Sweden's New Trustworthiness in Defense: The Nato Effect

Sweden's entry into Nato has reshaped its defense landscape, allowing companies like Saab to engage in new agreements and heightened military spending. As Sweden and Finland navigate this new alliance, their security strategies now include expanded roles for both established and emerging defense firms.

Sweden has undergone a significant transformation since its admission into Nato, shedding its historical neutrality and establishing itself as a reliable partner in global defense. According to Micael Johansson, the CEO of Swedish defense giant Saab, recent world events have catalyzed this shift. The ongoing turmoil sparked by Russia's invasion of Ukraine in May 2022 prompted both Sweden and Finland to pursue membership in the North Atlantic Treaty Organization (Nato).

Notably, following their full membership in March 2024, the nations are beginning to reap the rewards of this alliance. "We're no longer a country that cannot be trusted," Johansson asserts, underscoring the credibility boost that comes with being part of Nato.

Saab's relationship with the Nato Support and Procurement Agency (NSPA) has evolved, giving the company access to crucial insights it previously lacked. This newly gained knowledge is expected to translate into favorable contracts as European countries commit to increasing their defense spending. While only 23 out of 32 member states currently meet the recommended 2% of GDP for defense, Sweden (2.2%) and Finland (2.4%) are already poised to surpass this target within the next few years, with goals set between 2.6% and 3%.

Nato is establishing new bases and creating coordinated defense initiatives, such as the Joint Nordic Air Command, which unites the combat capabilities of Finland, Sweden, Denmark, and Norway. This move signifies a strategic strengthening of military cooperation amongst Nordic countries amidst rising tensions.

With the lingering threat from Russia, European leaders are committed to ongoing defense spending, anticipating a robust arms procurement that includes aerial surveillance and underwater systems. Saab is keen to meet this demand with its innovative technology. However, the balance between European defense needs and reliance on American support remains challenging, especially with the complexities of Nato's operational supply chains.

Johansson emphasizes Europe's obligation to bolster its defense industry while fostering competition among companies. Meanwhile, Finnish officials recognize the burgeoning opportunities that come with Nato membership, especially for smaller tech firms positioned to fulfill unique military requirements, such as the development of advanced drones and surveillance tools.

Moreover, the concept of "Total Defence" that is emerging from the Nordic nations symbolizes a holistic approach to national security encompassing infrastructure beyond traditional military frameworks. This strategy includes essential civilian sectors like energy, internet, and medical supplies, although such investments may not directly register as defense spending.

As both Sweden and Finland adapt to their new roles within Nato, they constantly redefine what defense means, shedding light on how civilian enterprises can contribute to national security. Their experiences in fostering defense innovation may offer valuable lessons for other allied nations navigating the complexities of modern warfare.