The foreign acquisitions and political retaliation as threats to supply security in an era of strategic decoupling (FORAC) research project studied how small open economies can shield enterprises critical for their supply security from strategic foreign acquisitions and political retaliation, while still maintaining their open economies. This question has become pressing, as recent years have seen active efforts by state-linked economic organisations to acquire foreign enterprises that possess critical technological know-how, or perform vital tasks in national supply systems. ForAc combined three research areas in an innovative, interdisciplinary way: supply security, economic statecraft and strategic enterprise acquisitions. There are critical knowledge gaps in the inter-linkages between these research areas with urgent policy implications, which this project addressed. Company acquisition processes with Chinese investors, developments in legislation regulating foreign ownership, Finnish and Swedish supply security systems and risks of high technology dependencies were studied by conducting 17 semi-structured interviews. The interviews were conducted either onsite or online from November 2021 to December 2022, they were either recorded or notes were written, and, finally, they were transcribed without personal identifiers. The interviewees included the following experts: • Five Finnish health and biotechnology companies that have either been subject to Chinese acquisition attempts, either successful or unsuccessful • Two Finnish water management companies that Chinese companies have attempted to acquire • One Finnish IT entrepreneur whose has successfully sold a company to China • One cybersecurity expert with a focus on health technology • One IT expert with a focus on start-ups • One maritime industry expert • Two Finnish investment screening officials • One Finnish state official with a specific knowledge of foreign investments • Four Finnish state officials with a specific knowledge of risks of foreign technologies • One Swedish investment screening official • One Swedish state official with expertise on the overall development of the Swedish FDI legislation • One Swedish state official with expertise on the economic aspects of the Swedish FDI legislation As part of the project, two Delphi stakeholder exercises were also organised. The exercises utilised comic art format threat scenarios, which the research team drafted based on expert interviews and horizon scanning exercises. In Finland, a major online exercise was organised in May 2022-March 2023. The exercise consisted of three rounds of questionnaires with each round consisting of three threat scenarios. The experts were asked to study the scenarios and propose ways to prevent them from materialising. The experts also had a chance to elaborate on their original views based on the answers of other experts, which were made visible in real time. The Finnish exercise was organised in Finnish, and the panellists remained anonymous to each other. In Sweden, an onsite Delphi workshop was organised in October 2022. The experts studied two threat scenarios, proposed their initial ideas on how to prevent them from unfolding, and finally, after oral discussion, elaborated on their original views. The answers were given anonymously, in Swedish. The Delphi data consists of around 500 anonymous comments from 97 Finnish stakeholders and 32 anonymous comments from 16 Swedish stakeholders. Thematically, the comments focus on ways to enhance Finland’s preparedness in the face of security risks of foreign ownership, supply disruptions and high technology dependencies. The key publication basing on the Delphi data is Mattlin et al. (2023) Enhancing Small State Preparedness: Risks of foreign ownership, supply disruptions and technological dependencies. FIIA Report 74. It can be found here: https://www.fiia.fi/wp-content/uploads/2023/08/report74_enhancing-small-state-preparedness_fixed_web.pdf. In addition, the project utilised policy documents, academic articles, newspapers, legislative acts and statistics as primary data. These sources are primarily produced by Finnish, Swedish, Danish, Norwegian, Icelandic, Chinese and US governments, state agencies, third sector organisations, media outlets and scholars. They include, for example, Nordic investment screening legislations, databases on foreign direct investments, Chinese policy documents guiding economic development and AI governance, journal articles on economic statecraft, and newspaper texts and journal articles on strategic decoupling and de-risking.

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