Innovation rarely announces itself with great ceremony. More often, it begins quietly—with a laboratory finding a new solution, a young entrepreneur transforming research into a business, a university collaborating with industry, or a small company deciding to take the risk of developing something that has never existed before. Economies do not become more competitive simply by producing more of what they have always produced. They grow stronger when they learn to create new knowledge, transform ideas into products, and convert scientific research into opportunities that benefit entire communities. For island economies like the Azores, where geography naturally imposes limitations on scale and markets, innovation is not merely an economic strategy. It is increasingly becoming a necessity.
The publication of the INOVAR 2030 regulations by the Regional Government of the Azores marks one of the most significant policy developments for research, innovation, and technological development in recent years. More than simply another funding program, it represents an attempt to reshape how innovation is financed across the archipelago and, perhaps more importantly, how businesses and researchers imagine what is possible.
At its heart, INOVAR 2030 seeks to strengthen the Azores’ capacity for scientific research, technological innovation, and the adoption of advanced technologies by regional enterprises. Supported through the European Regional Development Fund (ERDF) under the Açores 2030 program, the initiative introduces a financial framework that removes one of the principal barriers that has long constrained ambitious research projects in the islands.
For many years, innovation funding available to Azorean businesses operated largely under the European Union’s de minimis rules. While valuable, those regulations imposed relatively modest funding ceilings that often prevented larger or more technologically ambitious projects from moving beyond the planning stage. Companies that had already reached their funding limits frequently found themselves unable to pursue new research initiatives regardless of their potential value.
INOVAR 2030 fundamentally changes that landscape.
By placing research incentives within the European Union’s General Block Exemption Regulation, the program allows considerably larger investments in industrial research and experimental development. Instead of forcing businesses to limit their ambitions to fit existing financial constraints, the new framework allows the funding system itself to adapt to the scale of innovative ideas. For many companies, particularly small and medium-sized enterprises, this shift could prove transformative.
Vice-President Artur Lima described the initiative as “a true paradigm shift” for industrial research and experimental development in the Azores. While political language often favors ambitious descriptions, the structural changes introduced by the program do suggest an important evolution. Rather than treating research as an occasional supplement to economic activity, INOVAR 2030 recognizes innovation as one of its principal engines.
The program’s design reflects an understanding that innovation occurs at many different stages. Scientific knowledge must first be created. New technologies require testing. Concepts need demonstration. Businesses often need assistance transforming laboratory discoveries into commercial products. Universities and companies must collaborate more effectively. Entrepreneurs require support during the uncertain transition between promising ideas and viable businesses.
Accordingly, INOVAR 2030 establishes a broad portfolio of funding instruments. These include industrial research projects, experimental development, demonstration projects, collaborative innovation programs, proof-of-concept initiatives, technology transfer mechanisms, scientific infrastructure, qualified entrepreneurship, and research nuclei within companies. Rather than offering a single solution for every applicant, the program attempts to accommodate projects at different levels of technological maturity.
Financial support is equally significant. Base funding may reach 50 percent of eligible costs for industrial research and 25 percent for experimental development. Through additional incentives linked to company size, effective collaboration, and the broad dissemination of research results, funding intensity can rise to 80 percent. In collaborative projects involving regional scientific institutions, public support may reach 85 percent.
These percentages matter because research and development are inherently risky. Unlike traditional investments, successful outcomes cannot be guaranteed. Many research projects fail. Others require years before generating commercial returns. High levels of public support therefore reduce the financial risks that often discourage companies from investing in innovation, particularly within smaller economies where access to private venture capital remains limited.
The program places particular emphasis on small and medium-sized enterprises (SMEs), which constitute the overwhelming majority of businesses in the Azores. This focus recognizes an important economic reality. Innovation does not belong exclusively to multinational corporations or large research laboratories. Some of the most significant technological advances emerge from smaller companies capable of adapting quickly, identifying niche opportunities, and responding creatively to local challenges.
Equally important is the strengthened relationship between the business sector and the regional scientific community. The University of the Azores, research institutes, innovation centers, and specialized laboratories possess considerable expertise across fields ranging from marine sciences and biotechnology to agriculture, renewable energy, environmental monitoring, and digital technologies. Programs such as INOVAR 2030 create stronger incentives for these institutions to work alongside private enterprises, transforming scientific knowledge into practical applications with commercial and societal value.
For the Azores, this collaboration carries strategic significance. The region possesses unique natural laboratories found nowhere else in the world. Its marine ecosystems, volcanic landscapes, biodiversity, geothermal resources, agricultural systems, and climate conditions provide exceptional opportunities for internationally relevant research. Innovation policy therefore becomes more than economic development; it becomes a way of leveraging the islands’ distinctive geography as a competitive advantage rather than viewing insularity solely as a limitation.
The announcement that more than €13 million in funding calls are expected before the end of the year further reinforces the government’s intention to accelerate investment in regional research and development. While funding alone never guarantees successful innovation, predictable financial instruments are essential for encouraging companies to undertake projects that may require several years before reaching commercial maturity.
Of course, no funding program, regardless of its size, automatically produces innovation. Success will ultimately depend upon the quality of projects submitted, the willingness of businesses to invest alongside public support, the strength of partnerships between academia and industry, and the region’s capacity to retain highly qualified researchers, engineers, entrepreneurs, and skilled professionals. Innovation ecosystems are built not simply through regulations but through people willing to collaborate across disciplines, institutions, and sectors.
Yet public policy can create the conditions under which innovation becomes more likely.
In many respects, INOVAR 2030 reflects an important shift in how regional development is increasingly understood. Traditional economic growth often relied upon attracting external investment or expanding existing industries. Today’s knowledge economy increasingly rewards regions capable of generating their own intellectual capital, developing proprietary technologies, and exporting ideas alongside products and services.
For island regions, this evolution offers particular promise. Geography limits the size of domestic markets, but knowledge travels without borders. Scientific discoveries made in the Azores can influence industries worldwide. Technologies developed for volcanic monitoring, marine conservation, renewable energy, sustainable agriculture, or climate resilience may find applications far beyond the Atlantic. Innovation allows smaller regions to compete globally not through scale but through specialization, creativity, and expertise.
Ultimately, the greatest value of INOVAR 2030 may lie less in the individual projects it finances than in the culture it seeks to encourage. It invites businesses to think more ambitiously, researchers to collaborate more closely with industry, and entrepreneurs to view scientific knowledge as an economic resource capable of generating lasting prosperity.
The future of the Azorean economy will undoubtedly continue to depend upon traditional strengths such as agriculture, fisheries, tourism, and the sea. But increasingly, it will also depend upon laboratories, startups, digital technologies, advanced manufacturing, and the capacity to transform ideas into innovation. INOVAR 2030 represents an investment not simply in research, but in the belief that the islands’ greatest natural resource may ultimately be the creativity and knowledge of the people who call the Azores home.
Based on a story in Diário dos Açores, directed by Paulo Viveiros. Photo from the Government of the Azores
