The move comes as Finland also seeks to ramp up its defense strategy and capacity to deal with escalating cyberthreats.

The NATO research centers, which are to focus on new technologies, will be based in the Finnish town of Espoo, while the accelerator unit will be run from a new facility in Oulu, Finland’s leading cyber technology hub.

The Espoo site will collaborate with VTT, Finland’s largest technical research center and the axis for quantum computer development in Finland. The location will also test cyber-secure communications in addition to quantum and space technologies.

The test facility in Oulu, which will operate in cooperation with the University of Oulu, will test 6G network technologies.

Finnish Defence Minister Antti Häkkänen said the accelerator and test centers will create business opportunities for domestic technology companies as well as help lift Finland’s profile among the 32 other fellow NATO member states. Finland joined NATO in April 2023.

“Finland’s leading position, especially in the development of new-generation communication technologies and quantum technologies, is likely to attract operators and experts to Finland. Our status as a global frontrunner of dual-use communication technologies will render Finland more attractive to international financiers and strengthen our technological input as a NATO member,” Häkkänen said in a statement.

NATO launched the DIANA program — or Defence Innovation Accelerator for the North Atlantic — in 2021 with the mission of identifying challenges for the defense sector. A core part of the program’s mission is to find technologically innovative solutions through partnerships with tech firms inside and outside of the defense industry.

Cyberspace switch

Meanwhile, under a new joint initiative, the Defence Ministry and the Ministry of Transport and Communications are tasked with revamping Finland’s national cybersecurity strategy. The initiative aims to provide the government with an operating model better suited to protect critical military and civilian assets and infrastructure.

Bolstering cyber resilience and improving defensive capabilities were among the chief national security priorities of Prime Minister Petteri Orpo’s coalition government that took power after parliamentary elections in June 2023.

The urgency behind updating the national cybersecurity strategy became evident during the third quarter of 2023 when Finnish security and intelligence service SUPO warned of a sharp rise in cyberattacks emanating from Russia. Those attacks reportedly targeted state agencies, the Finnish Defence Forces, and their critical IT networks and infrastructure.

In February, SUPO issued an alert that Russia was trying to recruit and train migrants seeking political and economic asylum in Finland as spies. The agency also warned that “hostile forces” in Russia were behind an increase in cyberespionage activities against Finland.

As a result of the heightened security threat — and with Russia allegedly bussing thousands of migrants to Finnish crossing points — Finland closed its 832-mile border with Russia on Feb. 20. The government plans to keep the border closed until April 14 at the earliest.

Finish government websites experienced a distributed denial-of-service attack in April 2022 amid an address to Parliament by Ukrainian President Volodymyr Zelenskyy. Russia launched a full-scale invasion of Ukraine in February 2022.

The Finnish government’s drive to strengthen national security is backed by an increase in the cyber defense budget. Finland will spend $350 million on cybersecurity in 2024, corresponding to a 35% increase over 2023. A large part of the additional funding will be used to drive projects and programs that counter artificial intelligence-based cyberthreats.

The budget will support new cybersecurity measures slated for implementation by the military and SUPO in 2024. The increase in the cyber budget is partly influenced by findings and recommendations in a report on AI-enabled cyberattacks, which was delivered to the government in 2022.

The report was created by a group that included the national communications agency Traficom, the National Emergency Supply Agency, and the Helsinki-based cybersecurity firm WithSecure.

The national cybersecurity strategy, once finalized and implemented, will conform with the European Union’s updated directive on measures meant to achieve a high common level of cybersecurity across the bloc, said Rauli Paananen, director Finland’s National Cyber Security Unit.

“Under its plan, the government wants to revamp Finland’s cybersecurity strategy in a way that makes it more able to respond to the changed operating environment and the increasing risk to national security that is posed by threats from the cyber domain,” Paananen said.

The unit ran a major national cybersecurity exercise over five days in mid-February. The KYHA drill included cybersecurity experts in Finnish municipalities as well as state and private sector operators of critical infrastructure.

“Organizations need to develop cyber defense capabilities and resilience, just as Finland needs to develop cyber resilience as a country. Exercises like KYHA strengthen Finland’s cyber resilience, which is also what the cyber security strategy update aims for. The goal of the strategy is to be well prepared as a society,” Paananen said.

