Financing for innovative SMEs within the framework of Horizon 2020


Within the framework of the programme for the financing of research and innovation of the European Union Horizon 2020, the SME Instrument is a specific financing measure targeted to small and medium-sized enterprises, whose objective is to promote their participation in research projects and consequently favour innovation and competitiveness in Europe.

SMEs (i.e. microenterprises and small and medium-sized enterprises) are a major source of innovation, growth and employment in Europe.

In October 2015 the European Commission published its new biannual 2016-2017 Work Programme for the SME Instrument, i.e. the fundamental document on related issues and available calls, as well as time deadlines and the budget foreseen for the funding of projects in various topics.

The SME Instrument is targeted to European small and medium-sized enterprises, which are identified according to the definition of EU Recommendation no. 2003/361, and is conceived as a financial support for the implementation of innovative ideas and projects characterized by a high potential, level of internationalization and economic impact.

The instrument is targeted to innovative SMEs operating in any sector and business activity, with the final aim of providing support for the identification of new markets, boosting investments, obtaining good results in terms of economic, technological and knowledge development. The instrument is structured in three phases, covering the entire cycle of innovation. Participants can elaborate an application for Phase 1 or directly for Phase 2.

Phase 1. Feasibility study: limited initial financing is foreseen for the analysis of the technical-scientific feasibility, the analysis of the commercial potential of the innovative project and the definition of the business innovation plan, thereby taking the industrial sector where the plan into account (i.e. new product, process, design, services and technologies, new market applications of already existing technologies). This phase lasts about six months and foresees an initial flat rate funding of 50,000 Euros.

Phase 2. Innovation: Projects passing the first phase will receive the actual funding to develop the contents defined in phase 1 and eventually launch the innovation on the market. The EU funding is expected to range between about 500,000 Euros and 2.5 million Euros per project, although the submission and selection of proposals involving other amounts are not excluded.

70% of the costs eligible for the action can be reimbursed; in exceptional cases, i.e. in cases when the research aspect is predominant, 100% of the sum can be reimbursed. Eligible costs have to be declared in the following forms of costs: direct personnel costs, direct subcontracting costs, direct costs for the provision of financial support to third parties, other direct costs (e.g. travels, equipment, consumables); indirect cost based on a flat-rate of 25% of eligible direct costs.

The project must focus on innovation activities, e.g. demonstration, testing, development of prototypes or pilot technologies, scale-up, miniaturization, design and all the similar activities whose aim is to guarantee that the innovative idea is successfully developed into its industrial application and is mature enough to be launched on the market. For technological innovations, a starting level of TRL (Technological Readiness Level) equal to 6 is indicated, as stated in the General Annexes.


Phase 3. Commercialization: it is funded with private capitals and partly through eased access to financial instruments, coaching, actions for the management and use of intellectual property rights. The objective is to promote the implementation and commercialization of the innovative solutions developed by SMEs.

Furthermore, each beneficiary of the SME Instrument will be offered support in the form of business coaching also during phase 1 (up to three coaching days) and phase 2 (up to 12 days), in addition to the contribution offered. This support will be provided through the Enterprise Europe Network (EEN) and given by a group of qualified expert business coaches. In this context, Enterprise Europe Network serves as an intermediary between the coaching service and SMEs, providing them with the necessary support to identify their needs and select coaching.

The contact between the beneficiary company and the EEN is directly organized by the Executive Agency for SMEs (Easme) as soon as the Grant Agreement is signed.

Calls for the 2016-2017 period

The calls of the SME Instrument are constantly open and generally structured around four deadlines per year. Applications can be submitted any time. Proposals are assessed in lots after each intermediate deadline.

The following are the recently published deadlines for 2016 and 2017:

Deadlines related to all themes for the years 2016-2017
Phase 1 24/02/2016








Phase 2 03/02/2016








In 2016 and 2017 SMEs are invited to submit proposals within the framework of the SME Instrument, at any time, within the themes of Horizon 2020 called Societal Challenges and Leadership in Enabling and Industrial Technologies, within a specific list of calls described in the Work Programme.

Table 2 features some of the available calls that are more relevant to the paper supply chain. It should be pointed out herewith that some ideas or products with multi-sector applications/effects can find room in other calls that are not listed here.

2016 2017
Open Disruptive Innovation Scheme SMEInst-01 € 60 m € 66 m
Accelerating the uptake of nanotechnologies advanced materials or advanced manufacturing and processing technologies by SMEs SMEInst-02 €3 1,83 m € 35,32 m
Dedicated support to biotechnology SMEs closing the gap from lab to market SMEInst-03 € 7,5 m € 7,5 m
Stimulating the innovation potential of SMEs for sustainable and competitive agriculture, forestry, agri-food and bio-based sectors SMEInst-07 € 25,46 m € 32,19 m
Supporting SMEs efforts for the development – deployment and market replication of innovative solutions for blue growth SMEInst-08 € 9,5 m € 10 m
Stimulating the innovation potential of SMEs for a low carbon and efficient energy system SMEInst-09 € 46 m € 50 m
Boosting the potential of small businesses in the areas of climate action, environment, resource efficiency and raw materials SMEInst-11 € 25 m € 27,5 m
Engaging SMEs in security research and development SMEInst-13 € 15,37 m € 14,67 m
TOTAL € 353,4 m € 385,91 m

In order to reduce applications, each SME is allowed to submit only one application. This implies that no application is possible for phase 1 during the submission and/or implementation of a project in phase 2 and viceversa, both in cases when the SME participates individually and as as a partner of a consortium of SMEs.

SMEs have instead the possibility to submit a proposal to the SME Instrument and at the same time to another theme of Horizon 2020 that is not related to the SME Instrument.

Assessment of proposals

Project proposals will be assessed based on three main criteria:

1) Excellency: this is mainly related to clear objectives and the soundness of the proposal, including its technological feasibility and level of innovation compared to the state of the art. The objectives and the approach of the project are assessed from the point of view of the launch on the market of the technology/product.

2) Impact: the impact of the proposal on the market is assessed, e.g. the target market the proposal aims to achieve, existing barriers and final users, as well as the impact on the same SME, in terms of expected benefits and potential improvement of innovative capacities and growth.

3) Implementation quality and efficiency: this consists in the quality and precision in the preparation of the work structure, deadlines of activities, organization of the work plans and competences of the partnership in the case of a consortium of SMEs.

The assessment process is very quick and clear. By way of indication, the following is the timing for the assessment and signature of the grant agreement in case of success:

Information on the outcome of the assessment

  • two months after the above-mentioned corresponding deadline indicated for phase 1
  • four months after the above-mentioned corresponding deadline indicated for phase 2

Indicative deadline for the signature of the grant agreement

  • one month from the date of the Notice applicants in phase 1
  • two months from the date of the Notice applicants in phase 2

The EU Commission Easme4 portal provides for an update list of beneficiaries and projects funded so far within the framework of the SME Instrument both in phase 1 and in phase 2, including a short description of the same projects.


Further details and support can be obtained from the Innovhub-SSI, Innovation area. Innovhub is part of the Enterprise Europe Network and through the Simpler consortium it is the access point to the network for the regions Lombardy and Emilia-Romagna. Innovhub is furthermore an information point of APRE (European Research Promotion Agency) for Lombardy.