Efficient product development of cyber-physical systems, through advanced digitalization

In this call for proposals, we aim to fund a project that contributes to efficient product development of industrial cyber-physical systems using advanced digitalisation. By cyber-physical systems, we mean systems that integrate digital and physical components, i.e. systems consisting of both software and hardware. The projects must be driven by industrial needs and lead to methods, tools and ways of working that integrate AI throughout the entire development chain, from requirements specification to verification and regulatory compliance.

You can apply for up to SEK 8 million in funding for a project running between 12 and 24 months. The applicant must be a consortium with at least two participants, including at least two industrial participants in the form of companies. In addition to companies, academia, institutes, public activities or government agencies may participate.

the call for proposals is part of the Advanced digitalisation programme, an industry-driven programme aimed at promoting Sweden's and Swedish industry's capacity to create the digital solutions of the future. The projects that receive funding must contribute to Sweden's collective capacity to create and make use of digitalisation opportunities.

Generative AI, AI agents and other AI-based development tools are changing the conditions for industrial product development. At the same time, industry is facing challenges in developing increasingly complex systems consisting of both advanced hardware and software, known as cyber-physical systems. This is an area in which Swedish industry has built its international competitiveness over a long period of time.

Swedish industry needs tools, methods and structures that support efficient product development, regulatory compliance and efficient collaboration between people and AI in the development process.

This applies to the entire development chain, including both hardware and software, and extends from an idea to a product that can be manufactured. Product development also includes links to legal, administrative and market-related aspects.

Some examples of industrial needs:

• Increase development productivity with agent applications that support the entire development cycle, from eligibility requirements to validation and launch, including various aspects of hardware dependencies.
• Detect errors and deviations earlier in the development process.
• Make the development process faster and manage new bottlenecks when software development is no longer the limiting factor.
• Shorten lead times and reduce costs through automation and support for parallel development.
• Manage ‘legacy’, i.e. retrieve information and knowledge from old systems or effectively replace them. This may, for example, involve knowledge of old code or integrations.
• Simplify regulatory compliance. This may involve tools and support for specifications, standards, documentation, analysis, structuring and product certification.
• Adapt solutions for organisations with complex product development, for example challenges related to real-time operations, safety-critical systems or complex hardware-related development.
• Increase understanding of complex relationships and decision-making information through human-in-the-loop-based ways of working.

What is the call for proposals intended to achieve?

the call for proposals is intended to contribute to the development of innovative tools and methods for product development that benefit Swedish industry across the board. It is important to emphasise that the call for proposals focuses on product development processes for cyber-physical systems and does not address AI-based decision support in all industrial processes or all operational technology (OT).

What are the projects expected to achieve?

• Solutions adapted for organisations with complex product development, for example challenges related to real-time operations, safety-critical systems or complex hardware-related development.
• Effective and secure methods for retrieving information and knowledge from old systems or effectively replacing them, for example through knowledge of old code and integrations.

• New methods and tools that address all aspects of product development, from start to finish. The projects must therefore address not only software development, but also slower adjacent processes such as legal, regulatory or administrative processes.

• Shorter lead times and reduced costs through automation and the possibility of developing several parts of a system in parallel.
• A realistic plan for industrialisation no later than three years after the completion of the project.

The Advanced digitalisation programme

the call for proposals is part of the Advanced digitalisation programme, an effort by Vinnova in collaboration with industry, which mobilises actors from different parts of society towards a shared objective.

Advanced digitalisation aims to strengthen Swedish research and make Sweden more attractive for research and innovation investments, as well as stimulate the development of advanced digital technology. The programme will be implemented with a long-term perspective and contribute to innovation, enabling technologies and the development of key areas of expertise that meet the needs of industry.

Read more about the programme on the Advanced digitalisation website.

the call for proposals is aimed at need owner in industry who, together with other actors in a consortium, can develop applicable solutions in the field. The other parties may, for example, be industrial companies, academia, research institutes or experts in product development.

Applicants must therefore form a consortium with at least two participants, including at least two industrial participants in the form of companies.

To meet the call’s expectations regarding the dissemination of results and industrial impact, cross-industry consortia are particularly welcome.

For the purposes of the Advanced digitalisation programme, industry refers to the entire production chain – from the extraction of raw materials to finished products, as well as industry-related service sectors and technology sectors required for the production chain to function. This includes, for example, energy, logistics and transport, telecommunications, water/air/ventilation and recycling. The defence industry is also included.