Under the purview of the Chalmers University of Technology, or CUT, Sweden wants to use quantum technology to improve the performance of radar systems. In Finland, the state-funded organization VTT Research wants to bolster the processing capability of an existing quantum computer

“There are many reasons why the defense industry might want to monitor, if not engage with, the quantum computer projects running in Sweden and Finland. It is generally recognized in defense quarters — and increasingly by governments, too — that while quantum science is a positive, its disruptive nature will bring challenges and a certain degree of threat,” Lars Sundström, an independent computer industry analyst based in Stockholm, told Defense News.

The challenge for cybersecurity specialists, Sundström said, is to build solutions based on quantum technology that offer a superior level of protection to critical IT networks and infrastructure. “The big defense and cybersecurity players in the Nordic region are already connected in some way, and indirectly to the quantum projects in Finland and Sweden. Saab is probably the most well-known name in the mix,” Sundström added.

Saab is an “industrial partner” to the Wallenberg Centre for Quantum Technology, a co-partner with CUT in the quantum computer project. Saab is currently running several PhD-level projects at the center aimed at developing new applications for the defense industry, the most high-profile of which is for a quantum-enhanced noise radar. Researchers are investigating whether entanglement between generated photons can improve the performance of radar systems.

In a significant move, CUT has decided to produce a copy of its quantum computer — the school currently has a 25-quantum bit system — that would be available to companies operating in the country’s IT, defense and engineering industries within eight to 12 months.

For its part, Finland currently has a 5-qubit computer, but VTT Research plans to have a 20-qubit version operational by year’s end. It’s slated for an upgrade to 50 qubits in 2024 — a level that can more capably demonstrate the quantum advantage to solving individual problems.

But to solve industrially relevant computational problems, the computing power must rise to 100 to 300 qubits, said Pekka Pursula, a research manager at VTT.

“When the number of qubits increases from 50 to 100, the computing power of a quantum computer does not double — it grows exponentially. This will enable companies to use quantum computing for industrial applications and achieve the quantum advantage,” Pursula told Defense News.

Quantum technology is developing rapidly and will become key in the areas of energy, defense and finance, according to Per Delsing, a professor of experimental physics at Chalmers who leads the quantum computer project at WACQT.

“We are now starting to get the tools to be able to control quantum systems and thereby exploit inherent quantum physical phenomena,” Delsing said. “The time is ripe to start using these commercially and in society. A national strategy and funding plan is needed in Sweden to coordinate all aspects of the development.”

Broadening investor interest in quantum computer technology was among the primary reasons management at CUT decided to produce a copy for selective release. The university-run project requires a deep funding pool, Delsing noted, and the school is seeking capital investments for related education and innovation specifically to build a 25-qubit computer. The organization hopes to finish building the system by the end of the year. The goal is to scale it up to 40 qubits, and then 100 qubits.

“In order to be able to do things that a classical computer cannot, such as super-fast optimization of complicated logistics problems, you need to reach more than 50 to 60 quantum bits,” Delsing said.

The CUT and WACQT quantum computer effort is currently working off a $132 million grant that covers a project development period of 2018-2029. The grant includes contributions from Swedish industry, universities and the private Knut and Alice Wallenberg Foundation.

A proposed route

Five organizations released a report in March, titled “A Swedish Quantum Agenda,” calling for a Swedish national strategy for quantum technology.

The document maps out how to deliver long-term financial support for related research, said Darja Isaksson, director general at the innovation funding agency Vinnova, one of the organizations that authored the report. The others are RISE, a research and innovation institute; Swelife, a life science-focused funding agency; the Swedish Research Council, the country’s largest governmental research funding body; and WACQT.

“Quantum technology has enormous potential in areas such as energy efficiency, defense and security, and health. Sweden is at an advanced stage in research. In order for Sweden to maintain its long-term competitiveness in quantum technology, we need to build a national ecosystem for innovation and commercialization of the technology,” Isaksson said.

The report identifies logistics planning, organizational realignment, product development and the creation of solutions for airspace security issues as ideal problem-solving areas for quantum computing to tackle.

