Tag Archive for: capability

Aiming at countering small drones, ADF faces challenges

The Australian Defence Force is working on countering small, cheap drones, but the challenges are daunting, with drone technology constantly evolving to sidestep anti-drone measures. Domestic legal obstacles don’t help.

A specific acquisition project, LAND 156, covers the requirement. The defence acquisition plan that was published last month, the Integrated Investment Program, presumably referred to LAND 156 in saying, ‘The Government will also invest in deployable counter‑small uncrewed aerial systems capabilities.’

However, nothing is said about when or how this will be achieved, not even in a table that sets out the funding and timeline for Australian Army projects.

LAND 156 applies to group 1 and 2 drones, which weigh as much as 55 kg and are also called small uncrewed aerial systems. Countering them will be an Army function, while the Royal Australian Air Force attends to larger uncrewed aircraft.

Adapting cheap civilian drones to deliver weapons or conduct other military roles is not difficult. This is creating what some call the democratisation of airpower, in which drones can provide complex and precise airpower effects for a fraction of the cost and effort of operating crewed aircraft.

Countermeasures are appearing, but counter-countermeasures often follow within weeks. A few years ago along the Turkish border, Syria-based terrorists were sending kamikaze drones into border towns to kill Turkish officials. The Turks countered by jamming the satellite navigation signals that the drones relied on, but three weeks later the terrorists had worked around the jamming and the drones were again hitting targets.

A drone’s attack can also be ruined by jamming the command signals it receives from its operator, but Russia has reportedly fielded small drones in Ukraine that unspool fibre-optic cables as they fly; the operator sends the commands through the cables instead of by radio. Using cables also defeats attempts at picking up radio transmissions for warning of an attack.

In 2022 the US Army said jamming countermeasures against drones were slowly becoming less effective. The service is going for more hard-kill countermeasures, aiming at destroying or at least debilitating the little aircraft.

Armed forces are looking again at sophisticated camouflage, decoys and smoke screens as means of holding down the drone menace.

But the application of artificial intelligence to small drones will raise it further. Swarms of them could soon autonomously synchronise their operations to defeat hard and soft kill countermeasures.

The ADF will need equipment to detect, track, identify and, if necessary, foil, debilitate or destroy small drones. Part of the challenge is finding ways of doing that which cost less than the drones do, since an opponent can respond by buying more.

The ADF will need countermeasures for use in Australia and abroad. And that’s where we meet another problem. The Australian Defence Act requires permission of a state government for the ADF to act against a drone and then only under the supervision of law-enforcement officer delegated by the Civil Aviation Safety Authority or Airservices Australia. Second, the (federal) Aviation Act prohibits ‘affecting’ any kind of aircraft in flight unless it presents a danger to life.

So the ADF is highly constrained in countering drones domestically. Legislative changes are needed.

It would help if drones were not so freely available in Australia. In some countries they’re treated as Australia treats firearms. You need a reason to own one, and a license operate it. They can be flown only in designated areas after flight plans have been submitted and approved.

The more we see of nefarious use of drones, the more a strict regulatory regimen seems justified.

Corrections departments globally are routinely seeing drones delivering contraband into jails. Reports in Norway say drones of unknown origin have been seen surveilling oil rigs far out in the North Sea. The UN says there is a concerning upward trend in observation by drones of its African humanitarian and peacekeeping activities.

Even some of our Pacific Island neighbours report a surge in suspect drone use around government and military facilities.

The good news is that as Defence looks for suppliers for project LAND 156, it is spoiled for choice. Australia has a vibrant industry for countering small drones. Companies include Droneshield, Department 13, Silentium, Codarra, Electro Optic Systems, Boresight and Acacia, to name just a few. For the moment, they’re mostly sustained by overseas contracts.

That may change as LAND 156 moves into acquisition.

The economics of defence industrial self-reliance: defining and monitoring the priorities

Identifying the industrial capabilities needed in Australia for military–strategic purposes and rectifying supply problems may seem mundane when regional tensions are rising and major decisions on the Australian Defence Force’s force structure hang in the balance.

Nonetheless, achieving defence industrial self-reliance depends on ensuring that appropriate administrative measures for defining and quantifying those capabilities are in place, and that each measure is fit for purpose. Quantification, through an effective and efficient form of capability monitoring by the Defence Department, takes on added importance following the government’s recent announcement that sovereign status has been extended to four additional areas of Australian defence industry.

Over the past five years, defining and monitoring important industrial capabilities has taken a circuitous route rather than the direct path one might expect in an increasingly threatening strategic environment.

From a narrowly defined set of ‘priority industry capabilities’, or PICs, variously estimated to cover between 10% and 20% of Australian defence industry, the government adopted the much broader concept of ‘sovereign industrial capability priorities’ (SICPs) covering all but a few areas of industry activity. Perhaps recognising that when everything is considered important nothing stands out, the government has now shifted the focus to what is ostensibly a more tightly defined set of ‘critical industrial capabilities’ (CICs).

Over the same period, the way Defence monitors the availability of important industrial capabilities shifted from a reactive or largely backward-looking method to a proactive or more forward-looking method under PICs, only to return to a reactive variant under CICs.

