Challenge Finland builds businesses by solving problems

Application period: Thu 28.01.2016 - Tue 29.03.2016

Challenge Finland is a competition that is seeking commercialisable solutions to major problems. The aim of the competition is to effectively combine top Finnish research with private-sector R&D. This will accelerate the search for new Finnish export products and services.

Who should enter?

Entry is open to Finnish top researchers and companies that want to improve the world – and have the keys to a solution 'jangling in their pockets'. The competition has two stages.

Funding awarded in the first stage of the competition is intended for research organisations.

Researchers have the chance to show what they can do in the first stage. What is the nature of the challenge? How will cutting-edge research solve it? Is there business potential in finding a solution? The problems and solutions can involve clean technologies, health, leveraging digitalisation, or applying entirely new business concepts. The markets for such solutions – created on the basis of research – are global. Already during the first stage researchers should have good dialogue with the company sector.

The second stage of the competition concerns joint projects between research organisations and companies.

In the second stage, we will challenge companies to leverage world-class research to create new business. Research in search of a solution will continue in the second stage of the competition, when corporate participants develop customer-oriented products and services based on world-beating expertise. The research results should form an integral feed-in for the companies' innovation activities. The second stage of the competition involves the closer synchronisation of cutting-edge research with businesses innovation processes.

What are the funding targets of the Challenge Finland competition?

In the first stage of this two-stage competition, the research project proposals will compete for funding based on their project plans. Each project plan must describe the following:

  • the problem
  • the proposed solution
  • the anticipated business potential of the solution
  • how a fit between the problem, solution and customer ("problem solution fit") will be created during the project
  • how a consortium will be formed to carry out the research and commercialise the solution and
  • any other preparatory work

Tekes will fund the best research projects and feasibility studies which explore the problem in greater detail and link the solution to customer needs, as well as building research consortia and business partnerships. This means that the consortium does not have to be assembled, nor do the required participants need to be involved, during the first stage. But you will need a bright idea, a clear direction and top expertise.

New innovations are not based on lazy assumptions. For this reason, the problem's importance, relevance and value to the end customer will be verified during an iterative project.

During the first stage of the competition, Tekes will network the funded projects with companies. In addition, there will be opportunities to present pitches for the ideas in various arenas, and to systematically build consortia of players ready to realise the ideas through projects.

In Stage 1, the estimated project costs must total no more than EUR 100,000. Tekes's contribution can be up to 70 % of the eligible costs.

During the second stage of the competition, the best research teams will be chosen on the basis of the results and final report of the research performed in the first stage; the results and report will also form the research plan for the second stage of the competition. The key selection criteria for the second stage are as follows:

  • the fit between the problem, the solution and the customer
  • the competitive edge and market potential of the solution
  • the partner companies' commitment to the commercialisation of the solution based on their own development projects or in-kind contributions
  • the academic quality of the research, based on an international peer review (evaluation by the Academy of Finland)

During the second stage of the project, the research will prepare the way for the solution's practical implementation and work will be done to help the companies exploit top-level Finnish research more effectively.

The second stage will involve funding the joint projects of consortia bringing together research organisations and companies, which have the resources for the rapid development and commercialisation of solutions.

During the competition, Tekes will provide a total of EUR 30 million of funding for research organisations (Tekes' contribution will not exceed 70% of the total costs of the approved research projects). The deadline for completion of the research projects is 31 October 2018.

Tekes will finance private-sector R&D projects through its normal loans and grants. There is no deadline for the completion of company projects.


28 January to 29 March 2016
Stage 1: Application period

30 March to 31 May 2016
Stage 1: Evaluation and decision

1 June to 14 November 2016
Stage 1: Implementation of projects and application period for Stage 2

15 November 2016 to 16 January 2017
Stage 2: evaluation of realised projects/applications for Stage 2
and decisions

17 January 2017 to 31 October 2018
Stage 2: Implementation of projects

Challenge Finland is seeking to fulfil the goals of the Government's knowledge and education key project.

Tekes favours open access scientific publishing

Tekes is committed to the objectives and approaches of open access science and research. We aim to make publications and the non-confidential information resulting from public research readily available for further use. Open access publishing promotes the wider use of research results for research and commercial purposes.

