How Sweden and Finland are Transforming Defense Posture and Industry Through NATO Membership

Russia’s invasion of Ukraine has significantly altered the geopolitical landscape in Europe, prompting Finland and Sweden to seek NATO membership in May 2022. Their accession as full members by March 2024 has not only enhanced national security but also positively impacted their economies, particularly in the defense sector. Micael Johansson, CEO of Swedish defense contractor Saab, highlights that Sweden’s newfound status fosters trust and opens doors to partnerships within NATO, such as its framework agreements with the NATO Support and Procurement Agency (NSPA). Both countries have pledged to increase their defense spending beyond the NATO target of 2% of GDP, with Finland at 2.4% and Sweden at 2.2%, aiming for even higher levels. New initiatives, including NATO bases in northern Finland and the formation of the Joint Nordic Air Command, underscore the regional collaboration enhancing military readiness.

The rise in defense spending will benefit companies across Europe, with expectations that small and medium-sized enterprises will play a pivotal role in meeting new military needs. Both nations are adjusting to a landscape where increased security measures, including cyber-defense and infrastructure protection, are prioritized. Additionally, the concept of ‘Total Defence’ is gaining traction, encompassing the protection of essential civilian infrastructure alongside traditional military capabilities. As new NATO members, Sweden and Finland present innovative perspectives on defense that may influence allied strategies and spending metrics moving forward.