Small and medium-sized enterprises (SMEs) encounter major obstacles in accessing public funding for digital innovation due to a fundamental imbalance in resources between small firms and the highly complex administrative structures of funding institutions.

One of the main barriers is the excessive procedural complexity. Preparing an application often requires hundreds of working hours, with no assurance of approval. Unlike large corporations, SMEs usually lack dedicated grant-writing teams, forcing them either to redirect essential staff away from core business activities or to rely on costly external consultants.

A further challenge lies in the misalignment between public financing models and the cash-flow realities of fast-growing technology companies. Most funding schemes operate on a reimbursement basis, requiring firms to pre-finance their projects and wait months for partial repayment after extensive audits. For businesses with limited liquidity and restricted access to short-term financing, this system frequently becomes prohibitive.

There is also a significant competency gap related to the specialised language of public project documentation. Funding bodies assess proposals using criteria linked to social impact, inclusion, and strategic policy priorities (such as the European Research Area), while SMEs typically frame their activities in terms of market demand, profitability, and competitive positioning. As a result, commercially promising innovations often fail in formal or substantive evaluations because they are not articulated in a way that aligns with public policy frameworks.

Finally, SMEs face considerable difficulties in forming international partnerships, which are often required for large-scale programs such as Horizon Europe. For local entrepreneurs, identifying reliable foreign partners and coordinating joint project plans involves substantial organisational effort and financial risk. Consequently, many small firms remain marginal participants in major initiatives, frequently limited to subcontracting roles rather than leading innovation activities.