K‑företag: how Sweden mobilises civilian businesses during war efforts

In 1994, Leif Arthursson, dir­ect­or of a Swedish fire hose man­u­fac­turer, had a dis­creet plaque on a wall in his fact­ory. It bore the inscrip­tion “K‑företag”, a com­mit­ment sig­ni­fy­ing that, in the event of war, the com­pany would not have to close its doors. On the con­trary, it would have reor­gan­ised its oper­a­tions to ful­fil a pre-estab­lished con­tract with the state, to pro­duce a spe­cif­ic type of hose designed to be man­u­fac­tured in times of crisis without the need for impor­ted raw mater­i­als¹. Thirty years on, Sweden is seek­ing to revive this system.

K‑företag (krigs­viktiga företag, “com­pan­ies of crit­ic­al import­ance in war­time”) are part of a long Swedish tra­di­tion of eco­nom­ic pre­pared­ness, the ori­gins of which date back to the First World War. Although Sweden remained neut­ral, it was not spared the eco­nom­ic con­sequences of the con­flict. Dis­rup­tions to inter­na­tion­al trade and short­ages of raw mater­i­als exposed the vul­ner­ab­il­ity of an eco­nomy heav­ily depend­ent on imports. This exper­i­ence gradu­ally led the author­it­ies to view civil­ian enter­prises not merely as eco­nom­ic play­ers, but as indis­pens­able resources for nation­al defence in the event of a crisis)²³.

This line of think­ing was part of a broad­er trend towards eco­nom­ic plan­ning observed in sev­er­al European coun­tries. In Ger­many, the indus­tri­al­ist Walth­er Rathenau dis­covered as early as 1914, after sur­vey­ing nearly nine hun­dred large com­pan­ies, that their reserves of raw mater­i­als would only be suf­fi­cient to sus­tain a few months of war. This real­isa­tion led to the cre­ation of an admin­is­tra­tion tasked with coordin­at­ing indus­tri­al sup­ply⁴. In the Soviet Uni­on, cent­ral­ised plan­ning fol­lowed a sim­il­ar logic of per­man­ent mobil­isa­tion of the eco­nomy. Sweden, how­ever, chose a dif­fer­ent path.

In 1917, the eco­nom­ist Eli Heckscher set up an ini­tial tem­por­ary com­mis­sion for eco­nom­ic pre­pared­ness. This became a per­man­ent body in 1928 under the name Rikskom­mis­sion­en för eko­nom­isk förs­vars­bered­skap, with the remit of build­ing up stra­tegic stocks and pre­par­ing industry for a pos­sible war. From this peri­od onwards, Gen­er­al Joachim Åker­man, the institution’s first chair­man, expli­citly rejec­ted the Ger­man and Soviet mod­els. In a memo addressed to its board of dir­ect­ors, he explained that Sweden must not inter­vene author­it­at­ively in the peace­time eco­nomy. On the con­trary, eco­nom­ic pre­pared­ness must be based on organ­ised cooper­a­tion between the state and busi­nesses that remain free, rather than on a com­mand eco­nomy. This prin­ciple of vol­un­tary part­ner­ship forms the endur­ing found­a­tion of the Swedish model.

Author­it­ies map out sup­ply chains to identi­fy those busi­nesses whose goods or ser­vices are essen­tial to the country’s func­tion­ing in times of crisis

The sys­tem proved its worth dur­ing the Second World War, with Swedish indus­tri­al pre­pared­ness prov­ing far more effect­ive than it had been in 1914. Build­ing on this exper­i­ence, the sys­tem was gradu­ally insti­tu­tion­al­ised and strengthened through­out the Cold War under the author­ity of spe­cial­ised agen­cies, not­ably the Över­styrelsen för eko­nom­iskt förs­var (ÖEF), or Nation­al Office for Eco­nom­ic Pre­pared­ness, which was respons­ible for coordin­at­ing the country’s eco­nom­ic pre­pared­ness until 1986⁵. The prin­ciple is simple: the author­it­ies map out sup­ply chains to identi­fy those busi­nesses whose goods or ser­vices are essen­tial to the country’s func­tion­ing in times of crisis. Each com­pany is then covered by a pre­pared­ness plan and, for the most stra­tegic ones, a bered­skapsavtal (“pre­pared­ness agree­ment”), which sets out both the company’s oblig­a­tions in the event of war and the guar­an­tees provided by the state, such as the reten­tion of key staff, pro­tec­tion against cer­tain requis­i­tions, or exemp­tions from trans­port and fuel rationing.

