Horizon 2020 small and medium sized enterprises (SME)

What is Horizon 2020?

With Horizon 2020 the European Commission maintains the biggest and most comprehensive research and innovation funding program within the European Union. The program was established in 2014 and has a term of 7 years. During the entire term there is a total of 80 billion Euro available for the funding of the research and development projects. In order to meet the requirements of as many applicants as possible, the European Commission has equipped the program with different instruments, one of them being the instrument for small and medium sized enterprises (SME). The instrument was introduced, in order to enable and increase the participation of innovative SME. Goal of the program is it to create an innovation promotional environment within the European Union, without discriminating special company types or business domains.

The program is designed to support innovative companies with the financial part of research and development projects, which given the risk structure of the projects cannot find financial assistance through other means. This is achieved through the variety of instruments. The SME instrument was established for highly innovative SMEs, which are characterized through a high ambition towards development, growth and internationalization. Additionally the program aims to increase the research and development efforts towards new products, new processes and new services within the European Union.

Who is eligible to apply?

Small and medium sized enterprises with a high innovation and growth potential stemming from any business area are eligible to apply for a funding through Horizon 2020. The SME instrument of Horizon 2020 supports companies which emphasize their R&D efforts towards the development of “basic and industrial technologies” or “social challenges”. The R&D project is required to be designed for a European wide use, which is why it should be relevant for the European market.

Is your company an SME according to the definition of the European Union? The first step is to establish if your venture is an enterprise by definition. An enterprise is an entity, which pursues an economic activity, regardless the legal form. In the next step it is to establish if the company in question is considered a small, smallest or medium sized entity.

sme-criteria orizon 2020

Up until recently only SMEs joint together in cooperation could apply for a Horizon 2020 funding, yet this has changed and now individual projects are eligible to apply as well.

How does Horizon 2020 work?

The SME instrument of the Horizon 2020 funding program is divided into three phases. Phase 1 comprises of the creation of a feasibility analysis stemming from the research findings. This phase can be supported by the EU with up to 500,000 Euro. The length of phase 1 is usually around 6 months and it is required to submit a project plan of 10 pages.

The development of a prototype is part of Phase 2. During this phase, participants can receive financial support of between 500,000 and 2.5 million Euro. A requirement for the approval of Phase 2 is the submission of a detailed business plan. The duration of the second phase varies between a minimum of 12 months up to two years. During the first two phases, the applicants have the possibility to attend a voluntary coaching. The length of the coaching depends on the phase of the application process. During Phase 1 the coaching sessions make up a total of 3 days. A more intensive coaching session is provided in Phase 2, in which the coaching lasts for 12 days.

The third and last phase consists of the commercialization of the product/procedure developed in the previous two phases. During this phase the applicants do not receive monetary support, but support through other means. This means that the EU does not finance the applicants during this phase, but companies receive an easier access to traditional financial instruments such as loans, guaranties and venture capital. Also support via further coaching is part of the third phase. The coaches are recommended by the promoter; however the company may decides which coach it wants to turn to.

With the application the applicant decides for the most suitable topic. Currently there are 13 different topics to choose between, such as Blue Growth, space exploration and development, urban critical infrastructure and many more.

Which additional advantages are there with Horizon 2020?

The participation with Horizon 2020 increases the prominence on a European level, which again might have a positive impact on the order situation. Additionally to the financial support, participants receive economic and management coaching. Additional support by finding a suitable following financing is given, as well as access to important networks.

Additional important information about Horizon 2020

The funding service of SME instrument of Horizon 2020 contains also indirect support by offering tailored services and projects (i.e. the IPR-Management, innovation management capacity building, etc.). Also the establishing of contacts is part of the indirect support offered by Horizon 2020.

All projects are evaluated according to the phase they are in. This shall guarantee that only projects with prospects are supported. The feedbacks are standardized. A negotiation of the final result is not possible. Also only one application per company is allowed, even though it has projects in different development phases.

Yet not all phases have to be run through. A company may apply for funding, even though its project is already in the second phase. However, it has to be verified that the company fulfills the same criteria as companies which have went through and be accepted in phase 1. This displays the high competitive character of the program. The most important goal criterion for companies wishing to participate in Horizon 2020 is the applicableness of the research and development efforts. The criteria of the evaluation are as follows:

  • Potential economic impact
  • Outstanding innovation
  • Potential commercialization
  • Is there potential to reach the specified goals

The evaluation process can be aborted if a upstream criteria is not fulfilled, such as the potential economic impact.

Interested in Horizon 2020? We offer consulting

DORUCON – DR. RUPP CONSULTING is authorized for the innovation consultancy in the go-innovative program of the Federal Ministry for Economy and Energy (Bundesministerium für Wirtschaft und Energie; BMWi). We gladly advise and assist you with the application for Horizon 2020. As an authorized consultant we can issue you for the consultancy for Horizon 2020 an innovation voucher, which cover a portion of our costs. We offer you a full service. With this, we take over a major part of the application process and relieve you from the work to fill out the required forms. You are welcome to use our free funding-check and receive an initial assessment free of charge. Contact us for a free funding-check.

Does the SME instrument of Horizon 2020 turns out to be not for you? We support you also with the application for other funding programs. We specialized in grant funding and the consulting for research and development projects, as well as in technology and innovation. Further information regarding our other services can be found via our sites “Innovation Consulting” and “Technology Funding” or you can contact us using our contact form.

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