The role of small states and dual-use technologies in meeting NATO’s defence and security needs

Companies engaged in both civilian and military sectors are also adaptable and flexible. They can respond to changing demands and rapidly evolving technological landscapes, applying lessons learned from one sector to the other.        

In December 2023, I attended the?NATO Defence Industry Conference?at the National War Museum in Ottawa, hosted by the Policy Insights Forum. The event provided a platform for deeply interesting presentations and discussions on the crucial roles played by NATO, its members, and the private sector in facilitating, supplying, and adopting innovative dual-use technologies that can enhance our collective security and resilience now and in the future. In this piece, I’ll share insights gleaned from this event on both this topic, and related opportunities for small NATO-member states.?

Dual-use technologies are often used for critical infrastructure protection, energy generation, and strengthening resilience against risks. Technologies initially developed for civilian applications can be adapted and transferred to the defence sector, and vice versa. Research and development costs can be shared across both civilian and military markets, making it more cost-effective to develop and maintain advanced technologies. The companies behind them—such as Iceland’s?IceWind—can, therefore, achieve economies of scale by diversifying the applications for their products.?

Companies engaged in both civilian and military sectors are also adaptable and flexible. They can respond to changing demands and rapidly evolving technological landscapes, applying lessons learned from one sector to the other. This is crucial given the rapidly evolving nature of today’s national and international security challenges. Additionally, speakers noted how the convergence of technologies, such as AI, robotics, and cybersecurity, has become common in dual-use technology development. This leads to integrated solutions that can enhance both military capabilities and civilian infrastructure.

Despite its importance, NATO representatives shared that the alliance cannot rely solely on the traditional defence industry to develop and mainstream new dual use security and defence technology. One reason for this is the need to develop and adopt new technologies at “real world speeds.” Therefore, NATO is engaging with start-ups and small- and mid-size enterprises through entities such as its?Defence Innovation Accelerator for the North Atlantic?(DIANA), which will open a regional office in Halifax, N.S., in 2024. DIANA runs programs such as its recent?Energy Resilience Challenge,?through which IceWind was recently?selected?to be part of a six-month accelerator program in an international competition attracting hundreds of applications.?

Moreover, NATO knows that it can and must tap into the expertise of member states, both large and small, to meet its evolving security and defence-related needs. Small NATO member states can provide value disproportionate to the size of their financial contributions to the alliance by offering highly specialized expertise. Estonia, for instance, was noted as a country known for its best-in-class capabilities in cyber security. Other small member states may also come to be recognized in similar ways; for Iceland, this may be for our expertise in renewable energy generation. But, first, each will need a firm understanding of their comparative advantage, and the companies leveraging it to the greatest degree.??

In sum, this inaugural event underlined the important role played by dual-use technology companies large and small in driving innovation, promoting efficiency, building resilience, and encouraging collaboration. In doing so, the event confirmed that they—and the smaller member states in which many are based—will play a critical role in meeting the defence and security needs of NATO and its member states deep into the future.