Resilience, security and the Nordic–Baltic opportunity

Article is written by Marina Unnérus, Senior Economist at NIB

The global landscape is shifting towards a more contested, transactional and security‑driven order. Great power dynamics increasingly shape trade, investment, technology and financial systems, making security, defence and economic resilience deeply interconnected and central to competitiveness and stability. For the Nordic–Baltic region, these shifts bring both risks and strategic opportunities. The outcome will depend on the region’s ability to strengthen collective resilience, deepen integration and position itself as a trusted hub for critical infrastructure, innovation and rules‑based cooperation.

Fragmented global order

The emerging world order is marked by rising protectionism, overlapping geopolitical and economic interests, and a shift from long‑term strategic alliances towards more transactional relationships. Security considerations shape economic decision‑making, and economic strength and resilience have become core elements of national defence.

In practical terms, economic relations are more explicitly used as instruments of power. Trade, investment, technology, finance and energy are deployed strategically to advance national interests, reducing predictability and increasing uncertainty for governments and businesses. Market access is increasingly shaped by export controls, sanctions and competing sovereignty claims, contributing to fragmentation across supply chains and technology ecosystems.

For small open economies, the operating environment is therefore less defined by universal rules and more by conditional access, alignment choices and resilience capacity.

Blurred boundaries

The line between peace and conflict is increasingly blurred, with hybrid threats always on the horizon. Defence and resilience policy now emphasises not only military readiness but also the continuity of society and the economy under stress. Economic infrastructure, supply chains, energy systems, technology and data are now integral components of the security landscape. Disruptions in these areas can quickly affect economic stability and social cohesion.

Strengthening resilience through diversification, stockpiling, domestic capacity and trusted partnerships is therefore seen as essential. Businesses are expected to integrate geopolitical risk and security considerations into core decision‑making. Defence readiness depends not only on procurement but also on the ability to sustain manufacturing and logistics capacity during crises.

Civil society must also prepare for threats beyond conventional warfare. Protecting communications, energy networks, logistics and data systems is costly, but it is much less costly than responding to prolonged systemic breakdowns, for example.

Nordic–Baltic opportunities

The Nordic economies have long been built on trust, knowledge, rapid technology adoption and strong institutions. This foundation has delivered decades of prosperity and global competitiveness. Individually, each country is relatively small. Collectively, with the Baltic states, the region constitutes a significant economic and technological bloc. Deeper Nordic–Baltic cooperation can become a strategic differentiator. As the old order of norms, institutions and trade systems frays, sharing knowledge, innovation and best practices across borders multiplies the impact. It strengthens strategic autonomy, reduces vulnerabilities and improves the collective crisis response.

Marina Unnérus

Senior Economist at NIB

In a fragmented and transactional world, trusted‑partner status carries measurable economic value. It lowers risk premia and financing costs for strategic projects, supports inward investment, and strengthens market access within aligned regulatory and security frameworks.

High institutional quality and governance credibility are therefore significant economic assets, particularly in sectors where security screening, compliance and reliability are increasingly decisive. A long‑term strategy should prioritise shared standards, interoperable industries and coordinated supply‑chain policies to strengthen collective security and competitiveness.

Defence sector as an innovation platform

The defence sector today does not mean only heavy industry but also advanced research and deep technology innovation in areas such as cybersecurity, artificial intelligence, logistics and systems integration. These investments can generate spillovers that benefit the wider economy by accelerating digitalisation, raising productivity and supporting technological diffusion.

With security spending rising, demand for advanced solutions is set to increase, making defence investment an increasingly important driver of innovation and growth. This trend is well aligned with the Nordic–Baltic region’s strong human‑capital base and research capacity.

At the same time, the overall nature of growth is changing. Value creation increasingly depends on intangible assets such as R&D, software, data, platforms and human capital. Yet financing frameworks remain largely designed for physical industrial‑era collateral, creating structural challenges for innovation‑driven firms seeking to scale.

The Nordic–Baltic region benefits from strong research institutions and innovation pipelines. However, translating these strengths into globally competitive firms has often been constrained by small domestic markets and relatively shallow risk‑capital ecosystems compared with leading global hubs. Despite well‑functioning capital markets overall, financing for intangible assets has not always kept pace with the region’s research and innovation strengths.

Ensuring adequate financing for intangible assets, particularly those underpinning resilience, security and defence, will be critical for sustainable scaling and long‑term competitiveness.

In a period marked by uncertainty, power competition and rapid technological change, courage and cooperation are more necessary than ever.

To support the resilience, security and defence capabilities in the region, NIB has revised its Sustainability Policy. The first change was made in 2024, allowing defence financing, and since July 2025, this has also included conventional weapons and ammunition. By taking these systemic and forward‑looking steps and by representing the financial institution of the entire Nordic–Baltic bloc, NIB can play a pivotal role in strengthening the region’s economic and social resilience, and in setting an example of trust‑based cooperation in a rapidly changing world.