Sweden: Defense Budget Increases and 3D Printing

Charles R. Goulding & Ryan Donley look at potential military use of 3D printing in Sweden.

Sweden’s Prime Minister Magdalena Andersson announced in early March that the country plans to significantly increase military spending to 2% of gross domestic product (GDP). Andersson cited the security threat from Russia’s ongoing war in Ukraine. 

At the height of the Cold War, Sweden dedicated 4% of its GDP to defense but in the past few decades, that number has drastically been slashed to as low as 1.2% in the latest years. Sweden joins the growing list of several European nations robustly increasing military investments including, Germany, Denmark, Norway, and Finland. The looming security threat imposed by Russia has engaged many European countries to fortify their military spending for the first time in decades as well as prepare for refugee intake as Poland has. The surge in military spending also opens the opportunity for countries such as Sweden and Finland to join NATO as the minimum requirement is 2% GDP on defense spending.

Sweden’s defense companies stand to benefit from the influx of defense spending. Sweden is home to several major defense companies including, BAE Systems Hagglunds, BAE Systems Bofors, AB Landsverk, and communications giant Ericsson, which recently announced its exit from Russia.

AB Bofors was a Swedish arms manufacturer that today is now part of the BAE Systems weapons arm. BAE’s presence in Sweden stretches to weapon systems and military vehicle solutions where the Swedish sites are designing, developing, and supporting equipment for land and naval forces.

This includes the introduction of 3D printing practices in-line with parent company BAE Systems (UK) implementation of additive manufacturing across their business segments. BAE Systems Hagglunds and BAE Systems Bofors employ over 1,200 employees in Sweden and are engaged in advancing the development of weapons and vehicle systems. The Swedish sites are fast-developing and evolving within their respective business units and present an excellent investment opportunity for additive manufacturing practices.

The Research & Development Tax Credit

The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software. 

3D printing can help boost a company’s R&D Tax Credits. Wages for technical employees creating, testing and revising 3D printed prototypes can be included as a percentage of eligible time spent for the R&D Tax Credit. Similarly, when used as a method of improving a process, time spent integrating 3D printing hardware and software counts as an eligible activity. Lastly, when used for modeling and preproduction, the costs of filaments consumed during the development process may also be recovered.

Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.

Conclusion

Sweden joins the ranks of the growing number of European countries bolstering their military spending because of the ongoing Russian-Ukraine war. The influx of military spending is unprecedented since the Cold War era and could have a significant impact on the future of additive manufacturing in the military segment.