.
4.1 Involvement
The process of applying for and executing of public funding for innovation can be separated in three different stages. These stages are pre-application, application and execution. The application stage was one of the subjects in the interview template for rejected projects, application and execution were both subjects in the interview template for accepted projects. Pre-application was not specifically mentioned in the interview templates, but this stage was mentioned several times during the interviews.
The pre-application stage is the stage before the application is written. While analyzing the data, different ways to find appropriate funding for projects were found. Applicants can contact consultants and hire them to find appropriate funding, or consultants notify applicants about interesting funding schemes. The second stage in the process is the application stage. The application stage is the stage in which the application for public
funding is written. The level of involvement of consultants can diverge in this stage. In certain cases, the client organization gives input, and the consultant writes the whole application with the help of this input, in other cases consultants write the application together with the applicants, a third option is that applicants write the application and consultants examine this. The third stage in the process is the execution stage. The execution stage is the stage that comes after funding is granted, in this stage the project starts. During the execution of the project, the applicants have administrative obligations to the management authority, the public body. In total 10 cases were interesting for the involvement part of this study. The distribution of the cases is shown in table 3.
Table 3: Overview involvement cases
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4.1.1 Pre-application
In table 4 the most essential information about case 2 is presented. In this case the applicant asked a consultancy office for tips and tricks to write the application. This
application was accepted.
Table 4: Case pre-application
Case Status Summary Citations
2 Accepted The applicant asked a subsidy advisory office to get advice about how to write a good application. They hoped for tips and tricks which would help to write the application perfectly. Unfortunately, most of the tips and tricks the advisory office gave were already known by the applicant.
‘We have received some advice, we got that from a consultancy company which is specialized in subsidies because they know how to best write such an
application’
‘I must honestly say that they did not come up with tips and tricks that I had not thought of, so ehh, I wrote most of it myself’
In this case the level of involvement is fairly low. The tips and tricks that an advisory office gives about writing a good application can be used by several different companies and are not specific for the applicant. This case is an example of a market exchange, the
applicant pays the consultant for advice, and the consultant is an outsider according to the theory of Kitay & Wright (2004).
4.1.2 Pre-application & application
There were six cases in which applicants involved consultants in the pre-application and application process or only in the application process. Four of these cases were
14 Table 5: Accepted cases pre-application & application
Case Status Summary Citations
5 Accepted The consultant searched for an appropriate subsidy scheme. Next to that the consultant had a prominent role in writing the application. The company used a consultant because it was the first time they applied for a subsidy.
Pre-application + application
‘We had an intermediary who applied for the subsidy for us and who also looked at which subsidy fitted our project best’
‘This was our first subsidy process we started, and because of that the use was an added value’
20 Accepted The consultant was an advisor and process supervisor. The applicant wrote the application but the consultant reviewed this before they officially applied, next to that the advisor pointed out to the applicant when they had to send particularly documents and needed signatures from partners. According to the interviewee he was not able to write the application without the consultant because he hadn’t understood when he needed
signatures, who he had to involve and which content was needed. Through the use of a consultant he could do the process quite fast, without the
consultant he thought that he needed much more time.
Application
‘The consultant advised us and guided us through the process’
‘Well because I think without them, with just everything I had to do I hadn't understood when which signature was needed, who should have an opinion, and what we still had to do. That would have taken a lot of time.’
35 Accepted It is only mentioned that an external advisor helped the project leader with writing the application.
Application
‘We had an external advisor
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36 Accepted The consultant mentioned the subsidy scheme to the organization. Next to that, the consultant helped the applicant writing the application. The consultant wrote the application but the interviewee mentioned that all the input for this came from the organization itself.
Pre-application + application
‘You have to deliver the input for the application yourself and the consultant writes it in the end’
Table 5 gives an overview of the accepted cases in which consultants were involved in the pre-application and application process or only in the application process. The cases are analyzed on the basis of three subject; relations, tasks, and reasons. All three subjects tell something about the involvement of consultants.
