The European Commission DG Research and Innovation opened a Information Day “SMEs and Horizon 2020” on October 18th to explain what Horizon 2020 is. Let’s go into some details on why Horizon 2020, what it is, how it runs, its target and its aims.
Why Horizon 2020
Just a few figures: 99 % of all European businesses are SMEs and 85 % of all net jobs in the EU between 2002-2010 were created by SMEs. However, R&D expenditure by SMEs is lower in the EU than in the US and less than a third of EU SMEs have innovative activities.
In this context, Horizon 2020 is a financial instrument designed to help bring more ideas to the market, to encourage the creation of jobs, growth and innovation in Europe.
It will run from 2014 to 2020 with an original proposed budget of €80 billion.
Horizon 2020 Target
The financial instrument is addressed to SMEs with the drive and the strong ambition to develop, grow and expand internationally, regardless of whether they are high-tech, research-driven, or non-research conducting, social or service companies.
As a matter of fact, statistics show that SMEs who act and 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.
In this panorama, EU research funding is designed to encourage such cross-border links.
How Horizon 2020 works
The type of financial instruments used will include venture capital investments for innovative, high-tech companies, particularly SMEs. Two financing facilities will be available:
- A debt facility: providing loans, guarantees and other forms of debt finance to entities of all forms and sizes, including research and innovation-driven SMEs.
- An equity facility: providing finance for early-stage SMEs with the potential to carry out innovation and grow rapidly.
The facilities will be implemented via a mandate to , or a partnership with, the European Investment bank group and/or other international financial institutions and national intermediaries. The Horizon 2020 facilities will be operated in conjunction with the financial instrument facilities of COSME, the programme of the Competitiveness of Enterprises and SMEs, where €1.4 billion has been allocated to debt and equity financing in support of SMEs.
These financial instruments sum up to the already existing RSI ( Risk-sharing instrument), managed on behalf of the EIB by the European Investment fund.
The RSI aims to encourage banks to provide loans and leases of between €25,000 and €7.5 million to SMEs and small mid-caps undertaking research, development or innovation, and seeking finance for investments and/or working capital.
Horizon 2020 aims
Horizon 2020 has three key objectives:
- Excellent science includes supporting the EU excellent science base, supporting world leading scientists in blue sky research, providing training and career development opportunities, development of future and emerging technologies, EU research infrastructures.
- Competitive industries includes building industrial leadership in Europe, boosting job creation, supporting innovation, increasing market uptake, stimulating private investments in research and innovation and strengthening the participation of innovative SME’s.
- Better society means tackling societal challenges for a better society, living longer and healthier lives, using reliable, clean and efficient energy, therefore an efficient use of resources for the protection of the planet, assuring inclusive innovation and a secure society. Ensuring a safe and secure food supply, smart and green transport.
For more information on Horizon 2020, please find here additional websites: