As Estonia Defence Week 2026 brings 4,000 experts, companies and investors to Tallinn, Estonia is presenting a sector where public demand meets fast-moving technology and new industrial capacity.
Innovations that meet demand and production
Estonia’s defence expenditure will rise to 5.4% of GDP, or €2.4B, in 2026. Spending is planned to remain above 5% of GDP through 2029, with €1.27B earmarked for procurement and €3.4B for ammunition across 2025–2029.
That demand is creating opportunities for foreign manufacturers and suppliers. At Ermistu in Pärnu County, the state is investing more than €50M in infrastructure and four companies are preparing production. In North Kiviõli, ARCA Baltics Operations plans a €300M ammunition factory, up to 1,000 jobs and production in 2028.
Technology that can be tested and scaled
Estonia’s industry generates most of its revenue from exports, with companies working in drones, autonomy, sensors, electronic warfare, cyber, software, maritime technology and space. Metrosert’s nine-laboratory Drone Technology Unit is expanding local testing for unmanned systems.
Enterprise Estonia offers a product development grant from €250,000 to €3M for applied research, product development, feasibility studies and intellectual-property protection. The large-scale investment grant can provide up to €20M for eligible defence projects of at least €20M creating at least 20 new jobs.
SmartCap’s €100M Defence Fund adds equity capital for military and dual-use companies. Direct investments range from €500,000 to €10M, alongside private investors. NATO-based companies may also qualify where they create value for Estonia.
Connected to allied markets
Estonia hosts NATO’s Cooperative Cyber Defence Centre of Excellence and a regional NATO DIANA accelerator. DIANA innovators receive €100,000, access to more than 200 test centres and mentoring from military users, researchers, industry and investors.
The Ministry of Defence says military assistance to Ukraine will reach at least 0.28% of GDP in 2026, with most support directed to Estonian products – and giving local companies unprecedented access to the world’s most rigorous testing ground.
Estonian Defence Week, held in Tallinn on 21–25 September, brings these networks together through innovation, industry, NATO and resilience events. And if you want to explore more, “Software Defined Space Conference” (SDSC), dedicated to the critical realm of cybersecurity and software development in space, will welcome guest in Tallinn on 27–29 October.
Invest Estonia and Enterprise Estonia can help companies identify partners, sites and funding routes. Explore business opportunities in Estonia or request e-Consulting from our advisors.
