Horizon 2020 SME Instrument

In order to enhance the participation of SMEs in EU innovation programmes, the European Commission has put in place a new funding instrument scheme, the so-called SME Instrument. This instrument is designed to help European enterprises commercialize their innovative solutions.

SME Instrument – part of the European rationale

The SME Instrument falls within a broader EU strategy for an Innovation Union which, among other things, seeks to “ensure stronger involvement of SME in future EU R&I programmes”.

The SME Instrument is part of the “Industrial Leadership” and “Societal Challenges” pillars. Innovative projects using in Key Enabling Technologies, or addressing issues such as food safety, green energy and transport, smart infrastructures, climate action, business model innovation, or e-government, will be funded.

Attractive conditions and funding rates

  • Contrary to other Research and Innovation Actions, one single SME can apply. A consortium is possible, but not required.
  • 70% of eligible costs will be reimbursed.

Evaluating the potential of applicants

Any SME within the EU or from a Horizon 2020 associated country can apply for this EU grant.

According to the EU definition micro, small and medium-sized enterprises employ fewer than 250 persons and have an annual turnover not higher than € 50 million and/or an annual balance sheet total not exceeding € 43 million ((Article 2 of the Annex of Recommendation 2003/361/EC).

Applicants have to be highly innovative, be well-established in their domain, have global ambitions, and a clear idea about the commercialisation of their project.

The evaluation of the proposal will consider these three criteria:

  • The company’s competence to bring the project to fruition;
  • The level of excellence of the proposed innovation (beyond state-of-the-art); and
  • The strong potential for commercialisation, as well as the economic impact of the project.

A phased support: from feasibility to commercialisation

The mechanism is divided into three standalone phases: participation in phase 1 is not necessary to apply for phase 2.

  • Phase 1: This phase provides financial and coaching support for the elaboration of a feasibility study, demonstrating the commercial opportunity and a first business plan. The allocated funding is a lump sum of €50 000.
     Phase 1 should last around 6 moths. The outcome of this phase is  a technical and commercial feasibility study.
  • Phase 2: This phase will finance demonstration and market replication activities with a grant going from  €500 000 to €2,5 million.
  • Phase 3 of the SME instrument does not offer any funding. It is however crucial for the commercialisation and internationalisation of the product, service or process created in Phase 2. Through the Enterprise Europe Network, companies are offered commercialisation advice, internationalisation support services, facilitated financial access, as well as networking opportunities with investors and customers.