Response to interpellation 2024/25:148 on Swedish defense industry strategy
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The government is working on a Swedish defense industry strategy to strengthen security of supply and production capacity 1. M argues that the strategy is required to manage long lead times and high prices, as well as to promote innovation and international cooperation 2. M emphasizes that previous principles were too doctrinal and that a market is now needed that is not only driven by price 2. S wants to see a greater state interest in the companies to secure long-term stability, similar to in other Nordic countries 3. M argues that previous privatizations and foreign ownership have been successful for market access, but that security must be guaranteed through requirements for Swedish management and boards 4.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Försvarsministern Pål Jonson (M)
Madam Speaker! Johan Andersson has asked me whether I and the government intend to develop a Swedish defense industry strategy for the purpose of strengthening the Swedish defense industry and fulfilling the need to secure the supply of defense materiel, and if so, when it should be implemented and when it will be presented to the Riksdag.
The Government sees a need for a defense industry strategy, and work is underway to develop such a strategy. In the total defense bill for the years 2025-2030, the Government presents a new direction for material supply in relation to the so-called material supply principles that were introduced in 2009. The increased importance of security of supply and defense industrial production capacity, as well as the needs for innovation and international cooperation, imply changed conditions and place new demands on both the state and the business sector.
The defense industry is a security and defense policy asset. Therefore, long-term and strategic perspectives on the Swedish defense industry are required, which the defense industry strategy shall contribute to.
Johan Andersson (S)
Madam Speaker! I thank the Minister for an answer that I am relatively satisfied with. The purpose of my interpellation, which I wrote a number of months ago and before the total defense bill was submitted, was precisely the connection to the strategy that work is currently underway with.
We are living, as said, in a very restless time. Sweden has a world-class defense industry. We have many good starting points when it comes to combat aircraft, submarines and other technology, which are truly worth being used in a good way and built out further.
With the help of the Riksdag's investigation service, we have on our part prepared a basis for what the defense industry looks like in other countries. As the Minister of Defence is well aware, it differs very much in that regard. Several of our neighboring countries have a defense industry strategy, even if it might be called something slightly different or have different focuses. There is still a strategy, and it shows the connection between civil society and the military industry as well as the goal of civil activity.
We have also had this in Sweden historically, which the Minister for Defence probably also knows well. There are good examples of how it has been possible to use that which has primarily been destined for the military side in the civil part as well.
I am very interested in what the Minister for Defence says. Could one loosen the reins a little bit regarding what the strategy will contain and what it will look like? I understand that one cannot anticipate it because work is ongoing and there is a preparatory phase. We will, of course, be given access to it, not least when this part is subsequently to be reported.
I also have some good examples from our neighboring countries where such a strategy has been introduced. There, they have pointed out somewhat different areas. But I intend to first let the Minister for Defence tell us something about what the strategy can contain.
Försvarsministern Pål Jonson (M)
Madam Speaker! I thank Johan Andersson for an important interpellation. It is true that Sweden does not have a defense industry strategy and has not had one for many decades. I consider that to be a deficiency. Many other countries have developed defense industry strategies, and many of these issues have been strongly influenced by the war in Ukraine. Let me therefore first address the international narrative.
A few years ago, we had an extensive discussion linked to the European defense industrial base. At that time, people spoke about the major problems with overproduction, duplication, and fragmentation. I dare say that these are no longer relevant problems for Europe. The major problems we have now are long lead times in production and, in part, an increasing price structure. We get, if Madam Speaker will excuse the expression, less bang for the buck. This will, of course, characterize the defense industry strategy.
Another dimension of this shows how important it is to be able to have security of supply not only in peace but also in crisis and war. The defense industry strategy will also focus on that. The war in Ukraine is largely a war of attrition. In that case, industrial production capacity becomes much more important and more central than it has been perceived previously.
There are, therefore, several parts to this. That is why a strong defense industry - a strong defense industry also in Sweden - is a part of our collective defense capability. I want to set that narrative.
Another aspect is how the state sets requirements in its procurements in both peace, crisis, and war. We need to have production capacity in that regard. There is also significant potential for development there.
In my response to the interpellation, I touched upon the fact that we have revised the principles that have existed for material supply previously and which were presented in 2009 in a completely different era. They were based on the idea that one should first and foremost repair and upgrade the material that exists and, in second place, purchase new material together with others. In third place, one should independently develop material. It was an entirely too doctrinal stance, which only dealt with chasing costs. Now we must achieve a much better security of supply.
Now we are revising these principles. It was high time to do so. We also need to have a market that is not only driven by price but also promotes innovation. Therefore, it must be ensured that there is a strong correlation between the development of the defense industry strategy and what is called the defense innovation strategy, which we presented half a year ago. It is about how we can get a market that delivers world-class products and how we can get good interaction between all actors to achieve a high degree of innovation within the defense industry.
We have a high degree of innovation, but to make it even better, the Armed Forces must also develop its capability and define what is usually called the military problem. It is problems that drive innovation. That is why the Ukrainians are very good at innovation; they have a long line of major problems to handle.
