This third Progress Report of the FP7 SME Inter-service Task Force includes an analysis of SME participation rates across the themes of the Cooperation Programme in the first two full years of the Framework Programme (FP7). Statistical information is provided on the number of SMEs and the funding allocated to them, broken down across themes and countries. The profile of the SMEs and the role they play in the projects are also described. This report includes an overview of the various actions to encourage greater SME participation in the various themes. In addition, an updated synopsis of SME participation in the Capacities and People programmes is provided.