Innovation as strategic capital
NATO members are placing increasing emphasis on science, technology and industrial capability as part of collective defence. The recent commitment by allies to move toward defence spending of 5% of GDP, including higher levels of research, development and industrial investment, reflects a recognition that technological advantage affects deterrence, economic resilience and the ability to operate in contested environments.
This shift places innovation, not only equipment, at the center of allied security. Defence innovation is no longer limited to specialized military environments. It is understood as a system that shapes broader economic competitiveness. The way allies finance research, accelerate technology adoption and coordinate industrial capacity will influence long-term stability and prosperity. In this context, NATO has introduced two mechanisms that form the backbone of its innovation architecture: the Defence Innovation Accelerator for the North Atlantic (DIANA) and the NATO Innovation Fund (NIF). Together, they represent a coordinated effort to guide and scale dual-use technologies across the alliance.
A new architecture for allied innovation
DIANA connects a network of 23 accelerators and more than 180 test sites across Europe and North America. Its purpose is to help innovators develop technologies that are relevant to both defence and civilian resilience. The current challenge areas include energy and power, critical infrastructure and logistics, human resilience and biotechnology, data systems, advanced communications and autonomy. These are the capabilities that shape how societies operate under stress. They are also the areas where civilian and defence needs increasingly overlap.
NIF complements DIANA by investing directly in early-stage companies that work on dual use technologies. It is a multinational venture fund backed by participating allies and deploys over €1 billion toward strategic technologies such as artificial intelligence, advanced materials, robotics and resilient space systems. In practice, DIANA identifies and tests potential solutions, while NIF provides the capital that helps them scale.
What makes this architecture significant for non defence sectors is that it creates a shared view of technological priorities. When DIANA selects a challenge area or NIF chooses to invest in a particular domain, it signals where allied governments believe the most important capability gaps lie. Over time, these signals influence national R&D strategies, private investment and public procurement. Technologies that align with alliance priorities gain credibility, visibility and pathways to deployment.
Canada’s innovation challenge
This emerging innovation environment intersects with a structural issue in Canada’s economy: slowing investment in science and research. The recent Council of Canadian Academies (CCA) assessment of the state of science, technology and innovation in Canada notes persistent declines in national R&D intensity, falling public investment relative to peers and fragmentation across research institutions. Canada’s business R&D spending remains well below the OECD average and aging infrastructure across research institutions constrains capacity for advanced experimentation and technology development.
The Canadian Agri-Food Policy Institute (CAPI) analysis of agricultural R&D identifies similar concerns in a critical sector. Public agricultural research spending has been flat or declining for decades and investment in modern facilities has not kept pace with sectoral needs. Coordination across federal, provincial and academic institutions is patchy. As a result, Canada’s agri-food sector risks losing ground in areas such as plant science and digital agriculture that support sector’s resilience and long-term competitiveness.
Taken together, these assessments point toward an underlying challenge. Canada’s innovation ecosystem does not currently operate at a scale or speed that matches the demands of a more competitive security environment or the requirements of a modern economy. Higher defence and industrial spending commitments raise an important question. How can new investments, particularly those directed toward R&D and technology development, strengthen Canada’s civilian research base and deliver broader economic value?
Defence driven innovation as an opportunity
Dual-use programs offer one pathway to bridge these gaps. Innovation for Defence Excellence and Security (IDEaS), Canada’s defence innovation program, funds research and prototypes that respond to defence challenges but often have civilian potential. Its emphasis on sensing, autonomy, cyber security and advanced materials aligns closely with technologies that DIANA prioritizes. Canada’s participation in DIANA’s first accelerator cohorts indicates that domestic innovators are competitive when given access to allied networks, testing facilities and challenge based funding.
What remains underdeveloped is the mechanism to translate these innovations into civilian deployment. Many Canadian technologies supported by IDEaS or selected by DIANA sit at the prototype or pilot stage. They require regulatory engagement, commercial partnerships and sector specific standards to move into wider use. This is especially true for agri-food systems, which often operate with older equipment, limited digital integration and constrained capital budgets.
If Canada applies its defence-oriented R&D investments in a way that supports broader capability building, it could strengthen the scientific and industrial foundations that agri-food relies on. This includes modernizing testing facilities, improving cyber security capacity, renewing scientific instrumentation and strengthening connections between research institutions and technology adopters. In this sense, the 5% spending commitment is not only a defence obligation but also an opportunity to renew parts of Canada’s research system.
Dual-use innovation and agri-food capability
Agri-food systems have become highly technologically intensive and increasingly dependent on the same capabilities that defence planners prioritise. They require secure operational technology, resilient power, modern genetics and biosurveillance, autonomous monitoring, advanced analytics and trustworthy data systems. These are areas that DIANA and NIF target.
When defence innovation produces tools that can be used in food systems, the value extends beyond efficiency. For example, Operational Technology (OT) cyber protection developed for critical infrastructure can secure processing plants and storage facilities. Autonomous sensors designed for military logistics can monitor temperature or contamination along cold chains. Resilient communications and satellite positioning systems can support logistics in remote regions. Secure data architectures help validate handling conditions, origin and quality.
These capabilities are increasingly important for global traders. European buyers routinely request evidence of cyber resilience, crisis recovery planning and traceability. Technologies validated in DIANA’s test network or backed by NIF provide a form of assurance that is beginning to matter commercially. Adoption of alliance-aligned technologies can signal reliability to insurers, lenders and high-value markets.
Canada’s position in the allied system
Canada is positioned to benefit from this evolution but also faces constraints. It has an innovation program (IDEaS) that aligns with DIANA’s priorities, an upcoming Defence Industrial Strategy and modernized investment screening that reflects allied practice. Budget 2025 includes significant funding to strengthen supply chain security, industrial capabilities and enabling technologies, which together provide institutional tools to connect Canadian research and industry to alliance priorities.
At the same time, Canada’s broader R&D system continues to struggle with slow technology adoption, limited scale up capacity and uneven coordination. Agri-food research remains undercapitalized relative to its economic importance, with aging infrastructure and fragmented efforts across federal, provincial and academic actors. These weaknesses intersect directly with NATO’s innovation agenda, which assumes that allies can develop and absorb new technologies at pace.
In this context, defence-linked innovation is not a substitute for civilian research investment, but it can act as a catalyst. Participation in DIANA and IDEaS can create new pathways for scientific renewal, support emerging firms and help modernise critical sectors such as agri-food, provided there are mechanisms to move solutions from prototype to deployment. The challenge involves building partnerships between DIANA tested solutions and Canadian agri-food operators, aligning research institutions with defence innovation pipelines and ensuring that public R&D investments support both national security and economic competitiveness.
NATO’s innovation push shows that technology, industrial capacity and scientific capability now sit alongside traditional military instruments in how allies understand security. For Canada, the more meaningful question is not whether defence innovation affects agri-food, because it clearly does, but how this convergence will be managed. Decisions taken in the coming years about R&D investment, science infrastructure and innovation governance will shape Canada’s role in the alliance and its position as a reliable supplier in a world where resilience and technological capability are increasingly intertwined.
Disclaimer: Any views or opinions expressed in articles are solely those of the authors and do not necessarily represent the views of the NATO Association of Canada.
