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)

The EIC programme is designed to ensure that Europe's research activities and innovations create new companies that can operate quickly on a larger scale (scale-ups). It brings together the previous specific funding instruments for high-risk, visionary and ground-breaking ideas from basic research through to commercialisation. This also includes the "EIC Accelerator", for example. It is aimed at young SMEs with growth potential that want to commercialise ground-breaking and risky ideas with European added value in the long term.

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

    Programme for basic research and testing of radically new technology concepts at an early stage of development. As part of the EIC, it combines the Pathfinder Open (development of novel ideas) and Pathfinder Challenges (development of emerging topics and research landscapes) funding programmes.

  • 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 part of the EIC and the successor to the SME Instrument Phase 2. It supports SMEs with growth potential in developing concrete and high-risk innovations to market maturity.

  • EUREKA Eurostars

    EUREKA is an international network, co-financed by the EU Commission, which offers funding instruments for R&I. EUREKA Eurostars is a joint funding programme of EUREKA. Eurostars projects are open to all technologies and aim to develop an innovative product, process or service.

  • The DIGITAL Europe Programme

    The "Digital Europe" funding programme improves European competitiveness in the digital economy and promotes technological independence through investment and innovation. As part of "Digital Europe", capacities for new technologies are being expanded, thereby accelerating the digital transformation. The EU's digital progress is also intended to help overcome other challenges such as the climate crisis.

  • Erasmus for Young Entrepreneurs

    Programme to promote the exchange of experience between young entrepreneurs and entrepreneurs from other countries.

  • IraSME

    Programme to support the search for partners for the implementation of research and development projects.

  • 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? Do you need advice to understand which programme suits your project? Are you looking for partners for transnational co-operation? Do you have questions about the time and the associated costs for funding applications or need support with support with the application process? Then arrange a free free consultation appointment!

Dipl.-Jur. Natalia García Mozo

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

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