Germany and Finland Innovative Defence Solutions for a Stronger NATO

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Germany and Finland are deepening their defence cooperation by combining technological innovation, dual use expertise and industrial capabilities to strengthen NATO's readiness and Europe's security.

Germany and Finland are intensifying their cooperation in the security and defence sector. The aim is to combine technological expertise in order to rapidly develop innovative defence solutions that will also benefit NATO. Finland contributes, among other things, its expertise in the field of dual use technologies. The country has several rapidly growing ecosystems that combine a wide range of capabilities and offer all the advantages required to bring first class European products to market in a customer focused manner.

They are as realistic as the real world and are modernising training in aviation and defence: with the virtual and mixed reality solutions developed by Varjo Technologies Oy in Helsinki (Finland), customers can train their personnel in highly realistic simulation scenarios. According to the company, the technology is already being used in more than 120 defence programmes worldwide. The Finnish company is now also working with the German defence group Rheinmetall. The aim is to integrate Varjo technology into Rheinmetall's simulators for land forces in order to expand training opportunities throughout Europe and within NATO.

As part of the partnership, Varjo will equip Rheinmetall's modular driving and weapons simulation systems with headsets and software from the Varjo XR-4 series. “By combining Rheinmetall's high fidelity simulators with our XR technology, armed forces can train with a speed, mobility and realism that meet today's operational requirements,” explains Valentin Storz, Chief Revenue Officer at Varjo. Bartek Panasewicz, VP Training Systems Land at Rheinmetall Electronics, adds: “Mixed reality gives us the flexibility to train large numbers of soldiers wherever they are needed without compromising quality or realism. We look forward to working with Varjo to accelerate NATO's defence readiness.”

Finnish German cooperation aims to strengthen NATO

Following Finland's accession to NATO in 2023 in response to Russia's war of aggression and the associated abandonment of its military non alignment policy, the Nordic country and Germany are intensifying their security cooperation. Both countries support closer networking within NATO, particularly in Northern Europe. Key topics include the protection of critical infrastructure, security in the Baltic Sea region and the exchange of information on comprehensive defence strategies.

For Germany and Europe, Finland serves as a strategic role model in defence policy through its model of comprehensive security and crisis prevention. “Finland's comprehensive security approach is based on the understanding that resilience is a responsibility shared by society as a whole,” says Kai Sauer, Finland's Ambassador to Germany. This means that ministries, the military, the private sector and civil society work hand in hand to maintain vital societal functions such as security, functioning infrastructure and the economy, even in times of war. “As close partners within NATO and the European Union, Finland and Germany have an excellent opportunity to combine this experience with technological innovation and industrial expertise in order to strengthen Europe's security and crisis preparedness,” explains Sauer.

Kirsi Kokko, Head of Defense and Digital Resilience at Business Finland, adds: “Together with partners such as Germany, we want to develop strong European defence solutions and expand bilateral cooperation. The war in Ukraine and the current geopolitical situation have shown that we must increase efficiency and sovereignty within the European Union's defence sector and develop innovative defence solutions more quickly.”

Dual use: How civilian innovations benefit the defence industry

One element of Finland's strategic defence concept is the use of so called dual use technologies. An alternative term is new defence. These are products primarily developed for civilian use that can also be used for military purposes. Alongside Varjo, many other Finnish companies are pioneers in this field. One example is the aerospace company ICEYE, which owns and operates the world's largest commercial constellation of radar satellites based on synthetic aperture radar technology. These satellites produce high resolution images of the Earth's surface. In the civilian sector, the data is primarily used for Earth observation and disaster management, while in the military sector it is used for reconnaissance purposes. Together with Rheinmetall, ICEYE has established the joint venture Rheinmetall ICEYE Space Solutions to expand satellite based reconnaissance capabilities for Germany. “Innovation cycles in the civilian sector are significantly faster. Evidence of this is that many traditional companies have established stronger cooperation with SMEs and start ups,” explains Kokko.

A well known start up is NestAI Oy. The Finnish technology company integrates artificial intelligence into unmanned vehicles, autonomous systems and command and control platforms. NestAI works closely with Nokia and the Finnish Defence Forces to develop AI enabled defence technologies. In November 2025, NestAI also secured more than €100 million (approx. 115 million USD)in investment capital to expand Europe's leading physical AI laboratory.

Deep tech regions offer numerous advantages for investors

Across Finland, companies and experts are using their existing expertise to develop a wide range of defence technologies. Organised regionally in clusters, these stakeholders are increasingly intensifying their cooperation both in research and in transferring civilian technological innovations into operational use by the Finnish Defence Forces. A common characteristic of these regional centres is that they conduct cutting edge research through technology and innovation hubs and host renowned universities as well as robust start up ecosystems. Highly skilled labour, excellent logistics connections and outstanding digital infrastructure provide additional advantages that attract investors from Germany.

Examples of such clusters include the DEFINE Accelerator (Defence Innovation Network Finland), located in the Finnish garrison town of Riihimäki (Finland). This three month accelerator programme focuses on scaling start ups in the defence and security sector as well as dual use innovations in fields such as artificial intelligence and autonomous systems.

Another important programme that stands out in this context is the NATO DIANA Accelerator (Defence Innovation Accelerator for the North Atlantic) in Espoo (Finland), operated by organisations such as the VTT Technical Research Centre of Finland, Aalto University and the University of Helsinki as part of the NATO DIANA network. It supports deep tech start ups, particularly those working on future communications systems and quantum technologies. Also noteworthy is the Oulu 6G Test Centre. This official NATO DIANA test centre, operated by the University of Oulu and VTT, provides state of the art laboratory and field networks in Northern Finland. It enables companies to validate communications and dual use technologies for international defence markets.

Other important clusters include Central Finland, with a focus on the city of Jyväskylä (Finland), which serves as a key centre of expertise for the convergence of cyber security and health technology. Another example is the Pirkanmaa cluster in Southern Finland, a highly specialised ecosystem where companies such as Saab benefit from local expertise in digital technologies and mechanical manufacturing.

Public programmes support the growth of Finnish defence companies

The Finnish defence sector is also supported through public programmes. Within the framework of the European Defence Fund (EDF), which finances defence research and development projects through international cooperation, Business Finland provides national co financing for defence projects that receive funding from the European Regional Development Fund (ERDF). Countries such as Germany can also benefit from Finnish initiatives such as the Defence and Digital Resilience programme (€120 million, approx. 137 million USD, running from 2024 to 2028), which promotes and expands international partnerships.

According to a recent study by PIA, the umbrella organisation representing Finnish companies from the defence, aerospace and security sectors and helping them make effective use of European programmes, investments in research, development and innovation remained at a high level, accounting for 15 per cent of member companies' turnover. PIA member companies made substantial investments in innovation, new technologies, expertise and production capacity, supporting the industry's long term growth and competitiveness. “This creates strong business opportunities for German companies. If Germany wants to be among the frontrunners, it will benefit from cooperation with Finnish companies and research institutions,” says Kokko.

Further information: www.businessfinland.com