Why dual-use tech is the next big frontier for founders

I recently sat in a packed room at Canadian Armed Forces Outlooks, an annual event where our nation’s military leaders outline their priorities. As expected, there were updates on everything from fighter jets to recruitment strategies. But what stuck with me wasn’t about hardware. It was about digital infrastructure and the urgent need to modernize it.

From AI and cybersecurity to robotics and autonomous systems, digital capability is a now-or-never necessity, not a future nice-to-have. If we’re going to keep pace with global threats and innovation, we need to get much better at adopting technology and do it quickly.

Dual-use tech is already here

When we talk about dual-use tech, we’re referring to innovations that serve both civilian and military needs. Think cybersecurity, AI, robotics, supply chain automation, infrastructure monitoring — the same technology that keeps our cities running safely is now being adapted for national defence.

I first started seeing this crossover clearly during our work on Communitech’s Future of Cities program, which is now Fast Track Cities, where we partnered with 55 municipalities across Canada. We set out to explore how to protect our digital infrastructure, how to respond to cyber threats, and how to build more resilient systems.

The interesting part is that military bases were asking the same things.

At the end of the day, a base is a city. It runs power grids, manages logistics and supply chains, handles security, and operates communication networks. It even does landscaping. The differences include higher stakes and a need for seamless, secure integration.

So when cities and defence are facing the same digital challenges, why are they solving them in silos?

Canada has the talent — but we’re stuck in the middle of the funnel

We already have an incredible pipeline of deep-tech startups working on these problems. Many of them are based right here in Waterloo Region.

Take Alchemy, for example. The Waterloo-based company developed a nanotech-based coating that helps soldiers avoid detection by infrared sensors, like the ones used in surveillance drones and smart targeting systems. Their solution weighs just a few grams per uniform. Compare that to traditional kits that can add hundreds of kilos. In field tests with the Canadian Armed Forces, Alchemy outperformed existing NATO solutions and has already secured defence contracts.

We’ve also seen companies like VanWyn selected for the NATO DIANA accelerator program for its work in secure information sharing. And across the board, Canadian startups are stepping up with technologies that meet defence and security needs.

There’s momentum, but we consistently hear the same concerns from founders:

• They’re being told their tech is “too early” for procurement

• They’re trying to navigate compliance rules

• They don’t have the bandwidth to take on years-long sales cycles

• And in some cases, they end up working with allies before they can land a Canadian defence customer.

Canada’s defence industry is sitting on billions of dollars in Industrial and Technological Benefits (ITB) obligations — money that must be spent with Canadian businesses — and it’s barely reaching our startup ecosystem.

We don’t have a tech problem. We have a matchmaking problem. The opportunity is there, but the system hasn’t caught up.

Startups often struggle to sell to governments. Procurement can take years. Paperwork overwhelms small teams. In some cases, Canadian companies go abroad first because it’s faster. We need to fix that. Public procurement should help Canadian tech scale, not send it packing.

Government has a role to play as a customer, a convener and a force multiplier for innovation. The U.S. military helped build the semiconductor industry through procurement. Canada can do the same with AI, robotics and cyber, but only if we build a system that moves with purpose.

How other countries are solving this

Canada may be behind when it comes to solving these challenges, but our country isn’t alone.

In the U.K., the government launched the Defence and Security Accelerator (DASA) to get early-stage tech into the hands of military users. In the U.S., the Defense Advanced Research Projects Agency (DARPA), AFWERX, and the Defense Innovation Unit have decades of experience bridging the gap between startups and procurement. Australia’s Defence Trailblazer initiative connects universities, startups and military organizations to get more innovation into deployment. These are large-scale systems backed by policy, capital and intent.

If Canada wants to compete and protect our intellectual property, we need to bring that same level of seriousness.

NATO DIANA creates new pathways

NATO launched DIANA — the Defence Innovation Accelerator for the North Atlantic — to help allied countries develop and deploy emerging technologies. Through challenges and accelerators, DIANA supports startups with funding, training, and access to defence experts and investors.

Canada had more applications for the first DIANA cohort than any other NATO country. That speaks volumes. And now that Communitech and COVE have joined DIANA as accelerator partners, Canadian tech companies have a new path to global defence markets.

We’re helping close the gap between invention and adoption. We work with founders and their teams to understand what defence customers need, navigate compliance requirements, build the right connections early and translate commercial traction into defence relevance. 

We help startups speak the language of defence. And we help defence leaders discover what's already out there, which is often just down the road.

How startups can get involved

Founders often ask me: Where do I start if I want to engage in this space?

Here’s what I tell them:

• Watch for challenge calls. Programs like DIANA issue specific problem areas for startups to tackle. These are open invitations to pitch solutions and secure support.

• Connect with an accelerator in the network. As a DIANA partner, Communitech helps founders navigate this space. That includes mentorship, pitch prep and help understanding what defence customers need.

• Join industry conversations early. Startups that show up early, listen closely and iterate fast are the ones that win.

• Think dual-use from day one. You don’t need to build exclusively for military applications. Many of the most successful companies in this space lead with commercial traction and adapt for defence.

• Understand the procurement cycle. It can be slow, but it’s changing. Knowing how to engage and how to be persistent is half the battle.

We have an opportunity to lead the next wave of defence innovation — but only if we rethink procurement, invest in our ecosystem, and give founders the support they need to break into this space through programs like DIANA.

Want to stay ahead of what’s coming? Sign up for updates on the upcoming Communitech Tech for Defence Summit. You’ll be first to hear about speakers, sessions, and ways to connect with the industry leaders shaping the future of dual-use innovation in Canada.