Skip to content

The Swedish defence market

Learn more about the Swedish defence market, procurement, agencies and regulations.

In Sweden there is no:

  • Security of supply strategy 
  • Defence industry strategy
  • Defence supply strategy
  • Governmental ownership or control
  • IPR strategy – but IPR stipulated in contracts

Instead, we have:

However security of supply is increasingly important in contracts.

The Swedish agencies look at different options:
  • Own stock, not with third party for imminent use
  • Stock ready to use at industry / third party semi imminent use
  • Stock for “current sales” at industry
  • Turnover stocks and possibility for industry to manufacture (raw materials etc.)
  • Commercial contracts with clauses including security of supply, sufficient IP for operational needs etc.

Procurement principles as a strategy

The main framework is the Public Procurement Act (LOU) that applies to all public organisations. Sweden also complies with the law for the procurement of defence and security (LUFS).

The basis for the defence procurement are based on principles agreed by the Swedish Parliament in 2006 and, further placed in to use, by the the Swedish Armed Forces and the Swedish Defence Materiel Administration in a 2007, and later, again in the Defence Committee’s report from 2008, acknowledged. The principles primarily advocated the continuation and upgrading of existing equipment, and if new procurements are to be considered, firstly, procurement should be done jointly with other countries, or, secondly, bought from existing products and market, i.e., products that are already in use by other Armed Forces. Thirdly, development only to be considered when the needs could not be met by the above. In the procurement commercial interests take precedence over domestic defence considerations.

The defence industry in Sweden typically serves multiple clients beyond the Swedish Armed Forces, each with their own contractual commitments that must be fulfilled. The defence industry in Sweden is not legally obligated to prioritize orders from FMV or the Swedish Armed Forces, but such priorization could be stipulated in contracts.

In the contemporary landscape, the primary objective for a company is to generate profits for its shareholders. Consequently, there exists limited room for any form of allegiance to Sweden as a nation or to Swedish defence interests, except in cases where an underlying contract ensures the firm’s emergency preparedness costs are covered.

However, based on European union Article 346 TFEU, specific to Sweden, five domains have been categorized as “essential security interests”: the underwater domain, the domain of fighter aircraft, specialised aspects of the command domain like cryptography, the supply of ammunition and sensors.

Due to this classification, FMV is granted the authority to choose suppliers for products and services within these specific areas without necessitating the complete procurement procedure.

The study of future warfare

For the Swedish Armed Forces the key document is “Perspektivstudien”. Read the final report of the Study of future warfare 2022 – a stronger defence for a challenging future below. The document is public available , but only in Swedish.

Strict export regime

The task of the Inspectorate of Strategic Products (ISP) amongst others is to control the exports of military equipment and dual-use products. The ISP is the national authority responsible for applying certain sanctions as well as the screening of foreign direct investments. For any company operating in Sweden, ISP is important.

Industry days

SOFF organises periodic “defence market days” and “international suppliers days” to communicate forthcoming needs and procurement plans. The existing public procurement regulations limit companies willingness to engage in discussions about alternative solutions to a quotation request. This is due to the requirement that information provided by FMV to a particular supplier must also be shared with other stakeholders, thereby inhibiting open dialogue. Therefore, the events, like the industry days and international supply days, are important venues for domestic and foreign companies.

How defence procurement works

Swedish procurement legislation is based on EU directives and EU primary law. Public procurement must be efficient and legally certain and make use of market competition. There are no general requirements for participation in the public procurements. Specific requirements are set for each individual procurement. Some procurements are security protected.

Mainly, the governmental agencies prefer to procure complete systems and seldom put specific sub products in their requirements. In addition, there is no defence industry strategy and no offset strategy. Instead, a competitive and diversified market is of great importance for the development of defence capabilities. A market where suppliers of different sizes can find business opportunities.

