This article demonstrates that dual-use technology has moved from a niche domain to a central element of both commercial innovation and national security strategy, with opportunities spanning immediate tactical applications to transformative strategic capabilities over the coming decade.
Current Status and Fundamental Shift
The defence industry has undergone a fundamental reversal in its innovation model. Rather than military-developed technologies spinning off to commercial markets, commercially developed emerging technologies are now increasingly being adapted for defence applications.[1] Analysis indicates that approximately five to six percent of dual-use companies have extended their solutions into defence, representing over 700 companies. However, Israel has already achieved over 60 percent conversion from civilian to military applications, suggesting a potential tenfold growth opportunity for other regions.[2]
Rising geopolitical tensions, increased defence budgets across NATO countries, and growing recognition that critical military capabilities will come from agile startups rather than solely from traditional defence contractors are driving this transformation. In 2024 alone, the European Union committed €1.5 billion to defence-related research and development through initiatives like EDIRPA and the European Defence Fund, while the UK pledged £400 million for defence innovation and Germany doubled its military procurement budget.[3]
Most Prominent Technology Areas
Artificial Intelligence and Autonomous Systems
The global artificial intelligence market in military applications was valued at $9.31 billion in 2024 and is projected to grow at a compound annual growth rate of 13 percent from 2025 to 2030, reaching approximately $178.14 billion by 2034 when considering broader defence AI applications. [4] AI is being employed across multiple military domains including intelligence analysis, autonomous vehicles, threat detection, cyber defence, and logistics optimization, with applications ranging from battlefield decision-making to predictive maintenance.[5] Investment in military AI increased by 30 percent in 2023, reaching $14 billion. Drones and unmanned technology have become particularly critical, with the military drone market anticipated to exceed $35 billion by 2027. [6] Autonomous systems now include drone swarms capable of coordinating actions in real time, ground combat platforms, and underwater vehicles operating with minimal human oversight.
Semiconductors and Advanced Computing
Semiconductors underpin both civilian computing infrastructures and military hardware, enabling high-speed data processing for applications ranging from consumer devices to guidance systems in precision munitions and radar arrays.[7] These components are used in unmanned aerial vehicles, global positioning systems, radars, and missile guiding systems, among other military applications.[8] The United States has substantially expanded export controls on advanced computing semiconductors, with updates in January and March 2025 broadening restrictions to prevent military AI training applications.
Quantum Technologies
A bipartisan commission has urged Congress to treat quantum technology as a mission-critical national capability, noting that whoever leads in quantum computing and artificial intelligence will control the encryption of the digital economy, enable breakthroughs in materials and medicine, and gain asymmetric advantage in intelligence and targeting.[9] Quantum computing and quantum cryptography present new opportunities in military intelligence and cybersecurity. Quantum communication systems offer completely secure communication that is almost impossible to intercept or hack, while quantum radars under development could detect stealth technology.[10] Scholars have warned about the imminence of “Q-Day” when quantum computing becomes capable of breaking RSA-2048 encryption, with some suggesting this could occur within two years.[11]
Space and Satellite Technologies
In 2025, both government offices and private innovators are intensifying collaboration in tapping space assets for shared civilian and military tasks, propelling dual-use satellites into a game-changing segment of the defence technology arena.[12] Worldwide spending on military and dual-use space systems surpassed $58 billion in 2023, with analysts projecting continued growth driven by public-private partnerships and venture-funded innovation.[13] Commercial satellites now deliver real-time battlefield intelligence and infrastructure monitoring, while consumer-grade drones retrofitted with simple software have disrupted centuries-old assumptions about air dominance and ground mobility.[14] The European Space Agency has proposed a €1 billion dual-use satellite network featuring optical and radar sensors, onboard artificial intelligence, and edge-computing modules as part of a broader €6 billion space security strategy extending to 2035.
