Horizon 2020
The EU Framework Programme for Research and Innovation


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

Horizon 2020: a new dynamic for SMEs

If research and development activities are not translated into innovation, i.e. value creation from novelty, SMEs cannot 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 over EUR 8 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.

Halfway the programme - i.e. in July 2017 - SMEs had received about EUR 3.5 billion in grant money from the about EUR 14.25 billion awarded under Horizon 2020 Societal Challenges and LEITs. With that, the 20% target was exceeded by more than 4%.

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.

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.

With a budget of close to € 3 billion over the period 2014-2020, the SME instrument is taking innovation in SMEs to the next level, by granting tailored support to SMEs that have ground-breaking ideas with a high market potential. It is expected that over 7500 companies will have received innovation support through the instrument when Horizon 2020 draws to a close; in 2014-2015, the EU invested over EUR 0.5 billion of Horizon 2020 budget to support innovation-driven SMEs under the SME instrument call; in 2016-2017, another EUR 0.79 billion has been invested. Up to July 2017, larger demonstration grants - in the order of EUR 2 million average per project - had been awarded to scale up an innovation idea from a business plan to a market-mature product, service, process or business model. Meanwhile, phase 3 of the SME instrument, which is aimed at supporting the commercialisation of the SME instrument project outputs and at equipping the companies involved with skills to access finance and markets as needed, has gotten into full swing. 

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.
  • Equity facilities 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 Equity.

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.