The nearby tension between Russia and the Ukraine over Crimea in 2014, as well as the existence of threats related to other diverse factors, such as those of climate change and terrorism, have affected the Security strategy of Sweden. After long discussions in the Swedish parliament, a raise of the Defence budget for the period 2016-2020 by 10.2 billion kronor (US $1.2 billion), was decided in April 2015. For the first time in more than two decades, Sweden’s governance decided upon consecutive increases of the defence budget (by 2.2% per year). According to the Swedish Defence Policy for 2016-2020 (see chart below), the total defence spending for the relevant 5-year period, will be about SEK 233 billion (some US $ 26 billion).

Sweden has managed to establish over the years a high-tech Defence Industry, with all of its companies currently (2016) being privately owned –more than 40% are foreign owned, with the US and the UK holding the lion’s share. According to the Swedish Security and Defence Association (SOFF) –with currently over 80 member companies, including about 59 SMEs- the sector has a total annual turnover of approximately €3.5 billion and employs 33,000 people in Sweden.

The large independence of the sector, has allowed Sweden to develop a defence industrial base that among others, covers system integration of fighter aircraft, submarines, surface vessels, infantry fighting vehicles, sensor and combat-management systems, as well as smaller components and IT systems to support the aforementioned.

In the last couple of years (2014-2015), a continued decline of actual exports has been noted.

This can be attributed on the one hand to the reduced defence budgets of the ‘traditional’ customers of the Swedish defence industry, and on the other hand to the strict export control regulations that Sweden follows. As for the latter, despite the fact that this regulatory framework guarantees technology transfers with important partner countries such as the US and the UK, it ‘prohibits’ other countries that do not apply similar export control regulations, from entering the defence area.

In 2015, the Swedish Defence Industry total exports, decreased by almost 4% when compared to a year before (2014). These sort of ‘fluctuations’ in export results however, are quite typical for the country, since Sweden’s defence exports have been dominated by large value exports (e.g. batches of aircraft or armoured vehicles). Moreover, taking into consideration that the related tenders from within the EU and also the US have been reduced significantly, this decreasing trend is expected to continue.

More specifically, in 2015, the military equipment exports of the country, were worth some SEK 7.7 billion. Of these, around SEK 1.1 billion was attributed to light weapons, components and ammunition exports, and a further SEK 143 million, to civilian firearms, parts and ammunition.

The largest export destinations for Swedish produced arms in 2015 (see chart below), were Norway, the US, Finland, India and Germany.

The main types of items exported to the top-5 export destinations in 2015, are listed in the following table:


Main type of exports


Combat Vehicle 90 (continued)


Ammunition & marine subsystems


Anti-tank systems


Follow-on deliveries for previously exported army materiel, including ammunition, spare parts & components


Components for weapon systems, electronic systems & armour plating

Source: http://isp.se/documents/

The ten biggest Swedish exporters of defence materiel for 2015, are indicated in the below table:

10 biggest exporters 2015

Exporting company

Value of exports

  1. BAE Systems Hägglunds AB


  1. Saab AB


  1. Saab Dynamics AB


  1. BAE Systems Bofors AB


  1. FFV Ordnance AB


  1. Norma Precision AB




  1. EURENCO Bofors AB


  1. Nammo Vanäsverken AB


  1. Saab Underwater Systems AB


Source: http://isp.se/documents/

According to the Swedish ISP (Inspectorate of Strategic Products), supplies of new and upgraded vehicles, as well as components for already delivered systems, will continue to contribute a significant amount to Swedish Arms export volumes. The sale of Gripen fighter (30 aircraft will be delivered by 2024) to Brazil, are expected to dominate the associated statistics post 2016.

At this point, it is worth mentioning that even before the signature of the contract with Brazil, Saab AB –representing more than 80% of the defence industrial capacities at the national level- was ranked in 37th position of the top 100 arms-producing companies according to the related SIPRI Fact Sheet for 2014, with US $2.71 Billion of Arms sales. Introduction of the advanced Meteor missile, helmet-mounted displays and other technical adjustments, will port improved operational capacities to Gripen, the flagship product of Saab AB, and probably give rise to further analogous sales in the future.

Given the decrease of EU and US tenders, and the fear of losing its competitive advantage through the technology transfers required to enter new markets (e.g. see cases of sale of Gripen aircraft to Brazil, South Africa and Thailand), further investments in R&D seem essential for Sweden in order to sustain its position in the global defence market.

Swedish defence enterprises are considered R&D intensive; in 2015, the SOFF member companies invested about 17.8% of their total turnover to R&D. However, the technological development achieved within the sector, is not as significant as it was some decades ago. In a different perspective, technological breakthroughs appear more regularly in recent times in sectors such as IT, robotics, advanced materials, etc. In addition, the defence market, is highly unpredictable and does not allow for high profit margins today, with the emergence of cost-competitive Far East nations (e.g. China, South Korea) as major players in the domain.

Having realised that the technological driver nowadays is stronger outside the defence sector and the fact that pioneering technological advancements in the military sector could also be generated in other parts of the world, Sweden seems more ready than ever before, to promote a different model for R&D funding. Through this, civil technological developments will be used to serve military applications too, rather that the opposite. Indicative is the fact that governmental funding for R&D in defence, has dropped from SEK 2 billion, to 600 million/annum, in the last decade (2005-2015).

Considering the aforementioned, it is essential to ensure the rapid dissemination and access to innovation and associated capabilities for the defence sector, and the continuation of investment in advanced technologies. Potential areas of such civil-defence capabilities integration, can be found in sensors’ development, robotics, quantum information, neuroscience, artificial intelligence, cyber security and space-based systems.