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Opinion: Japan is leveraging dual-use technologies to boost defence and innovation, creating strategic opportunities for Australian SMEs, if they engage with the right partners and understand Japan’s business and cultural landscape, explains Guy Boekenstein, director Australia and Oceania – PACFORCE.
In response to regional security challenges and rapid technological advancements, Japan is increasingly leveraging dual-use technologies – innovations with both civilian and military applications – as a cornerstone of its national defence strategy. This approach aims to bolster defence capabilities, stimulate economic growth and enhance technological innovation.
As Japan seeks to diversify and build new industrial partnerships, there are opportunities for Australian start-ups and established SMEs to tap into the dual-use technology ecosystem in Japan, including for defence-focused companies.
This comes at a time when the Japanese government has made it clear that it is seeking a deeper industrial partnership with Australia and is waiting for the outcome of the SEA 3000 decision and the Mitsubishi Heavy Industries’ Mogami Class platform. Australia should embrace this relationship and regardless of the outcome of SEA 3000, there are plenty of other opportunities to form genuine partnerships.
Given the difficulties that some local companies are facing winning work in the Australian Department of Defence, this could be an attractive alternative market to explore. However, it is one where networks, cultural understanding and ongoing relationship building is vital to success.
What is Japan doing?
Japan’s Ministry of Defence and the Ministry of Economy, Trade and Industry (METI) are central to this transformation. Recognising the rapid development of commercial technologies and the fiscal constraints on defence research and development, both ministries have emphasised the necessity of collaborating with external organisations, both domestic and international, to enhance national security capabilities.
A key initiative is the Innovative Science and Technology Initiative for Security (ISTI), launched in 2023. This program supports universities and start-ups engaged in deep-tech research with potential defence applications – ranging from AI and robotics to materials science and quantum computing. ISTI represents a growing recognition that national security in the 21st century will depend as much on technological leadership as on traditional military strength.
The Japanese government is also actively working to identify and support SMEs developing technologies that can be adapted for national security use. For example, Kyoto-based Mitsufuji, a company known for wearable devices that monitor heat stress, has been tapped to provide solutions for the Japan Self-Defence Forces. These partnerships help integrate commercially available, cutting-edge technologies into its operations without bearing the full burden of development.
Start-ups focusing on robotics, artificial intelligence, quantum computing and materials science are also being encouraged to explore dual-use applications. Through government funding and procurement programs, Japan is cultivating a more resilient and innovation-driven defence ecosystem – one that is ripe for engagement.
US Army Colonel (Ret’d) Frank Clark III, CEO of PACFORCE (pacforce.com) and long-term Japan professional, emphasised that as Japan seeks to build its Allied Nations ecosystem, “non-Japanese companies will succeed by understanding the right partnerships to develop in Japan, and then how to build practical cooperation that is mutually beneficial”. He added: “After 26 years working in Japan across government, industry and academia, there are a range of specific business development tips and traps for newcomers.”
Practical initiatives
Amid economic challenges and shifting security dynamics, the Japanese government has prioritised innovation and international engagement as pillars of its national strategy. One notable policy instrument in this effort is the J-Star-X program, launched by METI and implemented by the Japan External Trade Organization.
Initially designed as an international start-up acceleration platform, J-Star-X now plays a subtle but growing role in Japan’s effort to cultivate dual-use technologies – those applicable to both civilian and military domains. J-Star-X is a comprehensive support platform for Japanese start-ups seeking to enter international markets. It provides targeted overseas dispatch opportunities to innovation hubs globally. The program offers multiple sector-specific tracks, each designed to align with high-impact global trends and emerging technology domains.
Export controls and security safeguards
With the increasing prevalence of dual-use technologies, Japan has reinforced its export control policies to prevent sensitive technologies from being misused. The Foreign Exchange and Foreign Trade Act serves as the cornerstone of Japan’s export control framework, ensuring that both defence and dual-use goods and technologies are regulated to maintain national and international security.
This emphasis on export controls underscores Japan’s commitment to responsible innovation – balancing the promotion of high-tech development with the need to uphold national and international security norms.
Japan’s commitment to integrating dual-use technologies extends to international partnerships. In April 2025, Japan and NATO agreed to deepen defence industrial cooperation, including the utilisation of advanced technologies from dual-use start-ups. This collaboration underscores Japan’s strategic intent to align with global defence innovation networks and contribute to collective security efforts.
Japan’s forward-leaning engagement with non-traditional partners like Australia, the UK, Italy etc. demonstrates its broader strategy to align with like-minded democracies in securing emerging technologies. Prime Minister Anthony Albanese recently stressed the importance for the Australian government to deepen trade and investment relationships in the region, including Japan.
Australian SMEs would be wise to prepare and explore these opportunities in Japan and the broader allied nation network. Leaders would be equally wise to seek informed advice for market entry and building successful partnerships which, importantly, are linked to “real and live” contracting vehicles.
Guy Boekenstein is the director Australia and Oceania at PACFORCE.
