Sweden's Saab has a long history of developing jet fighters for the Swedish Air Force, such as the J32 Lansen, J35 Draken and J37 Viggen. The company established the Industry Group JAS (IG JAS) with other manufacturers, including Volvo Aero, to co-ordinate industry efforts to develop the fourth-generation JAS-39 Gripen multi-role fighter, which first flew in 1988 and entered Swedish Air Force service in 1997. Saab also established with BAE Systems the joint venture Gripen International to handle the marketing and export sales of the aircraft. Gripen components are currently built in Sweden, the UK and the US.

The Mach 2 Gripen is currently Europe’s second most successful delta-wing fighter export behind the Eurofighter Typhoon. Only the French Rafale has failed so far to secure any export orders, but is the only
combat-proven aircraft having recently undertaken operations over Afghanistan. The UK’s Empire Test Pilot School (ETPS), which is run by QinetiQ and the UK MoD, has had an agreement since 1999 with Saab’s subsidiary, Saab Aerosystems, to use Gripens for advanced training at Linköping in Sweden. The Czech Republic and Hungary are each leasing 14 Gripens for a period of ten years with the type coming into service in 2005/06, while 28 aircraft will be delivered to the South African Air Force in 2008–2012. South Africa reported in November 2007 that it had so far achieved US$4.8 billion (EUR3.3 billion) in offset benefits gained through its combined acquisition of the Gripen and 24 BAE Systems Hawk Mk120s, covering more than 100 civilian and defence projects. Defence-related industrial offsets related to the Gripen programme have so far generated US$520 million (EUR355 million). Both aircraft types are being assembled locally with Denel Aviation the prime contractor.

In October 2007, Thailand selected the Gripen to meet its requirement for a replacement for its ageing fleet of F-5B/E Tiger II fighters. Two contracts worth US$1.1 billion (EUR751 million) to cover 12 JAS-39C/D variants and two Erieye AEW aircraft, plus training and two years of maintenance support and spare parts, are expected to be signed in the near future. The Swedish and Thai governments approved the first deal in January 2008 that will cover six Gripens, one Erieye and one Saab 340 turboprop aircraft (the platform used for the Erieye model) for training with deliveries due in 2011.

The Swedish government recently awarded a US$160 million (EUR109 million) contract to Saab to upgrade the standard JAS-39C/D by 2008 with new software, night vision goggles (NVGs) for the pilot, enhancements to the radar and the ECM suite, as well as make the aircraft capable of undertaking full combat operations using two aircrew. A separate US$600 million (EUR409 million) contract will see 31 Flygvapnet JAS-39A/B variants being upgraded to C/D standard. Coupled with a later US$54 million (EUR37 million) order for Cobra
Helmet-Mounted Display Systems (HMDS), efforts are being made to ensure that the Gripen remains at the cutting-edge of fighter technology.

Significantly, Saab announced plans in June 2007 to develop a new version of the aircraft, dubbed the Gripen Demo. The Gripen Demo will be built for evaluation purposes to utilise further technology that could keep the JAS-39 Gripen in service until 2040. It will incorporate enhanced avionics, new weapons and a new powerplant, the 96kN F414G turbofan, which is a modified version of the F414-GE-400 turbofan that Volvo Aero (part of the Volvo Group) has worked on with General Electric to power the US Navy’s F/A-18 Super Hornet. The F414G in the Gripen Demo will replace the current RM12 turbofan and is based on General Electric’s F404 engine. The Gripen Demo will also be fitted with a new Active Electronically Scanned Array (AESA) radar developed by Ericsson, replacing the company’s
PS-05 multi-mode pulse doppler radar. Saab has joined forces with a number of companies to develop and evaluate the Gripen Demo and a ground-based avionics rig in 2008-2010, including General Electric, Volvo, Martin-Baker, Honeywell and Rockwell Collins. Some US$155 million (EUR106 million) has already been invested the Demo’s development.

Kockums is part of ThyssenKrupp Marine Systems (TKMS). The company employs about 1,200 people and has an annual turnover of US$297 million (EUR203 million). Kockums has constructed a range of naval vessels currently operated by the Royal Swedish Navy at its Malmö and Karlskrona shipbuilding facilities, including the Götland and Södermanland Class SSK submarines, the Visby Class corvette, and the Landsort and Styrsö Class MCMVs. The company has built SAM remote-controlled minesweepers for the Swedish, Japanese and US Navy. It is also constructing two new SSK submarines for Singapore and assisted in the design of the Australian Navy's Collins Class SSK submarines. In December 2007, the Swedish government approved the start of the development of a next-generation submarine for the Royal Swedish Navy. Currently codenamed "A29" or NGU (Nästa Generation Ubåt), a 1,400-tonne diesel-powered vessel that will feature added stealth, an extended range and increased speed as well as the use of advanced unmanned underwater vehicles (UUVs). It is now in its early design stages, but an order for about two vessels is expected to be placed in 2008. The type could also be ordered by Australia, Norway and Singapore, and it is believed that these countries are in discussions with Kockums for industrial co-operation. It has also been reported that the US is interested in acquiring one vessel. The US leased a Swedish-crewed Götland Class SSK submarine in 2005 for ASW training purposes.