Evaluation of ERDF funding for SMEs

Regional policy is one of the European Union's key investment instruments. Its aim is to strengthen growth, create jobs, promote sustainable development and improve quality of life in all regions and cities of the EU. The European Regional Development Fund (ERDF) provides support in particular to economically weaker or structurally disadvantaged regions.

In order to assess the effectiveness of these investments, the European Commission commissioned Prognos and CSIL to evaluate ERDF funding for small and medium-sized enterprises (SMEs) in the period 2014–2020. As the backbone of the European economy, SMEs create two-thirds of jobs in the private sector and generate more than half of total value added – despite their great structural diversity.

SMEs are the main players in the European economy

Between 2014 and 2020, the EU provided over 45.4 billion euros to strengthen the competitiveness of SMEs. The majority of the funds were awarded as grants, supplemented by a growing share of financial instruments such as loans, guarantees or equity investments.

Support for SME competitiveness focuses in particular on funding for

• innovation, incubation and entrepreneurship, as well as advanced support services,
• the environmental sustainability and energy efficiency of SMEs,
• training and
• the areas of business infrastructure, cluster formation, networking, digitalisation, culture, tourism and social entrepreneurship.

The evaluation shows:

• 54 per cent of ERDF funds went towards expanding business production, increasing productivity and modernisation investments for existing SMEs, primarily in digital and technological investments.
• 18 per cent covered liquidity and working capital support, which played a crucial role in stabilising businesses during the COVID-19 crisis.
• Financial instruments accounted for 25 per cent of expenditure, a significant increase compared to the previous funding period.

SMEs benefited throughout their entire life cycle – from start-up to maturity. Around 500,000 start-ups received support, which corresponds to around 3 per cent of all new businesses established during the funding period. A total of over 320,000 new jobs were created.

What works – and why?

1. Large-scale strategic projects have the greatest impact
   Larger investments, particularly in digitalisation and new technologies, achieved the most sustainable effects: higher productivity, sales growth and more employment. They were mainly implemented by experienced, more efficient SMEs.
2. Financial instruments increase efficiency
   By 2023, 17.7 billion euros had been invested in repayable support. Loans for stable SMEs, investments in fast-growing young companies and measures in regions with weak financial markets were particularly effective.
3. Smaller and less efficient SMEs need different support
   Simple investment projects, local advisory services, start-up centres and industrial parks were particularly helpful for them. The impact here is often long-term. The combination of advice and subsequent follow-up investments is particularly effective.
4. Access barriers limit the reach of support
   Around 15 per cent of SMEs made repeated use of ERDF funds, while micro-enterprises in particular had difficulty accessing them. Improvements are being made through targeted public relations work, training, digital and simplified application processes, and broader selection criteria.
5. COVID-19 aid significantly stabilised SMEs
   ERDF liquidity assistance led to survival rates of over 90 per cent. It accelerated processes within the framework of funding, including through digitalisation, on the part of SMEs and public authorities. Around a quarter of the funds also went into new investments – an advantage, but also an indication of somewhat unclear objectives. 

Our approach

Prognos, together with the Italian economic research company CSIL and country experts from 27 EU Member States, analysed 215 ERDF Operational Programmes (2014–2020) in terms of their contribution to strengthening the competitiveness of SMEs. The study was based on annual implementation reports, national evaluations, statistical data, specialist literature and over 400 guided interviews with administrative authorities and beneficiaries.

We also conducted selected case studies – for example, on industrial areas or tourism initiatives – to identify which measures were particularly effective in which regional contexts and which factors determined their success.

Links and downloads

To the evaluation (PDF)

Further information on the evaluations of the 2014-2020 programme period (website EU-Commission)

Project team: Anja Breuer, Dr. Jan-Philipp Kramer, Markus Zock

Last update: 03.12.2025