The report concludes that Sweden’s defense and national security sectors could harvest real value from four subfields — quantum computers, quantum simulators, quantum communication and quantum sensors — by using spinoff disruptive technologies to both create new and improve existing applications.

On cybersecurity, the report notes that encryption algorithms currently “rely on the inefficiency of classical computers to solve the functions required to decrypt the secure data. While they are astronomically hard to solve in classical implementations, a quantum computer equipped with the right algorithm can break the encryption with relative ease.”

The advance of quantum computers, the report states, has motivated multiple European initiatives to quickly assemble quantum cryptographic communication channels where fiber-optic networks can be used to securely communicate sensitive information between and inside of national borders.

“Additionally, satellite networks can be put in place to connect local fiber networks to the global web — something that requires considerable national effort to initiate,” the report notes.

“Sweden should actively develop international collaboration in the quantum technology field while also developing cooperation with ambitions on Nordic, European, as well as global levels. The Nordic countries, in particular Denmark, Finland, and Sweden have a strong research tradition in quantum technology,” the report recommends in its conclusion. “Together the Nordic countries become a strong international player.”

The mergers and acquisitions are taking place as Sweden seeks NATO membership, and neighboring Finland this year joined the alliance.

Combined, according to defense spending plans, the Nordic states of Denmark, Finland, Iceland, Norway and Sweden are to invest more than $2 billion to upgrade their respective military and national security cyber defenses over the next three years.

Meanwhile, cybersecurity companies are also forming strategic partnerships with the regional armed forces. For example, the Norwegian firm Atea won a two-year information technology and cybersecurity services contract worth $45 million from the Norwegian Defence Research Establishment (FFI) and the Norwegian National Security Authority (NSM).

The former is responsible for Norway’s defense research and development efforts, and the latter serves as the country’s national intelligence agency. FFI also operates as a procurement agency for the property-focused Norwegian Defence Estates Agency, the Norwegian Armed Forces and the NSM.

Atea signed the first segment of the two-part deal, with a two-year option, in June 2022. The second part of the deal was inked in April 2023. The contract covers the delivery of hardware, software, IT and network cyber defense solutions, and consultancy services.

“The deal reflects the greater emphasis on IT network and infrastructure security in national defense areas. The contract reinforces our positive and developing relationship with the defense sector,” said Steinar Sønsteby, CEO of Atea.

The appetite for strategic corporate partners in the Nordic cybersecurity domain gained momentum in 2022 following a far-reaching nonequity collaborative agreement between Finnish software specialist Digia and Danish cybersecurity technologies provider Arbit Cyber Defence Systems.

The collaboration was instrumental in securing a $6 million contract to build a protected information-exchange gateway for the Finnish Defence Forces, said Jussi Tammelin, the director of Digia’s defense unit.

The contract includes the supply of a secure information-exchange gateway communication solution, as well as software and equipment. The technology is based on Digia’s Linja software and Arbit’s data diode.

“Our collaboration with Arbit reinforces the capabilities of our defense and security sector services in the Nordic countries. International cooperation improves the competitiveness of both companies when it comes to defense sector tenders and increases defense sector exports,” Tammelin told Defense News.

In 2022, Digia accelerated its plan to establish a dedicated defense unit, after it became clear Sweden and Finland intended to apply for NATO membership.

Nordic countries must do more to strengthen their cybersecurity against increasing threats, said Natasha Friis Saxberg, the CEO of Danish ICT Industry Association, a trade organization representing information and communication technology firms.

According to Saxberg, the pooling of Nordic skill sets in this area, driven by the wave of cybersecurity mergers and acquisitions, is beneficial to developing a deeper pan-Nordic expertise to counter cyberthreats.

“A significant number of the cyberattacks emanating from Russia and linked to the invasion of Ukraine are directed at Denmark and the other Nordic countries. Today, cyberthreats play a significant role in every war and conflict, and therefore it is necessary to invest in cybersecurity and make it a central element of our defense,” Saxberg told Defense News

Growth trends

Acquisitions — such as Swedish firm Lyvia’s takeover of Polish company IT Systems and Solution — underline a trend where major players in the Nordic cybersecurity space with the financial means are looking to use such purchases to consolidate the market and accelerate regional growth. That acquisition by Lyvia is expected to help the company gain greater access to even larger contracts in the defense and national security sphere.

