What Does the Criterion "Novelty" Mean for the Forschungszulage?
TL;DR – Summary
"Novel" in the context of the Forschungszulage means: your innovation activities aim to gain new knowledge/skills or to use the state of the art (scientific, technical, economic, etc.) in a new way – with the goal of developing new or significantly improved products, processes or services (possibly also new business models/methods). "Novel" does not automatically mean "unique worldwide", but it must go beyond routine/standard implementation (e.g. no mere copying, imitation or pure reverse engineering). Important: For a BSFZ certificate, the criteria of risk/uncertainty (technical/scientific uncertainty) and systematic approach (structured, traceable development process) must also be met.
Why This Article Matters
Many companies fail not because of the idea, but because of the justification of novelty: "We haven't done it this way before" is often correct – but it only becomes eligible for funding when it systematically produces new, reliable knowledge (and not merely a project "with new software" or "a new feature"). Presenting novelty clearly increases the chances of a positive BSFZ certificate – and thus of the tax-based funding.
Tax-based funding (requirements):
Novelty: What Exactly Does It Mean?
"Novel" refers to the degree of novelty of the knowledge generated in your innovation project.
Innovation projects:
In practice this means:
- New to your company: You do not yet have the solution and cannot simply adopt it from existing resources.
- New in the industry / state of the art: Something is being developed that is not yet used in the market or the industry (or at least not in this form/performance class).
- New for the customer segment/application area: Even if a method exists elsewhere, transferring it to a new environment can be novel – if genuine technical uncertainties must be resolved in the process.
- No copy / reverse engineering: Pure "copying", "reverse engineering" or standard integration without generating knowledge is not novel.
Important: Novelty rarely stands alone. In the logic of the Forschungszulage, "novel" is closely linked to creative, uncertain, systematic and reproducible/transferable.
Common Misconceptions (and Why They Are Critical)
Common misconceptions:
"For us this is new – so it is eligible for funding."
May be true, but it must be justified: What exactly is new about the knowledge? What assumptions/hypotheses were tested? What technical hurdles existed?
"We use new tools/frameworks/cloud – that's innovation."
New tools are often only a means to an end. If you "implement known methods with existing tools", the novelty in the sense of technical progress is frequently missing.
"We are building a new product – so it is novel."
A new product can still be not novel if at its core it is a known solution (e.g. standard software + customisation, routine engineering, a typical feature set).
Practical Examples: When Novelty Is More Likely "Yes"
1) Software & AI: Novelty Through Technical Progress
Context (software R&D):
More likely novel, if you e.g.:
- develop new or significantly more efficient algorithms,
- build a new search/matching logic on an original technology basis,
- resolve hardware/software conflicts through new system/network configurations that were not solvable "by the book",
- develop new encryption/security mechanisms (rather than merely implementing known standards).
Example (plainly stated): "We needed to enable real-time analysis directly at the production line, even though existing approaches only covered static quality control. To achieve this, new procedures for robust detection of process deviations under varying conditions were developed and validated."
2) Data & Analytics: Novelty When It Goes Beyond Reporting
More likely novel, when data collection/analysis is an integral part of the innovation project and you:
- develop new methods for acquiring or processing data,
- generate insights that go beyond known analyses.
Not novel is often:
- standard BI, dashboards, sales statistics,
- classic market analyses using known methods.
3) Transfer to New Contexts: Can Be Novel – But Only With Uncertainty
A transfer can be novel if it is not "plug-and-play" but creates technical uncertainty, e.g.:
- transferring B2C logic to data-sparse, complex B2B contexts and developing new methodological approaches for this,
- achieving multi-tenant cloud environments with significantly new performance boundaries (e.g. extremely short startup times).
Practical Examples: When Novelty Is More Likely "No" (or Subject to Scrutiny)
- (Further) development of application software based on known methods and tools, without technical progress.
- Integration of customer-specific applications into existing systems or adaptation for new use cases, when it is essentially standard work.
- Routine debugging (exception: debugging as part of an ongoing development phase when it contributes to resolving the technical uncertainty).
- Market research and market analyses (even if important for commercialisation).
- Patent/licensing work, production start-up, routine checks, etc.
How to Demonstrate Novelty Convincingly (Practical Approach)
To make novelty "verifiable", you need clear, concise building blocks:
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Starting point / state of the art (brief):
What is standard today? What is the "default solution" – and why is it insufficient?
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Core of novelty (1–3 sentences):
What is the new knowledge / the new technical capability you are generating?
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Technical uncertainties (specific):
What open questions existed at the outset (feasibility, performance, stability, integration risks)?
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Plan & iterations:
Which work packages/experiments/tests did you plan, carry out and evaluate?
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Results & documentation:
Which artefacts demonstrate the findings (e.g. test protocols, simulations, architecture decisions, measurement series, code repos, technical reports)?
Results & documentation (example link):
If you want to make life easier: this is exactly where we support you at dieforschungszulage.de – from structuring the novelty argument to solid project documentation and preparation for BSFZ/tax office.
Project documentation:
Why the Forschungszulage Is a Strong Option for Innovation Projects
The Forschungszulage is a tax-based innovation incentive: it targets exactly those situations where companies bear genuine technical risks and systematically develop something new. Especially for innovation-driven software, AI, industrial or process topics it is often a very attractive lever – regardless of whether a project ultimately "succeeds perfectly" (what matters is the systematic process of generating knowledge).
Tax-based innovation incentive:
Software/AI context:
More details on implementation, the process (BSFZ → ELSTER) and suitable innovation examples can be found at dieforschungszulage.de.
Process (BSFZ → ELSTER):