Investing in Defense Tech Is Necessary

Source: Stenbock House

At the opening of the annual conference on technology, entrepreneurship, and innovation on May 24 Prime Minister Kaja Kallas (Reform) said that it is important to seize the opportunity to invest in defense technology because it will strengthen security and boost the economy.

In her speech, opening the debate on the link between security and successful business, she emphasized that

“The changed security situation in Europe has clearly shown the need for increased investment in defense and has also highlighted the current bottlenecks in the defense sector.”

Kallas said that procurement and production processes in the defense industry are obsolete in their current form because they cannot adapt quickly enough to changes and real needs on the battlefields in Ukraine.

“We are seeing how readily available technologies can prove fatal for military equipment costing millions. Cheap drones carrying warheads can deplete the reserves of even the more sophisticated defense systems,” she went on. “However, for defense companies to be able to create new solutions, they need the money and the infrastructure to do so.”

As a positive example, Kallas highlighted the recent decision of the Estonian government to create a defense industry fund with an initial size of €50 million. She said it is important that the new fund will allow investments in purely defense tech alongside dual-use technologies.

Moreover, she confirmed that the government will develop a national defense industrial park and review legislation to support the production of arms and ammunition.

According to the prime minister, the security environment in Europe is not going to change in the near future, which is why countries need to make long-term investments in defense.

“Europe must allocate billions of euros to strengthen its defenses,” she said. “We continue to call on all European partners and the European Commission to find more robust and direct ways to finance defense investments.”

After her speech, Kallas participated in a panel alongside Markus Villig, co-founder and CEO of Bolt, and Gundbert Scherf, co-founder and CEO of a defense technology company. The discussion was moderated by Kadri Tammai, the head of the Tehnopol Startup Incubator.

Latitude59 is Estonia’s largest conference dedicated to technology, entrepreneurship, and innovation.

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