The purchase also improves Lyvia’s reach in to the Baltic region as well as Central and Eastern Europe, according to Oleksandr Fomenko, who leads the business’s Central and Eastern European division.

“We want to expand in this high-growth sector. ITSS is a large player in a fast-growing industry with top-drawer, end-to-end cybersecurity services and impressive IT infrastructure modernization resources,” Fomenko told Defense News.

Similarly, Norwegian cybersecurity company DNV’s $107 million purchase of Finnish firm Nixu was motivated by a desire to win more contracts, while taking advantage of increasing investments by Nordic governments to upgrade and maintain next-generation cyber defenses and more reliable IT infrastructure.

DNV’s cybersecurity expertise has historically focused on high-security areas in energy, maritime, telecommunications and financial services. “By joining forces with Nixu, we will make cyberspace a more secure place with greater impact than either company could achieve alone,” said Remi Eriksen, DNV’s chief executive.

Other industrial acquisitions in the region included Sweden’s Truesec buying Danish firm Venzo Cyber Security. And Ireland-based Integrity360 acquired Sweden’s Netsecure. In Denmark, Columbus purchased ICY Security, while in neighboring Norway, Netsecurity acquired Data Equipment to create a new cybersecurity group with revenues of $74 million.

The acquisition of Venzo will allow Truesec to strengthen its cybersecurity offerings to both the corporate and national defense sectors in Denmark and the wider Nordic region, said Anna Averud, Truesec’s chief executive.

“The acquisition significantly enhances our cyber defense capabilities. It expands our capability to better defend cyberattacks. The pooling of our cyberspecialists with Venzo will make a significant difference in creating a safer society for all organizations in Denmark and Northern Europe,” Averud told Defense News.

The first of its kind between the Nordic states, the declaration was signed March 16 at Ramstein Air Base in Germany by the commanders of the Swedish, Norwegian, Finnish and Danish air forces.

The concept of a joint Nordic air force, comprising about 250 modern front-line combat aircraft, has been the subject of periodic discussions between the regional governments since the mid-1990s.

Sweden’s and Finland’s unaligned status remained an impediment to advancing talks and joint initiatives. But with the two countries primed to join NATO, Nordic governments find themselves on more solid ground to discuss a common action plan to create a so-called mini-NATO that would deliver a formidable and unified air force capability.

The primary aim of the joint declaration is to strengthen air force cooperation between the four Nordic states, precipitating concrete joint initiatives to develop a strong regional air defense. The idea is to elevate collaboration between Nordic air forces so they can operate together in all situations.

The air defense operations concept, embedded in the declaration, envisions joint Nordic air force cooperation developed along four principal lines of action. It also proposes the development of an integrated management structure for planning and executing air operations.

Moreover, the concept anticipates the development of a flexible and sustainable support system, joint air situational awareness, and joint training and exercise activities between the four Nordic air forces.

Maj. Gen. Rolf Folland, the chief of the Royal Norwegian Air Force, views the idea as a basis for creating a joint Nordic center for air operations that could also house the United States and Canada under a single command structure.

“There is obvious interest in a regional initiative for a joint air command on NATO’s northern flank. We know the conditions in the High North well, and we have a lot to learn from each other. With a total of almost 250 modern combat aircraft, this will be a large combat force that must be coordinated,” Folland said.

The last operational NATO headquarters in Norway — the Combined Air Operation Center-3 at Reitan, located east of Bodø — closed in 2008, with responsibility transferred to the alliance’s CAOC Finderup in Denmark.

The group, which functions as a forum for pan-Nordic cooperation, is positioned to serve as a conduit for discussions between states wanting to explore the development of common cyber defense solutions, and in the long-term a possible joint strategy. Nordic states are moving to elevate cyber-security cooperation against the backdrop of regional tensions over Russia’s war with Ukraine.

