# Supporting Sustainable Innovation: Development Contracts for the Green and Digital Transition

In today’s era, characterized by increasing attention to environmental issues and technological innovation, there is a growing need to promote the development of critical technologies to address contemporary challenges. To this end, institutions are making substantial resources available, incentivizing businesses to invest in projects that contribute to the transition towards a greener and more digital economy. An emblematic example of this is represented by Development Contracts, facilitative tools designed to support strategic and innovative investment programs.

## What Are Development Contracts?

Development Contracts were introduced in the Italian regulatory context by Article 43 of a decree-law in 2008 and have established themselves as a fundamental tool for supporting investment programs of significant economic relevance. They can be implemented by Italian or foreign companies, of any size, either individually or in partnership, including through the use of network contracts.

Recently, the Ministry of Enterprises and Made in Italy allocated €497.8 million to finance these contracts through the “National Program for Research, Innovation, and Competitiveness for the Green and Digital Transition 2021-2027” (PN RIC). This investment represents a significant opportunity for companies looking to embark on innovative paths in critical technology sectors, in accordance with the guidelines of the STEP Regulation, which came into effect in February 2024.

## Beneficiaries of the Resources

The allocated resources are primarily aimed at promoting the development and manufacturing of strategic technologies, such as digital, deep tech, clean, and efficient technologies. More specifically, over €335 million will be dedicated to small and medium-sized enterprises, while €162 million will be reserved for projects presented by companies of any size. This approach aims to ensure broad inclusivity, encouraging SMEs to undertake new initiatives.

## How to Access Funding

To access the funding offered through Development Contracts, interested companies must follow some fundamental guidelines:

1. **Project Location**: Investments must be made in production units located in the less developed regions of the country, such as Molise, Basilicata, Calabria, Campania, Puglia, Sicily, and Sardinia.

2. **Do No Significant Harm (DNSH) Principle**: Projects must ensure compliance with the principle of not causing significant harm to environmental objectives, and therefore must be designed with sustainability in mind.

3. **Eligible Sectors**: Areas of intervention must fall within digital technologies and innovation in the deep tech sector. Projects related to clean and efficient technologies are also included, with particular attention to those achieving net-zero emissions and biotechnology.

4. **Reducing Strategic Dependencies**: Projects must contribute to reducing or preventing the European Union’s strategic dependencies in the relevant sectors.

5. **Significant Technological Advancements**: Companies must plan for the realization of significant technological advancements and commercial-scale production.

## Eligible Expenses

Funding can cover a wide range of expenses necessary for the realization of investment and research and development programs. Eligible expenses include:

– Costs for the purchase of instrumental goods and materials necessary for the project.
– Expenses for personnel engaged in the project.
– Costs for consulting and specialized services.
– Expenses for the promotion and commercialization of new products and technologies.

Companies must demonstrate that the expenses incurred are directly related to the project objectives, thereby ensuring accurate and transparent accounting of the resources used.

## Application Procedures and Deadlines

Applications for accessing funding must be submitted according to specific procedures indicated by the…