News On Japan

Japan’s push for a dual-use defence startup ecosystem

Japan’s push for a dual-use defence startup ecosystem

TOKYO - Japan is revolutionising its defence innovation by creating a dual-use startup ecosystem that integrates civilian technologies into defence research.

To survive in the global technological race, Japan must integrate defence and civilian innovation ecosystems that are made up of various stakeholders. The concept of a ‘dual-use startup ecosystem’ was jointly announced by Japan’s Ministry of Defense and Ministry of Economy, Trade and Industry in September 2024. It aims to integrate Japanese startups into research and development to address technological needs for defence equipment.

Preceding the announcement, the government informally identified around 200 startups in July 2023 and outlined plans to introduce defence-related equipment and financial support to these companies, addressing their concerns about entering the market. The list includes companies specialising in advanced technologies such as drones, cyber defence, satellite communications and electromagnetic wave-related innovations.

The Ministry of Defense’s Acquisition, Technology and Logistics Agency is spearheading this initiative through the Defense Innovation Science and Technology Institute, established in October 2024. The goal is to incorporate civilian technologies into defence equipment efficiently, aligning with the recent global trends in defence acquisition policy, which increasingly integrates private-sector technologies and ideas into the defence innovation ecosystem. Startups’ unique technologies and innovations are considered critical resources for the defence sector. These defence initiatives are inspired by models such as the US Defense Advanced Research Projects Agency and the Defense Innovation Unit, designed to swiftly adopt advanced private-sector technologies.

This approach is not entirely new in Japan. Efforts to strengthen cooperation with the private sector and utilise dual-use technologies in defence research and development can be traced back to the 2013 National Security Strategy and the 2014 Strategy on Defense Production and Technological Bases. These policies clearly stated that the promotion of public–private partnerships was a critical aspect of policy change, which was affected by complex factors, including the globalisation of supply chains, the deterioration of Japan’s security environment, concerns about the shrinking of the Japanese defence industry’s base and the pursuit of technological cooperation with allies and friends.

But the gap between policy formulation and implementation has hindered the development of dual-use technology in Japan. One significant obstacle is the low profitability of the defence industry, which has led to a sustained exodus of private companies from the sector. Japanese defence industry reform must enhance incentives for startups to engage in the innovation ecosystem. While increased defence spending offers short-term advantages — evidenced by traditional defence firms expanding their facilities — the ability of small- and medium-sized companies, including startups, to benefit remains uncertain.

Another crucial hurdle is the deep-rooted cautiousness of the private sector in Japan toward defence-related research and development, rooted in anti-militarist norms established during the early Cold War period. A significant part of the Japanese industrial and academic sectors has often shown normative resistance to cooperation with the Ministry of Defense, viewing military involvement as a reputational risk in the civilian field that accounts for the majority of their activities.

The academic sector opposed the Ministry of Defense’s research and development funding established in 2015. The Science Council of Japan criticised it as a move that would lead to excessive restrictions on free and open scientific research, and many universities decided not to apply for the research grant. For these reasons, the Japanese defence industry’s reforms, including private-sector-led defence projects, have not produced immediate and sufficient results, and some startups are also likely to face similar hurdles in entering the market.

Despite these challenges, Japan’s new approach to the dual-use startup ecosystem reflects a shifting political and social context. Since the 2010s, Japan’s national security policy has evolved to address a harsher security environment and fiscal constraints. Public opinion has gradually shifted, becoming less negative toward pragmatic national security policy, though some resistance persists among companies and universities. Startups led by younger entrepreneurs unbound by traditional business models are likely to play a decisive role in the success of this policy.

Another political trend that can accelerate the rearrangement of the Japanese defence innovation ecosystem is the strengthening of economic security policy. Since the enactment of the 2022 Economic Security Promotion Act, many fields of policy in Japan have entered a period of ‘economic securitisation’. An essential part of this economic security policy is acquiring critical and emerging technology.

The act also supports initiatives like the ‘Key and Advanced Technology R&D through Cross Community Collaboration Program’. In doing so, the government has expanded research and development budgets, with applications spanning both civilian and military domains — officially referred to as ‘multi-use’ technologies. This means that defence-related research and development is now framed not only in the context of military security but also economic security, which is likely to be more acceptable in the Japanese political culture.

If this trend of ‘economic securitisation’ continues, normative barriers to defence-related research and development may be reduced for companies and universities. This is an opportunity for the Japanese government to realise a defence innovation ecosystem. But it is also a time of tough choices for the private sector to decide whether and how to get involved in the defence business based on its interests and normative stance.

Kousuke Saitou is Professor at the Faculty of Global Studies, Sophia University.

News On Japan
POPULAR NEWS

Japan began applying a new numerical alcohol threshold for dangerous driving offenses on July 21, introducing a clearer standard for cases involving impaired driving that could lead to fatal accidents.

Prime Minister Sanae Takaichi's government approved its first annual basic economic and fiscal policy on Tuesday, pledging "responsible and proactive fiscal policy" and envisioning about 370 trillion yen in public- and private-sector investment in strategic industries through fiscal 2040.

A covert network of shuttle tankers is carrying crude through the increasingly dangerous Strait of Hormuz as renewed fighting between the United States and Iran disrupts shipping and raises concerns over how Japan will secure the oil it needs.

Russian Deputy Foreign Minister Andrey Rudenko has criticized moves by Japanese and Ukrainian companies to cooperate on drone technology, warning that such ties would be regarded by Moscow as a "clear hostile act."

The rainy season ended in the Kanto-Koshin and Tokai regions on July 20 as strengthening high pressure brought intense heat across Japan, with temperatures forecast to reach 38 C in Kumagaya, Saitama Prefecture, and Kofu.

MEDIA CHANNELS
         

MORE Politics NEWS

Prime Minister Sanae Takaichi’s first economic policy roadmap took center stage on July 21, setting out a long-term investment strategy aimed at reviving growth, but the plan was immediately overshadowed by concerns in the bond market over fiscal discipline and the Bank of Japan’s independence.

Asset reports for all 465 members of Japan's House of Representatives elected in February 2026 have been released, showing average declared assets of 32.78 million yen, up 6.09 million yen from the previous disclosure.

Russian Deputy Foreign Minister Andrey Rudenko has criticized moves by Japanese and Ukrainian companies to cooperate on drone technology, warning that such ties would be regarded by Moscow as a "clear hostile act."

Prime Minister Sanae Takaichi entered the week of July 20 with her government facing a shortened but politically important stretch before the extended Diet session ends, as debate continued over Bank of Japan independence, domestic investment policy, the revised Imperial House Law and the ruling coalition’s unfinished legislative agenda.

Japan's revised Imperial House Law was enacted after clearing the House of Councillors with majority support, allowing female members to retain royal status after marriage and male-line descendants of former imperial family branches to enter the Imperial Household through adoption.

Prime Minister Sanae Takaichi closed the Diet session on July 17 under pressure from both parliament and financial markets, as lawmakers enacted a revised Imperial House Law while the government moved to clarify that monetary policy tools remain under the sole authority of the Bank of Japan.

A bill to revise the Imperial House Law was approved by an Upper House special committee on July 16, paving the way for its expected enactment on July 17.

A protest against Prime Minister Sanae Takaichi was held in Tokyo's Shibuya district on July 16 as public concern grew over a bill that would impose criminal penalties for damaging the Japanese flag.