Companies developing civil technologies are now entering the defence market with an increasing volume, as they can offer speed, agility, and innovations to traditional defence technology development. This whole new outlook on defence can be suitably named as ‘New Defence’. It is more current than ever in the era of technological advancements and geopolitical tensions.
Although the situation was the opposite just a few decades ago, civilian companies are now at the forefront of developing defence and security technologies. While off-the-shelf solutions used in the civilian sector may not be directly suitable for defence applications, agile experimentation speeds up the production and deployment of battlefield-ready products.
The New Defence phenomenon shares many similarities with New Space, where private companies have shown increased interest in exploring space technology in addition to household names such as ESA and NASA. This offers multiple benefits, as traditional administration-led governmental programmes and government-owned actors are not as fast-paced and innovation-rich as a high number of civilian companies.
"We see a clear paradigm shift in solutions. Instead of utilising a limited number of extremely high-cost units, we can take advantage of numerous smaller, cost-efficient units initially designed for civilian use. The innovation pace of civilian technology alone can save years of development," Sauli Eloranta, Vice President, Defence at VTT, says.
Combining the cutting-edge technology of civilian companies with the expertise of the defence industry sets fruitful grounds for the agile discovery of new applications. Essentially, it shifts defence technology development from predeterministic results to evolution through experimentation.
"Traditional military capability development involves a top-down approach to designing and implementing all systems. In contrast, the civilian sector operates more like an evolutionary process. New innovations are adopted in a decentralized manner, and those systems that develop effectively and fit their intended purposes best gain the widest user base," Eloranta elaborates.
Civilian technology needs support mechanisms to enter the defence market
Russia's war of aggression in Ukraine demonstrated the importance of civilian solutions in maintaining satellite communications and situational awareness with drones and crowd-sourced digital solutions. Everyday technologies and devices may seem too mundane for defence technology, but they may offer innovation and importance in new applications.
To explore the benefits of civilian technology, the barrier for companies to enter the defence market with dual-use solutions is lowered and supported by multiple mechanisms. NATO Innovation Fund (NIF) and DIANA (Defence Innovation Accelerator for the North Atlantic) are geared towards finding new solutions and innovations across the Alliance.
Though DIANA activities are available to all companies in NATO countries, establishing DIANA activities in Finland helps familiarize Finnish companies with the mechanism.
“VTT and its partners also provide training and support to improve domestic companies' chances of accessing the DIANA accelerator. I encourage civilian companies to explore the defense market with dual-use technology, as it offers significant business potential,” Eloranta says.
Eloranta hopes that traditional defence industrial companies recognise the new phenomenon and are committed to proactively capture the benefits of these mechanisms through increased collaboration with innovative civilian companies.
"Traditionally, developing defence technology has been a long process hindered by rigid structures that also slow down the international breakthrough of new companies. But to keep up with technological advancements and the increasingly technological security environment, the defence sector needs to rethink its structures and decision-making processes," Eloranta points out.
Are you curious about getting involved with the New Defence market? Read more about VTT's role as part of the DIANA network in Finland.
The mechanisms supporting civilian companies to enter the defence market with dual-use solutions include, for example:
- NATO DIANA with accelerators and test centres to find and accelerate dual-use innovation capacity across the Alliance.
- NATO Innovation Fund (NIF) to empower deep tech founders to address challenges in defence, security, and resilience.
- European Commission Defence Innovation Scheme EUDIS to strengthen defence innovation in the European Union.
- European Investment Bank (EIB) strengthening Europe's security and defence industry.
- Nordic Investment Bank (NIB) is reviewing its Sustainability Policy to allow security and resilience investments.
- New collaboration models joining defence and civilian companies, such as Digital Defence Ecosystem.
- There are also an increasing number of national and international activities to stimulate and fund innovation in dual-use technologies, such as Business Finland's Digital Resilience programme and the Finnish Business Angels Network (FiBAN).