At its peak, dur­ing the Cold War, the scheme covered nearly 15,000 com­pan­ies, extend­ing well bey­ond the defence sec­tor alone. Indus­tri­al groups such as Volvo and Saab were thus included along­side oper­at­ors of essen­tial infra­struc­ture, such as the Swedish rail­ways and the Stock­holm Stock Exchange. This diversity illus­trates a broad con­cep­tion of eco­nom­ic defence: the aim is not merely to ensure mil­it­ary pro­duc­tion, but to guar­an­tee the con­tinu­ity of all of society’s vital functions.

In the 1990s, Sweden gradu­ally dis­mantled its eco­nom­ic pre­pared­ness sys­tem. This decision was based on a new approach to secur­ity of sup­ply, which was no longer to be ensured through stra­tegic stocks and state plan­ning, but through integ­ra­tion into the European mar­ket and free trade. This shift reflec­ted a widely held belief fol­low­ing the end of the Cold War that peace was now deemed to be last­ing and that inter­na­tion­al sup­ply chains were a factor for sta­bil­ity rather than a source of vul­ner­ab­il­ity. The open­ing up of the Swedish eco­nomy accom­pan­ied this shift in doc­trine. Con­sequently, fol­low­ing its applic­a­tion to join the European Com­munity in 1991, Sweden reformed its com­pet­i­tion law to bring it into line with Com­munity rules, joined the European Eco­nom­ic Area in 1994 and then acceded to the European Uni­on in 1995. Con­tin­gency plans were gradu­ally phased out in the late 1990s, whilst the main stra­tegic stocks were liquid­ated in the early 2000s.

This strategy was based on the idea that eco­nom­ic inter­de­pend­ence was now suf­fi­cient to guar­an­tee the con­tinu­ity of sup­plies. How­ever, the crises of the 21st cen­tury have revealed its lim­it­a­tions. The Cov­id-19 pan­dem­ic has high­lighted Sweden’s depend­ence on glob­al sup­ply chains, lead­ing to short­ages of face masks, medi­cines and indus­tri­al com­pon­ents. The Rus­sia-Ukraine war has con­firmed this vul­ner­ab­il­ity by high­light­ing insuf­fi­cient ammuni­tion stocks and the dif­fi­culties in rap­idly scal­ing up pro­duc­tion capa­city with­in the defence industry.

Recent crises have promp­ted the Swedish author­it­ies to recon­sider this decision. As early as Decem­ber 2023, the Defence Com­mis­sion (Förs­vars­bered­nin­gen), the par­lia­ment­ary body respons­ible for set­ting the broad guidelines for defence policy, recom­men­ded in its Kraft­sam­ling report that a sys­tem mod­elled on the K‑företag be re-estab­lished⁶. This dir­ec­tion was con­firmed a few months later in Stärkt förs­varsförmåga, Sverige som alli­erad, which set a tar­get of at least three months’ self-suf­fi­ciency for activ­it­ies essen­tial to defence, achieved through a com­bin­a­tion of stocks held by the state and by com­pan­ies, sup­ple­men­ted by indus­tri­al and inter­na­tion­al agree­ments⁷. The debate there­fore no longer centres on wheth­er to re-estab­lish eco­nom­ic pre­pared­ness, but on how to adapt it to an eco­nomy pro­foundly trans­formed by glob­al­isa­tion, digit­al­isa­tion and the inter­na­tion­al­isa­tion of value chains.

