The ECoC-SME project recognizes the European Capital of Culture (ECoC) Programme as a yet under-utilised resource and opportunity for cities and regions to develop existing and prospective local small and medium-sized enterprises (SMEs) via their early engagement in the event. The project focusses on the mega-event's potentials to trigger, strengthen and diversify local entrepreneurship by encouraging their creative, innovative cross-sectoral cooperation, clustering and networking, as well as their internationalisation. In the project, via an iterative process of interregional and local-participatory learning and co-creation, the Partners explore and share approaches and practices to invigorate their local-regional SME sectors and align them with the special contexts (phases, scope and themes) of the mega-event in their regions. Exchanges between past, present and forthcoming cultural capitals (Leeuwarden, Matera, and Rijeka, Timisoara, Kaunas), under the coordination of an expert team at the University of Eastern Finland, combined with twenty Local Learning Labs result in new practices and projects tailored to the five territorial contexts and their local/regional policy instruments: the (Regional) Operational Programmes of North Netherlands, of Basilicata Region in Italy, of the West Region of Romania and the local development strategies of the Municipalities of Rijeka (Croatia) and Kaunas (Lithuania). Action Plans will be drafted to enrich these instruments, and selected measures will be implemented in the participating cities and regions during the third year of the project. There is growing interest from the part of both the EU Commission and the partaking cities in the efficient use of local and EU resources and the maximization of benefits from the ECoC. Yet, currently there are no concrete guidelines offered to ECoC hosts for the engagement of local SMEs. Therefore, experiences will be shared also with the ECoC Programme.