Cybersecurity and Electronic Warfare
The value of the global electronic warfare market is estimated to be approximately USD 18,5 billion in 2025, and it is expected to grow at a compound annual growth rate (CAGR) of around 8.3% from the present to 2033, reaching a projected value of approximately USD 35,1 billion by 2033.
Key trends include cyber-electronic convergence and quantum technologies enhancing signal processing, jamming, and secure communications. [15] Network-centric warfare emphasizes real-time data sharing and situational awareness, while cognitive electronic warfare systems utilizing AI-driven threat detection are being rapidly adopted.
Opportunities in a Two-Year Perspective
Within the next two years, the most promising opportunities lie in areas where commercial technology can be rapidly adapted for defence applications with minimal modification.
AI-Powered Intelligence and Surveillance: AI systems can process surveillance data from drones, satellites, and cameras far faster than human analysts, spotting targets or anomalies in real time.[16] Companies developing computer vision, predictive analytics, and autonomous decision-making systems will find immediate demand from defence agencies seeking to modernize intelligence operations.
Counter-Drone Technologies: With the increasing use of unmanned aerial vehicles and counter-drone systems, military investments in electronic warfare capabilities have surged to counter the electronic threats posed by autonomous platforms.[17] Solutions combining detection, identification, and neutralization capabilities represent high-priority procurement areas.
Small Satellite Constellations: The price of heavy launches to low Earth orbit has fallen by 95 percent largely due to efficiencies introduced by the private sector, facilitating the proliferation of small satellites. [18]Companies offering modular satellite designs and adaptive payload integration can rapidly reconfigure systems for surveillance, reconnaissance, or early-warning missions.
Cybersecurity for Critical Infrastructure: As military operations increasingly depend on digital networks, cybersecurity solutions protecting command and control systems, satellite communications, and operational technology will see accelerated procurement cycles.
5G Military Communications: The 5G defence market is projected to grow from $1.58 billion in 2025 to $4.24 billion by 2030, expanding at a compound annual growth rate of 21.77 percent, as militaries seek high-speed, low-latency communications. [19]
Opportunities in a Five to Ten-Year Perspective
The longer time horizon presents opportunities in more transformative technologies requiring substantial development and integration efforts.
Quantum Computing and Communications: The US-China Economic and Security Review Commission recommends creation of a Quantum Software Engineering Institute focused on developing software foundations for scalable, secure, and interoperable quantum computing, ensuring quantum hardware is matched by world-class software capabilities. [20]Companies developing quantum algorithms, quantum-safe encryption, and quantum sensing technologies will be positioned for significant defence contracts.
Advanced Autonomous Systems: The United States is testing fully autonomous ground combat platforms that can operate independently, while new trends include drone swarms able to autonomously coordinate their actions and change tactics in real time. [21]Long-term opportunities exist in developing artificial intelligence systems capable of complex tactical decision-making, multi-domain operations, and human-machine teaming.
Hypersonic Technologies: Hypersonic weapons demonstrate high maneuverability and speed making them extremely difficult to intercept using traditional air defence systems. Military analysts predict these technologies will become key strategic weapons by the 2030s. [22] Both offensive and defensive hypersonic systems represent major investment areas.
Space Defence and Anti-Satellite Capabilities: China has expanded commercial launch capacity, deployed early stages of mega constellations, and built a global network of ground stations, all structured for easy dual use, including counterspace technologies that can disrupt or disable satellites.[23] Technologies for satellite protection, space situational awareness, debris removal, and in-orbit servicing represent growing markets.
Directed Energy Weapons: Development of laser technologies and electromagnetic systems for both offensive and defensive purposes will mature over this timeframe, offering alternatives to kinetic weapons for certain applications.
Quantum Radar and Sensing: Quantum devices require near-perfect materials, accelerating research in super-clean interfaces, new superconductors, and low-defect dielectrics—innovations that can also enhance traditional logic chips. [24] Quantum sensors capable of detecting stealth technology represent long-term strategic investments.
