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.
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.
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.
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:
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.