Saab: Defence offsets should build expertise, not just factories

When countries buy fighter aircraft, submarines or radar systems, they typically expect something in return.

For decades, that has often meant local production, industrial participation and new manufacturing facilities.

According to Fredrik Gustafson, Head of Business Development at Saab, that approach does not always create lasting value.

- Decision makers often want to see a factory, something tangible, but that is not necessarily the best thing long-term, Gustafson told Defence Nordic.

The problem, he argues, is that major defence procurements are often relatively small.

Building a production facility to manufacture a handful of systems may generate political goodwill, but once deliveries are complete, questions remain about what happens next.

- If you buy two, four, 12 or 50 systems and set up a production site, what do you do with the facilities afterwards? Gustafson asked rhetorically.

Instead, Saab increasingly focuses on technology transfer and capability building as part of its industrial cooperation efforts.

The Finnish example

Rather than creating facilities that may only be relevant for a single programme, the aim is to develop expertise that can support future industries and technologies.

- If we can identify technologies involved in a programme, we can transfer that knowledge and create capabilities together with universities and industry, Gustafson said.

One example is Finland.

Gustafson pointed to a research programme established with Finnish academia, including company-sponsored PhD positions, as part of a broader industrial cooperation effort. What began as a research initiative eventually helped create a lasting Saab presence in the country.

Today, the company employs around 250 people in Tampere working with sensor technologies.

- It's a really good success story, Gustafson said. 

- It's good for us, it's good for Finland and it's good for the users.

Triple helix

The approach underlines what Gustafson sees as one of the Nordic region's key advantages: close cooperation between government, industry and academia.

The model, often referred to as the "triple helix", has played a central role in the development of strategic industries across the region, from aerospace to telecommunications and defence.

- We have a mature way of working between academia, government and industry. Many other countries lack that foundation, Gustafson said. 

He argues that resilience is built over decades, not procurement cycles.

Long-term commitments, he argues, have helped create capabilities that continue to benefit the country decades later.

As European governments increase defence spending and seek industrial returns from major procurements, Gustafson believes the debate should focus less on what can be built during a programme and more on what remains after it ends.

- The impact of those long-term decisions is crucial, he said.