Key Challenges and Considerations
Despite increased funding, procurement still follows outdated models, creating a “Valley of Death” for startups after initial pilots. Many armed forces are unaccustomed to working with technology readiness level six-stage startups, startup fragility raises concerns about survivability, and scaling and field deployment remain major bottlenecks.[25] In April 2025, the European Commission issued a directive urging member states to coordinate export control policies for dual-use technology, particularly in AI, semiconductor design, and autonomous systems.[26] Regulatory frameworks are evolving rapidly, creating both constraints and opportunities for companies navigating international markets.
Dual-Use Technology in the Nordic Region
The convergence of geopolitical pressures, technological maturation, and institutional support creates a favorable environment for dual-use technology development in the Nordic region, with particular strength in autonomous systems, space technology, cybersecurity, and advanced communications infrastructure.
The Nordic defence and dual-use technology sector has undergone dramatic transformation since 2022, primarily driven by Russia’s invasion of Ukraine and the subsequent NATO accessions of Finland and Sweden. Nordic pension funds are well-positioned to substantially increase investments in leading defence groups and dual-purpose SMEs in 2026 and 2027, with Danish pension funds led by AkademikerPension and PFA having already doubled their capital investments in defence and security firms since June 2024. [27] The Nordic states will spend a total of €50bn on defence and security in 2026, almost 30% higher than what the four Nato-aligned nations spent in 2020, with projected total capital outlay rising above €70bn.[28] The region benefits from strong institutional frameworks for dual-use development. Approximately 15,000 scaleups – around 25% of the overall VC-backed ecosystem in NATO and allied countries – are working on Dual-Use technologies that serve both civilian and defence purposes, though currently only about 5-6% (700+) of these Dual-Use companies have extended their solutions into defence.[29] This suggests substantial untapped potential for conversion of civilian innovations to military applications.
Most Prominent Technology Areas
Counter-Drone and Autonomous Systems
Counter-drone technology represents one of the most active Nordic dual-use sectors. Nordic Air Defence emerged from stealth mode in September 2024 and introduced its first product: the Kreuger 100 dual-use (civil and military) drone interceptor platform, which will be ten times cheaper to produce than some conventional technology, such as interceptors or missiles, used to destroy drones.[30] Finland, Sweden, Norway and Denmark signed a technical agreement for joint procurement of unmanned aerial systems (UAV), with the growing joint procurement volume expected to enable the industry to increase its production capacities and reduce the national procurement costs for UAVs in the four countries.[31]
Telecommunications and 5G Networks
Fifth-generation telecommunications infrastructure has emerged as critical dual-use technology. Finland’s Ministry of Defence collaborated with Nordic telecoms Telia and Nokia to conduct the world’s first standalone 5G slice handover between multiple countries in a live network, demonstrating the potential of 5G to provide mission-critical capabilities for defence and other key national security areas.[32] Demand is fueled by 5G-enabled Industry 4.0 programs that expand OT attack surfaces, compelling energy, manufacturing, and automotive verticals to converge IT and OT defences.[33]
Cybersecurity
The Nordic cybersecurity market demonstrates robust growth trajectory. The Nordics cybersecurity market was estimated at 12 billion USD, with expectations to grow drastically over the next five years, with Finland and Sweden witnessing a fourfold increase in Cyberattacks after applications to join NATO.[34] Cloud security led with 26% of Nordics cybersecurity market share in 2024, whereas integrated risk management is projected to grow at a 15.2% CAGR.[35]
Space-Based Intelligence and Satellite Technology
