Japan’s defense establishment is turning to a new generation of startups to build its "new way of warfare," a strategic change shown by Defense Minister Shinjiro Koizumi’s recent visit to a Nagoya drone maker. Asahi Shimbun reported that companies like Prodrone Co. are transitioning from civilian drones to dual-use technologies, a shift driven by geopolitical pressures and a push for domestic production autonomy.
The Nagoya Shift: From Hobby Shops to Defense Contracts
At the end of July, a gathering called the SAMURAI Defense Council in Nagoya brought together more than 50 drone startups and officials, including former Acquisition, Technology & Logistics Agency (ATLA) Commissioner Hideki Tsuchimoto. The council’s driving force is Shunsuke Toya, president of Prodrone Co., which declared itself a dual-use technology company in 2026 after years as an industrial drone producer. “Our hallmark is that we use not cutting-edge technology but mature technology,” Toya explained. “Older technologies are inexpensive, durable and easy to repair.”
Prodrone’s flagship GT-M unmanned helicopter exemplifies this approach. Powered by a 32cc engine—roughly the size of a lawn mower—it stays airborne for three hours, reaches 135 kph, and withstands 72 kph winds. At roughly 2 million yen ($12,700) per unit, it costs one-tenth to one-twentieth of comparable foreign models. This cost efficiency stems from Prodrone’s roots in radio-controlled helicopters, a far cry from the R&D-heavy processes of traditional defense contractors.
Tokyo’s Gambit: Countering China’s Drone Dominance
The government’s push for domestic drone production is a direct response to China’s market stranglehold. Shenzhen-based DJI controls roughly 70% of the global drone market, and even Japanese-assembled drones rely on Chinese-made batteries and components. “If Beijing were to restrict exports, Japan’s domestic drone production could be severely disrupted,” the National Growth Strategy warned in July.
To mitigate this risk, the Takaichi administration designated drones as a “Specified Critical Material” in December 2025, alongside semiconductors and batteries. The strategy sets a target of 80,000 annual aircraft and key components for civilian use by 2030, with a dual-use focus for defense. Prodrone has already answered the call with a prototype drone using all-Japanese components, prompting Koizumi’s May visit to Nagoya. “Maintaining unmanned-aircraft production capabilities within Japan is indispensable,” he stated.
| Key Player | Market Share | Japan’s Dependency Risk |
|---|---|---|
| DJI (China) | ~70% | High (Critical Components) |
| Prodrone (Japan) | N/A | Low (Prototype All-Japanese) |
Reputational Crossfire: Startups Face Defense’s Double-Edged Sword
For startups, entering the defense sector is a minefield of reputational risks. Some companies fear being labeled “merchants of death,” while others worry about economic pressure from China. Prodrone itself saw investors pull back after announcing defense plans. “There has long been a tendency in Japan to avoid talking about defense matters,” Toya admitted. “But today we face a far more severe security environment.”
Toya argues that transparent communication can mitigate these risks. “We need to explain our belief that dual-use technologies can contribute to national defense and help protect people’s lives,” he said.
Global Ripple Effects: The Drone Arms Race Goes Commercial
The government’s subsidies and R&D support will be critical, but reputational and supply chain challenges remain. The question is whether Japan can scale up fast enough to matter in a market dominated by Chinese and Western firms, one Tokyo-based defense analyst noted.
For now, the SAMURAI Defense Council’s message is clear: the future of warfare will be built in places like Nagoya, including government labs.
