Dual-use curious? How startups can start doing dual-use technology business

The Finnish dual-use sector offers plenty of business opportunities for tech startups. This article is meant to help startups considering entering the dual-use market by giving some valuable insights and dual-use dos and don'ts. The information in the article was provided by the Finnish Defence Forces, Tespack, Patria, and Castrén & Snellman at our Slush 2024 dual-use side event.

Let's start with a definition. What is dual-use technology? Dual-use technology is civilian technology that can be used for military purposes or vice versa. The Finnish dual-use sector offers various innovation and business opportunities to tech startups and companies. This article is meant to help Finnish companies enter the dual-use or defence field in Finland.

Dual-use curious?

As part of the Knights of Nordics event in November 2024, Enter Espoo and VTT organised a dual-use business Slush side event, Dual-use curious: Exploring opportunities in the dual-use sector. At the event, we got valuable insights and dos and don'ts from a battle-tested Finnish startup (Tespack), Finland's most prominent defence company (Patria), the Finnish Defence Forces, and a law firm (Castrén & Snellman) on how to adapt civilian tech solutions for military applications and do business in the defence field.

A startup's perspective: The road to the dual-use market goes through the battlefield

In his talk, "Road to Dual Use," Mario Aguilera, CEO of Tespack, provided an eye-opening distinction about how civil tech and defence tech differ and what startups thinking about entering the dual-use market need to be prepared for.

Here are some of Aguilera's key instructions to startups:

Startups need to understand that dual-use tech can both save lives and take lives.
Nothing beats battlefield experience:
- Battlefield logic is different than that of civil tech.
- Avoid assumptions.
- Networks and connections in the field of battle are key for startups.
Warfare has gone entirely digital.
Advisory is critical — a lot more so than in the civil sector.
Startups vs. big company dynamics: Startups need to ensure fulfilling certain criteria, whatever tech you create.

Patria and Finnish Defence Forces: Entering the dual-use market may not be as difficult as you may think

With over a hundred years of experience in the defence field and 50,1% owned by the Finnish state, Patria is a major Finnish defence player. Matti Saarikko, CTO of Partia Group, gave some useful instructions on how startups can start working with Patria in his talk, "A Prime's Perspective on Civilian Partnerships and Acquisitions."

There is plenty of room to join the Finnish dual-use field.
How to start working with Patria?
- Patria does R&D with startups and research organisations.
- Begin with the eALLIANCE ecosystem programme that is partly funded by Business Finland and aims to enhance collaboration with Finnish dual-use sector companies.

Similarly, the Finnish Defence Forces gave startups a reassuring message about selling to the military. Timo Minkkinen, Director IPR & Programme Security, in his talk, "How to sell to the military," even called it easy to sell to the military (as long as you know your way around the marketplace).

Here are some of Minkkinen's main points about selling to the Finnish Defence Forces:

Knowing the legal requirements makes selling to the Finnish military easier.
When an object is procured in the interest of national security, procurement law doesn't apply.
HILMA (FIN) and TED (the EU) are the places where all public procurements are posted.
Security is tantamount.
The military operates regardless of conditions, and your solutions and products must handle that.
You need to learn a new language, as plenty of acronyms are used in the procurement process.
Best practices:
- Be absolutely open and truthful.
- Admit ignorance.
- Don't sell promiseware — the military doesn't deal in ideas.
- Do not assume that the defence forces know you or your product.
- Useful market entry strategy: educate rather than "create demand."
- Know the procurement actors.

A legal point of view: Know the regulations and make the buying easier

Now that we've established that working with the biggest Finnish defence players is possible and, at times, even straightforward, it's important to look at some of the legislative details.

Maarit Taurula (Counsel) and Kim Parviainen (Partner) from Castrén & Snellman shed some light on the legal side of dual-use business in their talk, "Legal insights on dual-use and FDI aspects in investments in the defence sector."

Dual-use in legal terms: export control regulations
- There are international, EU-related, and national dual-use regulations.
- Here, you can find useful information on the Finnish dual-use export regulations and EU/international regulations.
- Know the regulations and make it easy for your customer or buyer when selling.