The objective of ‘Innovation in SMEs’ is to optimise the Research, Development & Innovation environment for SMEs, including through the establishment and facilitation of a range of support services, with the aim of strengthening the innovation capacity of SMEs and creating value on the market and/or into society, thus underpinning the Europe2020 strategy for smart, inclusive and sustainable growth.
A range of actions contributes to building innovation management capacity for Small and Medium Enterprises. Innovation management capacity is the internal ability of companies to manage innovation processes from the generation of the idea to its profitability on the market.
SMEs can find this kind of support via a dedicated SME instrument , which is a novel approach to support SMEs' innovation activities. It attracts more SMEs to Horizon 2020 ,and helps to increase the economic impact of project results by a company-centric and market-driven approach.
The SME instrument  addresses the financing needs of internationally oriented SMEs, in implementing high-risk and high-potential innovation ideas. It aims at supporting projects with a European dimension that lead to radical changes in how business (product, processes, services, marketing etc.) is done. It launches companies into new markets, promote growth, and create high returns of investment. The SME instrument addresses all types of innovative SMEs so as to be able to promote growth champions in all sectors.
'Innovation in SMEs' also includes actions which provide indirect support to SMEs in the form of tailored services and projects (innovation management capacity building, IPR management, etc…), networking and mobilization actions for innovation service providers and policymakers (i.e. exchange of experience between national innovation agencies); moreover, Horizon 2020 provides direct support to the Enterprise Europe Network , a key player in improving SMEs' access to funding opportunities. 'Innovation in SMEs' funds additional activities intended to support entrepreneurship, internationalisation, and improving access to markets (through the COSME programme ).
Furthermore, this challenge supports the second EUREKA/Eurostars Joint Programme Initiative (2014-2020), that provides funding for market-oriented transnational collaborative R&D projects, spearheaded by R&D performing SMEs established in any of the 34 EUREKA Member-States that participate to Eurostars. Eurostars pools together national resources, with the aim of strengthening integration and synchronization of national research programmes contributing to the achievement of a European Research Area .