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30. July 2025
Global Tech Landscape Divided As Dual-Use Innovations Take Center Stage
The Dual-Use Tech Surge: Innovation’s Double-Edged Sword
In recent years, the global tech landscape has witnessed a significant shift in the way innovation is approached. The rise of dual-use technologies — innovations with both civilian and military applications — has become increasingly prominent, transforming the way governments, venture capitalists, and startups operate.
The drivers behind this trend are clear: intensifying geopolitical tensions, ballooning defense budgets across NATO countries, and a growing awareness that critical future capabilities will increasingly originate from agile, high-growth startups. The consequences of inaction could be catastrophic, making the development of dual-use technologies an imperative.
As of May 2025, there are 17,619 dual-use tech scaleups operating across NATO countries — out of a total of approximately 64,000 scaleups identified in the 47 countries analyzed. Within this cohort, 1,025 are categorized as defense tech scaleups, with 200 of these being “pure defense tech” or startups focused exclusively on military applications.
The dual-use tech surge is not just about numbers; it’s a paradigm shift. Dual-use technologies now make up 27% of the total scaleup population in the countries examined, indicating that innovation is no longer a niche pursuit but a mainstream endeavor. This has significant implications for the global economy, as startups are increasingly creating value beyond their original civilian applications.
The growth of dual-use technologies has been explosive, with the number of dual-use tech scaleups increasing by 16% in just six to eight months. Defense tech scaleups have crossed the 1,000 mark, and pure defense tech has grown at an astonishing 18%. Investment in dual-use tech has skyrocketed, reaching nearly $1.2 trillion in May 2025, with defense tech-specific investment jumping 27% to $70.8 billion.
The rapid growth of dual-use technologies has led to a surge in new scaleup creations across NATO and allied countries. Between October 2024 and May 2025 alone, over 4,300 new scaleups were created, with more than half (2,359) being dual-use tech companies. Roughly 70% of all new scaleup investment during this period went to dual-use tech startups.
Israel pioneered the model of converting military R&D into a startup-driven tech powerhouse, and the U.S. is now following suit with a growing network of integration programs to onboard commercial innovation into the defense ecosystem. Europe is catching up, with the EU committing €1.5 billion to defense-related R&D via initiatives like EDIRPA and the European Defence Fund.
Even smaller, digitally advanced countries are moving quickly to integrate their startup ecosystems into national defense strategy. Estonia stands out for its efforts, while Ukraine, Poland, Czechia, and other Eastern European countries are also investing heavily in defense innovation.
Despite this momentum, dual-use innovation still faces significant challenges. Startups develop hard tech with critical military applications — often requiring long R&D cycles and large funding rounds. The data shows that defense tech startups are more capital-intensive, with pure defense tech scaleups raising an average of $80 million, compared to $66 million for dual-use tech and $50 million for purely civilian tech scaleups.
The “Valley of Death” post-pilot phase, where startups struggle to transition from research and development to commercialization, is another major barrier. This creates a bottleneck in scaling and field deployment, as defense startups often lack the infrastructure to produce hardware at scale. Moreover, dual-use startups often suffer from a “not here nor there” syndrome — torn between two demanding markets, without fully committing to either.
Fundraising and exit opportunities are also a friction point. Many institutional LPs remain hesitant or hindered to back defense-related ventures, while exit options are limited due to national security restrictions. However, the landscape is shifting, with Mind the Bridge identifying 74 VC funds globally that actively invest in dual-use startups. More than one-third (35%) of these funds are based in the United States, followed by the U.K. (12%), and another 22% are located in Ukraine, the Baltics, and Eastern Europe.
The implications of this surge in dual-use technologies are profound. As innovation becomes increasingly democratized, with more startups creating value beyond their original civilian applications, we must consider the potential consequences for national security and the global economy. Will the growth of dual-use technologies lead to a more peaceful world, or will it exacerbate tensions and fuel competition?
The answer lies in understanding the complexities of this phenomenon. Dual-use technologies are not just a product of technological advancements but also a reflection of shifting societal values and geopolitics. As we navigate this landscape, it is essential to prioritize transparency, accountability, and responsible innovation.
Ultimately, the dual-use tech surge represents both an opportunity and a challenge. It offers a chance to harness innovation for peaceful purposes, while also posing significant risks if not managed carefully. As we move forward, it is crucial that governments, venture capitalists, and startups work together to ensure that this technology is developed and deployed responsibly.
The future of dual-use technologies will be shaped by the choices we make today. Will we continue down the path of innovation and growth, or will we let the complexities of this phenomenon hold us back? The answer lies in our collective ability to harness the power of technology for a more peaceful and prosperous world.