The advent of war triggered a steady increase in the number of cyber-attacks against Nordic industry and military targets since Russia invaded Ukraine in February 2022. The military targets have included the defense departments of Denmark and Sweden.

Strengthening cross-border cyber-security collaboration was one of the significant regional defense issued examined the Nordic Council’s Presidium in December 2022.

Norway currently holds the 12-month rotating presidency of the Nordic Council for 2023, having taken over from Finland in December.

The Nordic Defense Cooperation (NORDEFCO) group, which consists of Denmark, Finland, Iceland, Norway and Sweden, will play a key role in the development of cross-border Nordic cyber-security collaborative solitions. The initiative is regarded as a good fit for NORDEFCO’s Vision 2025 project.

In the long term, the military-influenced strategy is to enhance intelligence sharing between countries, giving the Nordic nations a heightened capacity to defend against threats emanating from the cyber domain.

“Cybersecurity issues are more relevant than ever. In recent years, the number of serious cyberattacks has grown. Additionally, the war in Ukraine has a direct effect on the Nordic region on many different levels. All these factors serve the need to have a common Nordic cybersecurity strategy,” said Erkki Tuomioja, the Nordic Council’s president for 2022.

The Nordic states have explored the potential for a common cybersecurity strategy since 2016. But Russia’s war in Ukraine and the potential resulting destabilization of the High North and Baltic Sea regions drove a sharper focus on collaboration.

NORDEFCO’s Vision 2025 initiative has the scope to be expanded to accommodate a broader new mission for a cybersecurity framework that strengthens Nordic resilience against cyberthreats. NORDEFCO already has the capacity to liaise with military cyberthreat units and national cybersecurity agencies across Nordic nations.

Individually, Nordic states continue to bolster their cyber capacities and make capital investments in new projects. Sweden is investing an additional $130 million in its military budget for 2023-2024 to bolster cyber capabilities. And Finland’s cybersecurity budget during the same period is being doubled to $80 million.

For its part, Iceland launched a national cybersecurity development strategy in 2022 that extends to 2037. The initiative will include joint exercises with Nordic partners to test defensive and offensive cyberthreat solutions.

“Cybersecurity isn’t just a security issue. We also need it to fully harness the power of Nordic innovation. We need greater awareness, expertise and regulations covering cybersecurity to enable us to future-proof our society,” said Áslaug Arna Sigurbjörnsdóttir, Iceland’s minister of higher education, science and innovation.

Editor’s note: This article was updated on March 13 and March 27, 2023, with new information from the Nordic Council about the steps taken at a December 2022 meeting.

Swedish prime minister Ulf Kristersson’s Moderate-led coalition government, which was elected to office after parliamentary elections in September 2022, has identified “unity of purpose” and the strengthening of European defense readiness and capacities as primary targets during the term of its presidency.

Sweden, against the backdrop of the ongoing war between Russia and Ukraine, favors solutions that can advance the collective defense of Europe using weapons and allied military equipment that are not only made in the EU but acquired under joint procurement arrangements.

The framework for Sweden’s presidency prioritizes continued EU economic and military support for Ukraine. A longstanding target of hostile threats from Moscow, Sweden embodies the Nordic view that Ukraine’s success in its war efforts against Russia is paramount to building a robust European security and defense policy.

Sweden is using the EU’s Strategic Compass, which is tailored to provide a shared strategic threat assessment of the challenges the bloc faces, as its guiding light. In particular, Stockholm is keen to deepen EU defense cooperation with NATO and develop a long-term capital investment program to bolster European defense.

Achieving a more meaningful level of pan-EU collaboration within the cybersecurity domain has emerged as one of Sweden’s critical targets. This goal gained traction on Jan. 3, when the European Commission (EC) presented a far-reaching Joint Communication (JC) for an EU common cyber defense policy to the European Parliament.

The proposal would help boost the bloc’s cyber defense posture, said Pål Jonson, Sweden’s defense minister.

“The ambition is to strengthen the EU’s cyber defense capabilities, as well as give individual states the tools to conduct joint cyber operations. It will also improve inter-state coordination, information sharing and interoperability between cyber security and cyber defense, including between the civil and military cyber communities,” said Jonson.

