Innovation support

Advancing Manufacturing Challenge Fund

Advancing Manufacturing Challenge Fund (AMCF)

Competitive grant funding for academic institutions, public bodies, and third sector organisations in Scotland to support initiatives that will help Scottish SMEs improve their manufacturing capabilities.

About the fund

Academic institutions, public bodies, and third sector organisations in Scotland can receive competitive grant funding to support initiatives that will help small and medium-sized enterprises (SMEs) in Scotland improve their manufacturing capabilities.

Up to £14 million of European Regional Development Fund (ERDF) grant funding is currently available, with scope to increase the funds to £18 million depending on the level of demand. Grant funding will be awarded on a competitive basis, to support the creation of a national network of regionally-based initiatives, to stimulate and improve the innovation performance of SMEs, by providing services focused on improving manufacturing capabilities across Scotland.

The overall aim of the AMCF is for projects to be of a scale and level of ambition to have a significant impact on advancing the manufacturing capabilities of SMEs within Scotland and lead to long-term transformational change.

Project themes we're looking to support

As part of your application, you'll be asked to submit project proposals which will contribute towards one or more of the following themes:

Reinvent the workforce

  • Increasing the capacity and diversity of the workforce, and creating a culture of continuous learning to foster innovation and creativity within the business

Adoption of new technology and processes

  • Including investment in SMART manufacturing and progress towards industry 4.0


  • Supporting SMEs to invest in the development of new products, services and/or processes which are new to the market or to the firm
  • Improving energy efficiency and decarbonising the industry
  • increasing Business Expenditure on Research and Development (BERD)

Supply chains

  • Strengthening existing supply chains
  • Identifying new opportunities. For example, circular economy or blockchain technology

Encourage growth

  • Increasing productivity, expanding into new markets, exporting opportunities, and attracting foreign direct investment

Horizontal themes

You'll also be required to demonstrate and measure:

  • How you'll include positive approaches to equal opportunities and non-discrimination in the work of the project
  • Equality between men and women
  • And how you'll promote sustainable development through the work of the project

How much funding can my project receive?

Intervention rate

Up to £14 million of European Regional Development Fund (ERDF) grant funding is currently available, with scope to increase the funds to £18 million depending on the level of demand, towards projects in Scotland. Grant funding will be awarded on a competitive basis. The maximum amount of grant that a project can be awarded (intervention rate) will depend on where project activities take place.

The AMCF can contribute up to a maximum of 50% of eligible project costs for the Lowlands and Uplands (LUPS) area of Scotland and up to a maximum of 70% for the Highlands and Islands (H&I) area. 

Only two cost models may be used, and projects can use one, or a combination of both:

  • Direct staff cost + 15% flat rate
  • Procurement

Match Funding

The ERDF funding contribution must be the minimum amount required to allow the project to proceed, and the match funding you secure must be in the form of a direct cash contribution or expenditure incurred. For example, actual costs for the procurement of capital equipment and/or direct staff costs.

Match funding can't be linked to the achievement of other outputs.

The following sources of match funding are not eligible:

  • European funding of any kind
  • Corporate and private sector match funding (in other words, contributions from companies that have shareholders who are paid dividends on profits or receive direct personal benefits)
  • In-kind contributions

Who can apply?

Eligible organisations include:

  • Academic institutions: for example, Scotland’s universities, colleges, research and technology organisations (RTOs)
  • Public sector organisations: for example, public bodies funded by the Scottish Government, local authorities in Scotland and related agencies
  • Third sector organisations: for example, charities, not for profit companies, organisations that directly or indirectly receive over 50% of core funding (excluding European funding) from the public sector, co-operatives

Applicants projects can be delivered in the Lowland and Uplands (LUPS) and / or Highlands and Island (H&I) areas i.e. delivered across Scotland.

Applications can be individual or collaborative.

Private sector organisations are not eligible to apply and can't be a member of a collaborative application.

How to apply

Applications for Stage 2 are now closed. Projects will be assessed during October and November 2019.


Updated guidance for AMCF applicants (PDF, 529kB)

Claims process and reporting guidance for AMCF (PDF, 665kB)

Audit, publicity and compliance guidance for AMCF (PDF, 523kB)

Stage 2 financial annex (Excel, 311kB)

Monitoring template guidance (PDF, 661kB)

Monitoring report template (Excel, 30kB)


  • Stage 1: outline project applications – closed 5 July 2019
  • Stage 2: full project applications – closes 13 September 2019
  • Project assessments – October and November 2019
  • Projects approved – December 2019
  • Projects start – from 1 April 2020, however there may be an opportunity to start earlier if contracts are signed and projects are ready to go
  • Projects end – by 31 December 2022
  • Projects submit final claim and final report – by 31 March 2023

Got a question?

Get in touch to find out more about this fund