【Cooperation between European and Indo-Pacific Powers in the US alliance system project：Policy Paper Vol. 12】
Prospects of NATO-IP4 Cooperation in Quantum Technology

Publication of Policy Papers for the SPF Project “Cooperation Between European and Indo-Pacific Powers in the U.S. Alliance System”

　IINA (International Information Network Analysis) hosts a series of policy papers featuring analyses and insights from U.S., Japanese, South Korean, Australian and European experts, which discuss constructive cooperation among U.S. allies in Europe and the Indo-Pacific. The series aims to provide readers with valuable perspectives on the future of NATO-IP4 (Indo-Pacific 4) cooperation for regional and global security.

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In this paper, I first explain the reasons for initiating cooperation between NATO and IP4 on next-generation technologies and which countries that are not NATO allies or partners could participate in these efforts. Second, I discuss one potential area for future NATO-Japanese cooperation: quantum technology.

Why is there interest in NATO-IP4 defense industry cooperation to increase interoperability between North American, European, and Indo-Pacific allies and partners? It is because the Russia-Ukraine War has made it apparent that liberal democracies cannot match the speed at which authoritarian regimes divert resources toward wartime needs. Authoritarian regimes can establish wartime economies at a rapid clip without popular protests because their citizens lack the freedom to publicly voice discontent and cannot oppose key government decisions.

As a result, Russia has swiftly transformed its economy to meet wartime needs and gain the upper hand against Ukraine. It is producing 250,000 artillery shells per month. By contrast, the US military’s target is to increase its shell production to 100,000 per month by the end of 2025.[1] There are a few ways to deal with this challenge. The most obvious answer is to pool resources with allies and partners. The IP4 countries Japan, South Korea, Australia, and New Zealand are particularly attractive partners for NATO efforts to increase defense industrial output because of their strong industrial bases.

However, NATO also needs to invite countries outside the IP4 framework to cooperate in expanding the industrial base even if they do not fulfill the criteria to become NATO members or operational defense partners for political or diplomatic reasons. For example, Israel, Jordan, Egypt, Morocco, and the United Arab Emirates are capacity-building and stabilization NATO partners through their membership in the alliance’s Mediterranean Dialogue. But these countries are not operationally integrated in NATO or its efforts to build an integrated defense industrial base. They, along with South Africa, India, Brazil, and Nigeria, are among the top 50 exporters of arms in the world. They could become defense industrial partners if NATO invites them to produce specific items based on a needs assessment to expand production. The alliance could create an Industrial Partner for Peace framework to begin this process. Such a framework may form the basis for creating NATO export control regimes to prevent transfers of sensitive dual-use technologies.

When focusing on the prospects of NATO-Japan defense technological cooperation, quantum technology has the largest potential and relevance. First, one of the most critical future security issues is how to maintain secure cryptography systems. Scientists and officials speak of Q-day, when a quantum computer—by using qubits, which can represent 1, 0, or both at the same time—can solve complex mathematical equations much faster than traditional computers, enabling it to crack the cryptographic systems that governments and other organizations use for data protection. Countries and other actors with quantum computers will be able to read everyone else’s communications while protecting their own communications from unwanted interference. Second, NATO and Japan already have an institutional basis for cooperation on quantum technology. They both already have separate quantum technology development initiatives. Cooperation between them and other IP4 countries with advanced technological industries, such as South Korea, would greatly contribute to securing a strong industrial base in quantum technology across the Euro-Atlantic and Indo-Pacific theaters.

What is the status of quantum technology development in NATO? NATO has been sensitive to the potential of new technologies. In 2019, it agreed on an EDT Implementation Roadmap, and in 2021, the alliance endorsed a Coherent Implementation Strategy on EDTs. The strategy has two objectives:

1. 1. To foster the development and adoption of dual-use technologies
2. 2. To create a venue for NATO allies to protect themselves, their own EDTs, and innovation ecosystems from interference, manipulation, and EDT use by potential adversaries and competitors

Work is focusing on nine areas that include but are not limited to quantum technologies, AI, autonomous systems, biotechnology, space, hypersonic systems, novel materials such as superconducting oxides and hydrogels, and next-generation communications networks.

