Defence Research and Development

Defence Research and Development

Defence Research and Development as a Promotor of Economic Growth

The Estonian defence industry is focused on developing international competitiveness and exports. In this way, the development of the defence industry – in addition to strengthening national security – contributes to economic development, exports and, through international relations, contributes to business cooperation in securing Allied relations.

The Estonian defence industry primarily focuses on the production, maintenance, repair and critical goods of defence equipment. The strengths of the Estonian defence industry are cyber defence solutions, autonomous systems, sensors, communication and surveillance technologies, electronics, individual equipment, vehicle maintenance and repair. The main target markets of the companies are Scandinavia and the Baltic countries, although Estonian companies are also active in the United States and the Middle East markets.

Development of the Defence Industry

The metric expresses the development of an internationally competitive, export-oriented and value-added national defence industry, by highlighting the volume of export turnover.

Although Estonian defence industry is still in a growth phase, in terms of total volume, a new industry has emerged in the past ten years with the systematic support of the Ministry of Defence. The annual turnover of the industry is more than 80 million Euros, of which exports accounted for 39% in 2018. Every year, the Ministry of Defence co-finances defence projects with the companies that have export potential, the activities of the Estonian Defense Industry Association and, together with StartUp Estonia and Garage48, the creation of new companies in the field of defence and innovation competitions. Estonian companies are supported in export markets by facilitating contacts. In 2020 Estonian defence industry companies raised about 10 million euros for the development of new products and technologies from European Union programs. The Defence Forces offer companies military expertise when it comes to product development and testing, which also provides the Defence Forces with the opportunity to get to know new technologies and to approach the resolving of problems facing the Defence Forces in a new way.

In addition, international defence industry cooperation helps to strengthen the country’s relations with its allies. The mission of the Estonian Defense Industry Association is to provide the state with a strategic partnership in the development of sectoral industries. The Cluster brings together companies in the defence and security field, who are planning to develop new products and services together with research and development institutions.

Defence Industry Export Turnover | in millions of euros per year

Total Volume of Research and Development Activities

The Ministry of Defence has systematically contributed to research and development activities to find the best technological applications and obtain new knowhow.

The research and development metric expresses the share of defence spending that Estonia contributes to research and development activities to find the best technological applications and smart solutions and acquiring new knowhow. These activities include cooperation with civilian universities, research and development projects, strategic studies, scholarships and support for the Doctoral studies of servicemen in the Defence Forces, and also allows for a comparison of the share of research and development expenditures of NATO Allies out total defence expenditures.

Research and Development Turnover | in millions of euros per year

Volume of Research and Development Activities | percentage from defence spending