Annex C: Finland

Finland's defence and security decisions are influenced by its geographic location (in the Baltic Sea and Arctic regions with a long border with Russia) and related geopolitical considerations, including its position as a neutral non-NATO state. The country has a historic policy of armed neutrality and participates in cooperation frameworks such as NATO's Partnership for Peace programme and NORDEFCO as well as other multilateral initiatives. In 2018, Finland spent €2.872 billion on defence, representing just over 1 per cent of the country's GDP. Finland is one of the largest importers of defence equipment in Europe. The majority of defence equipment is acquired through foreign procurements except for the land domain, where Patria is the dominant supplier and an active exporter. The defence industry is plays a major role in supplying and maintaining defence equipment and materiel. With the exception of Patria, the Finnish defence industry is primarily focused on the domestic market, with export efforts a recent and increasingly important development for the sector. Nearly all of Finland's defence, aerospace and security companies are SMEs under private ownership. In 2016, Finnish defence and security companies directly employed approximately 6,100 people and had an annual turnover of €1.4 billion, with 46 per cent of the turnover deriving from exports. The Finnish DTIB has a high level of expertise in electronics, software and information systems, even without the wider industrial capabilities needed to compete at the platform level (outside of Patria's success as a prime-contractor in the armoured vehicles market).