EU funds to support SMEs

The European Commission estimates that Small and Medium-sized Enterprises (SMEs) comprise over 99% of all businesses within the European Union. It, therefore, comes as no surprise that the EU considers SMEs as the backbone of Europe’s economy.

At EU level, SMEs have created around 85% of new jobs over the past five years. In Malta, SMEs employ 76.3% of the entire workforce. The EU consistently supports SMEs and ensures that they maintain a high level of resilience through their ability to adapt rapidly to market requirements, innovation and are able to continuously invest and expand.

The EU strives to create a business-friendly environment within the EU. It does so primarily through the Small Business Act for Europe (SBA) which provides a comprehensive SME policy for the EU. The SBA promotes the 'Think Small First' principle and entrepreneurial spirit among European citizens. The Commission encourages entrepreneurship through an action plan that supports education, whilst providing tools for aspiring entrepreneurs. Moreover, the Commission supports SME innovation as it is vital to European competitiveness in the global economy.

The EU is constantly implementing policies and programmes that support innovation. One example of this is Horizon 2020, an EU funding programme which actively supports SMEs by providing financial assistance, both directly and indirectly to increase their innovation capacity. Under the thematic objective of ‘ Innovation in SMEs’, Horizon 2020 strives to stimulate sustainable economic growth by increasing the levels of innovation in SMEs, covering their different needs over the whole cycle for all types of innovation, thereby creating more fast-growing, internationally active SMEs.

Horizon 2020 funding programme

In 2014, a call for proposals under the Horizon 2020 funding programme was launched aimed at enhancing SME innovation capacity by providing better support. This call was launched on the basis that research on open innovation had not taken into account the extent and creativity of SMEs in designing and implementing open innovation strategies. One successful project was that implemented by Technologicke Centrum Akademie along with five other partners in the Czech Republic.

Project activities addressed the lack of quality and affordable services for SMEs in the area of innovation management in the Czech Republic and the lack of innovation management capacity within Czech SMEs. In particular, the project aimed at running a standardised support system for beneficiaries of the SME Instrument under Horizon 2020 as well as to identify, through the analysis of innovation management capacity of SMEs with significant innovation activities, weaknesses of the innovation management system within the SME and offer measures for their elimination. This project, having a total cost of €319,330, was successfully implemented throughout 2015 and 2016. Ultimately, innovation management capacity assessment tools and support services for SMEs were further developed within the Czech Republic and offered to a wider spectrum of innovative SMEs.

A similar call is also currently open and aimed at improving SME access to alternative forms of finance, such as peer-to-peer lending, venture debt and convertible loans, equity finance provided by crowd funding or business angels, as well as factoring and trade finance. This call aims to sensitise and improve the capacity of financial suppliers, facilitate the exchange of best practices amongst SMEs within other Member States, make it easier for niche and specialist providers of alternative finance to market themselves, improve the availability of financial and credit information about innovative SMEs to alternative lenders and investors, and improve innovative SMEs' awareness and understanding of the types of alternative finance that are available. This call is open to all legal entities for project proposals lasting a maximum of 24 months. The deadline for this call is September 7, 2017. For more information on this call as well as on the other various EU funding programmes or assistance, you are invited to contact MEUSAC on funding.meusac@gov.mt or 2200 3300.