While the Golob government fantasises about “climate solutions” for defence, and while Slovenia is increasingly criticised by the USA for its underfunded defence budget, there is much more appetite for serious investment in this area in countries directly exposed to the Russian threat. One such country is Estonia, where the Russian threat is also seen as an opportunity for high-tech start-ups to flourish and penetrate abroad. In January, Prime Minister Kristen Michal pledged to spend five percent of the country’s GDP on defence.
While Robert Golob‘s government is looking for ways to double cross the European Union and take advantage of the dedicated EU funding for defence capacity building (Golob has “climate solutions” for defence), in Estonia, they are thinking about how to use the arms race to give an extra boost to domestic companies, especially start-ups. The new US administration of Donald Trump has recently increased the pressure on the Slovenian government to step up its defence investments.
Estonia is developing its own military industry
Estonia’s fast-growing technology sector is becoming a key player in the European defence sector. Kusti Salm, a former senior defence ministry official, warns that in the event of a Russian invasion, key infrastructures in the region (power plants, airports, railways) would be the first targets of attack. As Europe is not sufficiently prepared for such a scenario, Estonia is working to strengthen its defences and develop its own military industry, reports The Edge Singapore.
The Estonian government has doubled the defence budget since 2022 – 5 percent of GDP for defence!
Salm left the government because of an under-ambitious defence policy and went on to co-found Frankenburg Technologies, a start-up developing affordable air defence missile systems. This project is part of a broader transformation of the Estonian defence industry: the government has doubled the defence budget since 2022 (in January, Prime Minister Kristen Michal pledged to spend 5 percent of the country’s GDP on defence), announced a new explosives factory, introduced a defence tax, announced the purchase of long-range missiles, and set up a 100-million-euro fund to invest in defence start-ups.
Self-driving armoured vehicles, electronic warfare systems and underwater drones
Meanwhile, Europe is increasing its defence spending, creating opportunities for technological innovation. Estonian start-ups are already developing self-driving armoured vehicles, electronic warfare systems and underwater drones, attracting domestic and foreign investors (the most successful player in the European defence technology sector, the German start-up Helsing, recently opened an office in Estonia).
The company Milrem Robotics, for example, is supplying Ukraine with drones (drones are currently being used by the Ukrainian armed forces to transport ammunition and evacuate wounded soldiers). Europe needs to develop low-cost and massively available defence solutions, as traditional systems are becoming too expensive and are not available quickly enough. Salm wants to build cheap, lightweight missiles that can fly three times faster than drones and can be produced in millions. He plans to test them in Ukraine this year.
The war in Ukraine is both a warning and an opportunity
Estonia sees the war in Ukraine as both a warning and an opportunity. While European countries are increasing their defence budgets, Estonian entrepreneurs are trying to penetrate the wider European market. Ukraine has become the main export destination for the Estonian defence industry.
Domen Mezeg
