Finland – Technology Performance Digest

Executive Summary

This report provides a comprehensive assessment of Finland’s current performance and trajectory in two strategically significant dual-use technologies: augmented-reality and wearable-health-tech. The analysis focuses on the roles of two leading Finnish organisations: Varjo, a pioneer in high-fidelity augmented and virtual reality solutions, and Ōura, a global leader in wearable health technology. As of June 2025, Finland is positioned as a niche innovator in both domains, leveraging its robust innovation ecosystem, strong public-private partnerships, and a reputation for technological excellence. However, the nation faces challenges in scaling, international competition, and regulatory harmonisation. This report evaluates Finland’s strengths and weaknesses, notable programmes and investments, comparison with global competitors, opportunities for collaboration and export, risks, and a five-year outlook.

Strengths

Advanced R&D Ecosystem

Finland boasts a highly developed research and development (R&D) ecosystem, underpinned by significant government investment, world-class universities, and a culture of public-private collaboration. The Finnish Innovation Fund Sitra, Business Finland, and the Academy of Finland have consistently supported dual-use technology initiatives, facilitating the translation of academic research into commercial and defence applications.

Leading Organisations

• Varjo: Varjo has established itself as a global leader in professional-grade augmented-reality and virtual reality (VR) headsets. Its products, known for industry-leading visual fidelity and precision, are used in aviation training, defence simulation, and industrial design. Varjo’s focus on enterprise and government markets, including NATO-aligned militaries, positions it as a key player in dual-use applications.
• Ōura: Ōura’s smart ring is a market leader in wearable-health-tech, offering advanced biometric monitoring (e.g., sleep, heart rate, body temperature) with a strong reputation for accuracy and privacy. The company has expanded into defence and first responder markets, providing solutions for fatigue management and health monitoring.

Digital Infrastructure and Data Security

Finland’s digital infrastructure is among the most advanced globally, with widespread 5G coverage and secure cloud services. The country’s strong data privacy regulations and trusted digital identity frameworks are attractive for sensitive dual-use technology deployments.

Human Capital

Finland consistently ranks high in education and digital skills, producing a steady pipeline of engineers, data scientists, and designers. The nation’s workforce is experienced in cross-disciplinary collaboration, essential for the integration of hardware, software, and AI in dual-use technologies.

Weaknesses

Scale and Market Size

Finland’s domestic market is limited in size, constraining the ability of companies like Varjo and Ōura to achieve economies of scale without rapid internationalisation. This poses challenges in competing with larger US, Chinese, and EU firms with greater access to capital and customers.

Funding Gaps for Scale-Up

While early-stage funding is robust, Finnish firms often face a “valley of death” when seeking late-stage venture capital or growth funding. This can impede the scaling of promising dual-use technologies and limit their ability to compete globally.

Regulatory Fragmentation

Navigating the complex regulatory landscape for dual-use technologies—especially those with defence and health applications—remains a challenge. Differing export controls, privacy laws, and certification requirements across jurisdictions can slow market entry and collaboration.

Limited Defence Procurement

Finland’s defence procurement budget, while growing, remains modest compared to larger NATO allies. This limits the scale of domestic defence-related contracts for dual-use technology providers, making them more dependent on exports.

Talent Retention

The global demand for skilled professionals in augmented-reality and wearable-health-tech has led to increased competition for talent. Finnish firms face challenges in retaining top talent, especially as international tech giants expand their presence in the region.

Notable Programmes & Investments

Government Initiatives

• Business Finland Dual-Use Technology Programme (2023–2028): Provides grants and advisory services for companies developing technologies with both civilian and defence applications, including augmented-reality and wearable-health-tech.
• Defence Forces Innovation Partnership: The Finnish Defence Forces (FDF) have partnered with domestic firms to pilot AR-based training and health monitoring systems for soldiers, leveraging products from Varjo and Ōura.

Industry-Led Projects

• Varjo’s Defence Simulation Suite: In 2024, Varjo launched a dedicated simulation suite for military and civil aviation training, integrating AR/VR with real-time data analytics. The suite is being evaluated by the FDF and several NATO air forces.
• Ōura’s First Responder Health Platform: Ōura has adapted its wearable platform for use by emergency services, integrating stress and fatigue monitoring into command dashboards. Pilots are ongoing with the Finnish Border Guard and fire services.

International Collaborations

• NATO Innovation Fund: Both Varjo and Ōura have received funding and technical support through NATO’s innovation initiatives, facilitating cross-border R&D and interoperability testing.
• EU Horizon Europe Projects: Finnish consortia, including these organisations, participate in EU-funded projects focusing on secure AR/VR for critical infrastructure and AI-driven health monitoring.

Academic Partnerships

• Aalto University & University of Oulu: Leading research on next-generation AR optics, sensor fusion, and privacy-preserving health data analytics, often in collaboration with industry partners.

Competitive Comparison

Augmented-Reality

• Global Leaders: US-based Microsoft (HoloLens), Magic Leap, and Apple (Vision Pro) dominate the AR hardware market, with significant resources and established defence contracts.
• Varjo’s Niche: Varjo differentiates itself through superior visual fidelity and a focus on professional/defence markets. Its headsets are favoured for high-stakes simulation and design, but the company lacks the scale and ecosystem breadth of US giants.
• Regional Peers: Sweden’s Saab and France’s Thales are investing in AR for defence, but few EU firms match Varjo’s technical quality.

Wearable-Health-Tech

• Global Leaders: Apple (Apple Watch), Fitbit (Google), and Samsung lead the consumer wearables market, with growing interest in health and wellness applications.
• Ōura’s Position: Ōura leads in form factor (ring), data accuracy, and privacy. Its penetration into defence and first responder markets is unique, but it faces increasing competition as larger firms add advanced health features.
• Regional Peers: Swiss and German medtech firms focus on clinical-grade wearables, but Ōura’s consumer-to-professional pivot is distinctive.