Agencies of relevance

Swedish Armed Forces
The Swedish Armed Forces' primary responsibility is the capacity to engage in armed combat. The Armed Forces’ procurements comprise the purchase of goods and services for the agency’s own activities such as defence-specific goods and services, IT-related goods and services, construction contracts and printing services.
Read more
Swedish Defence Materiel Administration
The Defence Materiel Administration is responsible for managing the design and procurement of new defence equipment, where products must be adapted to the future network-based defence.
Read more
Swedish Civil Contingencies Agency
MSB is responsible for issues concerning civil protection, public safety, emergency management and civil defence if no other authority has responsibility. In some areas of civil preparedness, MSB procures for own and other public needs. Responsibility refers to measures taken before, during and after an emergency or crisis.
Read more
National Defence Radio Establishment
FRA supplies intelligence to the Government of Sweden, to the Swedish Armed Forces and to other concerned authorities. FRA also provides cyber security services for selected government authorities and individual business operators who handle information deemed to be sensitive from a vulnerability point of view or in a security or defence policy aspect.
Read more
Swedish Coast Guard
The Swedish Coast Guard supervises, rescues, and provides assistance at sea, 24 hours a day, 365 days a year along the entire Swedish coastline. It is a civilian government agency under the authority of the Ministry of Justice
Read more
The Swedish Fortifications Agency
The Swedish Fortifications Agency manage governmental properties intended for defence purposes. For example, its own regiment buildings, offices, training facilities, workshops, firing ranges, harbours, airports, underground facilities, forests and the areas of land upon which the Swedish Armed Forces conduct their training exercises.
Read more

How the Swedish defence market differs from other countries

Ownership/control

In Sweden

Companies are privately controlled.
Common in other countries

Major companies controlled by State.

Financial risk

In Sweden

Most companies invest their earnings into R&T and innovation. The companies bear the commercial risk in terms of investments.
Common in other countries

Companies, including those privately controlled are dependent on the State’s full financial support towards R&T and innovation activities. Companies take low commercial risk with own capital.

Drivers

In Sweden

Demand is driven by the market and companies.
Common in other countries

State and companies plan, prioritise and decide on development.

Dialogue model

In Sweden

No structured model for interaction with companies, even in early stages.
Common in other countries

Many countries have structured dialogue forums with industry.

Procurement

In Sweden

Most systems are procured openly and internationally (e.g., Patriot).
Common in other countries

Few open procurements and large portion of procurements influenced by political guidance (e.g., by state-owned companies).

Defence industry strategy or offset strategy?

In Sweden

Sweden do not have a strategy for defence industry nor for inbound offset – however a strategy for the supply to the armed forces has been investigated.
Common in other countries

Most nations do have a defence industry strategy and a policy or strategy for inbound offset.

Security of supply (SoS)

In Sweden

SoS is ensured by availability of best possible capability through partnership and cooperation with suppliers within and outside of Europe due to the increasing complexity of defence technologies/systems.
Common in other countries

SoS is ensured by domestic companies which in turn dis-incentivises them to partner with globally competitive companies.

Competitiveness

In Sweden

Companies compete for contracts on the global market to the benefit of their domestic markets.
Common in other countries

The companies focus on securing domestic supply (therefore not guaranteeing global competitiveness).

Cost efficiency

In Sweden

The model encourages in cost efficient business models.
Common in other countries

Without competitive procurement there is less emphasis on cost efficiency.

Future needs?

Sweden do not, like other countries e.g. Norway and Denmark, publish a future acquisition plan. Beyond the current procurement, the best way to understand the medium and long-term needs of the Swedish customers are a few strategic documents. The Defence Bill sets the five year framework for the total defence of Sweden. The current covers 2025-2030. There is also a national security strategy from 2024, that covers some of the areas.

The Defense Resolution 2025-2030

In need of support, we also recommend you to contact your embassy, as many have defence attachés in Stockholm, as well as Business Sweden. Also, learn more about the procurement process at the governments webpage.

Business Sweden
Government of Sweden