European SME funding for research and innovation projects

Small and medium-sized enterprises (SMEs) account for 99.8 percent of all businesses across Europe. In 2018, there were over 25 million SMEs in Europe (EU-28), of which 93 percent were micro-enterprises (companies with fewer than 10 employees). According to the EU Commission's SME Performance Review, SMEs contributed significantly more to growth from 2016 to 2018 than in previous years (from 2013 to 2018). This increase is almost entirely due to micro-enterprises. Almost 50 percent of SMEs in the EU focused on innovation from 2014 to 2016.

SMEs are the driving force to boost economic growth and job creation. Moreover, SMEs are considered by the European Commission to be the drivers of innovation, the ones that can quickly transform research results into marketable and competitive products. Therefore, SME funding is an important building block of European SME policy.

SME funding under Horizon Europe

Within the framework of the new EU funding programme for research and innovation, Horizon Europe, SME funding has a special status. Almost 50 percent of the programme budget is earmarked for activities close to the market and for the participation of industry and SMEs. In Pillar 2, " Global Challenges and European Industrial Competitiveness", the EU earmarks a total of 53.5 billion euros for research projects in which companies play an essential role in the commercialisation of project results. Of the 13.6 billion euros under Pillar 3 "Innovative Europe", 10.1 billion euros is available for the commercialisation of the best innovative ideas (see also European Innovation Council (EIC) below). The funding instruments under the EIC cover the entire innovation chain – from basic research to manufacturing to market maturity of the product. The target group is highly innovative SMEs, including start-ups or scale-ups. In some cases, they can also receive funding as individual applicants.

European Innovation Council (EIC)

After a two-year pilot phase, the European Innovation Council (EIC) now has its own work programme under Horizon Europe. The EIC is intended to ensure that Europe's research activities and innovations give rise to new companies that can quickly operate on a larger scale (scale-ups). It now brings together the previous specific funding instruments for high-risk, visionary and breakthrough ideas from basic research to commercialisation. This includes, for example, the "EIC Accelerator". It is aimed at SMEs with growth potential that pursue long-term innovative and risky ideas with European added value and already have market experience.

SME funding outside Horizon Europe

Outside Horizon Europe, other SME funding programmes such as EUREKA Eurostars, the LIFE programme or the "Cascade funding" offer numerous opportunities to participate in transnational cooperation projects.

Further information on the individual SME funding programmes:

The national and European programmes listed below are either aimed exclusively at SMEs or are structured in such a way that they are particularly suitable for SMEs.

  • European Innovation Council (EIC)

    Programme to promote long-term innovative and risky ideas with European added value. As SME funding under Horizon Europe, it covers the entire innovation chain.

  • EIC Pathfinder

    The EIC Pathfinder aims to implement radically new technology concepts in the long term. Both open-topic and topic-specific calls are planned for the 2021 work period.

  • EIC Transition

    The EIC Transition aims to further develop promising results from EIC Pathfinder projects and the European Research Council (ERC) “Proof of Concept” (PoC) funding line.

  • EIC Accelerator

    The EIC Accelerator is the funding instrument for innovative small and medium-sized enterprises (SMEs). It is part of the European Innovation Council (EIC) programme and consists of two variants: "Accelerator Open" (bottom-up) and "Accelerator Challenges" (top-down).

  • The DIGITAL Europe Programme

    The "DIGITAL Europe" funding programme improves European competitiveness in the digital economy and promotes technological independence through investment and innovation.

  • Erasmus for Young Entrepreneurs

    Erasmus for Young Entrepreneurs is a cross-border exchange programme which gives new or aspiring entrepreneurs the chance to learn from experienced entrepreneurs running small businesses in other Participating Countries.

  • IraSME

    IraSME supports SMEs in their transnational innovation activities, helps them to acquire technological know-how, extend their networks and bridge the gap between research and innovation.

  • Connecting Europe Facility (CEF2) Digital

    Connecting Europe Facility (CEF2) Digital strengthens investments in digital infrastructures from 2021 to 2027, in particular for cross-border connectivity and in socio-economic areas such as schools and hospitals, but also to increase the EU's competitiveness.

Support from BayFOR

Are you a Bavarian SME and are you interested in national and European funds for your company? Would you like to know which programme is best suited for your project? Are you looking for relevant partners for transnational cooperation? Do you have any questions about the required timing and the costs related to a funding application? Do you need support in submitting your application? Then please get in touch with us! We are here to help!

Dipl.-Jur. Natalia García Mozo

Natalia García Mozo
Head of Unit SME Advisory Services
Phone: +49 89 9901888-171

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