I found this interesting topic, posted on LinkedIn group 'Innovatie 2.0' by Guus Loehlefink.

"Although one would expect that a grant could boost innovation, my experience is that it has precisely the opposite effect. A few points:

• Grants come with so many conditions that they do not reach to those who need it, but often those who are good in applications. Of course you could hire someone to do the application for you, but in most cases, a large chunk of this public money will not reach its goal.
• After being granted you enter a sticky web that helps kill all of your creativity. You could continue your initial approach, but soon you’ll be accused of fraud. Procedures take precedence over everything and budget justification becomes more important that the end result.
• Living of grants is addictive. A cut in subsidy is often fatal. This is because regulations slow down an entrepreneurial mindset. Non-entrepreneurial applicants can perhaps start with a subsidy, but would not succeed in keeping their innovation alive..

Why don’t we use tax deduction as a mechanism to stimulate innovation? Or the market mechanism: after having successfully passed competition you could earn your freedom"

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