Introduced in 2013, the innovation tax credit (crédit d’impôt innovation - CII) is an extension of the research tax credit (CIR) intended to supplement its incentivising effect on SMEs, so that they can engage in spending on innovation and the promotion of research and development, through the development of prototypes and, ultimately, the creation of new products.

In 2014, the CII represented €120 million of tax credit, for 5300 SME recipients. The introduction of this scheme led to a substitution effect of research expenditure reported under the CIR by innovation expenditure reported under the CII.

The employment, balance sheet total, turnover and patent application likelihood by the SME beneficiaries of the CII are growing faster than those of similar SMEs that have not benefited from the scheme in the years following its introduction. In contrast, mean wage and investment are growing at the same rate. Furthermore, the manufacturing SME beneficiaries of the CII have introduced more new products to market. However, these differentiated evolutions between beneficiaries and non-beneficiaries with similar characteristics do not guarantee the interpretation of the results as causal.