Direct EU-funding for SMEs in Central Ostrobothnia : business development needs and funding opportunities

This thesis examined the EU financing options available to small and medium-sized enterprises in Central Ostrobothnia, Finland. The main objective was to investigate the needs of the region’s SMEs when it comes to funding and applying for funding, and the barriers: what is preventing SMEs from applying. The goal was to encourage SMEs to apply for funding and lower the threshold for it with the funding guide designed for them. The work was commissioned by Centria University of Applied Sciences and the EU Boost - boosting private sector EU-funding project. The aim of the project is to significantly increase the number of companies from the Central Ostrobothnia region participating in direct EU calls (e.g. Horizon) and the volume of their RDI funding. This will be achieved by sharing the EU expertise of the implementers and by encouraging and guiding companies to participate in EU projects. This thesis provided the basis for the project to start with: the development needs of SMEs and their knowledge and experience about the direct EU funding. The theoretical part of the thesis gives a brief overview about Central Ostrobothnia and the objectives of the EU, which are guiding the funding framework. In the theoretical part there is a brief overview about the funding options. The funding options studied more carefully are introduced in chapter five and they have been selected for this thesis based on the needs of the Central Ostrobothnian businesses. Research data was collected in three phases. First, to understand the needs of the SMEs in Central Ostrobothnia, a questionnaire was used. Second, semi-structured interviews were used to get more information from the funding experts about the funding instruments suitable for Central Ostrobothnia region’s SMEs’ needs. And third, benchmarking in a form of a semi-structured interview, was made to learn from one SME’s success story in Horizon Europe calls. The questionnaire showed that the direct EU funding is still unfamiliar to small and medium-sized enterprises in Central Ostrobothnia. Lack of confidence, lack of knowledge and self-financing rates are the most important factors for not applying for direct EU-funding. According to SMEs, they need more information, networking events and concrete project preparation support. They want to develop and disseminate innovations, especially those related to digitalization. This thesis therefore focused on financial instruments that support the development of digitalization in SMEs.