Space technology represents a rapidly expanding dual-use domain. A consortium of Ukrainian, Nordic and eastern European companies is hoping to raise more than 100 million euros ($115 million) to build a constellation of 70-plus imagery satellites that would provide intelligence along Russia’s border, with the dual-use satellite constellation dubbed Intermarsat.[36] Finland completed a 158-million-euro ($182-million) acquisition of ICEYE SAR satellites in September 2025 to establish sovereign space-based surveillance, while Norway launched a collaboration with Surrey Satellite Technology to develop a satellite constellation for maritime domain awareness.[37]
Quantum Computing
While quantum technology development occurs across Europe, the Nordic region maintains active participation. IQT Nordics 2025 took place in central Gothenburg at Chalmers Conference Centre in May 2025, featuring sessions on end-user applications and quantum strategies in industrial sectors, commercializing quantum applications, innovations enabling progress in quantum computer platforms, and developments in quantum sensing.[38]
Artificial Intelligence and Advanced Computing
AI integration spans multiple defence applications. German AI defence company Helsing partnered with Sweden’s Saab, winning a joint contract from Germany’s Ministry of Defence to upgrade 15 of the Luftwaffe’s Eurofighters with AI-enabled cognitive electronic warfare capabilities.[39]
Opportunities in 2-Year Perspective (2025-2027)
Near-Term High-Growth Areas
Defence Industrial Cooperation: Nordic ministers of defence and chiefs of defence all hail close Nordic defence cooperation as the objective, with numerous new Nordic defence initiatives emerging, particularly in integrated air force command and control structures within NATO.[40] This creates immediate opportunities for companies providing interoperable systems.
Counter-Drone Systems: The rapid maturation of affordable drone interceptor platforms presents immediate commercialization opportunities. Nordic Air Defence aims to reduce European reliance on international supply chains, particularly from the United States, by developing technology within Europe, with future expansion plans including diversifying into defence technologies for land, sea, and subsea domains.[41]
Cybersecurity Integration: Sweden commanded 39% market share in 2024, whereas Norway exhibits the fastest 10.1% CAGR to 2030 in the Nordic cybersecurity market.[42] The convergence of IT and operational technology security for Industry 4.0 applications offers substantial near-term opportunities.
Private 5G Networks: The deployment of private 5G networks for defence and critical infrastructure represents an immediate growth sector. About 9,000 people gathered to discuss NATO framework for future cooperation, with most NATO countries expected to increase their military spending to 3.5 percent of GDP on hard defence and an additional 1.5 percent on defence-related investments such as cybersecurity and military mobility by 2035.[43]
Opportunities in 5-10-Year Perspective (2025-2035)
Long-Term Strategic Areas
Space-Based Intelligence Architecture: The European Defence Fund 2025 continues to drive innovation in space technologies, recognizing the critical role of satellites in both military and civilian applications, with EDF prioritizing resilient, secure, and advanced satellite capabilities.[44] The European Space Agency proposed a 1-billion-euro dual-use satellite network featuring optical and radar sensors, onboard artificial intelligence, and edge-computing modules as part of a €6 billion space security strategy extending until 2035.[45]
Quantum Technologies for Defence: Research shows that quantum computing, quantum communication, and quantum sensing could together generate up to $97 billion in revenue worldwide by 2035, with quantum computing growing from $4 billion in revenue in 2024 to as much as $72 billion in 2035. [46] Applications in secure communications, sensing, and computing offer long-term opportunities.
AI-Driven Autonomous Systems: The integration of artificial intelligence with unmanned systems across domains (air, land, maritime, subsea) represents a fundamental transformation. EDF 2025 is promoting AI-driven space technologies that enhance automated threat detection, anomaly analysis, and predictive analytics in satellite imagery, including edge computing in space.[47]
Integrated Multi-Domain Operations: Finland has approximately 200 companies operating in the space sector, with ecosystemic collaboration between new actors and companies that have been in the defence industry for a longer time already beginning to form through Business Finland’s leading company projects.[48] The convergence of space, cyber, electronic warfare, and kinetic capabilities creates opportunities for systems integration.
