Horizon 2020
The EU Framework Programme for Research and Innovation

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

Commitment number 7 of the Innovation Union aims at the creation of an innovation-friendly ecosystem for the European Union (EU). It has turned greater involvement of SMEs in Research & Innovation Support, into one of the chief recipes to put Europe on track for becoming a smart, inclusive and sustainable economy in a changing world, in line with the Europe 2020 strategy (2010).

Following this commitment, SME support under the EU’s 7th Framework Programme for Research and Technological Development (FP7) was stepped up. The result by mid-2013 was that SMEs were represented in 74.6% of project consortia and had received 16.9% of the FP7 Cooperation Programme budget, 1.9% beyond the 15% target set at the start of FP7 by Council and Parliament.

Despite this relative success, independent assessments measuring the impact of EU Framework Programmes (evaluation and publications), in support of research and development activities have revealed – time and again – that SMEs do not really manage to reap full commercial or strategic rewards and create value for the economy and society through their participation in these programmes. It was time for change.

New Approach, Different Dynamic

Horizon 2020 takes an integrated approach to SMEs, based on a different dynamic. It stimulates SME participation across the whole programme, yet with a particular focus on close-to-market support. At the end of the day, if research and development activities aren't translated into innovation, i.e. value creation from invention, 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 € 8.65 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 over € 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.
  • 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.

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 thr Participant Portal.



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


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


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



The European Commission has today welcomed the commercial launch of the first "InnovFin SME Guarantee", a new European Union loan guarantee facility under Horizon 2020 for innovative small and medium-sized enterprises (SMEs). Read more


Research partnerships between the EU, the private sector and Member States presented their first calls for projects and partners under Horizon 2020, the EU's €80 billion research and innovation programme, at an event in Brussels on 9 July 2014. Read more


Vigi’Fall received Gold Medal at the Paris international Concours Lépine, which rewards the most promising inventions of the 2014 edition. Read more

Project stories


Using digital machining, companies can turn a digital design into an object with the click of a mouse. An EU-funded project has come up with a new and innovative way to do this, bringing the technology within reach of smaller companies with limited budgets. Read more


The European Union (EU)-funded research project MusselsAlive has created better methods for handling, transporting, storing and reducing waste in the mussel industry. In particular, the team has developed new holding systems that can help keep the mussels fresher for longer on their journey to the consumer. Read more


Many large, multi-storey buildings, particularly residential and office spaces, are built using precast concrete components and then assembled on-site. While generally rapid and economic to build, the performance and stability of such buildings in earthquake zones is poorly understood. The European Union (EU)-funded project SAFECAST has investigated how to make them safer and developed new construction guidelines which are expected to be implemented in the regions at risk in Europe. Read more



Interested in Open Government, eParticipation, mobile eGovernment, cloud of public services, use of emerging technologies in public sector, etc...?

Find your way and your funding opportunities in the new programme Horizon 2020. Read the flyer!

(last update 24/3/2014) Read more


The SME instrument (Horizon 2020) offers seamless business innovation support from idea to market, covering the three stages of the full innovation cycle (proof-of-concept, innovation development and commercialisation). In addition, a coaching and mentoring scheme is provided exclusively to beneficiaries of the instrument in order to accelerate the impact of the funding provided. Find out more via this brochure! Read more

Press Release


The European Commission and the European Investment Bank Group (EIB) launched a new generation of EU financial instruments and advisory services to help innovative firms access finance more easily. Read more

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