Defence industry development and innovation capacity

How can national ambitions be realised?

In the national strategy for the defence industry (White Paper) no. 9 (2015-2016), the Government describes objectives for safeguarding national security policy interests through maintaining and further developing an internationally competitive Norwegian defence industry. These are objectives that will now be further developed and operationalised in cooperation between the actors in the defence industry – known as Triaxial collaboration.

FFI provides knowledge-based advice to the Ministry of Defence in the work on further developing Norwegian defence industry policy. This work involves cooperating with key decision-makers in the sector, operational user environments in the Armed Forces, and maintaining good contact with various industry actors. It also entails extensive international cooperation in order to assert the Norwegian industry’s position in relation to international markets. 

We conduct analyses, prepare statistics and make assessments relating to development aspects for the Norwegian and international defence industry and defence markets. This is subsequently used as a basis for advising the Ministry on the continued development of Norwegian defence industry strategy – including regarding the use of various tools to secure market access and equal framework conditions for the Norwegian defence industry in the American and European defence markets. 

On assignment, FFI also conducts defence industry assessments and analyses as a basis for the Ministry of Defence’s choice of procurement strategy for development or purchases of new materiel. We shall contribute to enabling the Ministry to make well-founded and consistent choices on the use of suppliers. National security needs and considerations for national emergency preparedness capabilities are especially considered. 

In recent years, there has especially been a focus on strengthening the defence sector’s capacity to manage needs and opportunity-driven innovation – and being able to rapidly develop new solutions by also utilising commercially available technology. FFI published a report on the Triaxial collaboration model in autumn 2018, with recommendations for measures to be implemented in order to strengthen this model and innovation capacity.

In 2019, FFI then commenced its own work on innovation in the defence sector in order to enhance the understanding of how we can further develop innovation efforts in the defence sector.

Among other things, we wish to increase our competence on how incentives and other tools can increase the likelihood of more rapid development, commercialisation and implementation of new solutions and materiel. This will enable us to serve as better advisers, both for the Armed Forces and for the defence industry.

We are therefore collaborating with national and international innovation communities to map trends, identify development opportunities and learn from other strong innovation actors both within and outside the defence sector. The project will then aggregate the knowledge and experience that is gained in the various areas of research at the Division for Innovation and Industrial Development, and present recommendations on this basis.

Annual report: Norwegian defence industry

FFI produces an annual report that described the activities of the Norwegian defence industry. These reports serve as a barometer of the industry’s development and are found primarily in the report series Defence Industry in Norway, which has been produced since 2009, and where selected financial target figures are reviewed. 

The purpose is to provide information about the industry’s structural and financial development. The statistics are commissioned by the Ministry of Defence. In addition, the Norwegian Defence and Security Industries Association (FSi) supports the work of retrieving and processing the material.

Research reports and scientific articles

The titles may be in Norwegian, but you can read an English summary of the report if you click the read more link.

FFI-Report 2025

Forsvarsindustrien i Norge – statistikk for 2024

Vi har studert nøkkeltall for 2024 fra virksomheter i forsvarsindustrien i Norge. Industrien har samlet sett rapportert om videre vekst i forsvarsrelatert omsetning på 34 %. Både omsetningen til Forsvaret, til andre norske kunder og til utenlandske kunder steg. De fire største virksomhetene sto for 70 % av den samlede forsvarsrelaterte omsetningen. Omsetningen til utenlandske kunder økte med 34 % fra 2023 til 2024. Denne består av eksport og omsetning i utenlandske datterselskaper, som steg med henholdsvis 40 % og 27 %. Forsvarsrelatert forskning og utvikling (FoU) økte med 87 % fra 2023 til 2024. Både egenfinansiert FoU og FoU finansiert av andre bidro til veksten, med økning på henholdsvis 77 % og 92 %. Ordrereserven fortsatte å vokse og økte med 71 % i 2024. Den var mer enn 3 ganger så stor som den samlede forsvarsrelaterte omsetningen. Antall forsvarsrelaterte årsverk i virksomhetene var 42 % høyere enn ved forrige måling. Norske årsverk og årsverk i utenlandske datterselskap bidro omtrent like mye til økningen. Statistikken bygger på data fra 91 virksomheter, 21 flere enn for 2023.
FFI-Report 2024

