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Questions and answers on support for Small and Medium Sized Enterprises in Horizon 2020 - UK IT Association (UKITA)
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UK IT Association (UKITA)

Questions and answers on support for Small and Medium-sized Enterprises (SMEs) in Horizon 2020 - The EU Framework Programme for Research and Innovation


Member States have put research and innovation at the top of the European political agenda, by adopting the Europe 2020 strategy and endorsing the Innovation Union in February 2011, making it a cornerstone of plans for investment in sustainable growth and jobs. On this basis, the Commission last year proposed a €80 billion budget for the next research and innovation programme Horizon 2020.

Speaking today at the 2nd European SME Convention, Commissioner Geoghegan-Quinn outlines key measures in Horizon 2020 to support small and medium-sized enterprises (SMEs), the backbone to the European economy (SPEECH/12/663). The 2nd European SME Convention is organised by UEAPME, the European Association of Craft, Small and Medium-sized Enterprises.

Why is research and innovation important for SMEs and the European economy?

•    SMEs are important for growth and jobs because 99% of all European businesses are SMEs.
•    85% of net new jobs in the EU between 2002-2010 were created by SMEs
•    R&D expenditure by SMEs is lower in the EU than in the U.S. and less than a third of EU SMEs have innovative activities

Why are taxpayers funding R&D at EU level?

EU research funding generates enormous added value for Europe. €1 of EU Framework Programme funding leads to an increase in industry added value of between €7 and €14. The expected long-term macro-economic impact of the current Seventh Framework programme amounts to 900,000 jobs, of which 300,000 in research, and an extra 0.96 percent of GDP.

Studies show that SMEs who are active outside their country of origin are more innovative: 26% of internationally active SMEs introduced products or services that were new for their sector in their country compared with just 8 % of domestically-focused SMEs. Internationally active SMEs are also more active with process innovations that are new for their sector, in their country (11% vs. 3% for the SMEs without international activities). EU research funding is designed to encourage such cross-border links.

How will SMEs be funded?

SMEs will be encouraged to participate across Horizon 2020 programmes through a new dedicated SME instrument. It aims to fill gaps in funding for early-stage, high-risk research by SMEs as well as stimulating innovation. It is expected that through this integrated strategy around 15%, or €6.8 billion, of the total combined budgets of the 'Tackling societal challenges' Specific Programme and the 'Leadership in enabling and industrial technologies' objective will be devoted to SMEs.

A new dedicated SME instrument

The new instrument will integrate R&I-related SME support that is currently spread across several programmes and initiatives (notably the EU's current Seventh Framework Programme (FP7) for research and technological development and the Competitiveness and innovation Framework Programme-CIP) into one comprehensive, simple and easily accessible scheme with simple rules and procedures. It will target highly innovative SMEs showing a strong ambition to develop, grow and internationalise, regardless of whether they are high-tech and research-driven or non-research conducting, social or service companies. Only SMEs will be able to apply for funding, and even single company support will be possible to ensure market relevance and to increase commercialisation of project results. SMEs can decide how best to organise the project and with whom to collaborate. It covers the possibility to outsource research and development critical to the innovation projects of non-research intensive SMEs.

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