X

Japan’s efforts to create a dual-purpose defense startup environment

To stay competitive in the global technological race, Japan must merge its defence and civilian innovation ecosystems, which involve diverse stakeholders. In September 2024, Japan’s Ministry of Defense and Ministry of Economy, Trade and Industry unveiled the concept of a “dual-use startup ecosystem.” This initiative seeks to integrate startups into research and development (R&D) to meet the technological demands of defence equipment.

Strengthening Defence Innovation

Prior to the announcement, the government identified approximately 200 startups in July 2023, outlining plans to support these companies with defence-related equipment and financial assistance to ease their entry into the market. The startups specialize in advanced fields such as drones, cyber defence, satellite communications, and electromagnetic wave technologies.

Leading this initiative is the Ministry of Defense’s Acquisition, Technology, and Logistics Agency through its newly established Defense Innovation Science and Technology Institute (October 2024). The aim is to efficiently incorporate civilian technologies into defence equipment, aligning with global trends where private-sector innovation plays a growing role in defence development. The model draws inspiration from the U.S. Defense Advanced Research Projects Agency (DARPA) and the Defense Innovation Unit, which rapidly integrate private-sector advancements into defence projects.

Historical Roots and Persistent Challenges

Japan’s push for dual-use technologies is not entirely new. Efforts began with the 2013 National Security Strategy and the 2014 Strategy on Defense Production and Technological Bases, emphasizing public-private partnerships. These policies responded to challenges like globalized supply chains, Japan’s deteriorating security environment, the shrinking defence industry, and the need for technological cooperation with allies.

However, gaps between policy and implementation have hindered progress. A major issue is the low profitability of the defence industry, which has driven many private companies out of the sector. Reform efforts must offer stronger incentives for startups to participate. While increased defence spending has benefited traditional firms, smaller companies and startups face uncertain gains.

Another obstacle is the private sector’s cautious stance on defence R&D, rooted in Japan’s post-war anti-militarist norms. Many academic and industrial players perceive military involvement as a reputational risk in the predominantly civilian-focused business landscape.

For instance, the Ministry of Defense’s 2015 research funding initiative faced strong opposition from the academic community, including the Science Council of Japan, which criticized it for potentially restricting free scientific inquiry. This resistance has limited the impact of defence-related reforms, and startups entering the sector may encounter similar challenges.

Emerging Opportunities in a Changing Context

Despite these hurdles, Japan’s new dual-use startup ecosystem reflects an evolving political and social landscape. Since the 2010s, Japan’s national security policies have shifted to address growing security threats and fiscal constraints. Public opinion has gradually become more open to pragmatic national security measures, although resistance persists in some sectors.

Startups, particularly those led by younger entrepreneurs who are less tied to traditional business norms, are poised to play a pivotal role in this policy’s success.

Economic Security as a Catalyst

Economic security policies are further driving changes in Japan’s defence innovation ecosystem. The 2022 Economic Security Promotion Act has marked the beginning of “economic securitisation,” incorporating critical and emerging technologies into national policy. Initiatives like the “Key and Advanced Technology R&D through Cross Community Collaboration Program” have expanded R&D budgets, with applications spanning both civilian and military domains under the label of “multi-use” technologies.

By framing defence-related R&D as part of economic security, the government is addressing concerns within Japan’s political culture. This approach may reduce normative barriers for companies and universities to engage in defence-related activities.

A Defining Moment for Japan’s Innovation Ecosystem

As economic securitisation gains traction, Japan faces an opportunity to establish a robust defence innovation ecosystem. However, this moment also demands tough decisions from the private sector about their involvement in defence projects. Balancing commercial interests with normative considerations will shape the future of Japan’s defence and civilian innovation integration.

Categories: Business
Archana Suryawanshi:
X

Headline

You can control the ways in which we improve and personalize your experience. Please choose whether you wish to allow the following:

Privacy Settings

All rights received