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The SME Instrument is a Horizon 2020 funding scheme dedicated exclusively to those businesses that come under the definition of “small and medium-sized enterprises” (SMEs). SMEs can participate individually or together with other SMEs.

The SME Instrument is addressed to those SMEs with a revolutionary business idea and breakthrough products, services, processes or models, based on a solid business plan and a strong commercialisation strategy that can allow them to scale up and reach international markets.

These SMEs must be bearers of a “disruptive innovation“, i.e. being able to put themselves on the market using high-impact innovations.

The funding scheme foresees three phases, divided as follows:

Phase 1 - Proof-of-concept

Phase 1 is thought to explore the scientific or technical feasibility and commercial potential of the business idea, with the help of a € 50,000 lump sum grant that finances the development of a feasibility plan.

Phase 2 - Development & demonstration

Phase 2 foresees the development of a ground-breaking business idea further with the help of a grant in the order of € 500,000 to 2,5 million, turning it into a market-ready product, service or process. A detailed business plan and commercialisation strategy should be produced, describing the expected impacts on the company in both qualitative and quantitative terms.

Phase 3 - Go-to-market

This Phase does not provide for additional monetary funding, but it offers continuous support in the introduction and development of the product / service / model on the market.


The evaluation process is based on 3 criteria:

  • Excellence: the Excellence measures if the business idea has high innovation potential and is beyond the state of the art. It should demonstrate that it offers a strong added-value to the market, it is viable and better than existing solutions;
  • Impact: the Impact is the most important evaluation criteria. It assesses the extent to which the proposed innovation will create substantial demand for the product, service, or model. It should also demonstrate how the business will generate revenue and create jobs and its international dimension;
  • Implementation: this criterion assesses if the work plan is efficient and coherent with a realistic time-frame, and if your team has the technical and commercial competence to carry out the actions foreseen.

The SME Instrument, whether applying for a Phase 1 or a Phase 2, is explicitly targeted at applicants presenting innovation projects that have reached TRL 6 as a minimum (or equivalent for non-technological innovations). This means that the proposed activities should take place in an operational or production environment.


TRL 1 Basic principles observed and reported
TRL 2 Technology concept and/or application formulated
TRL 3 Analytical and experimental critical function and/or Characteristic proof of concept
TRL 4 Technology validated in laboratory environment
TRL 5 Technology validated in relevant environment (industrially relevant environment in the case of key enabling tecnologies)
TRL 6 Technology demonstrated in relevant environment (industrially relevant environment in the case of key enabling tecnologies)
TRL 7 System prototype demonstration in operational environment
TRL 8 System complete and qualified through test and demonstration
TRL 9 Actual system proven in operational environment


Phase 1 Phase 2
Phase 1 Phase 2

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