We recommend open access publishing in public research projects by Tekes. The project research plan for Stage II must include a publication plan which takes account of open access publishing. We recommend that you consult your own organisation's guidelines on open access publishing.

Briefing events providing further details

3 March 2016 Tekes and the Academy of Finland organised a briefing on Tekes and Academy funding for key projects (in Finnish).

29 February 2016 Tekes will arrange a briefing session for researchers and businesses on the Challenge Finland competition. At the event, funding applicants can present Tekes and the other participants with a brief (10 min.) preliminary proposal for the problem they intend to solve, the solution and the research idea. You will receive feedback on your idea and the opportunity to network with potential partners. To take advantage of this opportunity, please send your contact information and a free-form description of your idea (no longer than one page) by e-mail to by 23 February 2016. There are only a limited number of slots for presentations, so act quickly!

For further information, please contact

NB: Because the competition involves experimenting with a new approach, some components and schedules are subject to change and may be updated. Keep an eye on the competition website (in Finnish) and other communications.

Jukka Leppälahti
Tel. +358 2950 55879

Mirja Kaarlela
Tel. +358 2950 55643

Erja Ämmälahti
Tel. +358 2950 55422

Maarit Lahtonen
Tel. +358 2950 55944

Markku Heimbürger
Tel. +358 2950 55977

Our email addresses are in the form

What kind of research will we fund in Stage One?

Deepening the understanding of the proposed problem and solution (a good problem/solution fit), drawing up a plan for commercialisation and setting up a consortium, and other preparatory steps.

  • The application must identify a problem and propose a solution which can be realistically implemented in the medium term (within 3–5 years). The problem must involve a sufficiently large number of potential clients, and the solution must be something for which they (those who have the identified problem, the end clients) would be willing to pay.

  • The project must seek a deeper understanding of the actual business potential of the problem and the proposed solution, and of whether the right problem is being tackled from this perspective. Truly understanding the functions that are important to clients, and clients' actual needs ("jobs to be done"), increases the chances of identifying problems that can point the way to new business activities.

  • Understanding the problem and the solution and being able to verify the related assumptions (hypotheses) by means of testing are essential. The verification process can take many forms, such as:
    - Customer contacts and interviews
    - Presentation of prototypes and demos
    - Power Point slide show or animation: virtual demos

  • The feedback may also reveal flaws in the hypotheses underlying the problem and solution, and show that by changing (iterating, pivoting) them, better premises can be formulated. Alternatively, the feedback may lead the parties to conclude that the project should be abandoned altogether. Modified Stage 1 proposals can also be submitted for Stage 2.

  • Of course, the aforementioned steps are more likely to succeed if private sector collaboration begins during Stage 1, although Tekes does not require the projects to have business R&D funding in the first stage. If necessary, Tekes can grant funding to businesses through its normal business R&D funding instruments. The Stage 1 final report and the Stage 2 application must include a description of the problem and solution's relevance to the client, and of how this has been verified.

Creating an R&D consortium and a commercialisation plan

  • Another important aim of Stage 1 projects is to set up a research consortium and build cooperation with businesses, as well as motivating them to commit to commercialising the solution during Stage 2. Ideally, this will be evident during the Stage 2 application process, from parallel applications submitted by the applicants, or demonstrations that they have launched other business projects that are a close fit with the work of the research consortium and the proposed topic. When selecting projects for funding, Tekes will take account of any private sector projects related to the Stage 2 work done by the consortium, or begun later if the company in question provides a concrete description of the project interfaces, schedule and content during the application stage.

Other preparatory work

  • Projects can also involve technical and financial feasibility studies, market research, experiments and other preparatory steps, as needed.
What kind of research will we fund in Stage Two?

The best research teams will be selected for Stage 2, on the basis of the results and final report of the research performed in Stage 1: the results and report will also form the research plan for the second stage of the competition. An application and plan for Stage 2 (report on content of Stage 1) must reach Tekes by 15 November 2016.

Stage 2 projects will involve developing solutions which, ideally, can be adopted by the end of the current term of government. Any further R&D after this project should have a commercial focus and be coordinated via business-led projects, which Tekes can fund through its normal business R&D funding instruments.

What size can the projects be?

In Stage 1, funding can be granted for research organisation projects with estimated costs of no more than EUR 100,000. Tekes's contribution can be up to 70% of the eligible costs.