Forsvarsindustrien i Norge – statistikk for 2023

We have studied key figures for 2023 from companies in Norway’s defence industry. The industry has collectively reported a 32% growth in defence-related revenue. Revenue from the Norwegian Armed Forces, other Norwegian customers, and foreign customers all increased. All sizes of enterprises reported growth.Revenue from foreign customers continued to rise, increasing by 30% in 2023 compared to 2022, up from 11% growth from 2021 to 2022. This revenue comes from two sources: exports and revenue from foreign subsidiaries, both contributing approximately equally to the increase.Total defence-related research and development (R&D) rose by 56% from 2022. The total R&D includes both internally funded R&D and R&D funded by others.The defence-related order backlog continued to rise, up 44% for 2023. The order backlog was 2.4 times the total defence-related revenue.The number of defence-related full-time equivalents (FTEs) in the companies was 11% higher than in our previous measurement. The increase was particularly driven by foreign subsidiaries, which saw a growth of 22%.The basis for this year’s statistics is reported figures from 70 companies, 17 fewer than in 2022.
FFI-Report 2023

Forsvarsindustrien i Norge – statistikk for 2022

We have studied key figures for 2022 in the defence industry in Norway. This industry reported a 13 % growth in defence-related revenue. The revenue from the Norwegian Armed Forces, the revenue from other Norwegian customers and the revenue from foreign customers all increased. All business sizes except micro-enterprises reported an increase in defence-related revenue.The increase in revenue from foreign customers is mainly due to increased export (+15 %). The revenue from foreign subsidiaries increased as well (+7 %).Research and development (R&D) decreased by 21 %. Both internally funded R&D and R&D funded by others declined.The defence-related order backlog increased by 39 %.The total number of defence-related full-time equivalents (FTE) increased by 4 %. The number of full-time equivalents in Norway (FTEs) increased by 8 %, while the number of foreign FTEs decreased by 4%.The statistics for 2022 are based on reported numbers from 87 enterprises, which is four fewer than last year.
FFI-Report 2022

Forsvarsindustrien i Norge – statistikk for 2021

The Norwegian defence industry reports a growth in defence-related revenue of 8 % from 2020 to 2021. The revenue from the Norwegian Armed Forces was unchanged, while the revenue from both other Norwegian customers and foreign customers increased. The large and medium-sized enterprises increased their turnover, while it fell at the small enterprises.The increase in revenue from foreign customers is mainly due to increase in foreign subsidiaries (17 %), while the export increased 1 %.The extent of research and development (R&D) decreased by 37 %. The change is mainly due to decrease in co-financed R&D.The total number of defence-related full-time equivalents (FTE) increased by 3 % from 2020 to 2021.The industry expect increased turnover, order backlog, innovation and need for STEM competence (science, technology, engineering, mathematics) for 2022.The basis for this year's statistics consists of 91 enterprises. The low response rate of 46 % is primarily due to the fact that more enterprises received the questionnaire than last year.
FFI-Report 2021

Forsvarsindustrien i Norge – statistikk 2020

The figures for 2020 show that the sample of Norwegian defence companies delivers approximately 17% of the Norwegian Armed Forces' total materiel investments.The defence industry in Norway reports a growth in defence-related revenue of 20% from 2019 to 2020. The revenue in the Norwegian market increased by 15%, while the revenue from foreign customers increased by 21%.The increase in revenue from foreign customers is due to both an increase in revenue in foreign subsidiaries (5%) and an increase in exports (45%). The scope of research and development (R&D) increased by 26% from 2019 to 2020. The change is due to increased co-financed R&D, while self-financed R&D is unchanged. Purchasing costs decreased by 14% from 2019 to 2020. This cost reduction can be attributed to a reduction in purchases from foreign suppliers (-26%). The total number of defence-related full-time equivalents (FTE) increased by 10% from 2019 to 2020. The development shows an increase every year in the total number of defence-related FTEs since 2013.
FFI-Report 2020

Forsvarsindustrien i Norge - statistikk 2019

The figures for 2019 show that Norwegian defence companies deliver approximately 16% of theNorwegian Armed Forces' total materiel investments. It is assumed that foreign suppliers, andthus the import share, account for the remaining 84%.2019 show a positive development in the revenue indicators. Defence-related revenueincreased by 10% from 2018 to 2019. In terms of NOK, the largest increase in revenue is fromforeign customers. Particularly the revenue in foreign subsidiaries of the large companies.The export figures show a decrease of 18% from 2018. However, seen in a historical light, theexport figures for 2019 are 4% higher than the average since 2010. In terms of NOK, the largestdecline is for the large companies, but these companies also had higher export figures than theaverage for the last ten years.Research and development (R&D) is unchanged (-1%). Apart from micro companies (with adecline of 66%), all other company categories have an increase in R&D.Purchasing costs had an increase from 2018 to 2019 of 56%. The increase is from bothNorwegian and foreign suppliers, but the increase is largest in relation to the foreign suppliers(80%). This increase in purchasing costs is also supported by a 91% increase in order backlogfrom 2018 to 2019.
FFI-Report 2019

