Definition of the day: the SME Instrument

The SME instrument is a new tool to support innovation in the framework of the Horizon 2020 Programme, under the section “societal challenges”.

What is the purpose of the SME Instrument? Its aim is to help high-potential SMEs to develop groundbreaking innovative ideas for products, services or processes that are ready for competition in the global market. According to their needs, SMEs can form collaborations in order to apply for funding and support.
The SME Instrument is in addition to the support provided through the participation of SMEs in collaborative projects within Horizon 2020.
What is the budget of the SME Instrument? Over the period 2014-2020, the instrument has a €3 billion budget.
What opportunities does the instrument offer SMEs? It makes the following possible:

  • Business innovation grants for feasibility assessment purposes;
  • Business innovation grants for innovation development and demonstration purposes;
  • Free-of-charge business coaching  to support and strengthen a firm’s innovation capacity and help align a project to strategic business needs;
  • Access to a wide range of innovation support services and facilitated access to risk finance, supporting the commercial exploitation of an innovation.

How does the SME Instrument work? Depending on the stage of their projects, SMEs can apply for funding for different phases (1 or 2) as follows:

Phase 1: feasibility assessment
Feasibility studies can receive funding to verify if a project has economic viability. This should cover risk assessment, market study, user involvement, Intellectual Property (IP) management, innovation strategy development, and partner search – and have a solid, high-potential innovation dimension. Funding may be provided in the form of a lump sum of €50 000.

Phase 2: innovation project
Innovation projects in the following areas may receive funding: prototyping, miniaturisation, scaling-up, design, performance verification, testing, demonstration, development of pilot lines, and validation for market replication. This can also include other activities related to bringing innovation to investment readiness and maturity for market take-up. The amount of funding would be between €500 000 and €2.5 million or more (covering up to 70% of eligible costs, in some cases up to 100%). Projects should last around one to two years.

Phase 3: commercialisation
Funding is available for specific activities, including support for further development of investment readiness, linking with private investors and customers through brokerage activities, assistance in applying for further EU risk finance, and a range of other innovation support activities and services offered via the Enterprise Europe Network (EEN).
More information
Work Programme 2014- 20120
Participant portal

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