Crossing the Valley of Death: Estonia's Innovation-driven Defense Technologies Amid Cyber Threats
Countries adopt new capabilities in response to challenges and constrained by resources, and sometimes, smarts can make up for dollars.
The U.S. defense budget accounts for 40% of global defense investments, according to the Peter G. Peterson Foundation, a think tank. This means that richer U.S. defense agencies can invest in innovation and succeed despite hazards in its business ecosystem; not all countries can afford such difficulties.
The Valley of Death is the phase between the development of a new technology or innovation and its successful adoption by the Department of Defense through a contract. The process could take up to two years, a period that is lethal for most startups.
The Government Accountability Office defined the problem: “This chasm, often referred to by department insiders as 'the valley of death,' exists because the acquisition community often requires a higher level of technology maturity than the science and technology community is willing to fund and develop.”
For a U.S. NATO ally and Russian neighbor with a population just short of 1.5 million, mistakes can cost dearly, and inaction is not an option.
"The Estonian defense budget is so small that no company would survive if they only wanted to live off the Estonian military,” said Oliver Tsarski, innovation lead at the Estonian Ministry of Defence.
According to government figures, cyber attacks in Estonia quadrupled between 2021 and 2022. This nation works on cyber threat prevention with school students and attacks against private companies, government and military agencies as almost part of daily life, according to anecdotal and recent historical evidence.
Therefore, there is a market for cyber protection and its businesses build a private innovation ecosystem leveraged by defense agencies.
Tsarski explained that companies innovate, and their products are repurposed for military use. There is no Valley of Death, as startups are already economically viable by the time these are evaluated as potential defense suppliers.
We are working very closely with the Ministry of Defense, and we are now supporting them to create and kind of defense industry center in Estonia.
Nevertheless, danger is just over a wire fence to the east, and this spurs further work.
“We are working very closely with the Ministry of Defence, and we are now supporting them to create a kind of defense industry center in Estonia,” said Stig Rogenbaum, business development head for defense and technology businesses in the Estonian Investment Agency.
This project aims to create an environmentally friendly area where companies from around the world come to create, test and deploy new technologies for the country and NATO.
The country already boasts the NATO Cooperative Cyber Defence Centre of Excellence and also hosts a NATO Defence Innovation Accelerator office, the coalition's agency that aims to employ dual use commercial technologies for defense and security.