Government approves Defence Industry and Innovation Strategy for 2025 – 2036

On Tuesday, 18 March, Cabinet of Ministers approved the Defence Industry and Innovation Strategy for 2025-2036, which has been developed in cooperation with the Ministry of Economy and sets out ambitious medium and long-term goals for the development of defence industry.

“We want to significantly accelerate the development of national military industry. Dynamic, competitive, innovative and cooperation-oriented national defence industry is critical for the arming and national security of Latvia. Our goals are ambitious: we will gradually increase the share of domestically-manufactured military resources in the overall National Armed Force defence procurement mix. We want to double it by 2028 to 20%, and later raise it to 30%. Investments in innovations will be at the level of at least 1.5 % of the defence spending. We will enhance military industry output, which should have major impact on the Latvian economy. We are building a solid foundation that local defence companies can use to become trusted partner of the National Armed Forces, both in times of peace and times of war or crisis,”  Defence Minister Andris Sprūds emphasised.

“We are happy that the government has decided to support our Defence Industry and Innovation Strategy for 2025-2036. Defence and security are at the top of government’s agenda, so we must prioritise these areas and appropriate resources. According to strategy, LIDA will take significant role in its practical delivery. Our sector will find local manufacturers who can fulfil defence procurements here in Latvia. That will allow us strengthen cooperation with local industry through new projects. It will also allow us to attract foreign investments from international military manufacturing companies,” Minister of Economy Viktors Valainis said.

According to the approved Defence Industry and Innovation Strategy for 2025-2036, Latvia will pursue the following medium and long-term industry development goals:

• increase the share of domestically-manufactured military resources in the overall National Armed Force defence procurement mix by doubling it to 20% by 2028, and tripling by 2036,
• raise funding for innovations to 1.5 % of the defence spending in 2028 and 3% of the defence spending in 2036,
• grow the share of defence industry in the national economy to 3% of the GDP by 2028 and 5% of the GDP by 2036.

In order to achieve these goals, Defence Industry and Innovation Strategy envisages the use of various defence industry support schemes, such as:

• gradual introduction of supply security policies that will allow to enhance the participation of local businesses to 30% of all contracts signed with National Armed Forces
• introduction of fast-track procedures to foster the capacity increase in the national defence industry
• streamlining of defence sector resource and infrastructure life-cycle management practices and procedures 
• regular and open dialogue with industry for quicker exchange of information and data with National Armed Forces, which is essential in procurements, innovation and other programmes and initiatives

Chapter on innovations has special significance in the Strategy, which proposes to deepen the existing and introduce new innovation, research and technology development support facilities. The main overarching objective of all these programmes would be to create an innovation support ecosystem that promotes research and businesses in all stages of growth, of all capital sizes and technological proficiency levels.

Moreover, to make defence resource procurements more efficient and stable, Ministry of Defence will issue, and update at least once every four years, special guidelines regarding strengthening of defence and security industry capacity, which will indicate major defence procurements in the next four years. To see the 2024 guidelines regarding role of defence and security industry in development of national defence capabilities, click here.

Like in the case of other strategies for the whole economy or specific sectors of it, including defence sector, delivery of this Strategy will be overseen by the Ministry of Economy. Meanwhile, Ministry of Defence is the government department that is responsible for management and coordination of national defence and security industry development policies and programmes/activities.

Latvia’s Defence Industry and Innovation Strategy has been developed in coherence with the National Defence Concept and National Armed Force Long-term Development Plan for 2025-2028. This means that Strategy covers the cycle of 12 years with interim reviews and updates every four years, if necessary.

MoD Military Public Affairs Department
Media Relations Section
Phone: 67335391
E-mail: prese@mod.gov.lv