Canada’s increased defence spending could unlock a wave of innovation and productivity gains but only if we avoid the illusion that dual-use innovation is automatic. Without deliberate effort, we risk wasting billions on prototypes that never reach the market. We need to develop and deploy the tools, frameworks, and expertise to get this right.

The Opportunity: Defence as a Driver of Innovation

Canada’s renewed commitment to defence spending presents a rare chance to strengthen sovereignty, modernize capabilities, and catalyze innovation. Defence is inherently research-intensive, and when targeted at dual-use technologies, those with both military and civilian applications, it can generate economic spillovers that boost productivity, create high-value jobs, and position Canada as a global leader in key technologies.

• Stimulating Domestic R&D: Canada has long lagged its peers in R&D intensity. Defence R&D can serve as a powerful stimulus: programs like NATO’s Innovation Fund (NIF) and DIANA (with its North American office now in Halifax) offer Canadian innovators a platform to develop and commercialize frontier technologies in AI, quantum sensing, advanced communications, and autonomy.
• Economic Multiplier Effects: Defence is export-intensive and can anchor domestic supply chains. When procurement dollars stay in Canada, they generate GDP growth, attract foreign investment, and build resilient industrial capacity which can then lead to export opportunities.
• Modernizing Military Capabilities: Dual-use investment helps Canada address urgent priorities such as Arctic sovereignty, developing cyber-security, communications, and infrastructure solutions that can lead to potential civilian applications for industry and government.
• Attracting Talent and Growing Startups: R&D-intensive projects, initially for defence, and then for broader use cases build a technology ecosystem that benefits the whole economy creating high-paying jobs, keeping Canadian talent at home, and spurring startup formation and growth.
• Encouraging Innovative Technology Adoption: Users from both the public and private sector who learn how to adopt innovative technology will enhance their productivity – a critical element of Canada’s economic performance.

Why This Is Harder Than It Looks

Globally, even the most sophisticated innovation agencies have struggled to translate military breakthroughs into commercial success. Programs run by DARPA, the US DoD, and Israel’s DDR&D show that dual-use innovation is not simply a matter of “if you build it, they will come.” The lesson is clear: dual-use commercialization is difficult, expensive, and failure-prone, unless it is linked to a commercialization process that is designed to challenge incorrect assumptions and overcome the likely pitfalls associated with these assumptions.

Challenging Assumptions: The Five Hidden Traps

The risk is not that Canada will fail to invest; it is that we will assume the path from military prototype to commercial product is obvious and linear. My research and field experience over the past twenty-five years, with companies and researchers wishing to commercialize a novel technology, has identified false assumptions that often lead to failure.  In this article, we highlight some of the most common causes of failure, so that Canadians can be better prepared to avoid them, by improved understanding of the process (and its challenges) and being better prepared to resource them.   

Each trap combines a common false assumption, why it persists, the problem it creates, and a practical remedy.

1. Flawed Assumption: “The important feature for military use will be valued by industry.”

Why it exists: Defence programs optimize for peak performance under extreme conditions. This performance culture, reinforced by mil‑spec requirements and test regimes, biases teams toward feature transfer rather than value discovery. Unfortunately, this can lead to over‑specified, high‑cost offerings that miss mainstream market needs; the defence‑winning feature rarely maps to a compelling civilian value proposition.

What to do instead: 

• Reframe the solution around “Jobs‑to‑Be‑Done”: Identify civilian jobs, contexts, and performance thresholds. 
• Design “Commercial Variants”: Strip back cost drivers; productize to ‘Good‑Enough’ specs; validate willingness‑to‑pay.
• Focus on alternate “Features and Benefits” that have value for commercial users and can give them a sustainable competitive advantage.

2. Flawed Assumption: “Users will know that this solution will address their needs.”

Why it exists: Technology‑push and expert framing dominate early programmes; users often haven’t articulated the problem in a way that maps to the new capability. However, this can lead to solutions that don’t solve priority pains for the user, producing ‘solutions in search of a problem’ and vitamins that are ‘nice to have”.

What to do instead: 

• Run “structured customer discovery process” that includes JTBD interviews to identify JTBD and ranks problems.
• Co‑define “acceptance criteria” and success metrics before completing technology development or starting pilots, iterating solution scope quickly.
• Explore the acquisition process, so that users can quickly identify potential benefits and potential barriers to adoption.

3. Flawed Assumption: “Potential users are always seeking innovative solutions.”

Why it exists: Most commercial buyers face switching costs, operational and performance risk concerns, and have constraints on their ability to innovate, reinforced by a status‑quo bias. Potential technology solutions become challenging to try,  too risky to adopt, and hitting innovation inertia which stalls progress.  

What to do instead: 

• Create “low‑risk on‑ramps”, pilots and demonstrations to de-risk the decision for the user.
• Offer references and case studies, trials, and outcome‑based performance guarantees to reduce adoption risk.
• Enhance education and awareness to reduce the risk, and highlight the dangers of not adopting the technology.   

4. Flawed Assumption: “The standard defence business model will work in commercial markets.”

Why it exists: Defence contracts often rely on cost‑plus, long contracts, bespoke support and long sales cycles; while civilian markets prefer scalable pricing, channels, standard service models and more rapid decisions. This can create a misfit on pricing, channel, and support – which might need modifications to both the technology and the business model.

What to do instead: 

• Explore different components of the business‑model to see which can overcome initial “barriers to adoption” (this might include: alternate revenue models – such as subscription, alternate channels – such as OEM partners, and enhanced customer relationships – such as software as a service).
• Create partnerships with other industry players who can both guide and resource commercial success.
• Use spinouts or dedicated units to avoid culture and process conflicts with the core defence business.

5. Flawed Assumption: “Users are organized to evaluate the potential of new technologies.”

Why it exists: Defence organizations actively seek innovative solutions to current problems, but many firms and organizations lack scanning processes, technical evaluation skills, and incentives to identify and trial early‑stage technology. Indeed, standard procurement policies often penalize experimentation. This makes it difficult for potential users to invest in identifying or prototyping potential pilots, or subsequently to adopt at scale.

What to do instead: 

• Build absorptive capacity that helps organizations identify and evaluate potential innovative opportunities, through enhanced academia/industry interaction, the development of communities of practice, and cross‑sector secondments.  
• Enable testbeds/sandboxes & agile procurement that incentivize validated adoption and productivity outcomes.
• Provide financial and related support to users willing to become first users and early adopters “SRED for users”.

The Prize

If Canada gets this right, we will create a virtuous cycle: defence investment that not only strengthens security but fuels a more innovative, productive economy. To do this we must challenge the assumption that identifying opportunities for dual-use innovation is easy. It demands the development of a more entrepreneurial mindset, a focus on user discovery, improved understanding of the process stages, and a deliberate strategy to transform potential opportunities into impact. Done well, defence investment becomes a catalyst for national prosperity, linking security, innovation, and productivity gains for decades to come.