TOKYO — A seismic shift is occurring within the global defense industrial base. Entrepreneurs with backgrounds far removed from the military-industrial complex—running tea shops, podcasting platforms, and drone surveying services—are rapidly converting their commercial operations into defense contractors. The driver is not ideology but a raw calculation spurred by great power competition and the slow-footed nature of legacy prime contractors.
In Tokyo, Terra Drone CEO Toru Tokushige detailed a pivotal meeting during Japan's Golden Week holiday. A retired major general visited his civilian drone firm with a blunt message: Japan’s military desperately needs domestically produced, attritable interceptor drones to counter threats from China, North Korea, and Russia. Traditional giants like Mitsubishi and Kawasaki are too slow. Tokushige, a self-described rebel who defied his steelworker father to enter finance, agreed to retool his company for national defense. His stated “minimum goal” is to become the top interceptor drone maker in Japan.
“It’s dramatically changed in terms of the landscape of engagement, the landscape of opportunities, compared to 10 years ago,” said Jerry McGinn, director of the Center for the Industrial Base at the Center for Strategic and International Studies.
This pivot is not isolated to Asia. In the United Kingdom, a former tea shop owner now supplies portable batteries to the British military. In Stockholm, an entrepreneur who previously founded a podcasting platform now sells interceptor drones, noting a stark cultural reversal. “Before the Ukraine War broke out, it was more acceptable for a tech entrepreneur to run a porn site than to work in defense,” he said. “Now, actually, when you tell people you work in defense, you get a hug.”
Western governments are actively fueling this transition, tearing down procurement barriers that once locked startups out of the lucrative arms trade. In December 2024, the U.S. Department of Defense launched the Expedited Research Innovation System, allowing firms to submit a seven-minute pitch video. Over 150 companies have been vetted and introduced to the government through the program. The Pentagon’s message is clear: bypassing traditional, slow cycles of risk-averse contracting is now a national security imperative. It is a policy that, while aggressively streamlining production for mutually hostile states, raises questions about the long-term entrenchment of a permanent war economy detached from any specific American interest beyond perpetual readiness.
For the American worker, this global arms build-up represents a double-edged sword. While defense manufacturing jobs may see localized growth, the overarching priority of accelerating drone and munition production for foreign theaters does little to shore up the domestic industrial base that produces consumer goods or energy independence. The economic nationalism required to rebuild American manufacturing strength is distinct from supplying a global gray zone conflict. The risk remains that this startup gold rush funnels top engineering talent into systems designed for foreign deployment rather than domestic prosperity.