Sweden, along with fellow unaligned Nordic nation Finland, is currently awaiting unanimous consent from NATO members to join the alliance, a process that could reach its conclusion in 2023 despite reservations about their applications being expressed by Hungary and Turkey.

The “Total Defense” focus in the Swedish government’s defense budgetary plan aims to raise military spending to 2% of gross domestic product by 2026. The defense budget is on course to grow by $800 million in 2023, backed by higher capital investments to strengthen cyber-defense, signals intelligence, defense preparedness and the expanded intake of military personnel.

“The government’s plan is that Sweden’s defense capability will be gradually expanded year-on-year going forward,” said Pål Jonson (Moderates), Sweden’s newly appointed defense minister.

The 2023 budget will give the Swedish Defense Forces’ (SDF) cyber-defense unit (CDU) a significant lift in capital spending to reinforce its capability to defend against hybrid warfare threats. These include cyber attacks and the targeting of critical infrastructure and IT-networks, both public and private, that are deemed essential to the functioning of Sweden’s economy.

Significantly, Swedish prime minister Ulf Kristersson’s conservative-leaning coalition government is proposing the establishment of a new ministry that would have joint responsibility for Total Defense’s two main components of military and civil defense.

The Total Defense format for Sweden’s national security is primed to be modified to conform with the country’s future membership of NATO.

The template for the proposed joint ministry means it will liaise closely with a new National Security Council (NSC) to be instituted in 2023. The NSC is intended to serve as a dedicated agency to analyze, review and coordinate Sweden’s security policy actions.

Sweden’s draft budget proposal for 2023 includes a provision to increase spending on defense and national security preparedness by $1.23 billion (SEK 13 billion) in 2022-2023. The SDF’s military equipment and facilities budget, according to the bill, will increase from $7.1 billion to $8.3 billion.

The scope and level of spending ambition in the 2023 defense budget is currently the subject of ongoing discussions between Jonson’s Ministry of Defense and the Parliamentary Defense Committee (PDC).

A major component in the talks will be how to effectively bolster the SDF’s procurement capacity to finance and purchase new weapons systems, a consequential issue given the rising costs associated with weapons procurement against the backdrop of a falling krona, Sweden’s national currency.

The government is concerned that a weakening krona could impair Sweden’s defense buildup and the ability to achieve the envisioned NATO spending ratio by 2026.

Defense Committee members are supporting a government policy initiative to bolster defense measures by increasing the SDF’s order authorization on new weapons systems by over $2.9 billion beyond 2030.

Based on its present trajectory, Sweden is proposing to scale up its spending on defense and security preparedness to $12 billion in 2028. Sweden allocated $7.3 billion to that budget line in 2022, equivalent to around 1.45 per cent of GDP, the highest level since 2005.

The Norwegian government has decried what it calls continued “electronic harassment” of critical communications systems and networks by the Russian government.

The military’s move was triggered by fresh intelligence reports from national security agencies that link the jamming of GPS signals — most recently during the Trident Juncture joint exercises in the High North with NATO held October to November 2018 — to electronic interference by Russia.

Most of the incidents of jamming since 2017 coincided with joint Norway-NATO exercises in the High North. The region is close to the heavily fortified military installations on the Kola Peninsula, which houses Russia’s Northern Fleet and elite Arctic land, air and naval forces.

Incidents of signals jamming by Russia are documented in the Norwegian Intelligence Service’s (E-tjenesten) annual national risk and situation report delivered to the government in February.

The NIS report details repeated incidents since 2017 where GPS signals and other secured communications between Norwegian Armed Forces, or NAF, units engaged in exercises were subjected to “blocking measures” from sites located in Russia.

Signals jamming presents a new challenge to Norwegian and allied training operations near Norway’s frontier with Russia, said Lt. Gen. Morten Haga Lunde, the head of NIS.

“Jamming is also a threat to, among other things, to civilian air traffic, police and medical-related operations in peacetime,” Lunde added.

The Focus 2019 intelligence report, which deals with perceived risks and threats to Norway’s national security, reveals a number of so-called mock attacks by Russia on NAF installations in 2017 and 2018.

