CIA Director William Burns said on 2 February 2023 that the CIA knew ‘as a matter of intelligence’ that President Xi had ordered the People’s Liberation Army to be ready to conduct an invasion of Taiwan by 2027. The optimal time for such an operation, allowing for tides and typhoons, would be April 2027—which is 33 months away. Burns was not claiming that Xi had made a definitive decision to go to war over Taiwan.

Most analysts favour the view that Xi would prefer to achieve his goal of subjugating Taiwan without resort to war. Nonetheless, we should plan on the probability of a Pacific war before the end of the decade as being at least 10 percent. If we adjust our assumption about Xi’s appetite for risk and consider his possibly rising concern about the correlation of forces in the Indo-Pacific, the probability of a Pacific war occurring between now and the end of the 2020s is more likely to be 20 percent.

In such a war, US and allied forces would be in combat with Chinese, and possibly Russian, forces in the Pacific, and probably in the Indian Ocean, too. It is possible that such a war would be fought for a prolonged period with conventional and cyber weapons alone, with the ever-present risk of nuclear escalation being a restraining factor, initially at least. It is also possible to imagine a situation where tactical nuclear weapons might be used, with a break on escalation to strategic nuclear strikes (against nuclear forces or population centres) being observed, for a while at least.

Crises other than war might come sooner than 2027, especially were China to continue to ratchet up pressure on the Philippines to the point where US security assurances were triggered. A PLA maritime raid on the Philippines, designed to test US and allied resolve, might well occur over the next 12 months, without necessarily triggering the major war for which China is not yet ready.

Whether and how war might occur is a topic for another day. For now, we should focus on the question of time—and specifically how we might in Australia make time by accelerating war preparations. Time is a critical, but too often neglected, factor in strategy. Strategies are often full of declaratory intent but silent on time and other crucial factors, such as space (that is, geography) and means (or resources). A time-bound approach to strategy exposes the question of why tasks take so long and how they might be accomplished more quickly. It forces us to ask: ‘What are the obstacles to moving at speed?’ Similarly, space (or the ‘where’ of strategy) and means (or resources for any strategy) must be considered. Absent the detailed consideration of time, space and means, ‘strategies’ are merely performative activities.

Today’s Australian Defence Force is configured for the 1980s model of escalated low-level conflict, when defence spending was 2.5 percent of gross domestic product. Though we now face the prospect of more substantial conflict, the ratio will be 2.1 percent in financial year 2024–25.

Had we proceeded with the plan in the 2009 Defence White Paper, we would now have the base force from which to build rapidly the military that we would need for a major war, with the defence/GDP ratio now being at or close to 3 percent. As it is, the ADF is too modest in size, and is not at the required state of readiness, for sustained operations in major war, as I outlined in an earlier article in The Strategist. While we cannot in the time that is available do much about rapidly expanding the force in terms of new major platforms, we could do a great deal in terms of equipping and readying the force in being, by increasing the availability of existing platforms, weapon systems and war stocks and also by lifting the readiness and survivability levels of ADF units.

Whatever else we do, there is an urgent need to dramatically increase local defence production. Why is that? With the increased global demand for defence production, as wars continue or threaten to break out in the Euro-Atlantic, Middle Eastern and Indo-Pacific theatres of the Eurasian geostrategic area, Australia will need to urgently increase local production, whether of indigenously-designed, co-designed or licensed platforms, systems and weapons. Reliance on global supply chains and market forces could render us defenceless. In other words, we need to add to the aggregate level of global defence production, and we need to do so for our own self-interested reasons.

We have done this before. Thanks to the tireless work of Andrew Ross of the University of New South Wales, we today better understand how Australia’s industrial development over 1900-45 was crucial to the defence of Australia in 1942–45. BHP’s Essington Lewis, as director general of munitions and later of aircraft production, was able to draw upon a mobilised national economy and industry base. His story should be better known. Blainey’s biography The Steel Master: A Life of Essington Lewis (1971) is well worth reading, or rereading.

