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Opinion: Japan is rapidly integrating dual-use technologies and civilian innovation into its defence strategy to strengthen supply chains, expand defence exports and deepen cooperation with allies such as Australia and the US in response to growing regional competition in the Indo-Pacific, explains managing partner for Honolulu with Ballard Partners, Bernice Kissinger.
Japan is accelerating a major shift in its defence and industrial policy, placing dual-use technology – innovations with both civilian and military applications – at the centre of its emerging security strategy. The move reflects Tokyo’s growing concern over regional security threats, supply-chain vulnerabilities, and the need to strengthen its domestic defence industrial base while maintaining its globally competitive technology sector.
Under the government of Prime Minister Sanae Takaichi, Japan has begun integrating civilian research, advanced manufacturing and emerging technologies more directly into defence planning. Recent events in the Middle East, lessons learned from Ukraine, an increasingly “busy” US supply chains and the need to diversify markets are also now driving this reform more quickly than expected.
Officials argue that technologies developed for commercial markets – including artificial intelligence, robotics, semiconductors and advanced sensors – are increasingly decisive in modern warfare. Japan’s Ministry of Defense has emphasised that leveraging this dual-use ecosystem will allow the country to innovate more quickly and collaborate more closely with allies.
Defence minister signals a new approach
In late February this year, Japan’s Defense Minister, Shinjiro Koizumi (son of the former prime minister), highlighted that Tokyo should consider creating a “China-free” supply chain for defence equipment following Beijing’s ban on exports of dual-use items to Japan.
Minister Koizumi publicly protested the ban on the export of dual-use items to Japan, including rare earths, which it imposed following remarks on Taiwan by Prime Minister Sanae Takaichi. The Defense Minister has joined other politicians calling for China to “withdraw a blacklist it announced Tuesday that targets 20 Japanese entities participating in enhancing Japan’s military capabilities”. Following Prime Minister Takaichi’s landslide election win recently, it is unlikely that Japan is going to back down from this position.
Minister Koizumi also unveiled a fast-track procurement program to allow start-ups – not just established prime contractors – to enter the defence sector and speed up the introduction of equipment and technology.
According to recent policy discussions, the government intends to harness Japan’s broader technological strengths – from electronics to advanced materials – to support military capabilities and strengthen the country’s defence supply chains. By mobilising its broader innovation base, Japan hopes to build a more agile and resilient security-industrial ecosystem capable of responding to emerging threats. The strategy also aims to ensure Japan’s defence industry remains competitive internationally while maintaining close integration with allied technology ecosystems.
Policy reforms to support dual-use technology for the defence sector
Tokyo has backed its dual-use strategy with a series of policy reforms designed to expand defence industrial cooperation and remove longstanding restrictions on defence production and exports.
Japan’s shift towards dual-use technology has been accelerated by a deteriorating regional security environment. Tokyo faces growing concerns over China’s military expansion, North Korea’s missile program and the possibility of a conflict involving Taiwan.
Japan’s ruling coalition has recently proposed loosening restrictions on defence equipment exports, which historically limited overseas transfers to a small number of non-lethal categories such as rescue or surveillance equipment. The proposed reforms would remove these limits and enable broader exports of defence systems, strengthening cooperation with allies and supporting domestic production.
Government officials said the change is necessary to sustain the country’s defence industry and to deepen collaboration with partners, including the US, Australia and European allies. This change will not happen quickly, but we are seeing Japan move at speed and scale in this space.
International partnerships expand
Tokyo is working more closely with NATO partners (this week confirming it wishes to join the NATO DIANA start-up program), European technology firms, US programs and broader Indo-Pacific allies to accelerate research and development in advanced capabilities.
Japan has also deepened defence coordination with Australia and the US through expanded trilateral cooperation and joint capability development initiatives. These efforts include collaboration on networked missile defence systems, autonomous platforms and emerging technologies.
PACT – bringing practical partnerships
From 25–27 February, the Pacific International Center for High Technology Research, Kissinger Advisors and other partners hosted the third Pacific Alliance for Collaboration and Technology (PACT) 2026 Conference and Design Sprint Workshop in Honolulu, Hawaii. This is an annual event that promotes ongoing engagement between the dual-use innovation ecosystem, traditional defence companies and government/military end users to accelerate the development and scaling of new technologies for national and regional security.
This year’s PACT included 10 Japanese dual-use technology start-ups funded under the Japanese government’s J-StarX program, as well as a range of established US technology and defence companies. It also included government representatives from Australia, the Philippines, Taiwan and other guest speakers focusing on the benefits of allied nation defence industrial cooperation.
A new era for Japan’s defence industry – opportunities for Australian companies
For decades, Japan maintained a cautious approach to defence production and military exports, shaped by post-war pacifist norms. Today, however, Tokyo appears determined to reposition its industrial base as a technology-driven contributor to allied security and regional deterrence.
By harnessing dual-use innovation across the civilian economy, the Japanese government aims to build a defence ecosystem capable of keeping pace with rapidly evolving technologies – and the strategic competition shaping the Indo-Pacific.
This opens new commercial opportunities for teaming and contracts in Japan for Australian SMEs and export-ready start-ups. While this remains new territory for both sides, larger scale industrial initiatives like the Japanese Mogami Class solution for the Australian Navy’s SEA 3000 program will help to increase awareness on both sides. More importantly, it will help to build trusted relationship at the commercial level which in turn enable and support research and development initiatives at the government level.
Progressing this cooperation will take time to build trusted partnerships and relationships in Japan (critical to success), assistance with navigating the complex bureaucracy and industry networks and government support. Nevertheless, the potential economic and security benefits for a deeper strategic industrial relationship with Japan make the efforts worth pursuing.
Bernice Kissinger is an expert in dual-use technology and rapid contracting between the US and allied nations, as well as the managing partner for Honolulu with Ballard Partners.