Advanced Manufacturing and Materials: The NIB entered a €400m uncommitted credit facility with Lithuania to boost the Baltic state’s national defence system during 2025 to 2027, earmarked for advanced technology and dual-purpose defence materials procurement including IT, counter-drone systems and cyber security enhancement services.[49]
Critical Success Factors
The Nordic region’s advantages include strong public-private collaboration frameworks, high technology readiness levels, and coordinated defence procurement through NORDEFCO. With the signing of the new Vision for 2030 under the Danish chairmanship, the Nordic defence cooperation entered a new era, paving the way for the Nordic countries to be able to conduct joint training and operations complementary to NATO deterrence and defence.[50] However, challenges remain. Many VCs are still wary of investing in pure defence companies due to restrictions LPs put on funds to back startups that produce ammunition or weapons, though this caution approach is slowly fading.[51] The regulatory environment continues evolving, with the European Investment Bank updating definitions of dual-use startups eligible for funding.
Sources
The analysis draws from multiple authoritative sources including:
– NATO Parliamentary Assembly reports on dual-use technologies (2024)
– Mind the Bridge “Dual Use Technologies 2025 Report”
– StartUs Insights military technology trends analysis (2025)
– marked.us (2025)
– BDO Ukraine defence-tech analysis (2025)
– European Parliamentary Research Service briefings (2025)
– US-China Economic and Security Review Commission annual reports
– Industry market research from Straits Research and Cervicorn Consulting
– Academic analyses from institutions including IE University and the Bulletin of the Atomic Scientists
– Defence industry publications including SpaceNews, Breaking Defence, and Military Aerospace
– Silicon Canals (November 2024)
– EU-Startups (November 2024)
– Defence Industry Europe (July 2025)
– Mind the Bridge Dual Use Technologies Report (2024)
– NATO Parliamentary Assembly Reports (2024)
– Computer Weekly Nordic Defence Investment Analysis (2024)
– Carnegie Endowment Nordic Security Cooperation Report (2024)
– High North News Nordic Defence Cooperation (2023)
– Nordic Cyber Group Cybersecurity Trends (2024)
– Mordor Intelligence Nordic Cybersecurity Market Report (2025)
– Euro Funding EDF Space & Defence Analysis (2025)
– SpaceNews Nordic Satellite Consortium Report (2025)
– McKinsey Quantum Technology Monitor (2025) – Business Finland Defence Industry Growth
[1] https://www.nato-pa.int/document/2024-dual-use-technologies-report-baldwin-051-esc
[2] https://mindthebridge.com/dual-use-technologies-going-beyond-the-divide-2024-report/
[3] https://mindthebridge.com/dual-use-technologies-2025-report/
[4] https://www.cervicornconsulting.com/artifical-intelligence-in-defence-market
[5] https://ts2.tech/en/artificial-intelligence-in-the-military-how-ai-is-reshaping-the-future-of-war/
[6] https://www.bdo.ua/en-gb/insights-1/information-materials/2025/key-trends-in-defence-tech
[7] https://grokipedia.com/page/Dual-use_technology
[8] https://www.ie.edu/insights/articles/the-new-arms-race-in-dual-use-technologies/
[9] https://breakingdefense.com/2025/11/congress-should-establish-fund-new-quantum-tech-initiative-to-beat-china-panel/
[10] https://www.bdo.ua/en-gb/insights-1/information-materials/2025/key-trends-in-defence-tech
[11] https://link.springer.com/article/10.1140/epjqt/s40507-025-00448-w
[12] https://www.marketresearchfuture.com/news/dual-use-satellites-to-reshape-defense-tech-landscape-in-2025