We should also widen the lens and examine defence production during World War II more generally, especially in the United States. The best account is Arthur Herman, Freedom’s Forge: How American Business Produced Victory in World War II (2012). We should better know this history and those business leaders. Men like William Knudsen, the head of General Motors who was appointed by President Roosevelt to be the director of war production, and Henry Kaiser, who oversaw the construction of 2,700 Liberty cargo ships, which proved to be vital in keeping Britain and the Soviet Union supplied—ships which were just good enough and which could be produced in days once the production techniques were mastered.

Or consider the Manhattan Project. Leslie Groves was appointed to lead the project as a temporary brigadier-general in August 1942. He was given a temporary wartime promotion to major general in March 1944. He was the proponent of taking first steps and adjusting his plan as he went. He knew that developing the perfect plan, especially given the experimental physics that were involved, was the enemy of good strategy. He relied on the initiative of his subordinates. He took risks with untried processes and moved on quickly when they did not produce results. If you have seen Christopher Nolan’s movie Oppenheimer, you might appreciate reading Groves’s memoir, Now It Can Be Told: The Story of the Manhattan Project (1962).

After World War II, similar traits were seen in the Marshall Plan of 1948 to rebuild Western Europe and in the Apollo programme of the 1960s. Individuals were empowered to make decisions, based on the work of teams of specialists. There was an emphasis on getting the job done, whatever it took, without being crippled by self-doubt and by compliance and oversight burdens. Men like Knudsen, Kaiser, Groves and our own Lewis were forceful types who lived their work and who would have scoffed at the idea of work/life balance. Being a man should of course today not be a prerequisite for similar roles today—but living the job should be.

What follows is a practical way to urgently increase the defence production in Australia of indigenously-designed, co-designed or licensed material. It very consciously tries to capture and reflect the memory of how similar things were done in those earlier times. While modern production processes have changed due to the complexity of high-technology end products—and perhaps instead of old school industrialists we might need a real-life Tony Stark—the same timeless principles of leadership and action-focus still apply.

To urgently increase local defence production, a Defence Production Commission should be established, headed by a director general of defence production. The commission would be chaired by the director general, who would be joined by the secretaries of defence and industry as members. The director general would be the provider; the secretary of defence would hold the budget as the purchaser and would consult closely with the chief of the defence force, who would be the user. The secretary of industry would be the enabler—charged with ensuring that the full weight of national industry policy and programs was thrown behind the effort.

Defence production would be seen as a sovereign national capability in its own right and nested in Australia’s industrial structure—‘sovereign but internationally connected’, to apply the formula used in a December 2023 report by the Australian Industry Group and the Australian National University’s Strategic and Defence Studies Centre: Defence Industry in National Defence.

The commission’s responsibilities would include production of ships, guided weapons, explosive ordnance and munitions and autonomous systems, including any licensed production, and maintenance and repair of aircraft and vehicles. Having it report to a cabinet-level minister for industry and defence production would ensure mobilisation of the entire economy in the face of looming peril. This would bring to bear the full spectrum of capital, innovation, workforce and scale across the economy. It would ensure better links between the defence production function and critical enabling national functions such as science, research, development, immigration, education, training, infrastructure and so on. While defence industry might lack scale, the Australian economy does not.

As the user, the ADF would set its requirements in the form of operational problems to be addressed, allowing industry to innovate and problem-solve without having to conform to strict tender conditions. These are too often written without deep understanding of national industry capabilities, especially in areas such as artificial intelligence, cyber, space, aerospace, data systems, autonomous systems, biotechnology, heavy engineering and more besides.

The commission and the office of director general would be established by a Defence Production Act, which would, among other things, exempt the commission from the requirements of the Public Governance, Performance and Accountability Act 2013. This would allow the commission to employ innovative procurement methods, using procurement superpowers, which would be authorised by special rules set by the minister for industry and defence production in consultation with the defence and finance ministers.

