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SMEs: major players in innovation

Research and innovation are essential pillars of current European policy. Indeed, the European Union supports many projects from basic research to market through several funding programmes.

Innovation, which involves the evolution or introduction of new services, products or processes, has become a mandatory aspect for obtaining European funding. There are many actors involved in innovation: they can be higher education institutions, laboratories, Fab Labs, companies or even SMEs. The involvement of the latter in the process is essential since they enable these new products to be launched on the market.

SMEs at the heart of innovation

For the period 2014-2020, innovation projects carried out by SMEs can be financed, for example, by the ERDF, the COSME programme, through collaborative projects, public procurement of innovation, etc. In addition, all European programmes expect a strong innovative aspect from projects.

In addition to these tools, SMEs can also turn to the Horizon 2020 Framework Programme. With a budget of €79 billion, it supports projects along the innovation chain and aims to promote scientific excellence, industrial leadership and respond to societal challenges. Within this programme, the EU has set up a specific instrument for innovative SMEs: the SME instrument.

The SME instrument: what is it?

This instrument is intended for innovative SMEs wishing to develop, expand and, above all, establish themselves on the international market. Its particularity is that an SME can position itself as a project leader. A consortium is not mandatory, which makes it much easier to support the development of SMEs and accelerate their competitiveness.

This instrument consists of three phases:

– Phase 1: Concept and feasibility assessment (up to 50,000 euros)

– Phase 2: R&D, first commercial application – demonstration (from €0.5 million to €2.5 million – co-financing rate of 70%)

– Phase 3: marketing phase, with support in this process, by a network of European professionals funded by the Commission.

On 6 June 2019, the Commission opened a new call under Phase 2 of the SME Facility. The total budget allocated to this phase is €610,839,171 for 2019 and €600,986,592 for 2020. This call aims to give a final boost to SMEs in the development of their project. This opportunity clearly shows the European Union’s renewed commitment to fully integrate SMEs into innovation projects and to support them throughout the implementation of their idea.

The recently opened call has several closing dates, the last of which is 7 October 2020. This is a real opportunity for project leaders who need a last significant help under phase 2.

The SME Instrument is relevant in supporting high-potential projects and the increase of the budget for the next Horizon 2020 (Horizon Europe) to €100 billion shows the EU’s efforts in this direction. EU action strengthens the competitiveness of SMEs and enables it to fully integrate into the knowledge economy through innovation. 


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