Finland’s new defence‑innovation playbook

Finland has quietly done something bold. On 20 February 2026, the Finnish Defence Forces (FDF) announced that it had initiated coordinated innovation activities and would stand up a dedicated Innovation Unit under the Finnish Defence Research Agency (FDRA) to speed ideas from the field into capability, without dismantling long‑horizon planning and procurement. In a European defence market that often equates rigour with inertia, Finland is aiming to keep both.

At one level, this is administrative plumbing. At another, it is a strategic bet that agility can be institutionalised: identifying internal problem statements, triaging ideas, validating them in test centres, and pushing good solutions into units, rapidly, while long‑cycle projects continue through orthodox gates. The FDF describes the Innovation Unit as a practical coordinator and single front door for domestic and international partners; FDRA’s own page notes the unit began operating at the start of 2026 and is expected to be fully operational by summer 2026.

That shift has market consequences, especially across the Nordics. Below, I argue Finland’s model is poised to reshape supplier behaviour, tighten cross‑border procurement, and redefine dual‑use pathways, with spillovers for Denmark, Norway and Sweden. And I anchor the analysis in three specifics: (1) the governance of innovation (FDF/FDRA), (2) the test‑and‑scale infrastructure (NATO DIANA, domestic ecosystems), and (3) the demand signal (budget authorities, Nordic frameworks, and real procurements).

Governance

The FDF press release is explicit: traditional capability development processes remain, but they are now complemented by an innovation stream designed to “identify, evaluate, develop, build, and implement” solutions against both identified and unidentified needs. That is a subtle but vital commitment to needs discovery, not just requirements compliance.

FDRA becomes the logical centre of gravity. Its five research divisions (Concepts & Doctrine; Energetic & CBRN; Information Technology; Weapons Technology; Human Performance) already cover the cognitive and technical terrain needed to scout, assess, and field innovations in northern operating conditions, think cold weather effects on energetics, spectrum‑contested C2, and human performance in sub‑arctic environments. The FDRA page also formalises the Innovation Unit’s placement and timeline.

If you want a single slide that captures the institutional intent, it’s the one FDF Chief of Research Jouni Koivistopresented at Aalto University’s Dual‑use Technology Forum (26 Feb 2026): innovation procurement differs from traditional procurement on object, goal, approach, risk model and supplier relationship, shifting from rigid specs and price‑only competition to functional outcomes, staged risk, and collaborative supplier dialogue. That is not ideology; it is operational logic in a fast‑learning battlespace.

Why this matters for industry: A defence customer that promises faster triage and TEVV (test, evaluation, verification and validation) access changes how SMEs and primes allocate bids and engineering hours. Expect more prototype‑to‑pilot offers, more outcome‑based pitches, and tighter consortia that pair deep‑tech labs with integrators.

Finland’s TEVV “backbone” is now NATO‑scale

You cannot accelerate innovation without places to test, securely, repeatedly, and with end‑user feedback. Here, NATO DIANA is pivotal. Finland will operate a DIANA accelerator (at VTT’s Dual‑Use LaunchPad in the Helsinki region) and two test centres: a 6G test centre in Oulu and a Secure Connectivity, Space and Quantum site in Espoo/Otaniemi. The programme offers selected firms €100k Phase‑1 funding, mentoring, and access to ~180 test centres Alliance‑wide.

This is not just a badge. The Ministry of Defence has put political weight behind DIANA (see Minister Antti Häkkänen’s opening speech in January 2026), explicitly tying it to speed‑to‑field and NATO interoperability. For companies, DIANA’s Rapid Adoption Service promises practical routes into the NATO enterprise, while FDRA and the new Innovation Unit provide the domestic demand‑side handshake.

Around this backbone, regional ecosystems are pivoting to dual‑use: Turku’s new Security & Dual‑Use cluster launched in January 2026; Tampere is building a project to pull SMEs into defence and dual‑use value chains; and Sitra’s nationwide DEFINE network is expanding to six cities to drive jobs and exports in defence innovation. These are not press‑release niceties: they are deal flow pipes for the Innovation Unit.

Why this matters for industry: Finland is aligning accelerators, testbeds, and the end user. If you can survive DIANA’s TEVV and answer FDRA’s problem statements, you can get to pilots faster, in Finland and across NATO.

Budgets, Frameworks and Contracts

• Budget authorities: The Ministry of Defence’s 2026 proposal totals €6.3bn (≈2.5% of GDP) and front‑loads Army modernisation. Two new procurement authorities (€4bn for materiel; €2bn for joint weapons systems) allow contracts in 2026 with payments scheduled mainly for 2029–2036, precisely the window where today’s prototypes could scale.
• Security of supply and real orders: The FDF Logistics Command’s multi‑year TNT contract with Forcit (EUR 189m, 2028–37) is a textbook case: sovereign production, clear industrial policy signal, and a domestic line of effort that can be innovation‑enriched (automation, safety, energetics).
• C4I and optronics frameworks (FISE): Finland and Sweden have created procurement implementing arrangements, now joined by Norway and Denmark, covering ground surveillance sensors (Bertin Exensor) and cognitive HF radios (KNL/Telenor Maritime Oy). This is Nordic standardisation by stealth and a magnet for suppliers who can slot into shared roadmaps.
• Pipeline visibility: From EO/IR sensors for NH90s (RFI) to UAS joint procurement across the Nordics, the near‑term market is populated with concrete buys. Add Finland’s DIANA test infrastructure and Business Finland’s national co‑funding for EU EDF projects (lifting total public support up to 90% of costs in some cases), and you have a healthy gradient from concept to contract.