The commission would move away from simply being a contractual partner. To achieve results it would be empowered to use its superpowers: its legislation, regulations, authority as a landlord, debt and equity financing, loan and other forms of business guarantees, accelerated depreciation and, in the extreme, constitutionally valid requisition during wartime. Strategic investment partnerships with (vetted) pension funds, private equity funds and emerging national security investment funds would be able to be used. The National Reconstruction Fund would be repurposed.

The commission would have the power to abolish red-tape and strip back unnecessary regulation. It would aim for 60-day turnarounds between proposal and contract, with a bias towards letters of intent being sufficient in many, if not most, cases. The commission would be empowered to remove barriers to entry, especially for industries that are adjacent to the defence sector. They could be mobilised with little effort, save the abolition of disincentives, which tend to be a function of bureaucratic requirements. We would need to be prepared to tolerate failures, where these could be explained as reasonable risk/reward initiatives. Ministers and senior officials would need to be prepared to defend such risk taking.

The commission would drive aggregation of effort across Australian industry and beyond. Foreign partners would be involved through defence-production free-trade zones and would include the United States, Britain, Japan, South Korea, France, Germany, Sweden and potentially others.

Accountability would have to be framed in accordance with the commission using its superpowers. Accountability would be ensured by the proposed joint defence committee of the parliament and by the auditor-general and National Anti-Corruption Commission. Otherwise, oversight exemptions would apply, including, for instance, by resolution of the Senate in relation to Senate Estimates.

A final word on Defence bureaucracy. If Defence were to be directed to move to a prewar footing, it would do so quickly. Finance rules, procurement complexity, convoluted oversight—all of which are imposed from the outside and which are then replicated internally within Defence through a maze of committees and processes—would all have to be done away with. Today, an Australian Leslie Groves would not be put in charge of a modern Manhattan Project. She or he would instead be an attendee at a project oversight committee meeting where generalists would opine on the ‘high technical risk’ associated with nuclear fission.

The times demand a different approach. With clear political authority, and the removal of external and internal blockages, Defence would deliver. It is a matter of will, and the right authorising environment.

We can gain time by simultaneously increasing authority and accountability. We can reduce time delays by concentrating authority in the hands of those who are not afraid to use it—and to answer for it. Purpose generates effort which quickens time, as we see in war—and in pandemic response, in dealing with natural disasters, and more besides.

A sense of urgency can literally make time. French philosopher Henri Bergson (1859–1941) wrote of the need to differentiate between ‘objective time’—which can be measured by watches, timetables and so on—and ’la durée’ or lived time, the time of human agency, where time can speed up or slow down. We can spend an hour of objective time accomplishing nothing useful, where time seems to pass slowly, or we can spend that hour achieving a great deal, where time seems to pass quickly.

Bergson married the cousin of novelist Marcel Proust, who wrote the famous novel that is today translated into English as In Search of Lost Time. One of Proust’s themes was ‘time regained’ through memory. If we remember how we once were, we might—hopefully without delay—remember how to be so again in similarly dark times.

Originally published on 9 February 2023.

In March, the government is expected to announce its plans to implement the ambitious proposal for an Australian force of nuclear-powered submarines (SSNs) that is at the heart of the AUKUS agreement.

Any scheme for an Australian SSN force must meet several conditions if it is to be viable. The first is that it must include solutions to address the looming shortfall in Australia’s submarine capability that can’t be met in time by ab initio building the boats in Australia. It must then provide a practicable and cost-effective way ahead for long-term construction of SSNs that is effectively coordinated with one or both of our AUKUS partners. As is becoming increasingly clear, meeting the shorter-term capability requirement and developing a mature SSN construction line will require substantial efforts not only by Australia but also by at least the US and possibly the UK.

Australia’s commitment to SSNs has profound implications for the way in which the defence budget must be managed. The level of understanding of the full requirements for raising, training and sustaining an effective defence force has never been high in Australia, either within government or outside it. Apart from the frequency with which the full on-costs of major projects are deliberately underestimated to secure their political approval, there has long been a tendency to manage any pressure on the budget by reducing the funds allocated to sustainment, in particular, while allowing maintenance of defence facilities to be done on a shoestring. Both of these practices may well be happening now as the defence organisation struggles to find the money to meet the demands of a difficult international environment when the government has so many other priorities. Bad at the best of times, these tendencies are worse when there are serious prospects that Australian forces will be required at little notice to assert the national interest.