[13] https://www.marketresearchfuture.com/news/dual-use-satellites-to-reshape-defense-tech-landscape-in-2025
[14] https://mercaton.org/blog/dual-use-technologies-from-ambiguity-to-strategic-advantage
[15] https://market.us/report/electronic-warfare-market/
[16] https://ts2.tech/en/artificial-intelligence-in-the-military-how-ai-is-reshaping-the-future-of-war/
[17] https://www.startus-insights.com/innovators-guide/military-technology-trends/
[18] https://www.chathamhouse.org/2025/05/securing-space-based-assets-nato-members-cyberattacks/02-trends-and-recent-developments
[19] https://www.startus-insights.com/innovators-guide/military-technology-trends/
[20] https://breakingdefense.com/2025/11/congress-should-establish-fund-new-quantum-tech-initiative-to-beat-china-panel/
[21] https://www.bdo.ua/en-gb/insights-1/information-materials/2025/key-trends-in-defence-tech
[22] https://www.bdo.ua/en-gb/insights-1/information-materials/2025/key-trends-in-defence-tech
[23] https://spacenews.com/chinas-space-ambitions-hit-a-new-gear/
[24] https://www.mrlcg.com/resources/blog/how-quantum-computing-will-accelerate-advances-in-the-semiconductor-industry/
[25] https://mindthebridge.com/dual-use-technologies-2025-report/
[26] https://mercaton.org/blog/dual-use-technologies-from-ambiguity-to-strategic-advantage
[27] https://www.computerweekly.com/news/366633899/Nordic-investors-drive-investment-in-regions-defence-sector
[28] https://www.computerweekly.com/news/366633899/Nordic-investors-drive-investment-in-regions-defence-sector
[29] https://mindthebridge.com/dual-use-technologies-going-beyond-the-divide-2024-report/
[30] https://siliconcanals.com/nordic-air-defence-raises-1-2m/
[31] https://militaeraktuell.at/en/finland-sweden-norway-and-denmark-form-drone-alliance/
[32] https://www.computerweekly.com/news/366633899/Nordic-investors-drive-investment-in-regions-defence-sector
[33] https://www.mordorintelligence.com/industry-reports/nordics-cybersecurity-market
[34] https://www.ncgrp.se/post/2024-cybersecurity-trends-nordic-and-wider-eu-regions/
[35] https://www.mordorintelligence.com/industry-reports/nordics-cybersecurity-market
[36] https://spacenews.com/ukraine-and-partner-countries-to-raise-funds-for-imagery-satellites-to-lessen-reliance-on-the-u-s/
[37] https://thedefensepost.com/2025/11/24/iceye-ssc-arctic-isr-nato/
[38] https://iqtevent.com/nordics-2025/
[39] https://sifted.eu/pro/briefings/defence-dual-use-tech-2024)
[40] https://carnegieendowment.org/research/2024/10/nordic-baltic-defense-cooperation-nato?lang=en
[41] https://www.eu-startups.com/2024/11/stockholm-based-nordic-air-defence-secures-e1-2-million-to-advance-their-drone-defence-solutions/
[42] https://www.mordorintelligence.com/industry-reports/nordics-cybersecurity-market
[43] https://strandconsult.dk/how-to-ensure-natos-next-generation-weapons-access-to-modern-communication-solutions/
[44] https://euro-funding.com/en/blog/space-defence-enhancing-dual-use-satellite-technologies-in-edf-2025/
[45] https://www.marketresearchfuture.com/news/dual-use-satellites-to-reshape-defense-tech-landscape-in-2025
[46] https://www.mckinsey.com/capabilities/tech-and-ai/our-insights/the-year-of-quantum-from-concept-to-reality-in-2025
[47] https://euro-funding.com/en/blog/space-defence-enhancing-dual-use-satellite-technologies-in-edf-2025/
[48] https://www.businessfinland.fi/en/whats-new/blogs/2024/the-defense-industry-is-growing-rapidly–are-you-interested-in-developing-innovations-and-global-networks
[49] https://www.computerweekly.com/news/366633899/Nordic-investors-drive-investment-in-regions-defence-sector
[50] https://www.fmn.dk/en/topics/international-cooperation/nordefco/
[51] https://sifted.eu/pro/briefings/defence-dual-use-tech-2024