War, cross-border conflict and geopolitical unrest are rarely considered favorable to businesses.
However, this appears to be the impact of Russian invasion of Ukraine on the two neighbors of the invaders, Finland and Sweden.
Of course not direct. Instead, it was the reaction of the two Nordic countries to the invasion that turned fear into hope.
About three months after the winter invasion, the two countries applied for membership of the Western Defense Alliance NATO in May 2022.
Less than three years later, they are all members and have already gained from it in national security and economics.
“We are no longer a country that cannot be trusted,” said Micael Johansson, CEO of Swedish defense company Saab.
He noted that since Sweden joined NATO in March 2024, Saab has reached a framework agreement with the NATO Support and Procurement Agency (NSPA). NSPA is the agency that organizes NATO orders from defense companies.
Mr Johansson added that it is much easier to get insight into what is happening within the league now. “We had no access to the NSPA before,” he said.
Finnish Ambassador to the UK Jukka Siukosaari agreed. “Being part of NATO has enabled us to maintain an equal position with all other allies. It expands the possibilities of the Ministry of Defense and beyond Finnish companies.”
Mr Johnson said he is increasingly aware that Europe has to do more things on its own [Getty Images]
Private companies will benefit from the commitments of NATO member states to increase defense spending.
Currently, only 23 of the organization's 32 member states currently meet the defense spending target of 2% of GDP, but ambitions have grown in recent months, with a lot of turmoil in the league in recent weeks and days.
In the uncertainty about what NATO might be like in the future, there is no doubt that these higher spending commitments will remain, and may even strengthen the situation in which Europe decides it no longer relies on the United States.
NATO's latest member spending commitments have already led the spending expressed by several existing members. Last year, Finland spent 2.4% on defense and 2.2% of Sweden’s GDP, both aiming to increase it to between 2.6% and 3% over the next three years.
Examples of NATO's new plans for the northern flank of Europe include the establishment of a new NATO base, and efforts to establish a United Nations Defense Force in northern Finland.
Coupled with the formation of the United Nordic Air Command, the command brings together 250 frontline combat aircraft from Finland, Sweden, Norway and Denmark, and has a flexible foundation under the joint command structure and is supported by common intelligence.
In addition, Mr. Johansson pointed out that substantial investment is needed to supplement the inventory of advanced weapon systems, including missiles and anti-tank systems.
While the White House announced a pause in military aid to Ukraine this week, European leaders announced that they have been in it for a long time, so we can expect substantial and sustained spending here on weapons, too.
As the return tension between Russia and the West brings new chills to the Arctic, demand for aviation surveillance programs and underwater systems is growing.
In these areas, Saab bosses are eager to promote their own solutions, such as the Global Airborne Early Warning and Control Platform and its Sea Wasp, a remotely controlled underwater vehicle that neutralizes explosive devices.
However, given Donald Trump's strong emphasis on “America first”, he is unlikely to be satisfied with choosing Saab or any other European defense company over U.S. competitors.
Europe will need to balance its desire to reduce dependence on the United States and obviously need to retain American support.
European members also need to consider the complexity and interdependence of NATO's defense system. They often combine technology and machines, weapons and ammunition, vehicles, handicrafts and ships, which are produced in several NATO countries.
In a sense, alliances are held together by complex supply chains and contractual agreements that cannot be stained overnight.
“European transatlantic relations will always be important,” Mr Johnson said, although he also pointed out that “in Europe, we have to do more things ourselves.”
Nordic countries are increasing military spending, like other members of NATO [Getty Images]
“The United States has indeed protected its own defense industry and we should do the same in Europe,” he said, and he welcomed the “hard competition” between commercial defense companies.
But much of this competition may be relatively newcomers to the defense industry.
Finnish Government Agency Business Finland has published a guide that provides companies with advice on how to do business with NATO.
Its authors predict that armed forces on both sides of the Atlantic will have “significant new demands for high-tech and low-tech services and equipment.”
Many of these requirements will need to meet startups and build small and medium-sized companies instead of being solely made by large, established defense companies, the guide says.
Johan Sjöberg, Security and Defense Policy Advisor for the Swedish Enterprise Federation [towards them] It has changed.”
Mr Sjöberg added that he favors “the overall view that security is good for the business as security and stability provide long-term credibility”.
NATO increases operations in the Arctic [Getty Images]
In Finland, NATO members have also created new opportunities, especially for large and medium-sized companies that Ambassador Siukosaari calls “Nokia Enterprise.”
These are expected to increasingly provide cutting-edge technologies such as drones, sensors and digital surveillance systems, such as Norway to Paironde’s “UAV Wall”, with six NATO members developing to defend their borders with Russia.
Indeed, as the nature of war changes, European security may increasingly rely on cyber defense and the protection of civilian facilities, such as system-critical submarine pipelines and cables.
But perhaps the most revolutionary idea that emerged from NATO's expansion is the concept of “full defense” in the region.
It is also applied by Norway and Denmark, which considers national infrastructure such as the Internet and telephone, energy generation and distribution, road networks, and safe food supply, medicine as part of a full defense system.
Most of this may not be registered as defense spending in the statistics, but at the same time, none of it is free.
Ambassador Siukosaari pointed out that in addition to civilian infrastructure spending, state military service sometimes disengages people from economically productive parts.
But maybe what they provide is more effective for the country than just providing products and services?
NATO's latest member believes they can teach other allies one or two things about national defense. They obviously provide new perspectives on how to measure defense spending. Perhaps it also involves how civilian societies and private enterprises play their roles.