Relation. In the ‘critical’ literature, consultants convince clients of their value and
knowledge (Werr, & Styhre, 2002). Consultants contact clients, this can be seen as a proactive approach from the consultant side. In the ‘functional’ literature clients contact consultants to help them (Werr, & Styhre, 2002), so this is the other way around. This can be seen as a reactive approach from the consultant side.
The proactive and reactive approaches are both found in the cases of table 5. In case 5, 20, and 35 the reactive approach was used, where the clients contacted the consultants. In case 36 the consultant notified the applicant about the public funding opportunity.
Tasks. The intensity of the relationship that a client has with a consultant can vary.
This depends on the tasks the consultant performs for the client. A consultant who has a very weak relationship with the applicant can be called an outsider (Kitay & Wright, 2004). The level of involvement is low in this case. A consultant with a strong relationship with the applicant can be called an insider (Kitay & Wright, 2004) in this case the level of involvement is high.
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In the cases, the involvement of the consultant is diverse, but in all the cases the consultant is not a complete outsider. There are quite some social ties between the
applicants and the consultants. The consultants have to know certain information to be able to write or help to write the application. There is a medium level of involvement between the consultant and the applicant. The boundaries are clear, the consultant works legally for a separate organization but there are social ties because the consultant needs involvement to be able to write the application.
Reasons. There are different reasons why applicants need to involve consultants.
Two main reasons mentioned by the applicants are time and knowledge. By using
consultants an applicant can accelerate the process of the application and the consultants bring in knowledge about the process which is not inhouse.
Table 6: Rejected cases pre-application & application
Case Status Summary Citations
24 Rejected The organization did not work very close with the consultant, they wrote a project plan and needed the consultant to translate this project plan into an application which fitted the subsidy scheme. So, the consultant did most of the writing to let everything fit in the application.
Application
‘The collaboration is okay but we don’t do a lot together.’
‘We explained what we wanted, what we had to do and how everything worked and the consultancy firm fitted that story in the framework of EFRO.’ ‘We delivered a report with all element included and the consultancy firm rewrote it to make it an application. They also added parts which were specifically needed for EFRO’
25 Rejected The consultant had to write the application.
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Table 6 gives an overview of the cases which were rejected. In both these cases the applicants hired a consultant to help them with the application.
Relation. In case 24 the relation between the consultant and the applicant was not
very close. In case 25 nothing was mentioned about the relation between the consultant and the applicant. The consultant in case 24 had to know specific information about the company to be able to write the application. The involvement was quite low, as the interviewee
mentioned that the applicant and the consultant were not very close. According to the theory of Kitay & Wright (2004) the consultant in case 24 can be seen as an outsider.
Tasks. In both cases the consultants were hired to write the application. In case 24
the consultant had to translate a project plan to an application and the consultant also had the task to include all the specific information which was needed to fit the public funding scheme.
Reasons. In the cases included in this part of the study no reasons were mentioned. 4.1.3 Whole process
In three cases the consultant took over the entire process, which means the pre-application, pre-application, and execution. All these three cases were accepted. Table 7 gives an overview of the cases.
Table 7: Whole process cases
Case Status Summary Citations
12 Accepted The pre-application, application and execution were done by a consultant. In the pre-application process the consultant notified the applicant about the subsidy scheme. One of the reasons that they had a consultant for the application was the language barrier. The applicant speaks English and the application had to be submitted in Dutch. Another reason was the administrative effort, according to the interviewee the process was
manageable because the subsidy advisor helped with the administrative process. The interviewee didn’t have
‘We are working with a subsidy advisor, they notify us about interesting
subsidies.’
‘The application was submitted in Dutch I have written it in English and they have translated it’.
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time to take care of this next to her regular activities.
too much administrative effort.’
‘Yes that is all in the package
of the subsidy advisor who in the first place informed us about the subsidy then gave us all the information
required so we could write the application in the right spotlight, to understand what you want to know and how you want to know it clearly what we are doing and at the same time to manage the process on the administrative side so help us understand what we had to set up so that everything is clearly
documented and then submitting it as well’
19 Accepted The consultant advised the applicant which subsidy scheme fitted the project best. The reason why this applicant used a consultant was that they already submitted the application 2 times, and both times the project was rejected. The consultants are also actively involved in the execution process. They accompany the applicant through the administrative side and also attend the controls and meetings the applicant has with the management authority.
