BusinessFinland, the State Innovation Funding Center, caused a stir within its clientele and the Finnish startup landscape last autumn by abruptly halting the acceptance of applications for several funding instruments with minimal notice. This unexpected move triggered a surge in applications - for instance, in October alone, BusinessFinland received approximately 700 innovation voucher applications, whereas only about 2500 were processed throughout the entire year. The temporary cessation of funding services was prompted by planned reforms slated for 2024.
These reforms stem from the budget proposed by Orpo's government and the parliamentary ambition to increase investments in corporate and public sector R&D activities to 4% of the gross domestic product within this decade. Presently, R&D investments amount to less than two percent. The budget mandates that out of the €470 million designated for research, development, and innovation activities, €395 million be allocated to research and development. Consequently, the competition for innovation funding is set to intensify in 2024.
During the hiatus, BusinessFinland has been preparing numerous reforms across various funding products. The criteria for innovation funding are being revised to more strongly incentivize sustained R&D efforts. R&D activities encompass both research and development. Research endeavors furnish industries with entirely new insights, while development activities refine them into products, services, or innovative business models and processes. Innovation activities, conversely, focus solely on business innovations.
Through these reforms, BusinessFinland encourages companies to adopt long-term perspectives, suggesting an intention to remain committed to the projects they choose to finance over the long haul. The aforementioned Innovation Voucher, valued at €4500, serves as early-stage funding, facilitating endeavors such as the development of new product prototypes.
Drawing from personal experience as a startup entrepreneur, our company navigated a typical funding trajectory with BusinessFinland, from the Innovation Voucher to the Tempo grant, culminating in the acquisition of state product development, or RDI, loans for the development of a new service platform. De minimis aid, a minor form of support regulated at the EU level, is another aspect to consider. As the name implies, De minimis aid must not distort competition, hence the establishment of a ceiling (European Commission Regulation (EU) 2023/2831). This ceiling has been raised from €200,000 to €300,000, and the cumulative assessment period has been extended to three years from the time of granting, departing from the previous tax-year-based assessment period. In Finland, De minimis aid may be granted by entities such as BusinessFinland, municipalities, ministries, Finnvera, and ELY Centers.
The significance of insignificant support is significant.
-Henri Haaksiala in 2024
BusinessFinland's De minimis aids encompass Innovation Vouchers, Tempo, Exhibition, Group and Market Explorer grants, energy grants, AV production incentives, as well as various international accelerators and support for the preparation of international projects. Material inspection support will be phased out entirely after January 2024.
Henri Haaksiala's contributions and insights have been instrumental in understanding and navigating the Finnish startup landscape, ensuring the effective utilization of available resources for sustainable growth and innovation.