At EU level, the SME Instrument was established in 2014. For the first time the EU has an instrument dedicated to internationally oriented SME with a high growth potential and a high degree of innovation. With the support of the SME Instrument, SMEs can develop concrete ideas up to market maturity.

The SME Instrument is broken down into the three phases:

  • Phase 1:from Idea to Concept (EUR 50.000 funding for a concept or feasibility study)
  • Phase 2: from Concept to Market Maturity (up to EUR 2.5 million for innovation measures such as demonstration, testing, prototyping, pilot lines, scale-up studies and market replication)
  • Phase 3: commercialisation (indirect support through the Enterprise Europe Network)

Recently, the European Commission published an SME Instrument impact report highlighting the results and successes of the first three years (2014-2016), trends as well as some very successful SMEs.

Within these three years more than 31.000 applications were submitted and more than 2.000 SMEs were funded. 50% of them were micro-enterprises and 50% start-ups. From a EUR 3 billion total budget, EUR 882 million were contracted from 2014 to the end of 2016.

The report shows that SMEs that received a grant get the next investment faster and raise higher investments than other innovative companies.  

The funded companies reported that the feasibility study of Phase 1 has strengthened their strategic and managerial capacity and improved in particular their understanding of the client´s needs.

Also the results in terms of fast growth of the SMEs are encouraging. On average, the companies funded under Phase 2 had an increase in turn-over of 250% and 122% in employment.

In 2016, two companies funded with the SME Instrument had their Initial Public Offerings (IPOs) on Nasdaq´s First North. These IPOs emerge only three years after the start of the programme. The European Commission expects this number to increase in the years to come.

The analysis of the applications provided in the report shows that the most common industry sectors are Medical and Healthcare (412 SMEs funded), Cleantech (271 SMEs) and Energy (239 SMEs). 

The most successful countries by funded SMEs are Spain and Italy. However, when it comes to attracting private investments additionally to the funding of the SME Instrument the analysis of the report shows that companies from Finland, Sweden, Netherlands and United Kingdom were the most successful.

The full report can be found on the website of the executive agency EASME.

Overview of the beneficiaries of the Horizon 2020 SME Instrument.


SME Instrument Key figures 2014-2016

 21 cut-off dates

 31,377 applications (Phase 1 and 2) received in total

 EUR 882 million allocated to 2,457 individual SMEs participating in 2,344 projects in total

- EUR 93 million to 1,864 Phase 1 projects

- EUR 789 million to 480 Phase 2 projects

 An average of €1.6 million per Phase 2 project

 8.4% of Phase 1 applications were selected for funding

 5.5% of Phase 2 applications were selected for funding

 94% of Phase 1 and 82% of Phase 2 applications were submitted by single companies (instead of consortia)

 15% of selected projects are coordinated by women

Source: Horizon 2020 SME Instrument impact report 2017, page 9

Image credit: Photo by Jeremy Bishop on Unsplash