And if we have been poor at understanding the on-costs of our platforms, the irony is that we have been—and continue to be—even worse at estimating the true requirements for and the associated on-costs of people, whether in uniform or not, no matter whether they’re ‘poor bloody infantry’ or the most highly qualified engineers.

The point is that the operation of an SSN force and all that this involves, even after the submarines are in the water, for maintenance, base support, quality control and other technical governance will introduce a new factor—a commitment of human effort and of funds that is not only substantial but also non-reducible to an extent that even meeting the demands of air safety has provided no precedent in the Australian experience.

Concerns expressed over the potential intrusions into Australia’s ability to make sovereign decisions have been well meant, but have generally focused on the wrong target. It is not the operations of the submarines themselves that will be subject to any real loss of national autonomy in a mature system but the working of the governance regime for nuclear power. The US in particular will want to be satisfied that Australia fully meets whatever commitments it makes to nuclear-power standards and safety, and it will insist on inspection regimes which guarantee that. Such regimes will not only apply to the submarines, their power plants and their support infrastructure, but also include critical assessment of the management bureaucracy. It is not a subject much discussed, but it is difficult to avoid the impression that American concerns were a critical factor behind the reforms of the UK system that resulted in the setting up in 2016 of the UK Defence Nuclear Organisation as the focal point and sponsor of the UK’s defence nuclear enterprise.

All this requires not only that Australia commit itself consciously to the total bill for nuclear power but also that the implications for the defence effort as a whole be completely understood for what will be in practice an irrevocable and irreducible commitment.

Here, a fully thought-out SSN plan also needs to include a complete understanding of the opportunity costs involved and confirmation that SSNs are indeed the most effective capability that Australia can select to meet its strategic challenges.

That itself will call for a degree of sophistication which has rarely marked the national debate on defence policy, whether within government or outside it. The report of the defence strategic review to be presented to the government next month might help provide some of the answers, particularly for the shorter term and about the way the transition from conventional submarines to SSNs will be managed.

In some ways, we have been here before, though we made a mess of things each time. The grand ideas of AUKUS are in many ways no novelty to Australian strategic thinking. The problem is that the history of Australian defence policy is marked by a series of ambitious force structure plans that have failed to be fulfilled. As with the SSN project, the most important of these have been maritime focused, recognising Australia’s situation as an island continent that is dependent on the maintenance of supply flows and for which achieving a secure region is a much higher priority than defending actual territory. Either Australia has attempted to create a force of sufficient weight that it could make a substantial contribution to regional collective defence, as was the case in 1923 with the plan to create a force based on new cruisers and submarines, or there was an explicit effort to develop an independent capability for power projection, as was the case in 1947 with the creation of the Fleet Air Arm based on two aircraft carriers.

The 1923 example may have the louder resonance for the present day, given that’s when Australia’s plan to create a submarine flotilla emerged from an Imperial Conference. Six submarines were to be our contribution to the large submarine force permanently based in the Far East, serving as a standing deterrent and the ‘trip wire’ against any Japanese incursions into British possessions in Southeast Asia. But only two of the six boats ever materialised, and by 1931 they were given to the British because the Australian budget could no longer afford them.

However, for our SSN effort, if we don’t take care, there may be closer parallels with the 1947 carrier plan in what followed over the long term. The carrier program went ahead but was dogged from the outset by barely adequate funding and the difficulties of finding the additional resources to adapt to changing technology. For the next 33 years, the navy had the experience of trying to maintain a major capability, in this case fixed-wing seaborne aviation, when the nation was unwilling to provide the full funding for the capability actually required, whatever the rhetoric that accompanied the initial commitment. That the navy was able to achieve so much with its aircraft carriers and their air groups between 1949 and 1981 was remarkable, but there was a price. Not only did naval aviation itself struggle at times, but there can be no doubt that the remainder of our maritime forces suffered. The difference this century is that such ‘making do’ cannot be enough.