Each participant applying for funding must be a Swedish legal entity. For this purpose, a foreign organisation with a branch or permanent establishment in Sweden is considered equivalent to a Swedish legal entity. The project costs must be attributable to the branch’s or permanent establishment’s activities.

We fund collaborative projects that contribute to efficient product development of industrial cyber-physical systems using advanced digitalisation.

Examples of activities

• Develop new knowledge, tools, methods, models, algorithms, decision support or digital solution concepts. Projects must seek new knowledge through planned research or critical analysis.
• Evaluate and validate that developed solutions contribute to efficient product development.
• Identify and analyse organisational conditions, barriers and enablers for the future introduction of new methods, tools and solutions, such as needs for change management, skills development and innovation management.
• Analyse conditions and knowledge needs for the future implementation and utilisation of project results.
• Disseminate results, experience and knowledge to relevant target groups outside the project.

We do not fund

• Routine or recurring changes to existing methods, tools and working methods.
• project that focus on industrial processes other than the product development process itself.
• project that concern only the development of software systems and not cyber-physical systems.

Which costs can we fund?

Our funding is subject to rules on state aid. The rules govern the types of costs we can fund. These are called eligible costs.

In this the call for proposals, the following types of costs are eligible:

• Salary costs: Paid gross salary, employer contributions and other payroll-related costs.
• Equipment, land and buildings: Costs for instruments, equipment and rental of premises other than regular business premises.

• Consultancy and licensing costs: Costs for consultancy services, knowledge and patents purchased or used under licence from an external party. These costs may amount to no more than 20 per cent of an organisation's budget. Where there are special needs, for example if the project requires specialist expertise, we may accept a higher proportion. You must then justify this in your proposal, and the justification will be taken into account in our assessment.

• Other direct costs: Costs for, for example, materials, supplies and travel that are necessary to carry out the project.

• Indirect costs (overhead): Costs that are linked to the project but do not arise directly, such as premises and cleaning. Indirect costs may amount to no more than 30 per cent of salary costs. Universities, university colleges, research organisations and government agencies may have higher permitted levels, depending on activities.

For more detailed information on which costs we can fund, see Guidance on eligible costs

Which eligibility requirements apply to costs we fund?

For your costs to be eligible, the following applies, among other things:

• They must be actual, reasonable and necessary for the activities in the project.
• They must be correctly recorded and assigned a separate project code in the accounts. You may not cover project costs with other public funding or your own funds intended for other project.
• You may not claim someone else's costs as your own.

For more detailed information on the eligibility requirements, limitations and exceptions that apply, see our general terms and conditions.

The rules on state aid govern what proportion of the costs we can fund. This is determined individually for each organisation. We therefore distinguish between how much funding the project can receive and how much a participating organisation can receive.

How much funding can the project receive?

The project can receive up to SEK eight million in funding, and a maximum of 50% of the project’s total eligible costs. The call’s preliminary total budget is SEK 40 million.

How much funding can a participating organisation receive?

The amount of funding a participating organisation can receive depends primarily on:

• the size and activities of the organisation's operations
• the activities that the organisation will carry out in the project.

The descriptions in the following sections of what support we can provide are simplified. For complete information, see Bases and aid levels for funding.

support to companies for research and development

In this the call for proposals, we provide support for industrial research.

Industrial research can be described simply as seeking new knowledge through planned research or critical analysis. This is done to develop or significantly improve products, processes or services.

Which companies are considered small or medium-sized enterprises (SMEs)?

• To assess the size of a company, we apply the EU definition of small and medium-sized enterprises. The definition is based on the number of employees, annual turnover and balance sheet total.

• If the company is part of a group, information for the entire group must be included. If the company owns, or is owned by, other companies to an extent of 25–50%, this information must be taken into account.

• For help determining whether a company is an SME, read How the EU defines small and medium-sized enterprises (sme).

What proportion of the costs can we fund?

The size and type of activity of the organisation's operations determine what proportion of the costs we can fund. This is called the maximum aid intensity.

Maximum aid intensity for industrial research:

• Small company 70%
• Medium-sized company 60%
• Large company 50%

Situations where we fund a higher proportion

If the project is covered by any of these bonus criteria, we can fund a higher proportion of the costs.

