What is New Defence and how it will impact the defense market? To navigate the shifting markets, civil technology developers must learn to collaborate with the traditional defence actors. At the same time, the increasing role of data in defence technology opens up both ethical and strategic dimensions.
This article summarizes Unikie’s second episode of Unikie’s 15-minute technology podcast. In this episode, our guest is Sauli Eloranta, the Vice President of VTT, Finland’s state-owned research institution.
New Defence refers to the growing role of civil technology in the global defence markets. Compared to the traditional defence industry, technology developed by civilian actors is often more cost-efficient and faster to develop, making it a great match for the growing defence sector needs.
New Defence Introduces New Business Dynamics
While New Defence provides a refreshing stimulus to the existing markets, it also brings completely new business dynamics to the table.
Traditional defence industry actors are well-prepared to operate in the highly-regulated markets and have established customer relationships. New defence companies have cutting edge innovation and faster development cycles, but lack experience on military regulations, standards and procurement processes, for example.
However, ideally traditional defence and New Defence can complement each other – assuming that the operators learn how to work with each other.
“The way I see it, the primary way for New Defence companies’ market entry is through current defence sector operators. Both need to learn how to dance to a common rhythm – if one is doing traditional line dancing and the other modern freestyle, you’re more likely to step on each other’s toes,” says Sauli Eloranta from VTT.
The key is to hit the dancefloor to find the common rhythm early. It might take a while to learn the new steps, and it may take a while for actual results to show, but the trend shaping the industry is picking up speed all the time.
“When working with New Defence companies, traditional actors do not have to change their cultures radically overnight. Instead, they can integrate new, more agile ways of working through partnerships,” Eloranta continues.
Accelerating Innovation Through DIANA
NATO’s Defence Innovation Accelerator for the North Atlantic – DIANA for short – is an organization aimed at finding and accelerating innovation of dual-use civil technology across the NATO Alliance.
Finland is part of the DIANA network and in 2026, VTT will lead a DIANA business accelerator in cooperation with Aalto University and the University of Helsinki. The accelerator provides a high-intensity training period for growth companies, focusing on planning business growth, customer understanding and technological development.
“Essentially we’re prepping growth companies to enter the NATO markets,” summarizes Eloranta.
Companies entering the accelerator will also learn about navigating through the defence regulation jungle, procurement practices and making their own products fit for defence use. All in all, DIANA provides a door for new actors to enter the traditional market.
Finland Finding its Role in the International NATO Market
With Finland’s NATO membership, the discussion around the defence industry in Finland is shifting toward the export of defence products.
“As a nation, we have to consider the defence sector as a potential, growing area of export. There’s a golden opportunity to find our role in the growing international markets,” Eloranta says.
In the big picture, Finland is especially known for its expertise in communication technologies and top-end digital solutions. When considering trending technologies, such as drones, many solutions rely heavily on communications technologies for remote operation, for example.
“Being a ICT-capable country, we have a lot to give in the field of communications. Not just companies like Nokia who pour millions after millions to product development, but also a lot of smaller growth companies. I also hope that the Finnish defence organizations notice the value of Finnish companies early,” Eloranta suggests.
Data Fundamentally Changes the Battlefield
Automated systems have already changed the reality on the battlefield. Going forward, data and digitalization will continue to drive the shift. In Multi-Domain Operations, integrated data is shared and used by all battlefield actors – and also by the civil society, outside the traditional military systems.
“The role of Cyber Defence has been well-established. Now, the importance of data takes things to a completely new level. In my opinion, data is the lifeline of all multi-domain operations, the integrity, security and fast availability of data are all critical. Many systems are based on data – nothing works without it,” Eloranta says.
So, data is becoming an instrument for warfare. For example, AI and algorithms can identify objects on the battlefield faster and with higher accuracy.
“Better accuracy underlines the ethical consideration – how can we ensure that we minimize civilian casualties, for example. Finland is a nation that strongly believes in mutually agreed rules and this is a field we can also have an impact on.”
New Defence as a Solution for Battlefield Asymmetry?
New technology on the battlefield has the potential to disrupt traditional technologies and capabilities. A multi-million investment – such as a battle tank – may be neutralized with a new capability that costs just a fraction of a tank. This introduces a significant asymmetry between a measure and its countermeasure.
What’s more, even the new solutions, such as drones, may in the future be vulnerable to single sources of failure, where a new technology could render entire drone fleets inactive. Another example of battlefield disruption has been Ukraine’s capability to fend off Russian navy with remotely operated capabilities.
Here’s where New Defence cost-efficiency comes into play. In the future, it might no longer be smart to develop expensive systems and stock up with potentially vulnerable technology. Instead, having an agile, innovative way to cost-efficiently produce new solutions may turn out to be invaluable.
What if the largest defence budgets no longer tell the truth about the actual power on the battlefield?
Watch the full podcast with English subtitles below.
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