Young innovative companies (NIY)
Details
COUNTRY: Finland
REGION: All
LINK
Goals, Recipients, Beneficiaries
The Young Innovative Companies (YIC) program by Business Finland is specifically designed to accelerate the global growth of the most ambitious and rapidly growing startups in Finland.
Objectives: the YIC program aims to support young Finnish companies in scaling up their business models internationally. It focuses on helping these companies achieve rapid growth through comprehensive business development, including enhancing their international business activities. The program seeks to promote innovation and a competitive edge in global markets.
Target Organizations: the program targets startups and small businesses that are under five years old and have potential for rapid international growth. These companies should be independent, with significant intellectual property rights, and aiming to scale up operations globally. The program is particularly designed for companies with a robust and target-driven internationalization strategy.
Intermediary Organizations: Business Finland directly manages the YIC program without involving financial intermediaries or banks in its administration. This state organization facilitates the program itself, providing both funding and advisory services directly to the qualifying companies.
Source of Funding and Investment: the YIC program is financed through national funds allocated by the Finnish government, specifically through Business Finland. This includes a structured funding approach divided into three phases, with grants amounting up to 1 million euros per company, contingent on achieving set milestones and targets. The funding for each phase is provided retrospectively based on the successful completion of defined objectives.
Geographical Coverage: The YIC program is strictly national and focuses on supporting companies based in Finland. It aims to position these companies for success on the global stage but does not extend its financial support beyond Finnish borders.
Eligible Projects / Expenses
Supported Projects and Activities
- Startup and Growth Initiatives: The YIC program primarily supports projects aimed at developing and scaling up innovative business models. It focuses on helping startups establish a significant market position internationally.
- Research and Development (R&D): The program encourages activities related to innovation, particularly those that will lead to the development of new products, services, or enhancements in existing offerings.
Eligible Cost Categories
- Labor Costs: Includes salaries of key personnel who must hold a significant ownership interest in the company and be employed full-time to drive growth.
- Operational Costs: Related to the day-to-day functioning of the business, including but not limited to office space, utilities, and essential services.
- Marketing and Sales: Costs associated with promoting the business and entering new international markets.
- R&D Expenses: Expenses related to research and development activities, provided they align with the company’s growth strategy and potential for innovation.
- Equipment and Machinery: While not explicitly mentioned, costs typically associated with scaling a business like purchasing new equipment or technology may be covered under operational costs if they are essential for achieving the program’s growth targets.
Obligations and Constraints for Beneficiaries
- Innovation Requirement: Companies must demonstrate a commitment to innovation, either through the development of new products or services or by enhancing existing ones.
- Growth and Internationalization: Beneficiaries are expected to have a clear and executable strategy for rapid growth and international expansion.
- Financial and Operational Health: Companies must maintain good financial standing and operational health, evidenced by timely financial reporting and adherence to Business Finland’s guidelines.
- Employment: Although not explicitly listed as a requirement, supporting local employment through business expansion could be an implied goal given the focus on significant business growth and development.
- Empowerment and Diversification: While specific details are not provided, programs like YIC typically encourage broader economic benefits such as empowerment through job creation and business diversification.
Support
The YIC (Young Innovative Companies) program provides financial and strategic support across three distinct phases, each tailored to a different stage of a company’s growth and development.
In addition to funding, participants benefit from comprehensive mentoring and advisory services. These include:
- Strategic business guidance
- Market entry support
- Operational improvement plans
This holistic support ensures that companies can effectively leverage the financial aid they receive to scale and succeed.
Financial Support – Key Features
- Grant Amounts
Each company can receive up to €1 million in total funding across all three phases. The amount disbursed per phase depends on the achievement of specific milestones and performance targets. - Funding Terms
Grants cover up to 75% of eligible project costs, easing the financial pressure on companies. Funding is typically retrospective, meaning it is released after the predefined goals for each phase have been met. - Non-Dilutive Funding
The YIC program primarily offers grant-based support, without requiring equity in return. This means entrepreneurs can retain full ownership and control of their companies while still accessing substantial financial resources.
