News On Japan

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

TOKYO, Dec 27 (East Asia Forum) - 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

From April 1st, a new regulation took effect across Osaka Prefecture requiring all restaurants with a customer seating area larger than 30 square meters to become entirely smoke-free indoors—unless they install a designated smoking room. Establishments violating the rule face fines of up to 50,000 yen, while customers may be fined up to 30,000 yen.

The Imperial Household Agency launched an official YouTube channel on April 1st to introduce the activities of Emperor Naruhito and Empress Masako.

Japan's new fiscal year began on April 1st, with companies across the country holding entrance ceremonies to welcome new employees.

The Japanese government has released an updated damage forecast for a potential Nankai Trough megaquake, estimating that up to 298,000 people could die in the worst-case scenario. This projection reflects a slight reduction from the previous estimate of 332,000 deaths made 13 years ago.

The Japan Meteorological Agency announced on March 30th that cherry blossoms (Somei-Yoshino) in central Tokyo have reached full bloom, one day earlier than the historical average and five days earlier than last year.

MEDIA CHANNELS
         

MORE Politics NEWS

Japan's national budget for the new fiscal year is now set to pass within the current fiscal term, following an unusual set of deliberations in the Diet on March 28th.

Japan is busily laying the groundwork for a state visit by Xi Jinping, in what has now become a roughly once-in-a-decade occurrence. The last visit was derailed by COVID-19. (East Asia Forum)

Japan is facing a pivotal moment in pension reform as the government prepares to revise its system for the first time in five years. With a shrinking workforce and an aging population, the pension system is under pressure, prompting new proposals that could impact millions.

The foreign ministers of Japan, China and South Korea have agreed to promote future-oriented cooperation in tackling common issues, and accelerate arrangements to hold a trilateral summit in Japan as early as possible. (NHK)

A third-party panel investigating allegations of power harassment against Hyogo Governor Motohiko Saito submitted its findings to the prefectural government on March 19th, concluding that ten instances of his conduct constituted workplace harassment.

A recent incident involving the attack on Takashi Tachibana has raised concerns over the lack of available information about the suspect, Miyanishi. Despite the rapid flow of information in the digital age, very little has surfaced regarding his background beyond his residence and employment status.

The controversy surrounding Prime Minister Ishiba’s 100,000-yen voucher program continued to face scrutiny in the Diet on Monday, with opposition parties intensifying their criticism. Within the ruling party, concerns are mounting that Ishiba may be an electoral liability.

Okinawa’s ruling and opposition lawmakers failed to reach a consensus on March 13th regarding revisions to the 2025 fiscal general budget, with the Washington office’s operational expenses emerging as a key point of contention. The debate remained deadlocked.