The security situation in Europe has changed dramatically since Russia's full-scale invasion of Ukraine, forcing Western armed forces to adapt and seek new solutions to military needs. This has opened the door for expanded cooperation between civilian and military actors, where smaller companies also play an increasingly significant role. How do technology development, political initiatives, and new business models align with administrative processes to strengthen Sweden's defence capability?
Increased cooperation as technology transcends borders
One of the most important trends in defence innovation is the collaboration between civilian companies and defence companies. Sweden has traditionally had a strong culture of innovation, where civilian technologies have developed rapidly and can now be adapted for military purposes. This has become particularly important with the accelerating technological development, where emerging productification in areas such as AI, quantum technology, and drone technology has military potential. Quickly transforming civilian technology into defence utility, especially in a time when the demands on defence capability are constantly changing, is a central challenge.
The government's strategic investments, such as the innovation programme for civil-military synergies, are designed to strengthen this collaboration. Through this programme, opportunities are provided for newly established and smaller companies to participate in the development of technical solutions for defence, which in the long run strengthens both defence capability and the competitiveness of the ecosystem.
Startups on the rise in the defence sector
Another important trend is the increasing presence of startups in the defence market. Traditionally, established companies have dominated the market, but in recent years more newly established ones have taken their place. The turnover in the defence market in Sweden increased by as much as 24% in 2023, attracting entrepreneurs who want to contribute with innovative solutions.
These startups often originate from the civilian sector, where they have developed technologies that can later be adapted for military purposes, such as VR/AR and space technology. A common challenge for these companies, however, is the lengthy processes within defence procurement, which often hinder the rapid introduction of new solutions, as well as the difficulty in reaching and engaging in dialogue about military problems.
Challenges for new actors
Establishing oneself in the defence market is not without difficulties. Many newly established companies and subcontractors struggle to navigate the regulations. To meet the needs of increasing knowledge about national and international legislation, education and knowledge sharing are required, as the application is difficult to assess and often falls into grey areas.
Another challenge is the connection between civilian and military needs. Many startups are based on technology originally developed for civilian markets and must be adapted for military use. This can create both opportunities and obstacles, as the military use of the technology may require extensive modifications based on the products' performance, security requirements, and reliability.
The importance of an innovation culture
We need a shift towards a more innovation-driven defence family. This involves not only technical advancements but also a cultural change within defence organisations, as innovation is much about how we solve things and which relationships (and business models) we utilise. Historically, the defence sector has been relatively conservative when it comes to introducing new technology, often due to security requirements and the need for reliability, but we must become quicker at adaptation, where innovation and flexibility must go hand in hand. Sweden can learn much from how countries like Ukraine face new threats, not least when it comes to learning and collaboration.
International collaborations strengthen Swedish innovation
To strengthen Sweden's defence capability, international collaborations are crucial. By participating in initiatives such as NATO's DIANA (Defence Innovation Accelerator for the North Atlantic) and various EU defence programmes, companies can gain access to new knowledge, new markets, and new partners. These collaborations also create opportunities for Sweden to share its experiences and lessons while benefiting from new technology from other countries. However, Sweden has not succeeded in gathering authorities and companies to proactively work in these processes, which is also reflected in the absence of smaller companies leading the open "SME calls".
The defence market is in an expansive phase, where new actors and technologies contribute to reshaping the defence of the future. This is important as it involves providing our soldiers, sailors, and pilots with the best equipment to defend our way of life. By bridging civilian and military silos, making it easy for new actors, and promoting conditions for smaller companies, the conditions for a more innovation-driven market are created. Sweden's competitiveness and security are at stake, and the companies that succeed in navigating this market can become key players in the defence of the future.