The lesson is obvious. If Australia is to embark on the SSN program, the bill in people, money and infrastructure must be understood and met from the first and in full.

The 2023 defence strategic review calls for a whole-of-nation effort to secure Australia’s interests in an increasingly unstable world. Tasks include building supply-chain diversity and a national industrial base with the capacity to scale up. Whole-of-nation efforts are all the rage, but all too often they signal urgency while leaving the particulars of implementation up to some hazy notion of ‘everyone’. It’s worth asking what it takes to execute such a grand vision.

Details of the DSR policy realignment are a work in progress. If they are to achieve the sweeping goal of fostering a diverse and scalable industrial base, a critical component of that realignment must be innovation strategy. In this area, emerging trends risk running counter to broader objectives.

Innovation is the lifeblood of the defence industry. Properly managed, it does far more than equip the force with cutting-edge technologies. It creates an international comparative advantage, encouraging exports that drive profitability and push investment into Australian businesses. It deepens the markets Australia relies on for resilience and sovereign industrial capacity.

The Defence Department’s demand signal to industry—the requirements it puts out to tender—is its single most powerful lever in marshalling a large-scale response to today’s challenges. Defence’s latest effort to refine that demand signal is the Advanced Strategic Capabilities Accelerator.

Self-imposed constraints on ASCA procurement make it suited to addressing a particular category of requirements. Typical project durations will be limited to three years and will only begin once a clear path to acquisition is identified. ASCA’s funding is about $340 million per year—just 2.5% of the military equipment acquisition program. Broader defence research and development spending doesn’t take the total much higher than this—certainly not to the level of US defence R&D funding, which is nearly three-quarters the size of its procurement budget.

These process and funding constraints imply that projects must be small. They must address the neatly defined operational needs of end users. What does that mean for the industrial base as a whole?

As with any component of a modern economy, the defence industry is a deep network. The machines we see roaring overhead at airshows or sailing by in Sydney Harbour are the tip of the iceberg. International prime contractors garner all the attention since their names are stencilled on hulls and fuselages. But they depend on a vast array of tier-one suppliers.

Lockheed Martin can’t build an F-35 fighter jet without engines from Pratt & Whitney. Pratt & Whitney maintains similar relationships with a range of tier-two suppliers, forming a complex ecosystem that took 20 years to build. Many of those subcomponent suppliers rely on tier threes, and so on down to the nuts and bolts that hold everything together.

Designing and sustaining an F-35—or any other major weapon system—requires innovation throughout its massive supply chain. Defence departments don’t usually buy subsystems directly. Lockheed Martin does. BAE Systems does. But those subsystems require investment, and Defence needs a say in which capabilities require modernisation.

If Defence places undue focus on projects that can be developed quickly and fielded directly to the services, it will miss all of that ice below the waterline. It will miss the wide range of subsystems that go into modern military hardware.

It’s a useful exercise to browse the US government’s unclassified R&D budgets, such as this one for the US Air Force. I have argued elsewhere that early technology readiness levels (TRLs) are the most important area for governments to invest in. But take for granted that ASCA’s focus on productising others’ early-stage innovations fills a critical gap in the Australian innovation pipeline. Such mid-TRL projects would fall (in part) within the US R&D system’s budget activity five: system development and demonstration.

In 2023, the US Air Force spent US$7 million in SD&D dollars developing advanced infrared countermeasures to protect military aircraft. It spent US$26 million on protected tactical waveforms to guard against jamming of satellite communications signals. It spent US$22 million on ejection-seat upgrades to better accommodate women’s body types. Only in rare cases would the US Department of Defense buy such subcomponents directly. More likely, they will be incorporated by prime contractors into the next generation of satellites and fighter aircraft.

