Developing disruptive ways of warfare and advanced technological capabilities is a critical function for any military organisation, including NATO. Yet relying exclusively on technological superiority and novel technologies to sustain outdated ways of fighting has significant drawbacks.
That is why understanding all the socio-technical factors that cause disruptive innovation should be a vital concern for NATO leaders. Indeed, ‘disruptive innovation’ doesn’t just happen – rather it starts with a mission-oriented vision, organisational changes and managing uncertainty.
In an increasingly uncertain era, from rapid advancements in Emerging and Disruptive Technologies (EDTs) to shifting geopolitical tensions, NATO faces many challenges. Threats are constantly evolving, from small and agile groups inventively exploiting commercial technology, to vast civil and military resources being operated by corporate giants and great powers.
In this respect, innovation is the lifeblood of defence organisations like NATO and why the Alliance’s approach to harnessing cutting-edge technologies will define its future operational success and relevance.
Bridging NATO’s EDT innovation gap
Acknowledging EDTs’ significance, NATO Allies agreed in 2019 on an Emerging and Disruptive Technology Implementation Roadmap. By integrating AI, quantum technologies and autonomous systems, to name a few of its nine technology priority areas, NATO hopes to maintain its strategic edge and collective defence posture. NATO is also well-placed to be a global driver of responsible innovation in EDTs, where democratic values are at the core of what defines security and defence for the Alliance.
The nexus between responsible innovation, new technologies and defence is the backbone of NATO’s strength. In recent years, it has launched ambitious initiatives designed to integrate EDTs into NATO’s strategic fabric, such as the Defence Innovation Accelerator for the North Atlantic (DIANA) and the NATO Innovation Fund (NIF). DIANA’s mission is to leverage its network of 23 accelerator programmes and 182 test centres to bring early-stage start-ups together with operational end users, scientists and systems integrators to harness dual-use deep-tech solutions for the Alliance. The objective is to encourage the ‘triple helix’ of government, industry and academia to explore and develop uncertain technologies.
The NIF, the first multi-sovereign venture fund, aims to attract investment in high-risk, long-term technological projects that the market would otherwise neglect. Its 15-year framework and rather modest budget of EUR 1 billion raise questions about its medium and long-term impact on defence innovation across the Alliance.
Together, NATO initiatives reflect a concerted effort to bridge a historical reliance on state-led innovation with the business ethos of the commercial tech sector. Yet many of these initiatives are still at an early stage and it’s difficult to assess their efficiency and effectiveness, given NATO’s diverse political, economic, technological and defence-industrial landscape. Suffice to say, disparities in jargon, participation, business models and resource allocation pose significant challenges.
Advanced defence technological and industrial nations within NATO may dominate access to contracts and technological advancements, exacerbating existing inequalities. NATO’s litmus test is to ensure that Allies not only embrace recent EDT initiatives but also align them with their national defence agendas. This means a shift in strategic mindset, organisational culture and agile financing, including involving armed forces earlier and more closely in all stages of defence innovation.
Dual-use EDTs require innovation through open civil-military ecosystems, by promoting positive feedback loops among all stakeholders. These include Defence Primes (very large companies that hold contracts for major defence institutions), large corporate players, start-ups, scientific communities, academia and end-users like the armed forces.
How to handle the new players on the block
Defence Primes should play a more important role in fostering defence innovation in EDTs. Their close collaborative relationship with defence ministries allows them to better understand military challenges. Allies should proactively incentivise such industrial players to spin in civilian innovations, especially for frequently-cited capability needs such as decentralised cloud computing, data management, edge analytics, autonomy-enabling systems and an array of novel hardware solutions and materials.
However, Primes may have little incentive to integrate EDTs that they themselves have not developed, due to the risk of becoming dependent on commercial tech players, thus endangering their security of supply by creating new dependencies.
EDT innovations in the digital age are partly at odds with the defence industry’s dominant innovation modes. National defence customers are increasingly demanding technologies from companies outside the traditional defence technological and industrial base. Corporate giants increasingly control critical infrastructures, from satellites and undersea cables, to compute power, data and algorithms, and are thus increasingly well-placed to meet critical national security needs – in times of both war and peace.
The ongoing war in Ukraine has showcased that not only corporate technological giants but also a much larger ecosystem of start-ups and nontraditional defence companies are driving defence innovation and experimentation, attracting significant venture capital funding.
This new cohort of start-ups and corporate hyperscalers offers diverse benefits but also introduces new risks. They tend to look at fast profit-making and short time horizons for returns, which can be out of sync with the longer pace of traditional defence programmes and NATO’s long-term strategic planning. When it comes to scaling solutions in defence markets, start-ups would require robust governmental affairs expertise and unique security requirements to navigate a sometimes baroque and opaque procurement process. While for small companies pursuing dual-use innovations could mean both scaling in commercial markets and entering the defence innovation game, it could also burden them in terms of having to design two-speed business models.
Innovating and integrating dual-use deep-tech EDTs remains contentious. Different stakeholders have different interpretations of EDTs, leading to a lack of consensus on what constitutes ‘emerging,’ ‘disruptive,’ ‘dual-use,’ and ‘deep tech’ for civil or military purposes. This complicates efforts to effectively harness these technologies. In terms of financing, deep tech ventures are characterised by substantial capital requirements and long development timelines – all factors that deter private investment and public financing.
Shiny new tech is not enough
NATO’s competitive edge hinges on its members’ willingness to highlight interoperability in dual-use EDTs, bridging innovation divides and prioritising the digitalisation of its members’ armed forces. How successful NATO’s various initiatives are will determine whether it can maintain its strategic advantage and move towards a future where deep tech becomes integral to defence.
But turning this vision into reality requires more than simple ambition and an arsenal of shiny new technology. The mistaken belief that technological breakthroughs can automatically win wars fails to recognise that organisational changes and high-level political commitment are also prerequisites for a successful EDT strategy.
Dr Raluca Csernatoni is a fellow at Carnegie Europe, where she is a team leader and senior expert on new technologies for the EU Cyber Diplomacy Initiative – EU Cyber Direct (EUCD) project.