Procedure
Program Design and Authorization
Business Finland is responsible for designing the structure of the YIC program, defining the funding phases, selection criteria, and expected outcomes. Once the design is finalized, it is submitted for approval at the governmental level. This ensures that the program complies with relevant regulations and fits within Finland’s broader economic strategy. After approval, Business Finland moves forward with implementation, including outreach to potential applicants and managing the selection and evaluation process.
The YIC program is primarily administered by Business Finland, which oversees the design, promotion, application process, and disbursement of funds. In parallel, the Finnish Government provides the financial backing and strategic oversight to ensure the program aligns with national innovation and economic development goals.
Program Design and Authorization
Business Finland is responsible for designing the structure of the YIC program, defining the funding phases, selection criteria, and expected outcomes. Once the design is finalized, it is submitted for approval at the governmental level. This ensures that the program complies with relevant regulations and fits within Finland’s broader economic strategy. After approval, Business Finland moves forward with implementation, including outreach to potential applicants and managing the selection and evaluation process.
Preparation Costs
Launching the YIC program involves certain upfront costs. These include administrative expenses, promotional efforts to attract applicants, and the creation of evaluation frameworks. These costs are jointly covered by Business Finland and the Finnish Government as part of their investment in national innovation infrastructure.
Accessing the YIC Program
To participate in the YIC program, companies must apply through Business Finland’s online platform. Applications require a comprehensive business plan, current financial documentation, and a detailed strategy outlining the company’s innovation and growth goals.
Selection and Evaluation
Applicants are evaluated based on three main criteria: the level of innovation in their product or service, the ambition and feasibility of their growth plans—especially regarding international markets—and the capability of their team to execute the plan effectively. The evaluation is conducted by a panel consisting of Business Finland staff and external experts from relevant industries. In some cases, the process may involve interviews or pitch sessions to further assess the applicant’s potential.
Timing and Results
The YIC program accepts applications during multiple funding rounds throughout the year. Each round has a fixed deadline, and applicants typically receive feedback and funding decisions within a few months, depending on the number and complexity of submissions.
Through this structured and transparent process, the YIC program ensures that support is targeted toward startups with the highest potential for international growth and innovation impact, reinforcing Finland’s role as a leader in entrepreneurial and technological development.
Status and Results
Since its launch in 2008, the Young Innovative Companies (YIC) program by Business Finland has demonstrated strong results and impact. By August 2023, the program had supported 525 Finnish startups, with 180 successfully completing all three funding phases. This reflects the program’s effectiveness in guiding companies through their growth journey.
The YIC program focuses on helping startups become globally competitive, and the outcomes speak for themselves. Supported companies have significantly increased their R&D activities, expanded into international markets, and developed innovative products and services, reinforcing the program’s role as a key driver of innovation and business development in Finland.
Remarks
Creating a support scheme similar to Business Finland’s YIC program—and ensuring its success and replicability—requires careful planning and a number of key components.
First, it’s essential to define clear objectives and identify the specific target group the scheme aims to support. This should be followed by the design of a structured, phased funding model that aligns with company growth stages and incentivizes performance.
In addition to financial support, the program must include comprehensive support services, such as mentoring, strategic advice, and market access assistance. A rigorous and transparent selection process is also critical to identify high-potential startups and ensure the efficient use of public funds.
Collaboration between public institutions and private sector stakeholders adds credibility and extends the program’s reach. To ensure long-term viability, the scheme should be built with sustainability and scalability in mind, and its outcomes must be measured through ongoing monitoring and impact assessments.
When replicating such a program in other regions or countries, several factors must be taken into account:
- Adaptability: The model must be flexible enough to suit different economic, industrial, and cultural contexts. While the YIC model works well in Finland, it may need adjustments to fit local conditions elsewhere.
- Stakeholder Engagement: Early involvement of local actors—such as government agencies, industry leaders, and innovation hubs—is crucial to shaping a program that meets regional needs and gains widespread support.
- Supportive Policy Environment: A conducive regulatory and policy framework is essential for fostering innovation and enabling startups to grow.
Contacts
ORGANISATION: Business Fnaland
CONTACT PERSON: Marko Kotonen
EMAIL: marko.kotonen@businessfinland.fi
PHONE: +358 29 50 55000