19
‘Actually, everything we already wrote, had to be attributed to the tender’ ‘They knew what SNN wanted to hear, without losing the core of the project.’
21 Accepted The applicant had an idea and they were looking for funding. They asked a consultant for help. They needed funding because the investment was very big for a small company. After the consultant found suitable funding, he wrote the application with input of the applicant. In the execution the
consultant took over the administrative process. A reason for this was time and also the knowledge and attractiveness of the administrative project.
‘You approached me with the question do you know how I can have financial help for this project.’
‘We gave the consultant all the information and
knowledge we had, and his task was to judge this for the application.’
‘I do not like all the administrative work.’
The cases in table 7 are analyzed on the basis of three subject; relations, tasks, and reasons.
Relation. According to the theory of Kitay & Wright (2004), the consultants who took
over the whole process are insiders, the borders between the applicant and the consultancy company become ambiguous and there are multiple complex social ties (Kitay, & Wright, 2004).
In case 12, the consultant used a proactive approach. The consultant informed the applicant about interesting public funding schemes. In case 19 and 21 the consultants used a reactive approach, in these cases the applicants contacted the consultants and asked them to help them with the process.
Tasks. When the consultant takes over the whole process, they fulfill different tasks.
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Reasons. There were different reasons why the applicants involved consultants in
the process. In case 12 the consultant took over the whole process because of the language barrier and the administrative effort. The administrative effort took to much time next to the daily activities of the applicant. In case 19 the consultant took over the whole process because the project was already rejected twice, so they needed someone who could write it again, someone who really knew how to write a good application. In case 21; time,
attractiveness and knowledge were reasons for the applicant to involve a consultant.
The reasons why the consultants are used fit with the ‘functionalist’ literature in which the client is a buyer who uses the consultant for knowledge and/or resources (Werr, & Styhre, 2002).
4.1.4 Special case
Case 15 can be seen as a special case. This case is different from the other cases, because in this case the consultant worked part-time for the applicant. The case is explained in table 8.
Table 8: Special case
Case Status Summary Citations
15 Accepted The consultant worked part-time for the applicant. He helped the organization with the development of eligible
projects. Which helped the organization to innovate, they couldn’t do this
without external resources like subsidies.
‘I’m an independent subsidy advisor and I work part-time for ... I help them to develop eligible projects.’
In this case the consultant works for the applicant partly for the applicant because of this the consultant legally works for the applicant. According to Kitay & Wright (2004), the consultant is not an insider in this case because the consultancy does not legally work for a separate organization. Therefore, this is another gray area, not in between the outsider and insider, but on a higher level of the insider.
4.2 Experience
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4.2.1 Applicants
In 4 cases applicants discussed the experience they had with the consultants. These cases are included in table 9.
Table 9: Experience applicants
Case Status Summary Citations
24 Rejected The applicant had a bad experience working with a consultant. The consultant did the application and through this there were three parties, the consultant, the management authority and the applicant. Through the use of a consultant the distance between the applying organization an de management authority increased, which then cause incomprehension.
‘At a certain moment, we had
three parties. The company, the intermediary, and the management authority (MA). Because of this there was a lot of distance between us and the MA, which resulted in incomprehension.’
‘We worked with an advisory office which was specialized in subsidies. This
collaboration has become a bad experience.’
25 Rejected The applicant had a bad experience because the consultant didn’t deliver the application on time.
‘First. the consultant said that everything was fine and at a certain moment the
consultant had many questions and did he not deliver the work before the deadline.’
21 Accepted The applicant was very happy with the consultant. The consultant took over the whole process.
‘He did his work very well,
detailed and diligent. Hats off for that.’
28 Accepted The applicant didn’t want to work with a consultant because of a bad
experience in the past.
‘My experience with
intermediaries is not very good.’
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the applicant had a positive experience with the use of a consultant in the whole process. In case 28 the applicant chose to not hire a consultant because of bad experiences in the past. In the experience of the applicant; consultants do not always write an application that fits the project plan of the applicant and because of this, misunderstandings appear about what is in the application and what is really going to happen in the project.
