The defense industry is growing rapidly – are you interested in developing innovations and global networks?
We have witnessed the New Space revolution in the space industry, where new players and innovative approaches challenged traditional methods. A similar change is now emerging in the defense industry.
The New Defence phenomenon can be seen as a sign that we are experiencing the rise of modern defense technology. New actors are entering the defense sector directly through new startups born within the industry, and through existing businesses whose civilian solutions have now found applications in defense.
When new meets traditional, significant economic changes become apparent. An article by Kauppalehti on October 1, 2024, noted that Finland has approximately 200 companies operating in the space sector. The turnover from their space business has roughly tripled during the period 2018–2022. The turnover of Finnish space technology companies in 2022 was over 62.5 million euros, compared to 20 million euros in 2018. So, the growth brought about by novel approaches can be very significant.
Notably, the turnover for the Finnish defense industry is already over two billion euros.
A recent study by Tesi has identified a total of 368 Finnish defense industry companies. About 144 of these are strongly growing businesses focusing on either defense technology or dual-use applications. Particularly significant is that dual-use technology companies' turnover growth figures were overwhelmingly the highest, about 30–40%. This reflects the increasing demand for modern defense technology, supporting a broader transformation in the defense field.
Clear benefits when new meets traditional – win-win for Finland
The rise of new space did not initially bring only enthusiasm among the more traditional players. It was easily referred to as a bubble that would disrupt the entire space industry. However, looking back over the years, the line between new and traditional space activities has increasingly blurred. Now, we talk about the space industry as a single entity again. New and traditional space actors have learned ways of operating and collaborating with one another. In the end, the encounter between new and traditional has revitalized the entire space industry.
As new and traditional meet now in the defense sector, it’s important to avoid a confrontation between the two right from the start. It has been encouraging to see how ecosystemic collaboration between new actors and companies that have been in the defense industry for a longer time has already begun to form. Business Finland's leading company projects are a good example of this, most significant for this sector being Patria's, Bittium's, and Nokia's projects.
I predict that the interaction already well underway between various defense industry actors will follow the same developmental path as has already occurred within the space industry sector, resulting in a stronger and more agile defense industry.
Through networks toward renewal
Close collaboration between companies and research organizations is key to forming a renewed and unified defense industry. Networks are needed in Finland as they make us larger than our size and more credible partners internationally.
Networking opportunities around defense themes are constantly emerging. Players such as Business Finland's Defense and Digital Resilience program, the Finnish Defence and Aerospace Industries Association (PIA), and the Digital Defence Ecosystem are examples of existing network opportunities in Finland. All these also provide opportunities to extend the network internationally. Being proactive is of utmost importance, whether building networks through these actors or independently by participating in industry events.
International frameworks supporting networking
The European Defence Fund (EDF) supports collaboration, innovation, and development to strengthen the competitiveness of the European defense technology and industry. Its main tool is the annual work program, which defines topics for project proposals from international consortia. Projects naturally have funding available, but equally important are the networks that are formed with international partners during the project. These may eventually provide the opportunity for the company to operate as part of the product delivery chain developed in the project.
Networks can also be built within the framework of NATO's DIANA accelerator concept.
DIANA's projects are designed for individual companies, particularly startups, but the implementation of projects using NATO's accelerator and test center network equally offers networking opportunities within the alliance.
A strong and agile defense industry benefits us all
It goes without saying that a strong and agile Finnish defense industry has a positive impact on Finland's economy. At the same time, however, it must also be remembered that its positive effects are much more complex for our society and global position. The Finnish defense industry is an essential part of our national emergency supply security.
When we develop new defense solutions, we are also at the same time protecting our country. Our high-quality defense solutions also provide security more widely within the EU and NATO framework, making us a valuable ally, which further enhances our security.
Is your company interested in developing innovations for the defense sector and joining international cooperation networks? If the answer is yes, the European Defence Fund (EDF) can help.