Assessing the effectiveness of public innovation support for SMEs in Europe

The European Commission published a study providing new insights to the population of SMEs in the EU, the hurdles they encounter when innovating and the effectiveness of EU Innovation Support (INNOSUP) programmes.

European SMEs’ satisfaction levels have risen since 2009, however SMEs still face barriers to innovation. These barriers originate from both traditional and new emerging trends and largely depends on the SME type. Also, SMEs situated in Southern and Eastern Europe face relatively more barriers compared to those in Western and Northern Europe.

Overall, SMEs consider the financial barrier as the most important obstacle. This is particularly true for micro-enterprises, which make up 93% of all firms in the EU. Slightly larger SMEs’ primary concern is access to skills, due to their limited networks.

The study also finds that public financial support generally accelerates the introduction of innovation in new firms. SMEs in Eastern and Southern Europe are generally lagging behind when it comes to challenges related to digitalization and green Innovation.

Cascade funding and lump sum approaches proved to be effective mechanisms to support innovation. However, support instruments need to be tailored as much as possible to the type of firm, their needs, and their willingness and capability to innovate.

The study identifies The INNOSUP programme as highly successful. Participants are largely satisfied with the volume and form of financial support, the transparency of the selection process and the easiness and duration of the application process. INNOSUP Actions could be even more effective by fast tracking procedures, combining them with other support initiatives and by raising the awareness level.

To conclude, the study confirmed the value of EU innovation support actions in helping SMEs embark on the green and digital transition and in fostering cross-border/ cross-sectoral cooperation.

The study is an INNOSUP action carried out by the European Innovation Council and SMEs Executive Agency (EISMEA) under policy guidance of Directorate General for Internal Market, Industry, Entrepreneurship and SMEs.