In one such incident recorded in February 2018, 11 Russian Su-24 aircraft flying in an attack formation performed a “mock strike” on the NIS-operated Arctic radar station at Vardø.

The “mock strike” squadron reversed course and returned to its home air base at Monchegorsk, on the Kola Peninsula, shortly before it entered Norwegian airspace.

Norway wants to combat such aggressive interference by Russia, said Defence Minister Frank Bakke-Jensen.

The Norwegian government expressed its disapproval of electronic jamming actions by Russia and is strengthening collaboration with Nordic partner states to improve intelligence sharing regarding the Russian military’s signal-blocking technologies and measures, Bakke-Jensen said.

“This type of interference is unacceptable, that much is very clear. Russia must stop these type of activities,” the minister said.

Finland also informed Moscow of its own protest over suspected signals jamming of both military and civilian communications systems by the Russian military near its northern border with Russia.

The Helsinki government summoned the Russian ambassador to Finland in November 2018 to explain why its civilian and military aircraft were reporting incidents of attempted electronic jamming of systems. All events were recorded by aircraft pilots while flying in areas of northern Finland near the country’s border with Russia.

Moscow denied involvement in jamming critical communications in either Norway or Finland.

Russia’s growing displeasure with near-neighbors Norway and Finland stems from Norway’s push to grow NATO’s presence in the High North. Moscow is also unhappy over nonaligned Finland’s deepening defense relationship with NATO through the Partnership for Peace program.

In support of a stronger NATO presence in the High North, Norway is redeveloping the civilian industrial harbor at Grøtsund-Tønsnes to cater to visiting allied nuclear submarines. Grøtsund-Tønsnes is located north of Tromsø and is 234 miles from Norway’s border with Russia.

Grøtsund-Tønsnes will provide a secure harbor for allied ships, which have not had such a safe High North facility since Norway closed the Olavsvern naval base near Tromsø in 2009.

“Russia regards Norway’s desire for an increased NATO presence as contrary to the historical traditions of good neighborly relations and cooperation in the Arctic. By doing this, Oslo will escalate tensions and raise the risk of military action,” Russian Foreign Affairs Ministry spokeswoman Maria Zakharova said.

Russia is also irate over Norway’s support for the NATO “Four Thirties” initiative. The plan calls for a large-scale, multi-branch and modular-designed rapid response force that can be deployed within a 30-day period. The proposed “unit” would comprise 30 battalions, 30 air squadrons and 30 naval vessels to be deployed in 30 days or less.

“We will take a holistic approach to this new NATO project, and then see what Norway’s contribution might be,” Bakke-Jensen said.

Norway’s role in the Four Thirties initiative is expected to be outlined in the NAF’s next long-term defense plan due in 2020. This timeline fits neatly into NATO’s own schedule. The alliance plans to identify relevant forces that can be integrated into the rapid forces initiative by 2020.

CybAero’s board opted to file bankruptcy papers with Linköpings District Court after the Nasdaq First North stock exchange in Stockholm halted all trading in the company’s shares on June 15. The Exchange said it was troubled by CybAero’s uncertain financial position.

“In the three months as CEO of CybAero, I have worked closely with my colleagues in an effort to do everything possible to prevent the situation we are in today,” CybAero’s CEO Tommy Magnusson said.

CybAero’s management team, which only recently completed a companywide reorganization, had explored a range of commercial options to strengthen its order books and improve its cash flow.

“We have continuously implemented quality measures. In parallel, we have investigated a number of possible options, while funding has been close to hedging on several occasions. Operational activities continued, and several new business opportunities were opening up to us. I hope that CybAero will be rebuilt under the leadership of new owners after bankruptcy,” Magnusson said.

What happened with the sale to China?

CybAero had invested heavily to break into the Asian market. The company’s economic fortune began to wane after Sweden’s Inspectorate of Strategic Products, or ISP, reversed a decision to grant CybAero clearance to export an unmanned helicopter system demonstrator to China.

The ISP cited “foreign and security policy” for its decision. The license reversal revealed the ISP’s concerns about the potential misuse of Swedish drone technology by AVIC, the Chinese research institute that contracted to test the CybAero helicopter drone system as part of an option to purchase 20 units.

