The Beginner’s Guide: Getting the Finland-China Joint Innovation Funding

- A case study of the Sino-Finland Joint Innovation Calls

Co-authored by: Yijuan Wei & Zara Kukkamaa

Do you need government funding to boost your R&D project in China? Are you looking for a door-opening opportunity and professional guidance for your business in the Chinese market? The Finland-China Joint Innovation Calls may just be your best shot.

The Finland-China Joint Innovation Calls provide capital support and market-access guidance for Finnish companies. Aiming at boosting the China-Finland innovative cooperation, the Joint Innovation Calls are initiated and supported by Business Finland as well as the national and provincial level governments of China (i.e. Ministry of Science and Technology of China, the Science and Technology departments in Jiangsu, Zhejiang, and Shanghai).

In this blog, our Chinese consultants will explore the opportunities the Joint Innovation Calls can bring to your company, what the joint funding’s frameworks and requirements are, and how to apply for the co-innovation funding.

1. Why to Choose This Joint Innovation Funding?

The innovation collaboration between Finland and China has been surging over the last decades, especially in industries like clean energy, maritime logistics, health, winter sports, and digitalization. China closely promotes innovation collaborations from both the national and provincial government levels. Here are 3 reasons why you shall consider the Sino-Finland collaborative funding:

1.1 Sufficient financial support and richer opportunities for Finnish companies

The innovation projects’ participants from both countries will have the opportunity to receive funding respectively from Business Finland and the Chinese government.

For all China-Finland Innovation Calls, the normal Business Finland funding principles are applied for the Finnish participants.This means financial support provided by Business Finland is not fixed and depends on the number of qualified applications. The funding includes grants covering a maximum of 50% of the project spending or 50-70% loan for SMEs and Midcaps, as well as 40% grant or 50% loan for large companies depending on the type of project. The maximum funding percentage of the project costs for research organizations is 70%.

To check how much funding you are likely to get, it is helpful to understand which size category your business falls into according to Business Finland’s definition for company sizes:

• SMEs: companies with fewer than 250 employees and a turnover of no higher than 50 million euros or a balance sheet total of no more than 43 million euros.

• Midcap companies: with a turnover of up to 300 million euros per the latest confirmed financial statements. It is worth noting that the turnover in question is the consolidated turnover, and the share of ownership of capital investors and other holdings is not considered in assessing whether the turnover exceeds the limit of 300 million euros at the group level.

• Large companies: corporations with more than 250 employees and a turnover of more than 300 million euros or a balance sheet total of over 43 million euros.

1.2 Visibility to various potential partnering companies and organizations

Regardless of the final result, you will likely have the opportunity to introduce your business to the targeting audience in the process of finding the right partner, and this brings visibility.

For instance, participating in some matchmaking events organized by Business Finland and Chinese local governments gives you a chance to present and promote your business to thousands. The audience can consist of government officials, professionals from various industries, and potential business partners from China.

One example is when Business Finland organized the last online matchmaking event with in June 2021, 15 Finnish and 18 Chinese organizations participated, reaching more than 72,000 online viewers. The large size of the audience can potentially expand your business opportunities in China from many perspectives.

1.3 Close attention and administrative security of the Chinese government

The approved joint innovation projects will have ministry labels, and the R&D undertaking is promised firm attention and support from the Chinese local authorities.

In terms of the IPR issues, the Chinese government has issued its new version of IP management provision for international science and technology cooperation projects, which strictly abides by the rules of WIPO. The new provision made clear effective measurements to keep IPR security for both parties and administrative responses in the face of IPR conflicts.

In addition, the Jiangsu Province government fully implements the scientific research integrity commitment system in the sorting process of the application, closely monitoring untrustworthy behaviors such as plagiarising, infringing others’ IPR, and falsifying materials to obtain declaration qualifications. The company and individuals responsible for untrustworthy behaviors will be listed in the social credit file and cannot apply for any projects in the year. The stricter punishment and closer-defined regulations showcase the governmental attention and better guarantees the rights of both parties.