4.2.2 Expert committee
The expert committee is the nominated committee who assess the applications of the applicants. They can accept or reject the applications. Table 10 gives an overview of the experience by the expert committee.
Table 10: Experience expert committee
Case Role Summary Citations
4 Expert
committee
The expert mentioned that for some entrepreneurs it is very hard to write a project plan. In this case it is good to have external help but in practice some of the project plans of
consultants are just copy paste. According to the expert the
consultant must be a coach for the entrepreneur in the writing process.
‘The subsidy advisor has to be a coach for the
entrepreneur, a coach who helps to write the story. If a subsidy functions as a coach I’m okay with the use of them. I don’t like it when the advisor writes the whole story and the entrepreneur only signs it.’
8 Expert
committee
According to this expert there are two kinds of consultants in the application process, there are
consultants who write the application because the entrepreneurs can’t do it. And there are also consultants which only do it for the money and who use a lot of copy paste in the applications.
‘As expert committee we are allergic for
‘broodschrijverij’ the impact of these kinds of projects is always low.’
11 Expert
committee
Consultants are quite aggressive on the granting of subsidies because some of them only get their fee when the subsidy is granted. Because of
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this most of the objections are written by consultants.
committee and other nonsense.’
In case 4 and 8 the experts have the same opinion on the involvement of consultants. According to them it is acceptable to hire a consultant when entrepreneurs are not able to write the application but they do not want to work with consultants who use copy paste in every application they write for a company. The expert of case 11 had a negative experience with applicants who use consultants, mainly because of how consultants react when projects are rejected.
4.2.3 Management authority
The management authority is responsible for the public funding scheme. They are superior on the expert committee which means the expert committee is chosen by the management authority to assess the applications. Table 11 gives an overview of the experience by the management authority.
Table 11: Experience management authority
Case Role Summary Citations
22 Management
authority
This management authority works together with the consultants. According to the interviewee are more than 50% of the applications written by consultants because most of the companies are small and they hire a consultant to do the whole process so they don’t have to do it
‘More than 50% of the applications is written by advisors.’
‘Small companies hire subsidy advisors for the whole project.’
The results from the interview with the management authority in case 22 are
interesting because they try to cooperate with the consultants because they know that most smaller companies use consultants for the process. This is interesting because according to the interviews with people of the expert committee, the expert committee is not content with the involvement of consultants. The management authority stimulates the consultants to notify potential applicants about the public funding schemes. This means there is a tension between the approaches and preferences of the management authority and expert
committee.
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5. Discussion & Conclusion
The aim of this study was to provide insights in the involvement of consultants in the application and execution process of public funding for innovative projects and the
experience of this involvement by stakeholders. This is done by analyzing interview data of several stakeholders who were involved in the process of public funding. In this chapter the main findings will be discussed and the research question will be answered.
5.1 Discussion
The findings of this research are grouped in two main categories namely; involvement and stakeholder experience. Because these are the focus areas of this research. The main category involvement, is subdivided into three categories which are all related to
involvement, these subcategories are; relations, tasks, and reasons.
5.1.1 Involvement
The relation a consultant has with the applicant is interesting for the level involvement because it gives insights in how the consultant is involved in the process. The tasks a
consultant performs for the applicant are interesting for the involvement because this gives insights in how close the consultant and applicant are and what consultants can do for the applicants. The reasons are interesting because this really answer the why question, why are consultants involved. These three categories together give a broad view of how consultants are involved.
Relations. The relation between the consultant and the applicant can differ per case.
It depends on the stage of the process and the reasons why an applicant chooses to involve a consultant in the process. In the pre-application stage, the consultant can be proactive which means that the consultant notifies the applicant about a particular public funding scheme which looks interesting to the applicant. The consultant can also be reactive in this stage which means that the applicant goes to the consultant to ask for help. The consultant can be involved by the applicant or the consultant involves the applicant in the process. The more stages the consultant participates in, the higher the involvement.
Tasks. The tasks a consultant takes care of differ per case and per stage. In the
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process of the public funding scheme, in the execution process the companies have
administrative obligations to the management authority. In some cases, the consultants help the organizations with the administrative obligations in other cases the consultants take over the whole process around the administrative obligations.