Why this matters for industry: There is money, there are frameworks, and there is an operational buyer signalling willingness to adopt early where risks are managed. That combination is rare.

The Nordic comparative

• Finland is building a soldier‑needs‑first, FDRA‑centred model with DIANA as an external force multiplier and national programmes (e.g., Business Finland’s Defence & Digital Resilience, 2024–2028, €120m) as the dual‑use bridge. The approach leverages sovereign supply deals (e.g., explosives), Nordic frameworks (FISE), and a public narrative that frames innovation procurement as a new industrial pillar, as Koivisto argued at Aalto.
• Norway leans on FFI (Defence Research Establishment) to advise on “Triaxial collaboration” (government–industry–research), with explicit work on tools that accelerate need‑ and opportunity‑driven innovation, and industrial strategy to win market access in the EU/US. Think policy‑heavy, evidence‑led optimisation of incentives and procurement strategies.
• Denmark is sharpening R&D investment and operational experimentation (e.g., drone concepts tested with troops in NATO deployments) and is acting as a procurement hub in some NORDEFCO UAS work strands. It pairs this with a strong innovation finance push (EIFO and venture) and academic pipelines. (See also the regional cluster activity similar to Turku/Tampere on the Finnish side.).
• Sweden continues to industrialise through FMV and primes (BAE Systems Bofors, Saab, etc.) and is tightening framework collaboration with Finland (FISE C4I/optronics), while sustaining its export‑backed innovation model, now with added urgency post‑NATO accession.

All four countries are converging on faster learning loops and cross‑border procurement. Finland’s distinctive twist is to place a new Innovation Unit inside an already mission‑diverse FDRA, and to wire it to DIANA and regional ecosystems that can furnish a steady stream of dual‑use candidates.

Opportunities

1. C2/communications and spectrum resilience. Finland’s cognitive HF framework (KNL) and FISE C4I arrangements are a signal: multi‑path resilient comms with long‑range HF, LPI/LPD mesh, and cross‑domain data flows are in demand. Suppliers who can prove TEVV performance in northern ionospheric conditions stand to win.
2. Sensing stacks and counter‑UAS. Nordic joint UAS procurement creates demand for sensors, fusion, and autonomy; Finland’s FDRA Weapons Tech and IT divisions give evaluation depth for hyperspectral, LIDAR, EW/cyber integration.
3. Dual‑use data and autonomy. DIANA’s 2026 themes (energy/power, advanced comms, contested EM spectrum, autonomy, data‑assisted decision‑making) align perfectly with Finnish strengths (6G, quantum, space). Firms that can traverse DIANA → FDRA trials → FDF pilots will convert faster.
4. Security of supply. Explosives and munitions (Forcit TNT), micro‑UAVs, and ammunition authorities are proof that Finland will buy sovereign where it counts. Localisation strategies (assembly, lifecycle MRO, digital sustainment) will beat glossy slideware.

Frictions

• IP and export controls. A DIANA‑plus‑EDF pathway is powerful but demands tight ITAR/EU control hygiene. Business Finland’s EDF co‑funding reduces cost of capital but raises compliance bar (security of info/IPR under EU control).
• Speed vs. safety. The Innovation Unit’s promise hinges on TEVV throughput; bottlenecks at classified ranges or scarcity of uniformed evaluators would slow adoption. (DIANA test‑centre access helps, if suppliers plan for it early.)
• SME onboarding. Functional specs and staged procurement de‑risk early phases, but SMEs must still bridge cashflow to production. Expect consortia with primes to become the default, especially on Nordic frameworks.

A word on Jouni Koivisto’s role

The FDF has put a senior uniformed researcher, Jouni Koivisto, Chief of Research, on the public circuit to explain and shape this shift (Aalto’s Dual‑use forum; regional cluster events like Business Turku). That matters: when the requirements community owns the innovation narrative, pilots reach troops. Koivisto’s Aalto deck frames innovation procurement as a structural complement to capability development, one that privileges soldier requirements, test‑and‑learn, and networked ecosystems.

What to watch next (Q2–Q4 2026)

• Innovation Unit FOC. FDRA says full operational capability by summer 2026. Watch for the first pilot‑to‑unit transfers and how they’re contracted (e.g., PPI/PCP hybrids).
• Early DIANA cohorts. Track how many Finnish firms enter DIANA’s 2026 accelerator and which test centres they utilise (Oulu 6G; Espoo secure connectivity/quantum).
• Nordic UAS frameworks. Ram‑ups from technical arrangements to call‑offs will show how quickly the FISE‑style model can push joint buys to units.
• Army modernisation tenders. The MoD’s authorities imply a wave of RFIs/RFQs. The NH90 EO/IR RFI is a template for how FDFLOGCOM will structure discovery with industry.