2. What are the frameworks and requirements?

The frameworks of the Joint Collaboration Calls are mainly categorized based on the funding government level in China. There are 5 calls with distinct lasting periods and concentrated industries:

2.1 MOST (Ministry of Science and Technology) Joint Innovation Call

This call gives funding priority to China-Finland R&D collaborations in areas of energy (e.g. smart grid technologies, clean technologies for energy production, and resource and energy-efficient production processes), health (e.g. data and analysis, epidemiology/pandemic related research, and life sciences), sustainable manufacturing and industrial renewal, as well as smart and green mobility (e.g. mobility as a service (MaaS), smart urban traffic solutions, and smart urban traffic system integration).

The maximum number of projects to fund in the energy area is 5, whereas the maximum number is 10 for the other areas. The collaboration program demonstrates a high level of inclusiveness for Finnish applicants. The funding provided by Business Finland is intended for Finnish companies or co-innovation projects including at least three companies and one or more research organizations.

2.2 Winter Sports Joint Innovation Call (Ministry of Science and Technology)

This call offers funding priority to collaborative innovation on green sports (e.g. design and construction of low-carbon stadiums), sports injury and rehabilitation, digital sport (e.g.wireless body area network), and smart sports equipment.

The maximum number of projects to be funded is 5. The Finnish partners are expected to be individual companies or co-innovation projects that include either two or more Finnish companies or no less than three Finnish companies (at least two applying for Business Finland funding) plus one or more research organizations.

2.3 Shanghai Science & Technology Innovation Call

The Joint funding from Business Finland and Shanghai Science and Technology Commission provides capital priority to areas of information and communication technologies, cleantech, as well as health and wellbeing.

The maximum number of funding projects is 5, with requirements for the applicants to be individual companies registered in Finland.

2.4 Jiangsu Science & Technology Joint Innovation Call

This call gives financing priority to areas of new-generation energy and environmental protection, medical and health, digitalization, and industrial renewal (especially sustainable manufacturing). However, the industries are not strictly limited in this call, there is an opportunity to have other innovation fields funded.

In addition, the number of projects to be funded is also not strictly limited in this call, as the provision decision is only dependent on the quality of the projects. The application partners are required to be individual companies registered in Finland.

2.5 Zhejiang Science & Technology Joint Innovation Call

This joint innovation call gives funding priority to areas of digitalization, digital transformation, industrial Renewal, health and well-being, bio and circular economy(including cleantech), sustainability with energy, and environmental protection. Nevertheless, other potential fields of innovation also have the opportunity to be funded so long as they are mutually agreed upon by the funding providers.

The number of projects to be funded is not strictly limited in this call, and the funding decision is only dependent on the quality of the projects. The applying partners are required to be individual companies registered in Finland.

On a side note, the maximum funding granted by the Chinese Ministry of Science and Technology can reach a max of 5 million CNY per project for 3 years. In comparison, the local government support ranges 1-1.5 million CNY per project.

Application Eligibility

Apart from the explicitly mentioned requirements in the call texts, there are general eligibility criteria for all 5 joint calls:

• The proposals are expected to demonstrate the applicants' resources for international collaboration. In the case of the Finnish applicants, the resources and ability to enter the Chinese market is especially significant.

• The joint industrial R&D projects should be both highly innovative in their nature and business-oriented.

• The proposals are expected to demonstrate the contribution of the participants from both countries. The project should be balanced between participants and significant to all partners.

• The project partners need to agree on the IP rights and the commercialization strategy of the product or process in advance.

3. How to organize the funding application?

Clear self-assessment and thoughtful planning are key to getting joint funding for China-Finland R&D collaboration projects. With reference to Business Finland’s recent webinar, we have summarized 5 basic steps to support you from decision making to application submission.

Step 1: Gather key information and consider practicalities

Reading through all funding specifications is the most efficient and straightforward way to collect all essential information. It is important to pay special attention to the different funding principles and submission details in each joint call. After developing a basic understanding of each call, consider three things before you decide whether to apply:

1. Knowledge about China

The first and foremost question to ask yourself is whether you have enough knowledge about the Chinese market and regulations. One simple way to find out is to take online quizzes. You can find the Self-Diagnosis Tool of European SMEs from the EU SME Centre. Of course, generalized quizzes may not meet your business’ unique nature. In this case, consulting China market specialists, such as Hohot‘s advisors, can be an effective way.

