How Horizon Europe funding can take your SME to the next level
New research suggests confidence among UK SMEs is rising, alongside a recognition that innovation, partnerships and access to funding are central to achieving future growth.
In a competitive and fast‑moving business environment, small and medium‑sized enterprises are increasingly focused on how innovation can help them stay ahead. Investment in areas such as research and development, AI, and digital tools is no longer seen as optional, but as central to long‑term success. For many SMEs, the challenge is not whether to innovate, but how to do so in a way that is sustainable and aligned with their ambitions.
Government‑backed support is playing an important role in how SMEs approach innovation and growth. A range of services are available to help SMEs build skills, collaborate with partners and access funding that can help turn ideas into reality.
Among them is Horizon Europe, the European Union’s flagship £80 billion research and innovation funding programme, which offers UK businesses the opportunity to secure funding, form international partnerships and accelerate innovation activity.
With average grants to UK businesses exceeding £400,000, Horizon Europe is increasingly seen as a practical route to growth for SMEs looking to invest in innovation and expand their reach.
Driving innovation
Looking ahead, innovation continues to feature prominently in SMEs’ growth plans. When asked which areas they were most focused on developing in 2026, 28% of surveyed businesses cited innovation and R&D, underlining the continued importance of new advances. It also shows a growing shift towards innovation as a core business strategy rather than an optional investment.
Importantly, SMEs appear increasingly open to engaging with government‑backed support. Nearly half of respondents (46%) said they would be quite likely to explore such support if it aligned with their ambitions, while 36% said they would be very likely to do so. For SMEs ready to take the next step and invest in innovation, Horizon Europe offers a practical route to funding, partnerships and international expertise - you can find out more about Horizon Europe online.
Looking to the future
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The link between innovation and business confidence is clear. Recent The SME Report research from TechRadar Pro, based on a survey of 1,000 UK small businesses, found that 84% of respondents were confident about their growth prospects over the next 12 months. A similar proportion said innovation was either essential or very important to their future.
Nearly half of those surveyed (47%) said that innovation and new ideas gave them the most confidence when planning their next steps. Taken together, the findings suggest that many SMEs now see innovation as a central, rather than optional, element of their growth strategy. This confidence comes at a time when businesses are navigating complex challenges, from rising costs to rapid technological change. For many SMEs, participation in structured programmes such as Horizon Europe offers a way to manage that complexity by providing access to expertise, infrastructure and collaborative networks that would otherwise be out of reach.
Collaboration is emerging as a key factor in successful innovation. Horizon Europe places a strong emphasis on partnerships, enabling businesses to work alongside academic institutions, research organisations and other companies across Europe and beyond.
The research also highlights strong interest in external support. More than a third of SMEs (36%) said partnerships would be the biggest help in driving further innovation, while 43% pointed to funding as a key enabler. Around a third (33%) said that access to partnerships and networks gave them the greatest confidence about the future of their business.
Take Electra, one of the many UK businesses benefitting from Horizon Europe funding and partnership work. The company designs and builds zero‑emission, electric heavy goods vehicles, including refuse trucks and specialist lorries, helping demonstrate how electric HGVs can operate reliably in demanding, real‑world settings. Their work relies on close collaboration with manufacturers and research partners. Through a Horizon Europe‑funded project, Electra is working with partners across Europe to support the development of next‑generation electric trucks.
84% of SMEs were confident about their growth prospects over the next 12 months.
