What is a SME?

The classification of a company as a small and medium-sized enterprise (SME) is based on the EU recommendation 2003/361/EG which has been in force since 1 January 2005. With the new regulation, economic development was considered for the relevant turnover and balance values.

A new feature was added to this regulation and concerns the inclusion of SMEs that are part of a larger corporate structure. In contrast to real SMEs, they can rely on a stronger economic position and should not benefit from the support measures for SMEs according to the Commission.

The crucial factor is therefore not the pure figures alone anymore, but the corporate structure when evaluating an SME. Whether a company can be recognised as an SME, can therefore be determined schematically only to a limited extent.

SME Participation

In many areas, it is the small and medium-sized enterprises that blaze trails of technological progress. This is why the German government provides small and medium-sized enterprises (SMEs) with a wide range of programs to promote their research and development (R&D) and focuses, in particular, on the transfer of knowledge.

Funding is provided through technology-neutral and technology-specific programs, either granted directly to SMEs or used to finance the SME-specific research infrastructure. Besides the Federal Government has created a framework that improves start-ups' access to financing and advising.

The German government has been providing substantial support for innovative SMEs, especially via:

KMU-innovativ: Priority for Cutting-Edge Research in SMEs (in German)
The Federal Ministry of Education and Research (BMBF) has opened a number of its specialised programmes of research funding especially for projects of cutting-edge research in SMEs. The industrial research and pre-competitive development projects are funded to strengthen the innovation capability of SMEs in Germany.

Central Innovation Programme SMEs (ZIM) (in English)
ZIM is the basic programme by the Federal Ministry of Economics and Energy (BMWi) for market-oriented technology funding of innovative SMEs in Germany. The programme offers SMEs a transparent funding opportunity with coordinated uniform funding conditions. In this context, funding is provided for financing cooperation, network projects and individual projects. Within ZIM there are different possibilities to cooperate with transnational partners.

More information about funding for SMEs is offered in German:
Forschungs- und Innovationsförderung für KMU