To promote technological innovation, NATO has created DIANA and the NATO Innovation Fund (NIF). DIANA has a network of over 200 accelerator programs and test centers throughout NATO member states that link startups with operational end-users to ensure that new technologies serve defense needs. Considering the potential for Japan to contribute to this network, NATO should not limit it to member states.

The NIF is the first multisovereign venture fund and seeks to attract investment in high-risk, long-term technology projects that private-market actors might not develop. NIF has a 15-year lifespan and a small budget of €1 billion ($1.04 billion).

Quantum technology will be a big part of the NIF effort. To become quantum ready, in November 2023, NATO’s foreign ministers approved the alliance’s first quantum strategy. In January 2024, they released a summary of the strategy, which states that quantum technologies could revolutionize sensing; imaging; precise positioning, navigation, and timing; communications; computing; modeling; simulation; and information science. Quantum technology has potentially revolutionary and disruptive implications, which can degrade the alliance’s ability to deter adversaries and defend its member states. Quantum technologies are therefore an object of strategic competition.

A key part of the strategy is the establishment of a transatlantic quantum community that consists of representatives of government, industry, and academia engaging strategically with one another across our innovation ecosystems. As the program has just started in a transatlantic context, there is still room to expand the community to include Japanese industry representatives such as Fujitsu, NTT, and Hitachi.

Japan has also banked on quantum technology as essential to getting ahead in the strategic competition with adversaries. In January 2020, the Japanese government published its Quantum Technology and Innovation Strategy.[2] In April 2022, the cabinet secretariat of science, technology, and innovation policy revised the strategy, renaming it the Vision of a Quantum Future Society.[3] In 2023, Japan released a strategy explaining practical applications and an industrialization strategy for quantum technology.

In 2024, an expert panel on quantum innovation released an updated document, Promotion Measures for the Development of Quantum Industries, to account for drastic changes in the international environment and the progress other countries have made in this field. It sets three goals to be achieved by 2030:

1. 1. Ten million quantum technology users in Japan
2. 2. Production that uses quantum technology with a total value of ¥50 trillion ($323.8 billion)
3. 3. Support for quantum unicorn companies that have reached a value of $1 billion without being listed on the stock market

The panel will publish data to assess whether Japan has reached these targets. As international competition has become increasingly tough, incentives to hit the targets are much stronger. However, to maximize the impact of Japanese quantum technology initiatives, NATO and Japan should establish a working group to discuss road maps for future cooperation. The working group should include Japan’s Ministry of Defense as well as its Ministry of Economy, Trade and Industry, which traditionally has not been involved in defense cooperation. However, the 2022 National Security Strategy of Japan encourages all Japanese ministries to coordinate technological development projects under their jurisdiction with technological development efforts in national defense.[4] Quantum technology may become the first example of whole-of-government technology cooperation in Japan.

One challenge will be controlling the spread of sensitive technologies, an issue that will become more complex if coordinated multilateral action takes off. The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies is collapsing since Russia vetoes all additions to the control lists, and its members need to replace it with a new regime.

Broader and more effective common export control regimes need to accompany a NATO-Japan framework for cooperation on developing new technologies and producing defense technological equipment.

So far, such frameworks in the defense realm have mainly taken place in bilateral or minilateral contexts, such as Pillar II of AUKUS, which is devoted to defense technology cooperation. In 2023, Japan, the United States, and South Korea agreed to cooperate on EDTs, and in April 2024, they held the inaugural meeting of their Disruptive Technology Protection Network.

NATO has a good track record of standard-setting and expertise in defense-related technologies through the involvement of numerous relevant actors. It seems well positioned to form a secretariat for new export control regimes to replace the Wassenaar Arrangement and to ensure implementation of the new regime. If NATO decides to include countries that are not formal allies or partners as industrial partners for peace in defense, these countries should be signatories to the new export control regime.

(2025/04/04)