SMEs are key drivers of innovation serving as an important conduit for knowledge spill-overs. The last twenty years have shown that entire sectors have been renewed and new industries created driven by innovative SMEs. SMEs form a more important part of the EU economy than of other regions such as the US. They can contribute significantly to achieving the objectives of the EU2020 strategy, and notably the Innovation Union.
Tapping the full innovation potential of SMEs requires favourable framework conditions (smart regulation, access to finance and markets, patenting, standard setting etc.), but also efficient support mechanisms. Currently SME access to EU funding is hampered by the fragmentation of support instruments with varying objectives. Administrative procedures are not adapted to SMEs, and they lack targeted information and coaching. The most crucial point is, however, that SMEs need a European support scheme that is tailored to their research and innovation needs and helps promoting their internationalisation.
SMEs do not innovate alone but rather in collaboration with others, including with their customers and business partners, and with universities and research organisations. This can concern the development of new technologies, new services or business models or a combination thereof and is frequently based on multi-disciplinary and/or cross-sector approaches. Collaboration is an important element in the innovation strategy of SMEs to overcome some of the barriers they have to confront (e.g. lack of management resources or technological and scientific competences). EU research and innovation programmes must take account of these developments by providing open and flexible support.
For the future programming period, success in line with the Innovation Union objectives cannot solely consist in increasing the number of SMEs benefiting from EU funding. The focus needs to be shifted to impact on SMEs looking, for example, at their internationalisation, increase in knowledge and R&D capability, competitiveness and growth. The objectives are to fill gaps in funding for high-risk research and innovation by SMEs, to create business opportunities out of the response to major societal challenges, to strengthen productivity and innovation capacities and to help innovative SMEs to grow.To this end a clear SME strategy including monitoring indicators has been developed.
The Commission proposals for Horizon 2020, the new Union programme for research and Innovation presented on 30 November 2011 (http://ec.europa.eu/research/horizon2020/index_en.cfm?pg=h2020-documents) are designed to facilitate SME access.
SME participation will be promoted across the whole programme and in particular in the industrial leadership and societal challenges pillars. Through this approach, it is expected that around 15% or € 6.8 billion of the total combined budget for all societal challenges and the Leadership in Enabling and Industrial Technologies (LEITs) will go to SMEs.
The simplification efforts will be of particular benefit to SMEs. Horizon 2020 will target support to SMEs with a specific instrument, which is largely inspired by the US Small Business Innovation Research (SBIR) programme. It covers the whole innovation process in three seamlessly connected stages, including links to private finance. It shall address the financing gap in developing high-potential innovative ideas of small companies and bringing them closer to the market. The possibility of single company support is one of the key elements of the dedicated SME instrument and a major simplification. Through the SME instrument, a group of SMEs but also one single SME shall take the lead in the projects and organise them without any restrictive conditions. By this focus on the strategic needs of SMEs and market opportunities, the dedicated instrument will appeal to a broader range of innovative SMEs and support a broader range of innovation activities. It will hence attract more SMEs to Horizon 2020 and increase commercial exploitation of research & innovation results.
In addition, a specific action will promote R&D performing companies, building on the Eurostars Joint Programme, and a substantial part of the 'Access to risk finance' budget is expected to go to SMEs. There will be measures to build SME innovation capacity and to support market driven innovation. Reinforced links with the Enterprise Europe Network (under COSME) will further promote SME participation in Horizon 2020 and enhance the innovation capacity of participating SMEs.