Finland national security and defense economy

Discussions regarding Finnish national security have increasingly linked military capability to economic resilience and regional vitality. In Eastern Finland, the closure of the eastern border has negatively impacted local service and tourism sectors, leading to concerns that maintaining economically viable inhabited regions is a critical security component.

While the defense industry has become a major economic driver in regions like Häme, concerns have emerged regarding the domestic benefits of increased spending. A report by the Finnish Industrial Union indicates that approximately 75% of defense procurement funds leave the country, with domestic employment and production remaining largely stagnant despite rising expenditures. Policymakers have called for increasing domestic content in procurements to ensure supply security and support national economic growth.

Building on these concerns, Niina Malm, Vice Chair of the Social Democratic Party (SDP), has urged Finland to maximize the domestic economic benefits of its increasing defense expenditures. As the country prepares to invest unprecedented billions, Malm argues the focus must shift toward how funds are allocated to support Finnish jobs, innovation, industry, and exports. The SDP has committed to raising defense spending to 3.5 percent of GDP, in line with NATO targets. Malm suggests that by leveraging national security and security of supply requirements, the government can direct more procurement, production, and maintenance toward domestic companies. She further noted that strengthening procurement expertise and utilizing EU regulatory openings could help Finnish businesses secure a larger share of European rearmament orders.