In addition, the ISP questioned the intended use of CybAero’s helo drone by AVIC. The ISP, underlining the potential high-risk nature of the agreement, noted that the drone contained embedded technologies that might be diverted by AVIC to military actors in China. Such an event would be outside the realm of CybAero’s agreement with AVIC, the ISP concluded.

Money problems

The funding side of CybAero’s operations have fluctuated widely since January 2017. The company’s finances improved in July 2017 when the Dubai-based investment fund, Bracknor, signed a debt-refinancing arrangement with CybAero to ease the company’s acute need for working capital to support product development, production and export operations.

The financial solution agreed under the deal comprises a $5.25 million capital injection in the form of seven convertible loans to CybAero. Each loan varied in size from $850,000 to $650,000.

Subversive Capital, a U.S.-base venture capital firm specializing in growth investments, has subscribed for 10 percent of all convertible loans and warrants endorsed by Bracknor.

Prior to the refinancing deal, Subversive Capital controlled a 5.9 percent shareholding in CybAero. This positioned Subversive Capital as the second-largest share owner in CybAero after the Swedish banking-insurance group Avanza, which held 9.1 percent of all shares in the drone maker.

Indications that CybAero’s operating situation had regressed emerged in mid-May when trading in the company’s shares were temporarily suspended on Nasdaq First North. The exchange responded to uncertainty over negotiations, led by CybAero to find a new refinancing solution.

CybAero had provisionally negotiated a financing solution with the Luxembourg-based European High Growth Opportunities Securitization Fund, or EHGO, to raise $6 million in the form of 13 convertible loans. The EHGO had hired the London-based Alpha Blue Ocean Advisors to mediate a deal. The first tranche in this solution involved a bridge loan amounting to $227,000.

Nasdaq First North rejected this first tranche arrangement and insisted that, in order for trading in its share to resume, CybAero needed to place a minimum of $114,000 in escrow on a authorized bank account. Moreover, Nasdaq First North launched an investigation to determine if the negotiated financing solution violated stock exchange rules.

The concerns raised by Nasdaq First North were compounded by rapid senior-level management changes at CybAero. Johan Ahlström resigned as CEO of the company in March after taking up the post in January. Ahlström had replaced Mikael Smith, who was appointed CybAero’s CEO in September 2017.

Supo has ranked terrorism-linked cyber-threats as the primary risk to Finland’s national security and critical industrial infrastructure going forward.

Perhaps more alarming for Finland’s tech-heavy technology export corporations is that Supo has identified a rising trend in state-backed cyber attacks against Finnish companies. The core focus of these attacks has been to hack information regarding critical infrastructure and sensitive product development programs.

“Cyber espionage poses a serious threat to Finnish information capital. If product development data is stolen to another country, it is possible that the company impacted could see its whole economic future put at risk,” said Antti Pelttari, Supo’s director general.

In response, Finland’s cyber defense “shield” is developing stronger counter-strategies for those Finnish corporations that have a significant international presence, and who may have contracts for outsourcing data with companies in foreign jurisdictions.

The range of cyber-defense tools available to Supo is expected to improve markedly when the Finnish parliament, the Eduskunta, passes new legislation in the second half of 2018. That will give national intelligence agencies greater powers to operate against “bad actors” in the cyber domain.

“At the present time we have no access to data networks. This means our capability to detect cyber crimes is completely inadequate. The proposed intelligence legislation will deliver an improvement to this situation,” said Pelttari.

The constant risk of cyberattacks has resulted in Supo retaining the terrorism threat level against the country at “elevated”. This assessment is based on the expectation of future cyber and possibly land-based attacks from ISIS, or groups or persons affiliated to the terrorist organization.

The threat of ISIS combatants returning to Finland from Syria and Iraq remains, Pelttari said.

“Our assessment is that ISIS remains a threat. Despite recent losses, it also has the capability to generate and widely disseminate damaging propaganda here,” Pelttari said.

The proposed law, when enacted, will give Supo and military intelligence agencies the authority to intercept confidential communications, hack messaging services and break encryption codes in order to read the contents of messages between persons deemed a potential threat to Finland’s national security.