• Effective collaboration: A certain level of collaboration between small and larger companies, between companies in two different European countries, or between research organisations and companies.
• Dissemination of results: Extensive dissemination through, for example, conferences or open databases.

Maximum aid intensity for industrial research with bonus criteria:

• Small company 80%
• Medium-sized company 75%
• Large company 65%

support to universities, university colleges and other public organisations

We also provide support to organisations that do not carry out economic activities. This means that the organisation does not offer a service or product on a market. This usually includes universities, research institutes and other public organisations.

This aid is not covered by the state aid rules. We can therefore fund up to 100% of such an organisation’s costs. The aid is often called “not state aid.”

How is it determined whether an organisation carries out economic activities?

An organisation that offers some form of service or product on a market is considered to carry out economic activities and cannot be granted this form of support.

It does not matter how the organisation is funded: whether it is public or private, or whether it has a profit-making purpose. Nor does the legal form of the operation matter. For example, whether it is a limited company, a trading partnership, an economic association, a non-profit association or a foundation.

Whether an organisation carries out economic activities is determined by its regular activities, not by the activities in the project.

Some organisations carry out both economic and non-economic activities, for example research institutes. In that case, it is important that you know which of these operations you are applying within.

If you are unsure whether an organisation in your project carries out economic activities, contact the call manager. However, the organisation is responsible for assessing whether it carries out economic activities.

For us to assess your proposal, it must meet certain formal eligibility requirements. If the requirements are not met, we will reject the proposal immediately.<\ p>

eligibility requirements for participants<\ h4>

• All participating organisations must be legal entities. Natural persons or sole proprietorships cannot participate. Foreign legal entities may also participate. However, foreign actors that receive funding from us must have a branch or permanent establishment in Sweden, and the costs must be incurred by the branch or permanent establishment.<\ li>
• The coordinating party must be a Swedish legal entity and conduct activities in Sweden.<\ li>
• At least two participants must take part in the project. This includes the coordinating party. Different parts of an organisation constitute the same legal entity and count as one participant, for example, two departments at a university.<\ li>
• At least two of the project parties must be industrial participants in the form of companies.<\ li><\ ul>

  eligibility requirements for the project<\ h4>

  • The project may apply for a maximum of SEK 8 million.<\ li><\ ul>
    • The project must start no earlier than 2027-03-19 and no later than 2027-04-15<\ li>
    • The project may not have started before you submit your proposal.<\ li><\ ul>

      eligibility requirements for the proposal<\ h4>

      • The proposal must be written in Swedish or English.<\ li><\ ul>
        • The proposal must follow the instructions under the heading “How to apply”.<\ li><\ ul>
          • The proposal must include all requested attachments.<\ li><\ ul>

Applications that meet our eligibility requirements proceed to assessment. In the assessment, we consider the potential of your idea, how realistic it is, and who will carry out the project.

We also consider how well your project integrates gender equality, both in the composition of your project team and in how you carry out the project. By integrating sex and gender perspectives, more inclusive and relevant solutions are developed. This strengthens both innovation capacity and the project's results.

gender equality as a tool for innovative societal development

What do we assess?

When assessing applications, we look at three main criteria:

• potential: We analyse the effects and value we can expect from the project.

• actors: We assess the participants' expertise and ability to carry out the project and achieve the desired results and effects.
• Feasibility: We assess how realistic and credible the project plan is, both in terms of carrying out the project and achieving the desired results.

In the overall assessment of the project, potential is weighted at 40%, and actors and Feasibility at 30% each.

potential (40%)

• The potential of the project proposal to achieve the call's objective and aim to contribute to efficient product development of cyber-physical systems.

• How innovative the project proposal is in relation to existing solutions and ongoing major initiatives in the field.
• How credible the project proposal's analysis of the problem is and the results that the proposed solution is expected to achieve.
• How likely it is that the project proposal is feasible, scalable, and has an impact on Swedish industry.
• How well the project proposal contributes to increased gender equality by integrating perspectives on sex and gender.

actors (30%)

• How well the composition, participation, expertise, and capacity of the actor constellation contribute to the project objectives and implementation.
• How well the consortium is anchored in Swedish industry.
• How well the project partners demonstrate the ability to disseminate, make use of, commercialise, and further develop the results and knowledge generated in the project, both within their own the organisations and outside the consortium.
• How well the project manager and other key individuals are considered to be positioned to lead and carry out the project.
• How well financial contributions, participation, power, and influence are distributed equally between women and men in the project team.

