Launched at the Madrid Summit in June, the NATO Innovation Fund (NIF) offers a historic opportunity for the Alliance to strengthen its defense capabilities through investments in dual-use Emerging Disruptive Technologies (EDTs). The fund’s ultimate goal is to help NATO fulfill its mission of safeguarding freedom and the international rules-based order, but also to cooperate with democracies in the Asia-Pacific region, including Taiwan, South Korea, and Japan. There are even greater opportunities for expanding cooperation. By establishing an investment fund aligned with NIF, we will strengthen our ties with NATO’s defense technology ecosystem and provide a new soft diplomacy tool in a world of geopolitical competition.
Allies are doing what it takes to deter threats of all kinds around the world. For example, since Russia’s invasion of Ukraine, NATO has revitalized its rapid response capabilities and strengthened forward presence groups in Central and Eastern Europe. But NATO’s most forward-looking initiative is the NIF. NIF is his €1 billion fund that invests in start-ups and venture capital funds developing dual-use emerging technologies. 22 (out of 30) allies have launched NIF, the world’s first multi-sovereign venture capital fund.
NATO is responsible for protecting nearly one billion civilians, and its ability to carry out this task depends on its military superiority over its adversaries. Military superiority, though complex to define, relies on technological superiority. Historically, the Western powers, led by the United States, have been able to achieve military superiority through large and timely investments in early-stage technological innovation. Whether it was the Apollo program or the invention of the Internet and the Global Positioning System, public investment has been essential in developing the dominant military capabilities of the United States (and NATO).
The U.S. defense industry continues to invest unilaterally in technology beyond its horizons. For example, Moderna’s mRNA research was initiated several years ago by the Defense Advanced Research Projects Agency (DARPA), a research arm of the US Department of Defense, to help build the innovation base of the US technology sector. But to put it mildly, the latest exponential global technological advances appear to come only from private tech companies. These companies pour significant capital into research and development, focusing on the best revenue opportunities that are likely to produce the most profitable results. A modern social networking app, a faster food delivery service, or an online platform for second-hand clothing.
The NIF, on the other hand, aims to expand and eventually integrate start-ups with EDTs such as artificial intelligence, autonomy, space and hypersonics, making dual-use investments often overlooked across the alliance. Identify opportunities. Make them a NATO defense capability. His NIF, inspired by his In-Q-Tel in the United States, is timely and axiomatic in its purpose. But two of his keys to success are expanding the depth and breadth of the innovation ecosystem and building partnerships outside the region.
First, in the short to medium term, NIF should foster a dynamic trans-Atlantic ecosystem brimming with accelerators, co-investors, late-stage investment funds, research facilities, and dual-use technology innovators. NATO’s newly established North Atlantic Defense Innovation Accelerator is one example, but more is needed. NIF aims to invest in early-stage companies, but the emergence of other investment funds with similar themes is key. For example, as start-ups grow and scale, the need for growth-stage investment funds focused on dual-use defense technology will increase.
Second, while NATO is leading the way in building a trans-Atlantic multinational defense technology ecosystem, it is imperative to mobilize other democracies aligned with NATO’s values. Geopolitical uncertainty in Asia has been marked by an increase in China’s attempts to reshape the international order, prompting Taiwan, South Korea, Japan, Australia and others to develop regional technologies for deterrence and defense. It shows the urgency to strengthen our preparedness. Multilateral defense efforts such as AUKUS and Quad are important initiatives, but cooperation and broad scale investment in emerging disruptive technologies is essential.
NATO’s Asia-Pacific partners therefore have an opportunity to mobilize public (and private) capital to invest in defense technology companies across the local innovation ecosystem. Together or individually, Asian democracies should consider setting up a venture capital fund in conjunction with NIF to allocate investment to dual-use EDTs and collaborate with the Alliance on R&D at all levels of technology readiness. there is.
In a fragmented world, the future may be determined by battles between democracies and authoritarian regimes. As competition with China intensifies, the NIF will serve as a beacon of inspiration for democracies in the Asia-Pacific region to mobilize capital, strengthen cooperation, and invest with the aim of defending freedom and preserving peace. is needed.
Giedrimas Jeglinskas is a Non-Executive Senior Fellow of the Atlantic Council, former Deputy Secretary General of NATO and former Deputy Minister of Defense of Lithuania.
<img src="https://www.atlanticcouncil.org/wp-content/uploads/2022/03/2022-03-10T003712Z_3_LYNXMPEI281F0_RTROPTP_4_USA-BIDEN-scaled-e1668710342507-500×350.jpg" alt="Investing in innovation helps NATO rally Asian democracies” class=”gta-horizontal-featured–img”/>
Tuesday, November 15, 2022
Designing national and multilateral strategies to maintain technological superiority
The future of technology competition
Peter Engelke, Emily Weinstein
This fall, the Scowcroft Center for Strategy and Security and the Global China Hub will discuss how the United States can work with allies and partners to design strategies to maintain technological superiority over China. To do so, we convened experts and officials in a closed workshop. The workshop explored the necessary elements of a competitive strategy through both ‘Protect’ and ‘Run Faster’ policies. This memo draws from insights gleaned during the workshop to help policy makers better understand the potential tools of strategic weapons.