The WATSON project has developed a platform for studying and analysing the impact of Research and Development (R&D) tax credits and incentives on enhancing the innovation capacity of  Small and Medium-Sized Enterprises (SMEs) throughout Europe.

R&D tax credit schemes have been widely implemented as a measure of innovation funding, but most schemes have yet to be subjected to detailed quantitative or qualitative study. This impedes their comparability and limits their improvement potential in efficiently funding the wide scope of innovations developed by SMEs, whose inherent differences would benefit from better targeting of the schemes. WATSON will further the study of innovation funding by providing a foundation for detailed study of SME funding through the framework methodology, which will be integrated into the WATSON ICT innovation analytics platform for richer analysis. This tool will identify gaps in funding of European tax credit schemes, and help to better target and improve innovation funding measures. The results of WATSON will thus expand innovation support for SMEs through the provision of instruments better targeted to the funding needs of specific SME segments (pharmaceuticals, manufacturing, etc).