Modern Estonia is a country that has existed on the world map since 1991. Due to its unique characteristics—small land area, population size, and proximity to the Russian Federation—the society and government effectively recognized that economic and state development required rapid mental and technological shifts. A painful lesson came in the form of a cyberattack at the end of April 2007, targeting numerous government offices and state and local institutions across the country. This attack highlighted how easily societal security levels can be undermined in today’s world. It is no surprise, therefore, that the government in Tallinn, together with NATO allies, took steps to improve the situation in the cyber domain.
Among the most well-known manufacturers is Milrem Robotics, which offers a range of unmanned vehicles / Photo: Milrem Robotics
The break from the communist system, coupled with the Estonians’ strong sense of self-determination, allowed for the creation of a modern economic foundation built on private investments and initiatives—even in such a critical sector as the defense industry. This mindset led to rapid transformations that are evident today. Since the early 21st century, reforms have introduced revolutionary solutions, including the extensive use of digital and internet technologies. It is no surprise, then, that Estonia’s defense industry has become a driving force behind the development of advanced technologies, leveraging artificial intelligence algorithms and innovations aimed at improving cybersecurity. Moreover, the reliance on a growing number of often small enterprises allows for quick resolution of emerging technical challenges and the proposal of practical solutions based on their own expertise and experience. According to official data, the defense sector—comprising nearly 150 entities—has been steadily growing. This growth is driven by geopolitical factors in the region (such as the full-scale conflict in Ukraine and Estonia’s increasing defense spending, which now exceeds 3% of GDP) and the rising appeal of Estonian products gaining recognition abroad. In 2024 alone, the sector’s estimated revenues reached 500 million EUR, with two-thirds of production and services destined for export. The main recipients include NATO member states, Ukraine, and countries in the Middle East and Far East.
Threod Systems is another example of success in Estonia’s defense sector. The company’s products are exported to numerous countries around the world / Photo: Threod Systems
According to data from international organizations, including the Global Cybersecurity Index, Estonia is currently ranked first among European Union countries in terms of development in the cybersecurity sector. Estonia’s expertise has also been recognized in another way—the NATO Cooperative Cyber Defence Centre of Excellence (CCDCOE) is based in Tallinn. One of the most important documents produced by this institution is a study on the application of international law to cyber conflicts and cyber warfare. This document is currently the most comprehensive work of its kind and is being developed with the participation of representatives from nearly 50 countries worldwide. Estonia’s capabilities in cyber warfare have earned significant recognition. In October 2018, the United States Department of Defense publicly declared Estonia as one of four NATO countries possessing advanced capabilities in cyber conflict operations. In the event of such needs, Estonian specialists are expected to provide support to their American counterparts.
Estonia regularly hosts the international exercises Locked Shields and Crossed Swords, both of which involve numerous groups of specialists from NATO countries and other allied nations.
The high assessment of Estonia’s competencies led to the establishment of a regional hub in Tallinn as part of the DIANA (Defence Innovation Accelerator for the North Atlantic) project, implemented by NATO. This hub coordinates the efforts of specialists from Central Europe. The program aims to enhance communication between academic and research institutions, government authorities, and technology companies within NATO member states. Innovative and promising cyber projects can receive funding from the NATO Innovation Fund.
Key segments of the defense market in which Estonia’s industry currently specializes include cybersecurity, unmanned vehicles, reconnaissance sensors, autonomous modules, and secure communication devices. In many cases, these address critical needs of the armed forces and serve as the “nerve center” of command systems, essential for the success of operational tasks. All of this aligns with Estonia’s long-term and regularly updated National Cybersecurity Strategy, with the current version covering the years 2024–2030.
According to international data, Estonia ranks first among European Union countries in the field of cybersecurity efforts / Photo: Threod Systems
Among the most notable entities in Estonia’s defense sector is Milrem Robotics, which supplies an increasing number of unmanned vehicles from the THeMIS and Type X RCV families. Current users (now in over 18 countries worldwide) include the Ukrainian Armed Forces, with interest in these designs also expressed by the U.S. Department of Defense. In 2024 alone, the Estonian manufacturer secured sales to the United Arab Emirates, delivering an armed variant equipped with unmanned weapon stations featuring the Northrop Grumman Mk 44 30 mm cannon. In addition to its combat variant, the THeMIS is also offered in reconnaissance and transport configurations.
Currently, Milrem Robotics is expanding its portfolio through fruitful collaboration with Estonian research institutions, including Tallinn University of Technology and Tartu University. These partnerships enable the company to enhance its capabilities and expand the options available to potential and existing customers.
Annual NATO cybersecurity exercises are regularly held in Estonia. Photo from U.S. Department of Defense picturing the operations center for the Locked Shields 21 exercise in Morgantown, West Virginia / Photo Credit: Chief Warrant Officer 2 Jeremiah Bennett, U.S. Army
In addition to the aforementioned company, other notable firms include Defsecintel, which specializes in the development and supply of mobile land and maritime surveillance systems. A key aspect of their solutions is the extensive use of artificial intelligence algorithms. These algorithms can identify anomalies or movements that do not fit within the observed area, thereby effectively assisting system operators in securing monitored zones. Such solutions are beneficial for both government agencies and private companies providing services like the protection of critical infrastructure. Moreover, the innovation of Defsecintel’s solutions goes beyond proprietary AI algorithms and sensor integration methods. Reflecting modern trends, the project also incorporates the use of renewable energy sources for power.
Established in 2012, Threod Systems is another noteworthy company, though it seldom publicizes its achievements. According to official data, its products are used in at least 25 countries, including eight NATO members. The company, which employs approximately 135 people, specializes in unmanned aerial systems (UAS) designed for observation, surveillance, and reconnaissance. These systems are utilized by the Ukrainian Armed Forces, and official reports indicate that a training center in Ukraine facilitates the effective training of Ukrainian operators. Adhering to its management’s philosophy, Threod Systems produces a significant portion of its products in-house, ensuring independence and interoperability across its solutions. Beyond drones, the company also develops communication systems, command systems, and simulators. This approach maximizes synergy between its products while minimizing dependency on foreign subcontractors, safeguarding critical components from potential external interference.
Co-financed by the European Union – NextGenerationEU