Feasibility (30%)

• How well the project plan and budget are considered able to realise a solution in accordance with the project proposal.
• How credible the project plan's risk analysis and action plan for these risks are.
• How well the project plan shows how the results will be utilised and disseminated in Swedish industry, both within their own the organisations and outside the consortium.
• How well the gender balance in the project team and perspectives on sex and gender have been integrated into the project plan.

• How well the need for consultancy services and licences is justified. This only applies if an organisation's budget contains more than 20 per cent in consultancy and licence costs.

How do we assess?

Once we have received the applications, we review them. We exclude all applications that are incomplete or do not meet our eligibility requirements.

Applications that are correct and complete are distributed among different evaluator panels and assessed in competition with one another. The evaluators are appointed by us based on their expertise in the field. Each proposal is assessed through at least three evaluator assessments.

Once the evaluators have reviewed the applications, we hold an assessment meeting where the evaluators recommend which applications should be granted.

We may also invite applicants for an interview before making a decision.

How does an organisation's financial status affect the assessment?

Before deciding on funding, we also conduct an overall assessment of the organisational and financial status of those receiving funding.

We use information obtained from credit reports, currently from Dun & Bradstreet.

In our assessment, we check the following:

• organisations granted funding for salary costs must be registered as employers with the Swedish Tax Agency. If such registration is not in place when we make our decision, you must be able to show that an application has been submitted. We do not approve retroactive registration.
• organisations must not be insolvent or undergoing liquidation or corporate restructuring. Nor may they have significant unpaid debts with the Swedish Enforcement Authority.
• The project manager must be employed by a participant, preferably the coordinating party.

• Limited companies must not have used up half or more of their share capital.

If we request it, small and medium-sized enterprises (sme) must be able to demonstrate that they have the financial capacity to carry out the project in accordance with their budget in proposal. Financial capacity means registered turnover or available capital corresponding to the company's total budgeted own funding of the project.

If we request it, small and medium-sized enterprises (sme) must verify the company's SME status with a model declaration in accordance with this model declaration template.

Once we have assessed all applications, we will send you a decision either approving or rejecting your proposal. Since applications are assessed competitively, your application may be rejected even if you meet all eligibility requirements and criteria.

In the decision, we state what proportion of the costs we will cover for each organisation.

You cannot appeal our decision, but you are welcome to apply to us again at another time.

What applies if you are granted funding?

If we grant your proposal, you must comply with our general terms and conditions for funding. The terms include, among other things, the following:

• You must sign a specific document in which you approve your participation and undertake to carry out the project.
• You must report on progress, your costs and the results achieved to us during the project period.
• If there are several parties, you must have a written project agreement governing your respective rights and obligations in the project. All parties must sign the agreement before you submit your first progress report. As it may take time to draw up and negotiate an agreement, we recommend that you start this as soon as possible.
• The results must be put to use, and scientific publications must be made open access so that the results are freely available to everyone.

See our general terms and conditions

You must also comply with the special conditions that apply to the call for proposals:

• At the invitation of the programme manager, the project must participate in relevant events within the Advanced digitalisation programme and thereby contribute to the dissemination of knowledge within Swedish industry in accordance with the programme's aim. 
• When providing information about the project and whenever project results are made public, it must be stated that the work was carried out with support from Vinnova (in English, the name is rendered as Sweden’s Innovation Agency) within the Advanced digitalisation programme. Making public refers, for example, to publication, regardless of medium, and oral presentations.

We may also decide to add supplementary special conditions for an individual project. If so, these will be stated in the decision.

May you need to repay funding?

If you have received more money than you are entitled to, or if you do not comply with any term of our terms and conditions, you may be required to repay it.

When the call for proposals closes, your proposal will be registered. We will then send an email confirmation to the person responsible for the user account, as well as to the project manager and the authorised signatory. If you have not received a confirmation within 24 hours after the call for proposals has closed, please contact us.

Once the call for proposals has closed, you cannot make any changes to the proposal. You can only provide additional information if we request it.

Who can read your proposal?

Your proposal will be read by employees at Vinnova and the evaluator participating in the call for proposals. Everyone is bound by confidentiality.

Applications submitted to us become official documents. This means that we must disclose them if requested. However, we keep certain types of information confidential if disclosure could be expected to cause financial harm to the individual. This applies to information on business and operating conditions, inventions or research results.

Official documents and confidentiality