Madam Speaker! Above all, this is about close cooperation between the suppliers, FMV and the Armed Forces to get started on a cost-effective, good and innovative ecosystem.
Johan Andersson (S)
Madam Speaker! I thank the Minister for the description, also of what the content of the upcoming defense industry strategy may be.
When it comes to the strategy, I have two additional questions linked to the work currently underway. One concerns the anchoring phase. It is, of course, very important that acceptance is gained in civil society. As we have said today, we have a number of municipalities with large employers operating within the defense industry. They certainly also want to be part of at least some form of discussion. We also have employer organizations, technical organizations, and others. I wonder if the Minister would like to tell us a little bit about how he and the department intend for the anchoring phase to look and how this is then to be accepted.
My second question also lies within this area and concerns the ownership conditions, which are interesting. We Social Democrats have, from our side, moved slightly from our previous position and now favor a greater state interest in our companies. Today, it looks very mixed, as the Minister is well aware. In a Nordic context, the ownership conditions look completely different. In other Nordic countries, one has a state influence in a completely different way, and the purpose is to secure long-term stability. With the societal picture we have now and the picture we have around us in general, it is perhaps extra important to discuss that part.
My first question, therefore, concerns the anchoring phase and how the continued work with the strategy shall be handled. My second question concerns the ownership conditions. Here, it can naturally look different, but what is the picture? Today, it is, in many respects, a number of actors that dominate.
Försvarsministern Pål Jonson (M)
Madam Speaker! The anchoring process is important in order to truly achieve the goal, just as Johan Andersson says. We have worked on anchoring the strategy. For what we call strategic dialogue, we invite a number of defense companies, FMV, FOI, the Armed Forces, Vinnova, and Tillväxtverket. We had such a meeting at the department about two weeks ago. I will have one additional such dialogue meeting to get in all actors' perspectives on this issue, which concerns security of supply, procurement, technology, and innovation. One meeting has thus been conducted, and another such meeting will be conducted within a couple of weeks so that we can get everyone's perspectives. I think this is important, because it gives agencies and actors the opportunity to influence a document that will shape them.
I try to be broad and accessible. A few months ago, I met the department within IF Metall that works with the defense industry. I think they do an important job. I visit defense companies quite often to get their perspective. It is part of the anchoring process linked to various actors in this area.
I have also invited the parties in the Riksdag to a meeting in a few weeks. I want to engage in a dialogue with them regarding the form and the expectations concerning the defense industry strategy. There are slightly different ways to do this. It can occur through a letter, a government bill, or a presentation. Ultimately, it will of course be the government's strategy, but if we can find a way to get the Riksdag to provide its perspective and feel that it can influence the strategy, I appreciate that. These types of anchoring opportunities are important for producing a better strategy.
Johan Andersson (S)
Madam Speaker! I thank the Minister for the answer. The Minister did not, however, answer the question I had regarding the ownership conditions and other matters, but he will be given the opportunity to do so in his next contribution.
I have another question. It is a bit outside [the main topic] but in this county. The question concerns the work with K-companies, which we had previously. Not least given how the threat situation and other things look, we really need to review how this should be formulated for the future. We have lived in the golden peace for a number of years now in Sweden, and hopefully, we will continue to do so in the future. But very many things have happened in our world around us. We are vulnerable in many ways, which the Minister for Defence is well aware of.
What do we do to build up that part? The K-companies were a way to handle this. One had a specific role linked to future development and other things. I am very interested in the Minister for Defence's view on that work. I also naturally want to hear the Minister for Defence's reasoning regarding ownership conditions and other matters.
Försvarsministern Pål Jonson (M)
Madam Speaker! I regret that I missed the question regarding ownership conditions.
The Swedish defense industry has, over time, managed the transition very well. Naturally, there is a legacy from the Cold War that was based on neutrality in war and non-alignment. But the transition that was made after the end of the Cold War was actually successful. It was carried out, not least by Björn von Sydow when he was Minister of Defence in the late 90s.
Björn von Sydow made three important reforms. Firstly, he urged the defense companies to enter the international market. Instead of 80 percent national and 20 percent international, the ratio was reversed. Secondly, the entire defense industry was privatized during that time. The last thing that was done was the privatization of Celsius. I believe that reform was successful. Thirdly, it was opened up for foreign ownership in the Swedish defense industry. That was probably important for many defense companies, as they gained access to global supply chains and sometimes also better market access. Those reforms were important.
One can have different views on ownership conditions. Some countries use what is called a golden share, which means up to 8 or 9 percent in foreign ventures. The companies can also be entirely privately owned, as the American companies are. I am open to arguments regarding this. What needs to be thought through is the issue of control and, naturally, how we ensure that these companies, which are extremely important for Swedish security, are not affected by foreign acquisition. There are requirements from ISP. There must be a Swedish CEO, and one must have a manufacturing license. Certain parts must also have a Swedish board.
Madam Speaker! I apologize and ask to be allowed to return at a later time to elaborate on the reasoning regarding K-companies, as they are just as important to discuss. I thank Johan Andersson for an important debate.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.