The defence industry in Sweden - as well as the defence industry in other parts of Europe and the USA - is transforming from manufacturing as the main source of revenue to becoming a service producing industry. This ongoing shift is due to several coinciding developments, for exampl- the increased use and importance of commercial technologies in defence produchon as well as changes in demand. SepAces and development of technological solutions is becoming the focus of customer demand and the demand for relatively long series of platforms is in decline. In services and advanced technological soludons much technology is of commercial origin - often from rapidly changing technology areas. This brings increased compl-xity as well as technological uncertainly to the defence industry. Defence companies need to change their strategic focuses and business models to manage the new environment. New business models witi include increased collaboration in networks of both commercial and defence companies as well as making early development phases and services equal sources of revenue of production. The defence indu*A management of this shift and not least the integration with commercial companies, will determine much of the future of the defence industry in Sweden - but there are many roads to the future.