Unlocking Sweden’s Defense Innovation Potential: A Roadmap Towards Institutional Agility

Written By Gustav Granlund

Context & Urgency

Sweden stands at a pivotal moment. The EU’s newly released Joint White Paper on European Defence Readiness 2030 calls for a massive surge in defense investment, faster procurement cycles, and strengthening Europe's defense industrial base. While most Swedish stakeholders agree on the strategic necessity of rearming, our current institutional and industrial frameworks are not equipped to meet this moment. 

Sweden’s historical model — built on a few prime contractors working closely with the government in long cycles of platform procurement — must now evolve into an agile ecosystem that welcomes startups, mobilizes private capital, and accelerates innovation. 

The Minister of Defense and Director General of the Swedish Procurement Agency stated in a press release (24/03/2025) Upprustningen av Sverige—försvarsmateriel, “In the Defense Industry Strategy that the Government is preparing, the importance of more innovation, production, and collaboration is emphasized.” The challenge is not one of awareness but of architecture. Three structural problems are at the root of our inertia. 

1. Fragmented Triple Helix Collaboration 

Sweden lacks a functional system for collaboration between government, industry, and academia/startups — the "Triple Helix." Existing efforts are siloed, with few sustained channels for early-stage innovators to engage with real end-user needs. For startups, access to the defense market is unclear, unpredictable, and often opaque. Although most actors recognize the urgency, coordination is still ad hoc. Furthermore, Sweden’s public procurement law (Lag (2016:1145) om offentlig upphandling) — and FMV's strict interpretation of it — creates ambiguity and risk for actors wishing to experiment or co-develop. 

2. Incompatible Development, Testing & Procurement Processes 

Our procurement systems — particularly those governing FMV — were designed for an era when defense systems evolved over decades. They are ill-suited to the modern tempo of technological innovation, where breakthroughs can emerge in weeks or months. In a digital-first world, where iteration cycles are measured in weeks, not years, our defense procurement culture is still built around paperwork, not prototypes. Policies such as the lagen (1971:1078) om försvarsuppfinningar (defense inventions law) and a pervasive culture of risk-aversion hinder both public actors and startups from engaging in rapid prototyping, experimentation, and co-development. Without meaningful testing pathways or early user feedback loops, Swedish defense startups remain stunted.

3. Misaligned Risk Distribution Across the Ecosystem 

The current defense innovation system lacks a coherent strategy for distributing risk across government, primes, and financial actors. Primes often wait for government orders before investing in next-gen solutions. The government, in turn, delays orders until primes show readiness. SMEs and startups fall through the cracks, facing systemic barriers to capital, end-user access, and legitimacy. Despite growing interest from financial institutions in defense tech, the absence of early signals from the state leaves startups stranded in a catch-22. Emerging tools such as match-funding mechanisms, milestone-based procurement contracts, or government-backed guarantees could help rebalance this risk and catalyze private investment.

Proposed Solution: A Swedish Defense Innovation Unit 

To resolve these structural issues, I propose the creation of an operationally empowered Defense Innovation Unit that complements Sweden’s recently established Defense Innovation Council. This unit would not act as a kingmaker or gatekeeper but as a neutral catalyst focused solely on strengthening Sweden’s ability to defend itself and its allies. 

Core Functions: 

  • Facilitate a real-time Triple Helix exchange, coordinating end-user needs with solutions from startups and research institutions. 

  • Issue limited-run procurement contracts to de-risk early-stage technologies and accelerate testing and evaluation. 

  • Act as a signal amplifier, validating technologies with operational potential to unlock private investment and industrial partnerships. 

  • Champion a culture of experimentation and adaptive acquisition, embedding speed and learning into Sweden’s defense innovation model. 

  • Operate under a flexible regulatory carveout to allow experimentation and speed — while staying grounded in transparency and accountability. 

Advantages: 

  • Faster fielding of critical technologies. 

  • Lower barriers for startups and SMEs. 

  • Increased confidence for private capital to enter the sector. 

  • More substantial alignment with European efforts such as the European Defence Fund, HEDI, and the new SAFE instrument. 

Challenges:

  • Requires political will and a new legal interpretation or regulatory sandboxing. 

  • Must remain non-partisan and avoid capture by incumbents or short-term political interests. 

Conclusion

Europe is rearming — but readiness is not just about spending. It’s about creating systems that can adapt, evolve, and out-innovate adversaries. Sweden can lead in this effort, but only if we build a framework that matches the moment's urgency with institutional agility. The Defense Innovation Unit is not a silver bullet — but it can be the catalytic backbone of a reimagined Swedish defense innovation ecosystem. 

Gustav Granlund