SENDAI, Japan: From interceptor drones designed to take down aerial threats to nanoparticles that could reduce dependence on rare metals, Japan is looking to an unlikely source to strengthen its defences: startups. 

Tokyo is stepping up efforts to harness dual-use technologies – innovations developed for civilian purposes that can also have military applications – as it seeks to bolster national security while opening new markets for Japanese firms at home and abroad.

The push comes as emerging technologies reshape modern warfare and economic security becomes a growing concern for governments around the world.

Japan wants to accelerate research and development of dual-use technologies not only at universities and national research institutions, but across the private sector.

Its plan is to set up research bases outside educational institutions by fiscal year 2030 by strengthening collaboration with the public and private sectors.

For Japanese drone company Terra Drone, that shift is already under way.

Founded in 2016, the company has developed drones for applications ranging from search-and-rescue operations to construction and infrastructure inspections.

It is now expanding into defence and is seeking to raise 14.5 billion yen (US$91 million) to fuel its growth.

Founder and CEO Toru Tokushige said the widespread use of relatively cheap drones, such as in conflicts in Ukraine and the Middle East, has exposed a costly weakness in traditional air defence systems.

“Shahed is very dangerous, very commoditised and very cheap,” he said, referring to Iranian-designed drones that have been used extensively in recent conflicts.

Defending against Shahed drones is resource-intensive and expensive.

Tokushige said he has visited Japan's Ministry of Defense more than 50 times to make the case for interceptor drones that could offer a cheaper way of countering such threats.

“I continuously explained, these interceptor drones have become really important,” he added.

In June, Terra Drone acquired stakes in two Ukrainian interceptor drone companies, giving it access to an environment where the technology can be tested and refined frequently.

But the company still faces obst...