2. The resources to sustain R&D and business

Collaborative R&D projects usually last for 2-3 years, and this may require a significant amount of resources from your business. Consider if your company is capable of sustaining this project while running the business at home. This is fundamentally important and often neglected by most SMEs. Without a considerate measurement beforehand, the decision is less likely to generate profits for your company's long-term operations.

3. The outcome of this program

What are the outcomes you wish to get out of the collaboration? What are the short-term and long-term goals of your project being planned? Are you aiming at entering the China market or expanding in China? Is the collaborative innovative topic able to generate long-term profit for your business after the program ends?

These are essential questions to ask yourself when sketching out the project plan. A strong and clear orientation can equip you with good incentives during the application period and lead to successfully getting the funding.

Step 2: Prepare materials for the application

The preparation period starts right after you have made up your mind and set up your business goals. The most fundamental preparation is an initial project idea or plan on project content, objectives, resources, and budget. It is a great idea to list out what competencies and contributions you expect from your potential Chinese partner(s). This can help to obtain a smoother and more rewarding collaboration afterwards.

Step 3: Develop an understanding of the IPR issues

There are two reasons you need to pay special attention to IPR issues:

The fundamental reason is that the intellectual property rights issues are very significant to both parties and need to be agreed upon before applying for funding. Due to the nature of joint innovation projects, the terms of IPR ownership and usage rights may be affected by the funding principles. This requires you to make clear terms of usage and ownership of existing IPRs and the new IPRs created from the joint innovation project.

The other reason is that China has different regulations on Intellectual Property Rights(IPR) from the EU and has its specific regulatory frameworks on data. Knowing the distinctions help you better protect your IPR in the joint R&D projects. Make sure you have checked relevant IP laws in China and consult a legal expert if any question arises.

Step 4: Find a partner

Matchmaking is one of the approaches to meet and identify your potential collaborator, who shares the passion for joint innovations and a higher likelihood of meeting qualifications. An exceptional collaboration can also support your business promotion and serve as a good demonstration of an international enterprise image.

Of course, there are other methods for finding partners besides participating in the joint call matchmakings. You can also find a partner through general partner searching in LinkedIn groups (such as Finland China Business Club and Oulu’s Business Network for Chinese Market), getting recommendations from your networks, attending industry conferences, or joining relevant industrial associations (such as The Chinese Association of Science and Technology in Finland. Networking platforms with a government background, such as the Team Finland and FinnCham (FinnCham Hong Kong, Finnish Business Council in Beijing, Finnish Business Council in Shanghai, and Finnish Business Council Guangdong), can serve as additional resources to get connected and form partnerships.

Once you have found the partner that meets your requirement, you can start making joint project plans and goals. Make sure to discuss all the details with your partner and consider the agreements you have achieved for yourself (especially how the IPR issues mentioned above are affecting your firm). Once you have reached a consensus and sorted out all the details, you can start preparing for the submission.

Step 5: Make the submission

Mark the deadline and the phase of the call listed in the specific call text. The submission needs to be made separately to the corresponding funding organizations of the applicants’ own countries and both sides’ applications are required. For Finnish companies, the application should be submitted through Business Finland’s submission system. Additionally, both sides should also fill in a bilateral cooperation form that is specific to the call.

Notice that for the calls with 2 phases, the submission process can be a little different. In the first phase, the idea application needs to be submitted to Business Finland through secure email with the call-specific identifier included in the subject. After the evaluation from both Finland and China sides, the selected applicants can enter the second phase and send the finalized application.

Takeaway:

The China-Finland joint innovation calls are adequate financial incentives for bilateral collaboration as well as a stepping stone if you are attentive to the Chinese market. This blog has provided you with an overview of available joint funding options and information regarding applications, for more specific information, do check Business Finland’s dedicated page.

Hohot Consulting supports you with matchmaking, professional knowledge of IPR laws and the Chinese market, funding applications, and negotiation with the Chinese partners. If you need help with the above spheres, or if the language barrier makes your application process difficult, please feel free to contact us.