Economics Norway, in cooperation with Technoloplis has studied Norwegian participation in the EU Horizon 2020 SME Instrument. Click here to read the full report. Below is an exerpt from the executive summary.
The H2020 SME Instrument has a total budget of about €3 billion over the period 2014-2020. The SME Instrument provides business innovation support to SMEs in the EU Member States and H2020 associated countries. It selects the best enterprises with the most innovative ideas, a real chance of disrupting the market and a very high growth potential. The instrument is delivered in three phases, including a coaching and mentoring service.
Phase 1 offers a lump-sum grant of €50,000 to carry out a concept and feasibility assessment. Phase 2 invests between €0.5 and €2.5 millionin innovation activities such as demonstration, testing, prototyping, pilot lines, scale-up studies and market replication. In addition to funding, SMEs receive tailored business innovation coaching as well as other business acceleration services.
Norwegian success rate
Compared to the overall success rate (all Member States and associated countries), Norwegian SMEs have experienced great success in the SME Instrument. In the period 2014-2018, 485 Norwegian SMEs have submitted 1,166 applications to Phase 1 and 2. The success rate among Norwegian applicants in this period is 9.5 per cent for Phase 1 and 10.0 per cent for Phase 2. Their success rate in Phase 2 is significantly higher than the overall success rate (all countries) of 4.8 per cent.
Innovation Norway’s strategy in the early stage of the H2020 programme was to encourage SMEs to apply for funding from Phase 1. In recent years, the high success rate in Phase 2 proves that this has paid off; completing Phase 1 increases the chance of success in Phase 2.
The success rate for Norwegian SMEs applying directly for Phase 2 is almost double the overall (all countries) success rate for direct applications to Phase 2. This is likely a result of Innovation Norway’s enhanced advisory efforts in 2018 (see below).
Profile on Norwegian applicants
Coming up with a breakthrough innovation, developing a sound business plan and putting together a credible team takes time and effort. A comparison of applicants according to their best outcome in the SME Instrument indicate that firm age and size (measured in both employment and turnover) correlate with success. We interpret this as a confirmation that success requires some degree of maturity.
Innovation Norway’s contribution to success
Innovation Norway mobilises Norwegian SMEs to apply for EU funding, both directly through their regional EU advisors and indirectly through funding of EU advisors in several cluster projects. Most SMEs succeeding in Phase 2 have received advisory services from Innovation Norway, and our data suggests that the clusters’ efforts in assisting the SMEs with their applications increase the likelihood of success in the SME Instrument. Based on our interviews, the clusters would not have been able to provide the EU advisory services without funding from Innovation Norway.