The SME Instrument – an Alternative to Innovate UK

This year, following the Innovate UK re-organisation, we have been advising current and prospective clients more often than before that an application to the European Commission (EC)SME Instrument mechanism is a worthwhile exercise. Although some know a little, many know nothing about this potentially lucrative source of support. What is it, how do you apply and how can it help innovators innovate?

Is it affected by Brexit?

Firstly before digging deeper, let’s address the Brexit issue. As with all funding for UK companies through European Comission mechanisms, the advice from the Commission is short and sweet. As long as the UK is legally a member of the EU, UK based companies can apply for funding without prejudice. The UK is a member of the EU until the end of the process that is triggered by the invoking of Article 50 of the Lisbon Treaty. With 6 SME Instrument deadlines set from now until October 2017, there’s plenty of time to plan a submission.

What is the SME Instrument?

The SME Instrument is the H2020 Work Programme designed to support innovation in Europe’s SMEs. Unlike much of the rest of the H2020 framework, applications can be made by single companies or in collaboration. 

It is a three-phase funding programme, which companies can enter at either phase one or two. Phase three is a range of commercialisation support only for successful phase two projects. 

The yearly budget is around €92m across phases one and two.

Phase 1

Phase 1, while optional, is a great place to start. It’s a short-ish 10-page application for a 3-6 month project that will result in a roughly 20-page feasibility study report at the end. The scope of what can be undertaken is fairly forgiving and will support; risk assessment, market study, user involvement, Intellectual Property (IP) management, innovation strategy development, partner search or feasibility of concept work. You could receive a lump sum of €50k which would cover 70% of your project costs.

Phase 2

Phase 2 is designed to support innovation activities such as demonstration, testing, prototyping, piloting, scaling-up, miniaturisation, design, market replication and the like aiming to bring an innovation idea (product, process, service etc.) to industrial readiness and maturity for market introduction. Projects lasting up to 24 months and costing between €0.5m and €2.5m are considered and the EC will cover 70% of project costs. The final report of a phase one project is an excellent basis for the much more in-depth 30 page application for this phase.

The benefits of applying

For successful applicants the EC offers up to 15 days of business coaching, three days for phase one and 12 for phase 2, designed to support business and operational development and to help foster pan-european cooperation and collaboration.

There are 13 topic areas which the mechanism supports, ranging from nanotechnology to agri-tech, although there is an Open Disruptive Innovation topic a topic dedicated to supporting new business models for inclusive, innovative and reflective societies that are agnostic to your sector focus.

Of course with SMEs from 43 countries eligible to submit an application, it is very competitive; over 2014/15, only 8% of phase one applicants were successful and 6% of phase two.

Get in touch

Our expert team has substantial expertise in navigating the application process, ensuring your application is in the most efficient topic area and understand how to position projects to score over the funding threshold. 

If you would like to chat about your options, please get in touch.