European SMEs represent the 98% of the whole European business sector, employing more than 87 million people (2/3 of the total European employment) and generating the 60% of the European value added. Nevertheless, despite these amazing numbers, only the 25% of the SMEs are internationally active.

As we know, Horizon 2020 is the new financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe’s global competitiveness. Running from 2014 to 2020 with a budget of just over €70 billion, the EU’s new programme for research and innovation is part of the drive to create new growth and jobs in Europe.

More in deep for the industries, Horizon 2020 will:

  • Build leadership in enabling and industrial technologies, with dedicated support for ICT, nanotechnologies, advanced materials, biotechnology, advanced manufacturing and processing, and space, while also providing support for cross-cutting actions to capture the accumulated benefits from combining several Key Enabling Technologies.
  • Facilitate access to risk finance.
  • Provide Union wide support for innovation in SMEs.

In order to achieve such an ambitious objective, Horizon 2020 tackles the participation of the SMEs from three different points of view:

  • As an imperative political objective, assuming at least the 20% of the total budget from the “Leadership in enabling and industrial technologies” and “Societal Challenges” to SMEs. This means basically that at least 7.600M€ must be allocated to SMEs throughout the aforementioned objectives.
  • A close support to SMEs during the complete innovation process, including a dedicated SME Instrument.
  • With financial benefits, facilitating the access to risk finance.

Horizon 2020 SME Instrument

One of the most promising novelties of Horizon 2020 is the SME Instrument. This will address the financing needs of European SMEs in developing high-risk and high-potential innovation ideas. The SME instrument will target all types of innovative SMEs so as to be able to promote growth champions in all sectors.

The intervention logic of the SME instrument will be based on excellent business innovation plans. The scheme will support rather small projects (1 to 3 million euros), bottom-up, and a single company support will be possible.

The SME instrument will be structured according to the next phase scheme:

This instrument expects to cover the complete innovation cycle of the SMEs by providing grants to every SME with the clear ambition to grow and internationalize by means of a European scope innovative project.

Three phases are foreseen:

  • Phase 1: Concept and feasibility assessment: 50k€ funding and duration of 6 months
  • Phase 2: Innovation and R&D activities: 1-3M€ funding (70% of costs) and duration of 1-2 years
  • Phase 3: Commercialisation: no direct funding but supporting actions.

It is expected that calls for Phase 1 and Phase 2 are continuously open, and SMEs with access to this funding (both for Phase 1 and/or Phase 2) will have priority treatment for risk finance. Moreover, SMEs taking part on this Instrument will benefit from a special coaching scheme, still under definition.

Finally, Horizon 2020 will keep supporting the Eurostars programme, with a contribution of 287M€, leaving the rest (1.140M€) at national public level.