At the same time, the gov­ern­ment com­mis­sioned a com­mit­tee of inquiry into the private sector’s eco­nom­ic pre­pared­ness (Utred­nin­gen om näringsliv­ets för­sör­jn­ings­bered­skap) to pro­pose a reform of the sys­tem. Its final report, sub­mit­ted in June 2025 and pub­lished in the offi­cial col­lec­tion of pub­lic inquir­ies (Statens offent­liga utred­ningar, SOU), con­cluded, how­ever, that a return to the pre­vi­ous sys­tem was impossible. Sev­er­al devel­op­ments explain this find­ing. Since the end of the Cold War, sup­ply chains have become glob­al­ised, cor­por­ate cap­it­al has become largely inter­na­tion­al­ised, and much of the expert­ise relat­ing to busi­ness plan­ning for defence (företag­s­plan­läggn­ing) has been lost. These eco­nom­ic trans­form­a­tions are com­poun­ded by a pro­foundly revised leg­al frame­work. Mem­ber­ship of the European Uni­on requires, in par­tic­u­lar, com­pli­ance with the prin­ciple of pro­por­tion­al­ity, which demands that any meas­ure be strictly neces­sary to achieve the object­ive pur­sued, as well as the prin­ciple of non-dis­crim­in­a­tion, which pro­hib­its favour­ing a com­pany on the basis of its nation­al­ity with­in the European Uni­on or the European Eco­nom­ic Area. Under these cir­cum­stances, eco­nom­ic plan­ning must be rethought with­in the frame­work of an open eco­nomy and European law.

Rather than rein­stat­ing the K‑företag sys­tem, the com­mis­sion of inquiry pro­poses a new instru­ment: sup­ply secur­ity agree­ments (för­sör­jn­ings­bered­skapsavtal), or F‑avtal. Unlike the his­tor­ic­al sys­tem, this no longer involves grant­ing cer­tain com­pan­ies per­man­ent stra­tegic enter­prise status. Spe­cially des­ig­nated sec­tor­al author­it­ies (F‑avtalsmyndigheter) con­clude indi­vidu­al­ised agree­ments with the com­pan­ies con­cerned, based on iden­ti­fied needs. The mod­el ther­fore moves away from a cent­ral­ised plan­ning approach in favour of con­trac­tu­al cooper­a­tion, which is more flex­ible and bet­ter suited to the diversity of con­tem­por­ary eco­nom­ic actors.

The com­mit­tee con­siders, how­ever, that this cooper­a­tion can­not be based solely on vol­un­tary par­ti­cip­a­tion. The com­mer­cial interests of com­pan­ies, par­tic­u­larly when they belong to inter­na­tion­al groups or are for­eign-owned, may con­flict with defence require­ments and the need to ensure secur­ity of sup­ply in times of crisis. It there­fore recom­mends that the F‑avtal be accom­pan­ied by the pos­sib­il­ity of leg­al com­pul­sion as a last resort. In sup­port of this recom­mend­a­tion, it draws on the Nor­we­gi­an exper­i­ence, where the mere exist­ence of a power of requis­i­tion has encour­aged the con­clu­sion of vol­un­tary agree­ments without it ever being neces­sary to invoke it in prac­tice. The cred­ib­il­ity of state inter­ven­tion thus appears to be one of the con­di­tions for the suc­cess of vol­un­tary cooperation.

In con­clu­sion, Sweden is not seek­ing to rein­state the K‑företag as they exis­ted dur­ing the Cold War. Rather, it is attempt­ing to rebuild cooper­a­tion between the state and busi­nesses in a way that is suited to a glob­al­ised eco­nomy and the European leg­al frame­work. Bey­ond the Swedish case, this devel­op­ment illus­trates a chal­lenge now shared by many European states: how can eco­nom­ic resi­li­ence be strengthened in the face of crises without abandon­ing the prin­ciples of an open economy?