Even subsystems such as these don’t lie too far below the waterline. Dig deeper, and you’ll find other R&D projects to enable them, and more projects to enable those projects.

Australia is rightly proud of its early-stage innovation, and the Defence Science and Technology Group is undoubtedly working on projects like these. But there’s an existing path to fielding for such innovations: Defence’s Capability Acquisition and Sustainment Group. CASG maintains a broader perspective on acquisition of complex systems and their requirements across the supply chain.

By creating a distinct organisation focused on operationalising mid-TRL technologies and divorcing it from the broader acquisitions enterprise, Defence risks short-changing the important innovations that don’t result in headline-grabbing wins. Those technologies also need a path to development and acquisition, and the proximate buyer may not be Defence.

ASCA must create an innovation strategy in lockstep with the broader CASG enterprise. It must enable projects across the supply chain, even if those projects don’t directly purchase pieces of hardware that can be presented to soldiers in publicised ceremonies. It must be careful not to create a set of rules so constraining that the only things it is able to purchase are personal gear, small arms and quadcopters.

Modern militaries are complex systems of systems, requiring a robust industrial base that provides technological innovation throughout. Australia’s emerging innovation strategy, with its focus on quick wins, risks hollowing out that industrial base rather than building it up. It risks starving top-tier contractors of the subsystems they need to develop the next generation of truly transformative technologies. It risks accomplishing the opposite of its intended effect of building a resilient and scalable supply chain.

Only rarely at last week’s Indo-Pacific International Maritime Exposition did defence acquisition officials rise to speak without emphasising the importance of fielding new capabilities at speed. Among those taking this line were the leadership team of the Australian Defence Department’s newly formed Advanced Strategic Capabilities Accelerator. Everything about ASCA—from its name to its mission objectives to its procurement strategy—drives home the imperative of rapid development and fielding.

As long-awaited details emerge on the future of the new defence innovation construct, it’s worth stepping back to evaluate Defence’s plan to equip the future Australian Defence Force with world-beating technologies. Speed to capability is table stakes in the innovation game. It is not a strategy.

The initial concept for a new organisation focusing on defence research and development was quite different from that which eventually took shape. Envisioned as an answer to the US’s Defence Advanced Research Projects Agency, the proposed advanced strategic research agency would have incubated breakthrough technologies to shape the future of the national security landscape for Australia and its partners.

Along with the realisation that funding levels wouldn’t support such a strategy came a shift from ‘strategic research’ to ‘strategic capabilities’ and a dramatic scaling back of ambitions. Rather than investing directly in R&D to keep Australia’s defence industry at the state of the art, ASCA will primarily facilitate adoption of core technologies developed elsewhere. It will avoid projects that don’t start with a clear path to acquisition.

ASCA’s strategy provides a nod to the entity’s original remit with a commitment of approximately 20% of the budget to emerging and disruptive technologies. That is welcome. But it amounts to less than $70 million per year. Even as a percentage of GDP, the number is meagre next to the US Department of Defense’s 2024 commitment of nearly US$20 billion ($31 billion) to early-stage R&D.

Most of ASCA’s resources won’t go to direct innovation activities. Through its missions component, they will go to accelerating ‘the transition of innovation into capability solutions’.

Dual-use technology has become a convenient alternative to publicly funded R&D for Western governments struggling with pinched defence budgets. Even the Pentagon’s US$20 billion is down by more than 25% from the year before. This continues a long trend. Between 1960 and 2019, the US government’s share of national R&D spending fell from 65% to 21%, while its defence organisation’s share of global R&D fell from 36% to 3%.

The resulting reliance on commercial technology is not a panacea, and it’s past time Australia considered its implications. Many elements of national security policy require optimising forces that run counter to one another in the short and long terms. Managing the defence industrial base is no exception.

If we look just at the short term, dual-use technology would appear to fix everything. A smaller proportion of the defence budget must go to investment activities that will bear fruit only far in the future. We can be nimble, and dramatically cut the time required to address an immediate need. We are not forced to forecast what warfare will look like decades in the future as we develop an investment strategy.