Forsvarsindustrien i Norge – statistikk 2018

The figures for 2018 show a decline in the number of defence-related companies, from 116companies in 2017 to 104 companies in 2018. The decline is primarily related to the smallestcompanies.There are decreases in all of the indicators on defence-related revenue, with the exception offoreign subsidiaries. The decline is greatest in the Norwegian market, which indicates increasingcompetition in the domestic market for 2018 as well.Export figures show a decline of 8% compared to 2017. However, the figures for 2017 were atthe highest level since 2010, and seen in a historical light, the figures for 2018 are 32% higherthan the average since 2010. All business categories have increased in comparison to theaverage since 2010. The large companies have the most increase with exports that are 41%higher than the average since 2010.Research and development (R&D) is down 11% in 2018, with the category of self-funded R&Ddown 35%. This decline can be related to the smallest companies (46% decline) and mediumsizedcompanies (28% decline).The number of defence-related full-time equivalent (FTE) increases by 2%. The increase is dueto activities abroad, while the FTEs in Norway are declining.
FFI-Report 2018

Forsvarsindustrien i Norge - statistikk 2017

Main figures for the Norwegian defence industry 2017 Table 0.1Main figures for the Norwegian defence industry 2017. The total revenue figures show an increase from 2% to 5%. However, the increase is lower than the defence equipment expenditures of 2017. This indicates increased levels of competition for the Norwegian defence companies in the domestic market. There is a significant increase in exports (31% from 2016), which also increases the share of export in relations to total revenue (from 35% in 2016 to 44% in 2017). All the export categories increase, but dual-use shows the highest increase (43%). It should be noted that the small businesses have increased their exports with over 51%. Part of the growth can be explained by the fact that some materiel produced for stock in 2016 was exported in 2017. However, the increase is also a strong indicator of the industry's enhanced competitiveness in foreign markets. Research and development (R&D) was also significantly strengthened in 2017 with an increase of 31%. The category of co-financed R&D increases the most (by 42%). Within this category, the increase is also the highest among micro companies. Defence-related full-time equivalent (FTE) has an increase of 5%. The increase is due to activities abroad, while the FTEs in Norway are declining. There is a 20% increase in value creation since 2016. This is due to increase in both labour costs and operating results. In combination with a decline in cost of goods, the margin trend is also slightly positive.
FFI-Report 2017

Forsvarsindustrien i Norge – statistikk 2016

With the exception of "cost of goods" the overall figures shows an increase compared to 2015. Itshould be noted that it is a decline in "revenue from the Norwegian defence" by 5 percent. Onthe other hand, there is a 10 percent increase in "revenues from foreign customers." The latter isdue to increased export (increased by 18 percent).Overall, there is a slight increase in R & D, but there is a significant shift in funding from cofinancedR & D to self-financed R & D.It is assumed that these observations can be related to an "F-35 effect" where it is expectedincreased competition in the domestic market but also increased access to other markets. In thelong run it will be interesting to observe whether and how the industry compensates for areduced home market.
FFI-Report 2016

Forsvarsindustrien i Norge - statistikk 2015

With the exception of "research and development" the overall figures shows an increasecompared to 2014. It should be noted that it is a decline in "revenue from the Norwegiandefence" by 11 %. On the other hand, there is a 20 % increase in "revenues from foreigncustomers." The latter is due to increased sales in foreign subsidiaries.There is a decrease in "research and development" (R & D). The decrease relates to the cofinancedR & D. The decline appears to be a periodical adjustment relative to 2014, but reducesthe level of R & D to the lowest we have recorded since we started our investigations.It is assumed that these observations can be related to an "F-35 effect" where it is expectedincreased competition in the domestic market but also increased access to other markets. In thelong run it will be interesting to observe whether and how the industry compensates for areduced home market.
FFI-Report 2015

Forsvarsindustrien i Norge - statistikk 2014

In terms of defense-related revenue from foreign customers, the decline is primarily related to thelargest businesses. Further, seen in conjunction with the export numbers, this indicates that thedecline in revenues is marginally higher in foreign subsidiaries.This year's figures also show a marked decrease in all the principal figures for the smallestbusinesses. Seen in conjunction with a decrease in overall operating profits for the defenseindustry, this suggests that the largest companies are in the process of changing market focus infavor of the defense market.