Reasons. Applicants have different reasons for hiring consultants to help them with
the process of applying and executing public funding, the main reasons are time and
knowledge. For smaller companies the process takes a lot of time, when this time is used for the process around the public funding, it cannot be used for the primary process of the company. Time was also mentioned in another context; the process time can be accelerated by using a consultant. Next to that, not all companies have the knowledge they need to write an application and they do not have the knowledge regarding to the rules around the
administrative obligations, consultant have this knowledge. Another reason mentioned by an applicant was a language barrier. The applicant did not master the Dutch language.
Figure 2 shows the combination of the existing theory and results of this research. The theoretical part comes from Kitay & Wright (2004), according to them consultants are always external but they use the term outsider if the involvement is low and insider if the involvement is high. In this literature the medium involvement is not mentioned. According to this research the involvement depends on relations, tasks and reasons. There is always a reason why the consultant is involved, the tasks a consultant has to perform depends mostly on these reasons and this is also related to the relations between the applicant and the consultant. In figure 2 are the stages displayed in the first line. The second line displays the level of involvement during the different stages. The third line displays the existing theory.
Pre-application Pre-application Pre-application
Application Application
Execution
Involvement low Involvement medium Involvement high
Outsider Insider
Another dimension was also mentioned in one case. A dimension further than high involvement. This dimension is included in figure 3, there was one case in which the
consultant worked partly for the applicant. This is another gray area in the literature. Gray area in the literature
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Pre-application Pre-application Pre-application Pre-application Application Application Application
Execution Execution
Involvement low Involvement medium Involvement high Involvement very high
Outsider Insider
5.1.2 Experience
The experience part of the study can be separated into experience by applicants, experience by the management authority, and experience by members of the expert
committee. Two applicants had a negative experience. Both applicants used a consultant in the application stage, the task of the consultant was to write the application. In one case the consultant did not deliver the application on time in the other case the involvement of the consultant resulted in misunderstandings between the applicant and the management authority. Both the projects were rejected, this could be a reason why the applicant
mentioned the negative experience. Because to Jiang et al. (2010), a behavioral reaction to negative experience is complaining which is a result of disappointment, an attitudinal reaction. Another applicant, who hired a consultant for the whole process had a good experience with the use of the consultant, this case was accepted. Negative experiences in an earlier situation can be a decisive reason for firms to not use a consultant in their
application and execution process for public funding. Unfortunately, there was not a lot of information about the experience, only very positive and negative experience were mentioned in the interviews.
The experience by the expert committee of consultants was fairly negative, according to them the use of a consultant can only be positive if the consultant is a coach for the
applicant who helps the applicant with, for example, writing the application instead of taking over the whole writing process. When the expert committee knows an application is written by a consultant, they are negatively biased. The applicant has to prove the contrary. They have to prove their project has impact and is important. Another interesting experience by the expert committee was that most of the consultant are quite aggressive when projects get rejected, most of the objections are written by consultants.
Gray area in the literature
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The management authority recognizes the use of a consultant. They do not experience this negatively. Because lots of small companies work with consultants, the management authority tries to work together with the consultants by informing the
consultants about the public funding schemes. So, the consultants can inform the potential applicants.
5.2 Conclusion
The research question which has to be answered in this study is: ‘How are
consultants involved in the stages of application and execution of publicly funded projects, and how do stakeholders experience this involvement?’ To answer this research question,
interview data of 16 interviews was thoroughly analyzed. The interviews were conducted with different stakeholders of the public funding process, namely: applicants of accepted and rejected projects, the management authority, and members of the expert committee.
The process of applying and executing public funding can be separated in three stages; pre-application, application, and execution. The involvement of consultants in these stages can differ. Consultants can be involved in only one stage, in two stages or in all the three stages. This depends mostly on the time the applicant wants to invest in the process and the knowledge the applicant has regarding to the process of public funding. In theory, the involvement of consultants can either be low or high. When the involvement is low, the consultant is called an ‘outsider’, when the involvement is high, the consultant is called an ‘insider’. In practice, there are outsiders and insiders, but in between these two extremes there are other non-defined levels of involvement, these levels do not fit the definitions Kitay & Wright (2004) give about outsiders and insiders.
