Navigating the dual-use and defence sector – what does this mean for businesses?
The Dutch government has urged companies to play a more significant role in the dual-use and defence sector. Technologies with both civilian and military applications may increasingly need to be made available for defence use. This demands a fundamental shift in how companies operate. Dual-use production and collaboration with defence bring strategic choices, investment dilemmas and complex regulations.
The future: opportunities in a shifting geopolitical landscape
The need to invest in defence stems from geopolitical tensions that are unlikely to disappear soon. Europe is under pressure to become more strategically autonomous and less dependent on the United States. This presents new opportunities for Dutch companies but also the challenge of positioning themselves in a highly regulated and politically sensitive sector.
The difference between success and stagnation lies in preparation, positioning and strategic decision-making. Those who act now can secure a strong position in a market that is becoming increasingly vital for the Dutch and European economy, security and strategic autonomy.
“For many companies, this is unfamiliar territory. Working with defence requires a different way of thinking and organising. Regulations such as ABDO and export control introduce additional requirements and investments must be justifiable within a long-term strategy”, says Michel van Ierland, Managing Partner at Unified International.
“The willingness to invest is often there but companies need certainty. Without government commitment large-scale upscaling remains a risk”, he adds.
Strategic Focus for Defence Innovation
To maintain technological leadership and enhance national security, businesses should align with the Netherlands’ five priority defence areas.
- Cyber and Digital Warfare – Advancing cybersecurity, AI and data science to counter evolving digital threats and enhance intelligence capabilities.
- Air and Missile Defence – Developing cutting-edge radar, air defence and sensor technologies to improve detection and response systems.
- Maritime Capabilities – Investing in advanced shipbuilding and underwater technology to strengthen naval operations and security.
- Drones and Autonomous Systems – Enhancing robotics, unmanned vehicles and AI-driven applications for modern warfare.
- Space and Satellite Technology – Expanding capabilities in navigation, intelligence and quantum technology to secure the strategic space domain.
Innovation, collaboration and strategic market positioning are key to strengthening both national and international defence capabilities. Examples are investing in R&D to drive technological advancement, partnering with defence agencies, NATO and industry leaders and expanding into global defence markets and securing international contracts.
The challenge: investing in a new market
“You need to invest and prepare the organisation. but investing without a clear long-term vision carries risks. Working with Defence is different from operating in the civilian market”, says Michel.
The investment challenge remains a major hurdle. Companies are willing to invest, but only if there is a degree of commitment from the government. Without long-term contracts or guarantees, it is difficult for companies to make the leap. A ten-year contract can mean the difference between cautious waiting and investing in production capacity.
To address this challenge, the upcoming NL Security Fund (SecFund) provides crucial financial support for SMEs, enabling them to develop defence innovations and scale up until they secure government contracts. SecFund helps drive investment in key technologies, strengthening the defence industry and encouraging private sector involvement.
What do companies need to know about regulations?
Companies face export controls, ABDO standards and other security requirements. You cannot simply adapt an existing technology and offer it directly to Defence as there are legal and practical restrictions. This requires not only a different mindset but also a carefully managed organisational transformation. ABDO (General Security Requirements for Defense Contracts) is an essential standard for companies working on military projects.
This involves both public procurement and private contractual agreements. On one hand, procurement law applies, while on the other, contractual agreements play a crucial role. We bring expertise in both areas to the table, procurement law and contract management.
Some examples of ABDO requirements are:
- Strict physical security of buildings and production processes.
- Screening and certification of personnel via a VGB (Certificate of No Objection).
- Secure IT systems and information management in accordance with defence standards.
Export controls also play a significant role in dual-use technologies. Companies must comply with regulations such as the EU Dual-Use Regulation, the Wassenaar agreement and ITAR/EAR.
How Unified helps bridge the gap
“For many companies, the defence domain is new and a complex territory. There is a lack of knowledge about how the defence sector operates and what businesses must do to become a serious player”, Michel explains. “Unified helps companies to gain a comprehensive market understanding and navigate it successfully”.
Companies must prepare for a new reality which means more than just regulatory compliance.
Unified assists businesses in this transition by:
- Identifying market opportunities both nationally and internationally
- Providing guidance in defence tenders ensuring companies position themselves for a winning bid
- Advising on organisational adjustments from security compliance to strategic business operations
- Accelerating dual-use innovation helping companies adapt their civilian technologies for the defence market
Unified ensures that companies not only understand the market but also know how to position themselves within it. There is a lack of knowledge about regulations and market mechanisms in the defence sector and this is precisely where specialised guidance is crucial. Unified International guides companies through this process.
Contact us to schedule a consultation and discover how we can help.