In the second stage, the goal is to fund parallel projects by consortia of research organisations and companies, which have the resources required for the rapid development and commercialisation of solutions.

Tekes will award up to EUR 30 million of key project funding to research organisations via the Challenge Finland competition (70% of the costs). It will provide a minimum of EUR 30–40 million for the funding of private-sector parallel projects.

What do we mean by 'innovation-capable' and "problem solution fit"?

In recent years, much new information has become available on the how innovations are created, and on innovation capabilities and the related success factors. The key principle is that "there is no point in developing something that no one needs". This is why it is important to start the process by identifying problems that are important to end-clients, and to formulate solutions that can lead to the creation of new business.

A solution has business potential if someone is willing to pay for it. In most cases, the problem and the chosen solution stem from a function or need that is critical to the client ('jobs to be done', Clayton Christensen) and for which the client is prepared to pay. It is important to bear in mind that the client may not be aware that it has a problem, or may not recognise the need to solve it, particularly in the case of completely novel solutions. This is why R&D players need to familiarise themselves as thoroughly as possible with the client's actual circumstances and activities. The key issue is to avoid basing your work on assumptions, but to verify that the problem and solution are important to the client and a good fit with its business activities, so as to build a plausible picture of the problem/solution/client fit (Eric Ries, 2011). A continuous verification process involving the client also generates feedback, which can help in identifying new applications for the solution and improving the chances of success in business development. Feedback also enables the solution's modification in order to increase its chances of succeeding. On the other hand, if the verification process is unsuccessful and the situation cannot be rectified by modifying the solution, an unwanted solution can be abandoned early and resources can be reallocated.

Funding for Challenge Finland projects is granted on the basis of a two-stage application process and the aforementioned principles. Close cooperation between researchers and businesses is critical to success in this competition.

Further information:

Selection criteria

The objective of Stage 1 is to launch several "proof-of-concept" projects, which will be selected on the basis of the following criteria:

  1. Novelty value and competitiveness of the proposed problem and solution, existence of multiple potential applications, market potential, contribution to the promotion of innovations, and any significance to society.

  2. The quality of the project plan in verifying relevance i.e. the fit between the problem, proposed solution and the client (problem/solution fit).

  3. The number of businesses that could benefit from and participate in innovation related to the proposed problem and solution, and the specification of the companies in question. Project plan for building cooperation between businesses and for setting up a consortium for Stage 2

  4. Project team in Stage 1 and the applicant's capacity to assign sufficient resources for Challenge Finland activities, including in Stage 2.

The Stage 2 selection criteria are:

  1. Plausibility of the proposed relevance i.e. the fit between the problem, solution and customer, in the light of the work carried out during Stage 1
  2. Quality of the consortium and plausibility of the commercialisation plan
  3. The solution's novelty value and competitive edge, the existence of multiple potential applications, market potential, the contribution to the promotion of innovations, and significance to society
  4. The level of scientific research
Stage 1 of the application process

Send your full application to Tekes via its online service by 29 March 2016. Attach a project plan (maximum 3 pages) to your application. To ensure a fair evaluation process and the rapid progress of the competition, applications arriving after the deadline will not be evaluated or eligible for funding.

Stage 1 projects do not need to have acquired business R&D funding. However, cooperation with businesses is necessary to meeting the objectives of Stage 1 and qualifying for Stage 2.

Select "public research networked with companies" from the application server and fill in the form, taking account of and applying the content and goals of the work performed during Stage 1. NB: See the separate instructions on filling in the application form.

In the basic information section of the application form, select "Challenge Finland" from the "Is the application related to a Tekes programme or theme?" menu.

Funding decisions will be made as soon as possible, by 31 May 2016 at the latest.


We believe that the Challenge Finland competition will succeed in solving problems and innovating, if researchers, companies and funding bodies cooperate closely in creating new practices. So let's boldly seek new solutions to problems and get behind the development and commercialisation of such solutions.

During the competition and projects, Tekes will arrange a number of networking and sparring events for researchers, companies and other partners. During Phase 1 in particular, the project goals and activities will be presented in sparring events, enabling companies to join the consortia of their choice for Phase 2. Themes such as innovation capability, experimental development and the lean startup method can also be included. Keep an eye on the competition website (in Finnish) and other communications.