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Saturday, December 9, 2023

Are there any grants or subsidies for DX (Digital Transformation)? Explanation of types and the process of obtaining them

DX (Digital Transformation) is a technological innovation that reforms the way people work through the introduction of digital technology to improve corporate productivity and competitive advantage. However, some people may think that it is difficult to implement DX because of the costs involved in introducing new technologies.

One way for companies to reduce implementation costs while moving forward with DX implementation is to utilize subsidies and grants. Subsidies and grants can help companies to reduce their out-of-pocket expenses while moving forward with DX implementation at an early stage.

So, in this article, we will introduce you to subsidies and grants for DX, and if you are looking for a cost-effective way to introduce DX, please take a look.

Explanation of DX (Digital Transformation)

First, let's review an overview of DX.

What is the concept of DX?

What is DX?It is the use of digital technologies, including ICT and cloud technologies, to reform business operations. We aim to improve productivity and competitive advantage and increase corporate value by efficiently transforming operations and work flows.

The purpose of DX is to create innovation by digitizing ways of working that have been tackled in an analog manner to make operations more efficient and by crossing existing technologies with technology.

What are the advantages of implementing DX?

There are two main advantages for companies to implement DX: First, theIncreased productivity through operational efficiencyIt is. By digitizing tasks that were previously analogized, you can automate tasks that are being performed manually by your employees. This will allow them to spend more time on other tasks for the amount of work that has been automated. In addition, by automating routine tasks, mistakes can be prevented and work can be performed more efficiently than if the work were to be redone manually.

What is the second advantage of implementing DX?Potential to lead business transformation in the industry through innovationis that there are In some industries, digital technology has not been adopted at all. Under these circumstances, DX initiatives can not only lead the industry in efficiency and productivity, but can also create innovations that cross existing technologies with digital technologies. Thus, the benefits of implementing DX are significant, and we recommend that DX be proactively introduced.

Benefits of promoting DX through grants and subsidies

The bottleneck in implementing DX is the cost at the time of implementation. Many companies cannot afford the cost of investing in new challenges and are struggling to respond to the changing times with existing technology. This is where grants and subsidies can be used to meet new challenges. Here is an overview of grants and subsidies and their benefits.

Difference between grants and subsidies

Subsidies and grants are similar terms at first glance, but each has its own characteristics, so it is important to keep these points in mind.

<Subsidy Features
More types than grants
The amount is higher than the grant.
In many cases, it is not a full subsidy (e.g., 1/2 of the total project cost)
Wide range of expense coverage
There is a screening process to be adopted as a subsidized project.
May require multi-year progress reports

<Grant Features
Always paid when conditions are met.
In many cases, there is no set application period.

Advantages of using grants and subsidies

There are two main advantages to utilizing grants and subsidies,Reduced out-of-pocket costs for new investments, including DX promotionIt is. Investors must be cautious about investing because there is not always a return on investment. However, the advantage is that grants and subsidies can reduce out-of-pocket expenses, making it easier to invest.

The second point,The point at which a company's credibility is enhanced by its history of grants and subsidies.It is. Many grant and subsidy programs are conducted by national and local governments, and it is a plus to have been selected for a grant in the past, especially if the grant is subject to review.

This is because the government places more importance on past performance, and therefore, a company that has been selected for a grant for another project is more likely to be able to complete the grant project than a company that has never been selected for a grant.
In addition, when applying for subsidies, you may receive support from financial institutions, associations of commerce and industry, and other organizations called "support organizations," and there is a possibility that new business will expand through interactions with these organizations. We encourage you to actively take on this challenge.

Grants and subsidies for DX

So far, we have introduced the significance of promoting the introduction of DX and the subsidy and grant programs. Here, we would like to introduce what kind of subsidies and grants are available for DX introduction.

IT Deployment Subsidy

IT introduction subsidies are the most suitable subsidies for promoting DX. The subsidy is intended for small and medium-sized enterprises (SMEs) and small businesses, etc., and covers a portion of the cost of introducing IT tools that meet their needs. Even if you have no knowledge of IT or DX and are worried about it, an "IT implementation support business operator" will help you with the implementation, so you can apply with confidence even if it is your first time working with DX.

Eligibility to apply for IT implementation subsidies is determined by "classification" and "requirements. Note that requirements include capital and number of employees, and each classification has different requirements.
Once the requirements have been met, the IT tools to be introduced are selected from among the products eligible for subsidies and applied for.

Monozukuri subsidy

The official name of the Monodzukuri Subsidy is the "Subsidy for Promoting Productivity Improvement in Manufacturing, Commerce, and Services. The subsidies support the development of innovative services, the development of prototypes, and capital investment to improve production processes in response to system changes that small and medium-sized enterprises (SMEs) and small businesses will face over the next several years.

The subsidies currently being offered are for "General Type and Global Expansion Type," with the General Type providing up to 10 million yen and the Global Expansion Type providing up to 30 million yen. The subsidy rate is 1/2 for SMEs and up to 2/3 for small businesses, making it possible to promote DX by utilizing the Monozukuri subsidy.
The general type has a "special quota" for new coronavirus, and subsidies are paid for measures against new coronavirus.

However, since the Monodzukuri subsidy includes an application requirement for either the amount of added value or wage increase for the entire business, care should be taken when drafting the business plan.

Process of introducing grants and subsidies for DX

What is the process for applying for a grant to install DX? Let's review the application process here.

Check the terms and conditions of the grant application.

At first, it is important to check the conditions of the application to see if your company is eligible to receive a subsidy; note that both the IT introduction subsidy and the manufacturing subsidy have designated targets. Although the application conditions for the subsidies are relatively broad, depending on the size of your company, you may not be eligible for adoption.

Prepare an application and have it reviewed

Obtain and complete the necessary application forms for the assisted project for which you are receiving assistance. In some cases, you will need to submit many documents, including a business plan. In addition, there may be documents that are not immediately available, such as the need for a recommendation from a support organization or proof of tax payment. Please allow plenty of time for preparation.

If selected, implement the project and submit a report

Once you have been selected for a subsidized project, you can proceed with the introduction of your new product or service according to your business plan. Most subsidized projects are generally paid after the project is completed.

The project will proceed, and upon completion of the project, a project report will be submitted, and if the contents are deemed appropriate, the subsidy will be paid.

Please note that if the amount of the subsidized project is large, reporting will be required for multiple years and reports will need to be submitted on an ongoing basis.

Let's take advantage of the grants and move forward with DX implementation.

In introducing DX, grants and subsidies are effective opportunities to introduce the latest technology at a reduced out-of-pocket cost. If you are considering implementing DX in the future, consider taking advantage of grants and subsidies.

Grants and subsidies can help you meet new companies and organizations in the process and expand your business DX is a concept that will become more common in our society in the future. Take this opportunity to consider implementing DX.

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