But what are the costs? The biggest one is this: commercially available technologies are, by definition, easy to replicate. One need only look at the seesawing stalemate of the Ukraine conflict to see this phenomenon in action.

We can develop an edge in dual-use technology by designing an acquisition system that runs faster than an adversary’s. But it will never be more than an edge. On the time horizon of most acquisition systems—months or years, not decades—that adversary can mimic and counter our capabilities. Excessive reliance on dual-use technology creates not a sustained strategic advantage, but an arms race. Over time, we will not outpace our competitors.

Traditional public-sector investment in military technology happens in the dark. It starts with early-stage basic research underserved by a private sector constrained by the requirement for profitability. It is informed by commercially available technology rather than seeing that as an end in itself. By the time its core innovations manifest as military hardware, they often appear to be the province of science fiction. Matching them seems a lost cause, and the timeline for doing so spans decades. Spillovers change the world—think the internet, or GPS.

Classified, military-focused R&D doesn’t ignore private-sector expertise. Private companies are critical partners in the enterprise. The difference is that the focus from the beginning is classified military requirements. It doesn’t rely on commercial market demand that happens to align with those requirements.

If we maintain a strategy of early-stage, defence-focused investment, we will benefit from a continuous supply of world-beating technologies that are not readily replicable. We will create a sustained military advantage. But it’s easy to cheat when budgets get tight. Investments with benefits far in the future lose out to emergency operational requirements. Little by little, we sacrifice long-run strategic supremacy for short-run tactical advantage.

In the end, we’re left with a never-ending scramble for parity. We’re left with dual-use technologies whose advantage is defined not by the wisdom of our nation’s best minds but by commercial market demand and the bureaucratic efficiency of our acquisition enterprise. Meeting short-run requirements is important, and dual-use technology does that well. But it should be one component of a far deeper innovation strategy.

Given the budgetary realities faced by Defence, perhaps ASCA’s focus on rapid acquisition is a necessary second-best solution. Within its missions component as currently envisaged, there’s room to invite tenders on classified requirements and to shift the mix of programs towards earlier technology readiness levels. This must be carefully considered.

Speed to capability is a noble objective. But make no mistake: it will not create an ADF to dominate future wars, and it will not turn Australia into a defence-industry powerhouse. At best, it will keep us relevant.

‘Defence acquisition has to improve. We have to get equipment faster and we have to make sure we spend our limited funds on the best possible equipment, to give our troops a capability edge.’

— Minister for Defence Industry Pat Conroy, ABC interview, 28 April 2023

The Advanced Strategic Capabilities Accelerator began operations on 1 July with an ambitious mission to address the shortcomings of the Defence Innovation Hub and the Next Generation Technology Fund. Prior to being replaced by ASCA, these two initiatives had been the focus of defence-related innovation for Australian industry, yet after seven years failed to transition their innovative projects into service with the Australian Defence Force.

Which raises a provocative question: does Australia have an innovation problem?

Initially, the Defence Innovation Hub appeared promising. It consolidated six different innovation programs into one streamlined portal and facilitated more than 150 contracts. It invested more than $240 million in innovative technologies developed by Australian primes, small and medium-sized enterprises, and academia.

And the outputs from those investments appeared good. Innovations sponsored by the Defence Innovation Hub have been supporting Ukraine against Russia’s illegal invasion, including the SYPAQ cardboard drones and the DefendTex Drone40. That’s great for Australian exports. And it’s great for Ukraine. Yet it’s a failure for the ADF. Why? Because you won’t find a cardboard drone or a Drone40 in any Q-store of the ADF.

Australia doesn’t have an innovation problem. What we have is an innovation-adoption problem.

In 2021, the Peever review was commissioned to look into the problem of how Defence-funded research and innovation could be more effectively commercialised. Fast-forward $2 million and one election cycle later, and Defence hid behind the implausible excuse that the report somehow wasn’t transferable to the new government, regardless of its national security significance.