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involved in the pre-application, application, and execution stage. In the pre-application and application stage the consultant can perform the earlier mentioned tasks regarding to the processes of finding appropriate funding and the writing process of the application. In the execution process the applicant has certain administrative obligations to the management authority. The consultant can help the applicant with these administrative obligations or can take over this whole administrative process. When the consultant takes over the whole process, the involvement is high. There are a lot of social ties between the consultant and the applicant, the consultant legally works for a separate organization but the borders are ambiguous. According to Kitay & Wright (2004) the consultant can be called an insider. The fourth scenario is an extreme case, in this case the consultant works partly for the applicant, and takes over the whole process. In this case the involvement is very high.
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6. Implications / Limitations
In this chapter the theoretical and managerial implications of this study will be discussed. The managerial implications are highlighted from the different stakeholders’ perspectives of this study. Next to the implications, the limitations of the study will also be discussed.
6.1 Implications
This research has theoretical implications and managerial implications. The theoretical implications focus on how this research adds to the existing literature, the managerial implications focus on the practical side of the study.
Theoretical implications. This study contributes to the literature about public funding
for innovative projects, consultancy in the process of public funding, and stakeholder experience.
Public funding is overall a scarce topic in the existing literature. This research complements the existing literature by explaining the different stages of a public funding process namely; pre-application, application, and execution. In the pre-application stage companies search or get notified about appropriate public funding schemes, in the application stage the application is written, and in the execution stage the applicant has several administrative obligations.
There is an overlap in the contribution because the main subject of this study is the involvement of consultants in the process of public funding. This can be seen as a separate topic but also as a part of the public funding literature. This study explains which tasks a consultant can perform for applicants; find an appropriate funding scheme, write the application, help the applicant with writing the application, review the application, handling the administrative obligations. Next to that it gives interesting insights in the involvement of a consultant in the process. The levels mentioned by Kitay & Wright (2004) are confirmed in this research. Next to that the gray area in between the levels of Kitay & Wright (2004) are discovered, a medium level of involvement is found wherein consultants have some social ties with the applicant but the borders are clear. Next to that a whole new area is discovered, wherein the consultant is partly employed by the client organization and partly by a
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A third contribution is given to the literature about stakeholder experience. The studies about stakeholder experience are mostly in a specific context. In this case the
specific area is the public funding process, experiences about the involvement of consultants in this process were the central topic. Stakeholders can have a negative bias, which is negatively related to their experience. Experiences can influence assessments.
Managerial implications. This study has managerial implications on different levels.
The study has managerial implications for the management authority, expert committee, applicants and consultants.
First the implications for the management authority are discussed. The reasons for the companies to involve consultants were mostly because of time and knowledge. The companies did not have time next to their primary process to handle the process themselves, or/and they did not have the knowledge to write a good application and to fulfill the
administrative obligations. The management authority could have a look at the time
consumption of the process and the administrative difficulty. Maybe the process of applying and executing the public fund could be more efficient, easier and less time consuming. Next to that, the management authority should be on the same line as the expert committee regarding to the involvement of consultants. This is important because the management authority enriches the consultants with information about the public funding schemes and motivates the consultants to search for companies which could use an interesting public funding scheme, and the expert committee is negatively biased when applicants work together with consultants. Better communication about this could lower the negative bias of the expert committee.
Second the managerial implications for the expert committee are discussed. The expert committee has to communicate with the management authority about the involvement of consultants. Next to that they could focus on the reasons mentioned by the applicants regarding to the use of consultants. Instead of having a negative bias, they could include the reasons in their assessment. Maybe ask the applicants who involve a consultant in the process to make a short statement about the reasons.
Third the managerial implications for (potential) applicants. For potential applicants this research is interesting because they can learn which tasks a consultant can perform during the process. Next to that this research is interesting for applicants because it gives insights in how the expert committee is negatively biased when consultants are involved. In this research some applicants had negative experience with the involvement of consultants. If you analyze the data about this experience one important factor is recognized,
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have a good process. In both the cases with the negative experience the communication caused misunderstandings and because of this negative experience. The applicant and consultant have to communicate throughout the whole process, and not only in the
beginning. In the cases where applicants had a good experience with the use of consultants, the applicants and consultant communicated through the whole process. The applicant and consultant worked together instead of separately.
