Sweden Has the Defense Tech Ideas – Scaling Them at Home Is the Problem

Sweden’s defense, space and deep tech sector has never had an easier time attracting capital, according to the panel “Defense, Space & Deep tech – Sweden’s next export success?” at Techarena in Almedalen 2026, but nearly everyone on stage agreed that turning good ideas into scaled-up Swedish businesses, not raising money for them in the first place, is where the sector actually loses ground.

Åke Nordlander, Director General of the Swedish Export Credit Agency (EKN), called it the “Swedish innovation paradox”: Sweden ranks among the world’s most inventive countries by patents per capita, but slides sharply down the ranking once the task shifts to scaling and commercializing that innovation.

He framed it as a European problem, not just a Swedish one. The EU’s newly launched Scaleup Europe Fund is a start, he said, “but that alone won’t be enough”, and said EKN itself is examining whether to raise the share of bank risk it currently covers on loans to smaller exporters, since deals still stall on bank caution even with the state absorbing half the risk.

Risks for Swedish-grown tech

The stakes of that gap were spelled out most bluntly by Martin Wänblom, CEO of GKN Aerospace Sweden, whose UK-owned parent weighs every industrialization decision against where conditions are best.

“If Singapore or the US offer more, there’s a risk that’s where the facility gets built,” he said. A direct warning that Swedish-grown technology can end up manufactured, and taxed, elsewhere if the domestic scale-up environment doesn’t keep pace.

Grew despite sector’s previous low status

Daniel Ljunggren, CEO of MilDef, offered his own company as evidence of both the opportunity and the cost of the old environment.

Founded in Helsingborg in 1997, MilDef grew into a roughly three-billion-SEK business, with some 80 percent of revenue now from outside Sweden, largely without outside capital, at a time when, as Nordlander (EKN) noted, banks grouped defense alongside pornography, gambling and tobacco on exclusion lists.

Given earlier access to working capital and market-entry funding, Ljunggren said, “we would have gotten further, faster.” His advice to today’s founders was to sell capability rather than a fixed product, since “you’re only relevant as long as nobody builds a better version of product A.”

High demand from the Armed Forces

Josefin van der Meer, Vinnova’s program manager for civil-military innovation, pointed to a related bottleneck in how the state connects industry to the Swedish Armed Forces.

Vinnova’s two-year-old joint innovation program launched amid uncertainty over demand and has since been oversubscribed in every call; its newest rounds build in an end user, the Naval Warfare School, from the start, because, she said, “sometimes the Armed Forces itself doesn’t know what it needs, because it doesn’t know what technology exists out there.

You can’t ask for a faster horse.” She floated “reverse pitching”, industry pitching problems publicly and inviting solutions, rather than the Armed Forces writing procurement specs, echoing comments from Air Force chief Jonas Wikman a day earlier.

Asking for a European awakening

Ljunggren (MilDef) tied the same idea to speed: fast field-test-and-iterate feedback loops, the kind Ukraine’s defense industry has used under wartime pressure, matter more than secrecy. “Before competitors understand how we do something, we’ve already taken the next step,” he said.

Asked what they hoped would be resolved by next year’s Almedalen, van der Meer (Vinnova) pointed to financing instruments built specifically for deep tech, letting firms scale from a Swedish and European base while selling into both civilian and military markets; Nordlander to progress on EKN’s risk-coverage review and reach more companies; and Wänblom (GKN Aerospace) to Sweden capitalizing on what he called a European “awakening” around competitiveness, before that momentum lands somewhere else.