What was in the report we may never know, particularly as the freedom of information disclosure presented very little for public consumption beyond some deadpan humour of life imitating art. So what could have been the causes for poor commercialisation and the lack of adoption by Defence?

In part, the Defence Innovation Hub and Next Generation Technology Fund lacked alignment with the specific technology needs of major projects, and in the few cases where there was alignment, Defence was reluctant to readily acquire the product upon the conclusion of the grant. Moreover, the schemes made it exceedingly difficult for the innovation needs of the grassroots warfighter to be considered due to unreasonable probity rules excluding engagement with serving ADF members.

Defence Industry Minister Pat Conroy recognised this as a problem when he announced the establishment of the ASCA, stating: ‘When the technology does get proven up … there’s an acquisition program to fund the commercialisation of it so that it doesn’t get forced to go overseas.’

But what does that look like in practice? While it’s commendable that ASCA is aligning innovation with pathways to acquisition, the procurement and sustainment of materiel capability for the ADF remains the responsibility of Defence’s Capability Acquisition and Sustainment Group.

Yet CASG is anything but an accelerator. The Australian National Audit Office regularly reports on defence procurement schedule overruns in its major projects report, with the latest published data indicating 405 months (33 years) of accumulated schedule slippage. Simple procurements are also exposed to astonishing delays; in one case, a civilian off-the-shelf safety beacon purchasable from any recreational boat shop took CASG an eye-watering 587 days to deliver to the warfighter. This is what the defence strategic review referred to as ‘capability acquisition … not fit for purpose’.

With such lethargy, how are we going to introduce into service quantum technologies, hypersonics or artificial intelligence? How does an organisation that takes a year and a half to purchase a commercial off-the-shelf item from BCF reorganise to deliver at speed?

While reform is underway by Deputy Secretary Chris Deeble, Defence should increase its speed by broadening the definition of industry as a fundamental input to capability and utilising industry far earlier in the capability life cycle.

Every acquisition program carries technology risks that should be documented in a technology risk assessment and reported to government as part of the Gate 1 approval process. Critically, the assessment should document ‘the risk that the project will not achieve its objectives due to an underpinning technology not maturing in the required timeframe’. If an acquisition program is carrying the risk of immature technology—also known as ‘low technical-readiness level’—why hasn’t that been informing Defence’s innovation priorities and investment?

The Defence Science Centre’s Defence Research Teaming events and the Defence Innovation Network’s Sandpit workshops have both been informally de-risking immature technological needs for land-domain projects in areas such as underwater communications, animal welfare and maritime projection. These specific problem statements are not only aligned to future acquisition, but also provide industry with actionable problems to solve, in contrast to previous descriptions of innovation priorities in such enigmatic detail as ‘Space’.

Defence must consider reforming the way technology risk assessments are treated. They shouldn’t be seen as just a box-ticking activity towards Gate 1, but rather a method to engage Australian industry to collaboratively de-risk future technology needs ahead of formal acquisition.

There’s hope that ASCA has been designed to address some of the criticisms levelled at the Defence Innovation Hub. It has, for example, indicated that innovation proposals need to be targeted to problem statements. Yet the outcomes from these programs require agreed and funded capability off-ramps into acquisition. With any innovation grant, the project directors from major projects (acquisition) and/or product schedules (sustainment) need to agree to issue limited tenders if and when the innovation proves successful. Anything less is simply innovation theatre.

Some of the public discussion on reforming capability acquisition indicates a desire to lock cost and schedule, while relegating the final capability as the ‘dependant variable’. How that will achieve the minister’s intent ‘to give our troops a capability edge’ is questionable.

Instead, to ensure that capability isn’t sacrificed, we should engage academia and industry through detailed problem statements, as has been proven by organisations like the Defence Science Centre and the Defence Innovation Network, which de-risk the technology needs for developmental projects—addressing a reported contribution to schedule slippage. But to do so, we need Defence and CASG equally motivated to issue the follow-on purchase order and deliver at speed—not sometime in the next 587 days.