Defence industry development and innovation capacity

How can national ambitions be realised?

Facts

Division

Innovation and Industrial Development

In the national strategy for the defence industry (White Paper) no. 9 (2015-2016), the Government describes objectives for how national security policy interests shall be safeguarded 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.

Facts

Division

Innovation and Industrial Development

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 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

I forhold til forsvarsrelatert omsetning er den største verdimessige nedgangen knyttet tilomsetning fra salg til utenlandske kunder. Denne nedgangen skyldes primært de størstevirksomhetene, og settes det i sammenheng med eksporttallene er det en indikasjon på atnedgangen i omsetning er noe større i utenlandske datterselskaper.Årets hovedtall viser også en markant nedgang for de minste virksomhetene. Settes dette isammenheng med nedgangen i det samlede driftsresultatet for forsvarsindustrien, kan det tyde påat de største virksomhetene er i ferd med å endre markedsfokuset til fordel for forsvarsmarkedet.
FFI-Report 2014

Forsvarsindustrien i Norge - statistikk 2013

This report presents statistics on the Norwegian defense industry in 2013. The statistics areselected economic indicators as revenues, man-labor years, export, research and development(R&D), sub-contracts and value added. In addition to the aggregated statistics, we also presentstatistics for business categories where this is relevant. This is the fifth year that FFI presents thedefense industry's annual business, and we discuss therefore the industry's development duringthis period. The report also describes the data sources and methods that form the basis for thestatistics.
FFI-Report 2013

Forsvarsindustrien i Norge : statistikk 2012

This report presents statistics on the Norwegian defense industry in 2012. The statistics areselected economic indicators as revenues, man-labor years, export, research and development(R&D), sub-contracts and value added. In addition to the aggregated statistics, we also presentstatistics for business categories where this is relevant. The report also describes the data sourcesand methods that form the basis for the statistics.
FFI-Report 2012

Forsvarsindustrien i Norge : statistikk 2011

Rapporten presenterer statistikk over forsvarsindustrien i Norge i 2011, og kommer som en årlig utgivelse fra FFI. Hensikten er å kartlegge virksomheten i forsvarsbedriftene og følge utviklingen over tid. Resultatene danner også et grunnlag for å gjøre mer omfattende studier av forsvars-industrien fremover.Den første delen av rapporten presenterer utvalgte nøkkeltall for størrelsen og driften av forsvars-industrien som helhet og for bedriftskategorier. Nøkkeltallene omfatter blant annet omsetning, årsverk, eksport, verdiskaping, forskning og utvikling (FoU) og innkjøpskostnader. For flere av disse tallene har vi også skilt mellom forsvarsrelatert og sivilt rettet virksomhet, samt utviklingen siden 2009. I tillegg presenterer vi noen resultater fra Forsvarets regnskap, for eksempel hvilke typer leveranser Forsvaret har fått fra bedriftene. Nytt i år er at rapporten også viser en kurve fra de største bedriftenes årsregnskap.Den andre delen av rapporten gir en beskrivelse av datakilder og metodevalg som ligger til grunn for statistikken. I denne delen opplyser vi også om frafall og usikkerhet i tallene.
FFI-Report 2011

Forsvarsindustrien i Norge : statistikk 2010

Denne rapporten presenterer statistikk over forsvarsindustrien i Norge i 2010. Hensikten er å skaffe bedre oversikt over virksomheten i forsvarsindustrien og danne et grunnlag for mer omfattende og detaljerte studier av forsvarsindustrien fremover.Rapporten presenterer utvalgte nøkkeltall for størrelsen og virksomheten i forsvarsindustrien som helhet og for bedriftskategorier. Nøkkeltallene omfatter omsetning, årsverk, verdiskaping, eksport, forskning og utvikling (FoU) og underleveranser. Videre fremstiller rapporten forholdet mellom forsvarsrelatert og sivilt rettet virksomhet på flere av disse områdene. I tillegg blir det presentert hvordan forsvarsbedriftene har utviklet seg på disse områdene siden 2009. Det blir også redegjort for bruk av datakilder og metodevalg som ligger til grunn for statistikken.
FFI-Report 2011

Forsvarsindustrien i Norge - statistikk 2009

This report presents statistics for the defense industry in Norway in 2009. The purpose of the study is to present a better overview of the activity in the Norwegian defence sector and to create a basis for more comprehensive and detailed analysis of the defence industry in the future.The report presents selected key figures for the size and activity of the defense industry as a whole and sorted by business categories. Key figures include revenues, man-labor year, value added, export, R&D and the relationship between civilian and military activity. Use of data sources and the methods chosen as the basis for the statistics will also be accounted for.