Last but not least this research has managerial implication for consultants. Firstly, it is good to know that applicants involve consultants because they do no have the time and/or knowledge to do itself. If consultants want to be involved, they have to show that they have the knowledge and that they can make the process less time consuming for the applicant. Secondly, the expert committee mentions that one of the reasons of their bias is that consultants use copy paste in their applications, they are not fully committed to the project. So, the consultants have to write very client specific applications to lower this bias. Third, through this research, consultants know that certain management authorities will inform them, the consultants have to take these chances.
6.2 Limitations / Future research
There were some limitations regarding this research. The first limitation in this research was the lack of relevant theory. This made it difficult to bring the subject into context. The concept public funding is relatively new in the literature, the subject consultant was researched before, but mostly with another focus. Next to that, the focus in the literature about experience is different from the focus which was used in this research. Due to these aspects this study can be seen as pioneering in this area, the combination of public funding and consultancy was not researched before, and the experience about consultancy as a service is also a new subject in research.
The second limitation of this study is the data set. The data used for this research was already collected for other purposes. The interview templates were not based on the subject of interest, because of this the questions that were asked were also not based on the subject of interest. No additional interviews were done for the subject of interest which made some of the mentioned aspects scarce. The data set focused on one public funding scheme, EFRO, the data could be different when other or more public funding schemes were included in the database. For future research it would be interesting to do a similar research, but to also include interviews with consultants and make the interview template more specific on the subject of interest.
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of a consultant can vary. For future research it could be interesting to look at other contexts, for example, the involvement of consultants in the merger and acquisition projects of
companies or the involvement of consultants in reorganization projects.
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Appendix I
Interview Template voor Coördinatoren van Afgewezen Projecten
0. Inleiding
• Interview past binnen tussentijdse evaluatie EFRO subsidieprogramma waarbij twee centrale doelstellingen worden geëvalueerd (kennisontwikkeling + innovatie en valorisatie)
• Doelstelling van interview is om beter zicht te krijgen op hoe en met welk resultaat de EFRO regeling wordt uitgevoerd
• Interview wordt opgenomen
• Interviews worden gebruikt om analyse te maken van factoren die het realiseren van centrale doelstellingen vergemakkelijken of bemoeilijken binnen specifieke regelingen in specifieke regio’s.
• Interview data worden in eindrapportage anoniem gebruikt (geen referentie naar concrete projecten, bedrijven, technologieën)
1. Aanvraag van project
• In kort: doelstelling en inhoud van het project
• Waarom heeft u besloten om binnen deze regeling een aanvraag in te dienen? o Attractieve aspecten van call
o Aspecten van call die indienen van aanvraag minder attractief maakten • De doelstelling kennisontwikkeling/innovatie en valorisatie staat centraal binnen deze
regeling. Hoe heeft u in de aanvraag getracht om in te spelen op deze doelstelling? o Concrete voorbeelden
• Wanneer zijn overige partners betrokken geraakt bij het project (beginfase van aanvraag/eindfase van aanvraag)
• Hoe zijn deze partners geselecteerd?
• Wat was hun rol bij het schrijven van de aanvraag? o Een organisatie nam de leiding?
o Contact met MA tijdens schrijven?
o Zelf geschreven? Met intermediair: rolverdeling? Wanneer betrokken? • Beoordeling aanvraagprocedure:
o Doorlooptijd? o Info van MA?
o Administratieve eenvoud?
2. Beoordeling van project
• Wat vind u van de beoordeling door de experts van uw project? o Kwaliteit, gedetailleerd, relevante opmerkingen?
o Mee eens: afwijzing terecht?
• Was de feedback van de beoordelingscommissie waardevol voor het project? o Concrete voorbeelden
• Wat ziet u als de belangrijkste voor en nadelen van het gebruik van experts bij het beoordelen van de aanvraag?
3. Vervolg van project
