Horizon 2020
The EU Framework Programme for Research and Innovation

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SME Instrument under Horizon 2020: the three phases
The three phases of the SME Instrument under Horizon 2020
Horizon 2020 stimulates SME participation across the whole programme, yet with a particular focus on close-to-market support.

New Approach, Different Dynamic

If research and development activities aren't translated into innovation, i.e. value creation from novelty, SMEs can't take profit from those activities. Great ideas need to be picked up by users, customers and the market, before they can really transform society.

Overall, it is expected that 20% of the total combined budget for all Societal Challenges and the specific objective Leadership in Enabling and Industrial Technologies (LEITs) will go to SMEs. This means that at least € 8.33 billion in EU support for Research and Innovation activities will find its way directly to SMEs, most of them part of consortiums participating in EU collaborative Research and Innovation projects.

SME instrument

In direct support, a dedicated SME-exclusive instrument will encourage for-profit companies to put forward their most innovative ideas with an EU dimension that can't find financing on the market because of their high-risk character. The SME instrument targets highly innovative SMEs showing a strong ambition to develop, grow and internationalise, regardless of whether they are high-tech and research-driven or non-research conducting, social or service companies. With a budget of close to € 3 billion over the period 2014-2020, the SME instrument ambitions to take innovation in SMEs to the next level, by granting tailored support to SMEs that have ground-breaking ideas with a high market potential, but are short of certain resources, or a real strategy, to deliver.

Moreover, the SME instrument will address the financing gap in developing high-potential, but high-risk innovative ideas of small companies and bringing them closer to the market. This has been a widely recognised EU-wide market failure which relates to the market's difficult relationship with uncertainty and estimating the potential value of new technologies, new products, new resources, new firms or new entrepreneurial capabilities.

More on SMEs in Horizon2020

On top of this direct support to SMEs, the Horizon 2020 specific objective Innovation in SMEs will boost the innovation capacity of SMEs, including through the Eurostars Joint Programme which will continue to promote transnational collaboration of R&D performing SMEs.

Last but not least, about one third of the Access to Risk Finance budget under Horizon 2020 – which represents more than € 900 million – will flow to SMEs and small midcaps. This support consists of:

  • A debt facility providing loans, guarantees and other forms of debt finance to entities of all forms and sizes, notably research and innovation-driven SMEs: InnovFin SME Guarantee.
  • An equity facility providing finance for mainly early-stage investments, with a particular focus on early-stage SMEs with the potential to carry out innovation and grow rapidly: InnovFin SME Venture Capital.

Their aim is to support the achievement of the R&I objectives of all sectors and policy areas crucial for tackling societal challenges, enhancing innovation and fostering sustainable growth. They are implemented via the European Investment Bank and the European Investment Fund and/or other financial institutions of comparable stature.

Search for funding opportunities related to SMEs in the Participant Portal.



27/05/2014 - 17:32

Find out more about Horizon 2020 in this three minute animation clip which will give you a general overview of the programme specifics. Read more

27/05/2014 - 17:51

This short video animation will guide you through the first steps you will need to take to apply to Horizon 2020. Read more

28/03/2014 - 18:57

Want to learn more on the funding opportunities under the Marie Skłodowska-Curie actions (MSCA) for companies including SMEs? Why don't you listen to the testimonials of companies that have benefited from the scheme! Read more


24/11/2015 - 17:24

38 SMEs from 13 countries have been selected in the latest round of Horizon2020 SME Instrument Phase 2. Each project, 33 in total, will receive up to € 2.5 million (€ 5 million for health projects) to finance innovation activities like demonstration, testing, piloting, scaling up and miniaturisation, in addition to developing a mature business plan for their product. Read more

10/11/2015 - 10:54

141 small and medium-sized enterprises (SMEs) from 24 countries have been selected for funding in the latest round of Horizon2020 SME Instrument, for Phase 1. For each project, the participants will receive € 50,000 to finance feasibility studies for new products that can disrupt the market. They can also ask for up to three days of business coaching. Read more

19/10/2015 - 14:48

ICT 2015 - Innovate, Connect, Transform, takes place in Lisbon from 20th to 22nd October 2015 with some of the most important European players in ICT, the excellence of EU universities and research centres and flourishing SMEs and start-ups. Read more

Project stories

30/10/2015 - 01:00

Our interaction with machines has progressed from tapping keys to control a computer, to waving a hand. An EU-funded project is developing technology that helps manufacturers apply the next step – mid-air virtual controls that you can touch. Read more

21/10/2015 - 02:00

When a boat pitches in waves, it creates inertial energy. The EU-funded SeaKERS project developed the tools to harness this renewable energy for charging yacht batteries. The project team is now planning to commercialise its invention. Read more

07/10/2015 - 02:00

EU-funded researchers are developing an environmentally friendly alternative to petrochemical-based coatings on food and beverage packaging. Made from food processing by-products, the biodegradable coatings would decrease dependency on fossil fuel-based plastics, improve recyclability and reduce landfill waste. Read more


25/09/2015 - 17:40

Horizon 2020 is the EU’s biggest ever programme for research and innovation, and it has got off to an excellent start. This brochure presents information on the first 100 calls for proposals that closed by 1 December 2014. Read more

24/09/2015 - 20:03

Horizon 2020 is the biggest EU research and innovation programme ever. Almost €80 billion of funding is available over seven years (2014 to 2020) – in addition to the private and national public investment that this money will attract. This publication presents the full set of Key Performance and Cross-Cutting Issues Indicators for Horizon 2020, including those for the European Institute of Technology and EURATOM. Read more

01/04/2015 - 13:30

For three decades, the EU Framework Programmes have been funding breakthroughs across Europe. RTD’s Horizon Magazine looks at the people and events that have helped shape European research policy, taking you behind the scenes during the pivotal moments from the last 30 years of research funding. These articles have been brought together into a special Horizon supplement to commemorate the 30th anniversary of the Framework Programmes. Read more

Press Release

13/10/2015 - 18:51

Carlos Moedas, Commissioner for Research, Science and Innovation said: "Research and innovation are the engines of Europe's progress and vital to addressing today's new pressing challenges like immigration, climate change, clean energy and healthy societies. Over the next two years, €16 billion from Horizon 2020 will support Europe's top scientific efforts, making the difference to citizens' lives." Read more

05/02/2015 - 16:40

With the support of the European Research Council (ERC) "Proof of Concept" grants, 59 researchers in Europe will now get the chance to turn their inventions into viable products. Read more

09/01/2015 - 13:15

Today the European Commission is announcing new support for innovative companies around Europe through two initiatives. One of these is a new, €200 million, "Fast Track to Innovation" initiative launched today by the Commissioner for Research, Science and Innovation Carlos Moedas. This instrument will promote innovation by reducing the time it takes to bring innovative ideas to market. Read more