Finland is not chasing buzzwords. It is normalising urgency: a doctrinally literate, northern‑conditions‑aware innovation system that uses NATO infrastructure and Nordic procurement to shorten the distance between insight and effect. If it works, Finland will have created a repeatable path from problem statements to pilots to production, built on a compact between FDRA scientists, soldiers, and industry. That is good for Finland and for a Nordic region that is discovering the benefits of shared frameworks and shared test ranges.

For suppliers, the advice is plain: bring outcomes, bring TEVV plans, bring partners and expect to move faster.

References

• Business Finland. (2025, November 3). Defense and Digital Resilience Program (2024–2028).https://www.businessfinland.fi/en/services/Programs-and-ecosystems/Programs/defense-digital-resilience/[businessfinland.fi]
• Business Finland. (n.d.). European Defense Fund National Co‑Funding.https://www.businessfinland.fi/en/services/funding/funding-services/european-defense-fund-national-co-funding/ [businessfinland.fi]
• Defence Industry Europe. (2025, September 10). Finland signs €189 million TNT deal with Forcit to secure defence supply and boost Pori jobs. https://defence-industry.eu/finland-signs-e189-million-tnt-deal-with-forcit-to-secure-defence-supply-and-boost-pori-jobs/ [defence-industry.eu]
• DIANA (NATO). (n.d.). Test centres. https://www.diana.nato.int/test-centres.html [diana.nato.int]
• DIANA (NATO). (2025, October 29). Spotlight on VTT Dual‑Use LaunchPad: Supporting innovation in the fields of 5G/6G, quantum and space. https://www.diana.nato.int/connect/spotlight-on-vtt-dualuse-launchpad-supporting-innovation-in-the-fields-of-5g6g–quantum-and-space.html [diana.nato.int]
• Finnish Defence Forces (FDF). (2026, February 20). The Finnish Defence Forces initiated coordinated innovation activities. https://puolustusvoimat.fi/en/-/the-finnish-defence-forces-initiated-coordinated-innovation-activities [puolustusvoimat.fi]
• Finnish Defence Forces (FDF). (2025, April 2). Nordic Defence Cooperation Deepens… New FISE Framework Agreements Signed. https://puolustusvoimat.fi/en/-/nordic-defence-cooperation-deepens-in-military-optronics-and-command-and-control-new-fise-framework-agreements-signed-for-ground-surveillance-sensors-and-cognitive-hf-radios [puolustusvoimat.fi]
• Finnish Defence Research Agency (FDRA). (n.d.). About us. https://puolustusvoimat.fi/en/about-us/finnish-defence-research-agency/ [puolustusvoimat.fi]
• Forsvarets forskningsinstitutt (FFI). (n.d.). Defence industry development and innovation capacity.https://www.ffi.no/en/research/defence-industry-development-and-innovation-capacity [ffi.no]
• Ministry of Defence of Finland. (2025, September 25). Finnish Defence Forces to launch army materiel procurement projects for 2030s. https://defmin.fi/en/-/finnish-defence-forces-to-launch-army-materiel-procurement-projects-for-2030s- [defmin.fi]
• Ministry of Defence of Finland. (2026, January 23). Minister of Defence Antti Häkkänen’s speech at the opening of Finland’s NATO DIANA Innovation Accelerator. https://defmin.fi/en/-/minister-of-defence-antti-hakkanen-s-speech-at-the-opening-of-finland-s-nato-diana-innovation-accelerator [defmin.fi]
• Public procurement (TED). (2025, September 18). RFI: EO/IR system for NH90 (612117‑2025).https://ted.europa.eu/en/notice/-/detail/612117-2025 [ted.europa.eu]
• Sitra. (2026, January 8). Defence innovation to drive growth and jobs in Finland – DEFINE expands nationwide.https://www.sitra.fi/en/news/defence-innovation-to-drive-growth-and-jobs-in-finland-define-expands-nationwide/ [sitra.fi]
• VTT Technical Research Centre of Finland. (2025, June 10). Finland’s NATO DIANA defence innovation accelerator kicks off in 2026 – companies can already apply. https://www.vttresearch.com/en/news-and-ideas/finlands-nato-diana-defence-innovation-accelerator-kicks-2026-companies-can-already [vttresearch.com]
• VTT Technical Research Centre of Finland. (n.d.). NATO DIANA in Finland.https://www.vttresearch.com/en/nato-diana-finland [vttresearch.com]
• Aalto University. (2026, January 14). Learn more about dual‑use products and technologies – course programme (incl. 26 Feb: Koivisto). https://www.aalto.fi/en/news/learn-more-about-dual-use-products-and-technologies-welcome-to-the-course-in-spring-2026 [aalto.fi]

Photo: Business Finland