19 Oct 2026
European Court of Auditors publishes special report on EU funding for innovation and competitiveness
The European Court of Auditors published a 'Special report on EU funding for innovation and competitiveness - – Limited focus on close-to-market measures under Horizon 2020’s “industrial leadership” priority' on 15 October 2026. The audit report is expected to feed into the debate for the preparation of the next EU Research Framework Programme.
The report finds that funding for close-to-market research under the 'Industrial Leadership” priority of Horizon 2020 – the EU’s 2014-2020 research flagship programme – was not sufficiently geared towards commercialisation of innovative ideas and products. While the auditors acknowledge that EU strategic priorities were reflected in Work Programmes, they make several recommendations to strengthen technology transfer and market uptake. They also call for improved monitoring and methods to assess lasting economic value.
Despite the fact that the strategic priorities of the EU were considered in the Work Programmes, the auditors criticise that it is not clear how funding was geared towards the SME's business needs. The auditors find that even under Horizon 2020’s 'Industrial Leadership' priority, which in principle should support research closest to commercialisation, around half of all funding went to non-profit organisations (research organisations, universities, and other educational institutions).
The auditors also find that the InnovFin set of financial instruments (such as equities and loans) managed by the European Investment Bank Group did not reach SMEs, and there are no data on whether these financial instruments effectively supported innovation and commercialisation outcomes. While grants provided through the SME Instrument did provide effective support for technology transfer, commercial uptake is found to be only modest, due to funding constraints, weak exploitation planning, regulatory barriers, and insufficient dissemination and exploitation of research results.
The ECA special report criticises the fact that neither Horizon 2020 nor the current Horizon Europe programme include eligibility requirements linked to applicants’ innovation capacity, meaning that money may not be channelled to those projects which present the strongest innovation potential. The report recommends a stronger focus on technology transfer, scale-up and market uptake, to simplify monitoring and to better assess the business performance and innovation capacity of funded organisations.
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