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SME Instrument

The adoption of the “Horizon 2020” Framework Programme for Research and Innovation for the 2014-2020 programming period confirms the Member states’ will to set innovation and research as priorities of the new EU political agenda.

In fact, Horizon 2020 concentrates its main effort on the enhancement of scientific knowledge and discovery, but also more than ever on trying to make Europe more competitive through research. Throughout the EU there is a unanimous consensus, indeed, in considering research an investment in citizens’ future and in putting this aspect at the heart of the EU’s blue-print for smart, sustainable and inclusive growth and jobs, fitting in this way the new programme in the EU’s 10-year Strategy 2020.

With 79 billion euro of funding available over 7 years one of its new initiatives is called “An Innovation Union” and it proposes a comprehensive set of actions to improve innovation in a concrete way and offers key measures to support small and medium-sized enterprises (SMEs) on this topic. At this stage a central question is indispensible to be raised: why are research and innovation so vital for SMEs and the European economy. 

SMEs are considered the backbone to the European market as they represent 99% of all European businesses and are essential for growth and jobs. Not for nothing 85% of net new jobs in the EU, form 2002 till 2010, were created by SMEs; however the research and development expenditure by SMEs is inferior in the EU than in the U.S. and less than a third of EU SMEs have innovative activities.

For all these reasons, SMEs are encouraged to take part across the whole Horizon 2020 programme and there are different ways to obtain funds. More precisely, small and medium firms can engage in joint projects as part of a consortium and it is predictable that thankful to this integrated strategy at least 15 % of the total combined budgets of the “Tackling societal challenges” Specific Programme and the “Leadership in enabling and industrial technologies” objective will be devoted to SMEs. Furthermore, SMEs will be boost to apply for Marie Skłodowska-Curie Actions grants and for actions on Future and Emerging Technologies (FET): the first ones are open to researchers of all ages and levels of experience, regardless of nationality and the second ones are expected to start radically new lines of technology through unexplored collaborations between advanced multidisciplinary science and cutting-edge engineering.

Besides, activities can be funded from the 619 million euro of the specific objective “Innovation in SMEs” which contains:
– A specific action for research intensive SMEs building on the Eurostars joint programme;
– Measures to enhance innovation capacity of SMEs through new and experimental types of SME innovation support;
– Support for market driven innovation.

But the most innovative component of the Horizon 2020 programme is the dedicated SME instrument planned for highly innovative smaller companies.

The new instrument intends to fill gaps in funding for early-stage, high-risk research and innovation by SMEs as well as inspiring breakthrough innovation. Integrating several opportunities offered in a quite dispersive way in the previous programming period, the new instrument fits in a better organised and simpler scheme which is undoubtedly more accessible. In fact, it puts together the specific SME Research and Innovation support of the EU Seventh Framework Programme for Research and Technological Development (FP7) and the Competitiveness and Innovation Programme (CIP).

Concerning the target, this instrument is designed specifically for innovative SMEs demonstrating a clear objective to develop, grow and internationalise without taking into account whether they are high-tech and research-driven or non-research conducting, social or service companies. A unique chance is given to SME’s as they are freely to settle how to organise the projects matching their effective needs. They will be able to choose with whom they desire to collaborate without excluding subcontracting works if they lack in-house skills.

The new instrument will assist firms in a complete way as it will cover the entire innovation cycle. The first step is made up of a feasibility part allowing for an assessment of the technological and commercial potential of a project. In the second step a main grant will support an innovation project focusing on activities such as demonstration, testing, prototyping, scale-up studies, miniaturisation, design, performance verification and market replication. At a final step the commercialisation phase is supported indirectly through facilitated access to debt and equity financial instruments.


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