TopTech shows the true potential of Estonian defence technology

Kalev Koidumäe

Head of the Estonian Defence and Aerospace Industry Association

This autumn the Estonian Defence and Aerospace Industry Association (EDIA) reached a significant milestone in its 15-year-history. Namely, in October the number of members in the industry cluster exceeded 150 for the first time. This year alone 28 companies have joined EDIA and next new member candidates are already knocking on our door, writes Kalev Koidumäe, head of EDIA.

The reason for such an interest in this sector is not difficult to guess. Due to the events unfolding not in Ukraine and the Middle East, but also in many other parts of the world, the defence industry sector is growing rapidly on both side of the frontier. Russia's senseless aggression is encouraging Estonian companies to keep searching for new and innovative solutions that would help Ukraine to win this war. Alliances and allies have more weight than ever. Collaboration between companies, sharing experiences, supporting each other and joint policy-making is vitally important especially now to ensure that the technology, developments and solutions of the Estonian defence industry help to defeat the enemy.

Members of the cluster have already established a strong presence in Ukraine. DefSecIntel Solutions, Milrem Robotics, Threod Systems and at least seven other Estonian companies in the TopTech ranking of Estonia's most valuable tech companies already offer solutions to help Ukraine win the war with Russia. While the victory remains an absolute priority, references to Ukraine are extremely important in order to ensure the breakthrough and success of Estonian companies in the global market in an increasingly competitive environment. The international success of the Estonian defence industry will also be the success of the Estonian economy.

Today, members of EDIA have already expanded to foreign markets and are held in high esteem thanks to their smart high-tech solutions. These solutions include different integrated software systems, unmanned mobile platforms, sensor and situational awareness solutions and smart observation platforms, while already making full use of AI technologies. Estonian companies are also developing different communication solutions, providing the Estonian Defence Forces with sustainable technical and weapons repair and maintenance services.

Also maritime companies belong to the EDIA membership. A case in point is Baltic Workboats, based on Saaremaa, which is leading an international consortium in the European Union Defence Fund project for the development of a multi-purpose unmanned reconnaissance and surveillance vessel. One must also mention aerospace companies that cooperate with the European Space Agency in developing various software solutions and providing remote monitoring services.

The war in Ukraine has shown us the demand for systems that develop electronic warfare, situational awareness with AI applications, unmanned platforms and anti-drone systems, and this demand is set to grow even more rapidly in the coming years. It is in these areas that the next Estonian success story may soon emerge. This story is already taking shape as we speak.

The ambition of EDIA is to grow into a regional centre of excellence for ground-breaking defence technologies. We hope that in the years to come, our defence ecosystem will also develop, both through legislation and the creation of a defence industry park, which will attract especially foreign investors.

Ingvar Pärnamäe, member of the supervisory board of EDIA, has said that Estonia should learn from Israel and South Korea and benefit from its geopolitical position in the development of its defence industry. By drawing innovation directly from the front lines, our goal should be to achieve that the revenue of the defence industry is in the same order of magnitude as Estonia's national defence costs. It’s possible. In 15 years, the revenue of EDIA members has grown to 350 million euros by 2023, of which more than 200 million euros came from exports. EDIA members are growing 30-40 percent per year, which is why the association has set a goal to reach 1 billion euros in the sector revenue by 2030, both in exports and domestic demand.