Overall Assessment

Finland’s dual-use technology sector is highly innovative and agile, with a strong reputation for quality and trustworthiness. However, it faces challenges in scaling and defending its niche against well-funded global competitors.

Opportunities for Collaboration / Export

Defence and Security

• NATO and EU Militaries: Both Varjo and Ōura are well-positioned to supply NATO and EU armed forces seeking advanced AR-based training and health monitoring solutions. Interoperability with allied systems is a key selling point.
• Homeland Security and Civil Protection: There is strong export potential for AR/VR training systems and wearable health monitoring platforms for border security, police, and emergency services across Europe, Asia-Pacific, and North America.

Healthcare and Industrial Sectors

• Hospitals and Telemedicine: Ōura’s platform can be integrated into remote patient monitoring and chronic disease management, especially in markets with ageing populations.
• Industrial Training: Varjo’s AR/VR solutions are in demand for high-risk industrial training (e.g., energy, manufacturing, aviation) where safety and realism are paramount.

Research and Innovation

• Academic-Industry Consortia: Finland’s strong university-industry links create opportunities for joint R&D, particularly in AI-driven analytics, privacy, and human-machine interfaces.
• Standardisation Bodies: Finnish organisations can influence international standards for AR/VR and wearable health tech, enhancing exportability.

Emerging Markets

• Asia-Pacific: Growing defence and healthcare budgets in Japan, South Korea, and Australia present export opportunities, especially where data privacy and quality are valued.
• Middle East: Defence modernisation and smart city initiatives create demand for advanced AR and health monitoring solutions.

Risks & Mitigation

Geopolitical Risks

• Export Controls: Stricter EU and US export controls on dual-use technologies could limit access to certain markets. Finnish firms must maintain robust compliance frameworks and diversify export destinations.
• Supply Chain Vulnerabilities: Dependence on global semiconductor and optics supply chains exposes Finnish firms to disruptions. Mitigation includes diversifying suppliers and investing in domestic or EU-based manufacturing.

Competitive Pressures

• Market Entry by Tech Giants: Large US and Chinese firms can rapidly enter niche markets, leveraging scale and ecosystem integration. Finnish firms must focus on differentiation (quality, privacy, interoperability) and strategic partnerships.
• IP Theft and Cybersecurity: As Finnish technologies gain prominence, the risk of IP theft and cyberattacks increases. Ongoing investment in cybersecurity and legal protections is essential.

Regulatory and Ethical Risks

• Data Privacy Compliance: Operating in multiple jurisdictions with varying data privacy laws (e.g., GDPR, US HIPAA) requires rigorous compliance and transparent data practices.
• Dual-Use Ethics: The potential for misuse of AR and health monitoring technologies in surveillance or coercive contexts necessitates clear ethical guidelines and export screening.

Talent and Skills

• Brain Drain: To retain talent, Finnish firms must offer competitive compensation, career development, and opportunities for international collaboration.
• Skills Mismatch: Continued investment in education and training is needed to keep pace with rapid technological change.

Outlook (5-year)

Market Trajectory

Over the next five years (2025–2030), Finland is expected to maintain its position as a global innovator in augmented-reality and wearable-health-tech, with Varjo and Ōura at the forefront. The dual-use nature of these technologies will drive continued demand from both defence and civilian sectors.

• Augmented-Reality: The global AR market is projected to grow at a CAGR of 25–30%, with increasing adoption in defence, aviation, and industrial training. Varjo’s focus on high-fidelity, secure, and interoperable systems aligns with NATO and EU priorities. Continued R&D investment and strategic partnerships will be essential for maintaining competitiveness.
• Wearable-Health-Tech: The wearable health tech market is expected to expand rapidly, driven by telemedicine, preventive health, and workforce wellness. Ōura’s reputation for privacy and accuracy positions it well for both consumer and professional markets, but ongoing innovation and regulatory compliance will be critical.

Policy and Investment

The Finnish government is likely to sustain or increase support for dual-use technology R&D, with an emphasis on export promotion, cybersecurity, and talent development. EU and NATO collaboration will deepen, providing access to larger markets and joint R&D funding.

Challenges

• Scaling Up: Achieving global scale will remain a challenge, requiring greater access to growth capital and stronger international partnerships.
• Competition: The entry of tech giants and rapid technological convergence will intensify competition. Finnish firms must double down on quality, privacy, and interoperability.
• Regulatory Complexity: Harmonising compliance across jurisdictions will be an ongoing challenge, necessitating proactive engagement with regulators and standards bodies.

Strategic Recommendations

• Invest in Differentiation: Focus on unique value propositions—such as visual fidelity, data privacy, and interoperability—for both defence and civilian markets.
• Expand International Partnerships: Leverage EU, NATO, and bilateral programmes to access new markets and funding.
• Enhance Talent Retention: Develop programmes to attract and retain top talent, including international mobility and advanced training.
• Strengthen Supply Chains: Invest in resilient, diversified supply chains for critical components.
• Proactive Regulatory Engagement: Shape international standards and advocate for harmonised dual-use technology regulations.

Conclusion

Finland’s dual-use technology sector, exemplified by Varjo and Ōura, is well-positioned for continued innovation and export growth in augmented-reality and wearable-health-tech. While facing challenges in scale, competition, and regulation, the nation’s strengths in R&D, digital infrastructure, and trusted innovation provide a solid foundation. With sustained investment, strategic partnerships, and a focus on quality and privacy, Finland can maintain and enhance its role as a key player in the global dual-use technology landscape over the next five years.