The government faces a strategic choice as the Inspectorate of Strategic Products (ISP) is to have a new Director General appointed after the turn of the year. It is one of the most important appointments remaining for the government in this parliamentary term. The decision is far more important than selecting a new agency head. With security policy being rewritten in real time while the defense sector needs strengthening, a leader who understands that a robust defense depends on a strong business sector is required.
Since 2022, the Inspectorate of Strategic Products has grown rapidly, tripling in size. The agency itself assesses that, in percentage terms, its growth is likely the fastest of all existing Swedish government authorities. Last year, the agency reported receiving more than 1,200 cases about foreign direct investment, over 900 cases concerning dual-use products, 2,700 military equipment cases and 115 international sanctions cases.
This development is a natural consequence of a more complex security landscape, new responsibilities and greater demands for oversight of strategic products, sanctions and foreign direct investment. At the same time, the agency has struggled to recruit the right expertise as its workforce has expanded rapidly. Assessing and balancing Swedish foreign and security policy interests with industrial policy considerations, is an area of expertise that needs to be developed over time. This is precisely why the top leadership is critical.
The new Director General must be able to reconcile security policy considerations with industry needs. Today, defense capabilities are not only created within the Armed Forces, but across an entire ecosystem of companies, research, and technological development. Sweden is dependent on a vibrant defense industry and on international partnerships that can contribute capital, expertise, and innovation. Moreover, technological advancements in the defense sector have spillover effects on other civilian areas such as AI, cybersecurity, space, and materials science, influencing Sweden’s entire innovation system.
It is therefore important that the Inspectorate of Strategic Productsreview process of foreign direct investments is based on a balanced and holistic perspective. The agency must, of course, safeguard Sweden’s security interests while also enabling investments that strengthen the country’s industrial base and defense capability. Security clearances must be efficient yet proportionate, as unpredictable, drawn-out, and overly bureaucratic processes risk deterring international companies and investors that we know have their eyes set on Sweden.
The agency has a broad and complex mission, and in the security policy landscape of our time, policymakers must provide the agency the right conditions to evolve. This is not about lowering the guard but strengthening the whole organization. The new Director General must be a leader who recognizes that businesses’ capacity for innovation is an integral part of Sweden’s security and national interests.
Sweden faces major investments in defense as well as in other sectors. To succeed, leadership that understands the interconnection between defense, industry and innovation is needed. The recruitment process should therefore focus on finding a Director General who is strategic about security policy, effective as a leader, and an ally of the business community. Only then can the state’s responsibilities be balanced with the conditions companies need to operate. The mandate is political, and in the near term the government has the opportunity to lay the foundation for a more robust, competitive and open defense ecosystem.
Björn Nyblom, Founding Partner
Tobias Krantz, Associate Partner
This insight was published as an op-ed in Dagens industri on Nov 25: https://www.di.se/debatt/isp-behover-en-tillvaxtorienterad-generaldirektor/
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