Over the past 18 months, industry and implementation plans have been published for most SICPs and CICs. Those documents raise several issues of concern. To begin with, although the criteria used to define SICPs are publicly available, neither the plans nor other forms of official advice reveal the criteria for selecting CICs. The proportions of industry activity covered by SICPs and by CICs also haven’t been disclosed.

Apart from military vehicle assembly, it’s difficult to identify from the plans which capabilities are sovereign but not considered critical. And despite being portrayed as blueprints for industrial sovereignty, the plans don’t assess the economic health of SICPs, only the health of CICs. That implies SCIPs are being pursued primarily for their economic advantages but without relevant supporting data.

The plans define many CICs purely in terms of a capacity for equipment design within industry. However, companies’ design capabilities tend to be sustainable—technically and economically—only if they’re linked to the remaining phases of equipment manufacture consisting of production, assembly and testing. Within each relevant plan, how far that manufacture should or could extend beyond niche materials and components is unspecified. That makes it difficult to determine the intended scope of industrial self-reliance, and if adequate progress is being made.

Finally, even allowing for the confidentiality of some data, the plans provide limited insight into the all-important issues of Defence’s demand for the CICs and industry’s capacity to supply. Apart from obscuring whether capabilities vital to the defence effort are readily available—when surety of access is paramount—that’s likely to hinder the department in targeting its industry assistance programs for innovation, export and workforce skilling.

For most CICs, the plans don’t identify the supporting Defence projects or indicate for each project the relevant levels and patterns of departmental expenditure. Corresponding data on the number of existing and potential suppliers isn’t provided consistently. The supplier numbers that are revealed originate from outdated Defence surveys and Australian Bureau of Statistics data too aggregated to be reliable. For each CIC, the resource and other constraints facing suppliers are dealt with in a rudimentary manner, if at all. Finally, the plans provide little indication of how CICs for equipment design are supported across the private and public sectors and what implications their dependence on the remaining elements of manufacture might have for capability development.

Those are fundamental problems. So, what are the solutions?

Given that CICs appear to cover a lot more of defence industry than PICs, the best initial option to improve monitoring may be to devise a screening method—or ‘trigger mechanism’—to better differentiate CICs that are in reasonable condition from those with health concerns. That could be based on current and expected levels of Defence demand, the identity and recent performance of currently contracted suppliers and the number of companies that have recently but unsuccessfully bid for the same work. The relevant data should already be held by the department.

Under a trigger mechanism, if Defence demand displays considerable volatility, the number of existing suppliers is small, the current performance of those companies is poor, and the number of companies that have tendered recently for related projects is minimal, the case might be made for a closer examination of availability.

Both initial and more detailed forms of improved capability monitoring should be based on well-established economic tools for assessing the structure, conduct and performance of defence markets. ‘Wish lists’ of what industry would like government to do, derived from high-level forms of group consultation, are unlikely to deliver the required data.

Neither defining important industrial capabilities nor intervening to ensure access can deliver what it promises without the ability to monitor where, when and why capability shortfalls are likely to emerge and how big those shortfalls are likely to be. In the political cauldron that is defence industry policy, the need for effective monitoring is one of the few issues on which most protagonists might agree. That, together with some obvious difficulties associated with the existing approach, suggests the need for a much better method of monitoring.

The Strategist Six: Dale Bennett

Welcome to The Strategist Six, a feature that provides a glimpse into the thinking of prominent academics, government officials, military officers, reporters and interesting individuals from around the world.

1. ‘Fifth generation’ is a term we first heard associated with the Joint Strike Fighter. In making the RAAF, and the ADF more generally, fifth-generation forces, what will be the impact of linking up communications among platforms?

Fifth-generation capability brought not only stealth technology to air platforms, but also tremendous sensor data and sensor data fusion to give a very clear operational picture. That’s the common thread. Defence forces are able to take sensor data, whether it’s in electronic warfare, radar, LiDAR [light detection and ranging] or an infrared sensor, and bring it together to create a detailed picture. You’ll hear the term ‘cross-domain’ as we link space, aircraft, ships at sea and vessels under the ocean’s surface. The traditional way to communicate was stove-piped, with navy ships talking to navy ships, airplanes talking to airplanes, and space assets talking to space assets or ground controllers. The aim is to take all of this information and bring it across all of these domains to build a clear operational picture. If that data could magically be available to everybody and they could see the threat when it’s further away, it would give them more time to react and they might react differently and smarter. It changes the game substantially.

2. What will the integration of key elements of the RAAF and those of the navy and army under Plan Jericho and the introduction of the joint battle management system and its weapons under AIR 6500 mean for the future of the ADF and the increasing emphasis on joint operations?

Plan Jericho and AIR 6500 is progressive thinking. The common picture is bigger than any one sensor can see. We understand how the navy fights with its surface ships and its submarines, and how an aircraft fights in anti-submarine warfare, whether it’s a P-8 or a P-3, or how an F-35 fights. If we can network them all together, we can build a common operational picture that’s bigger than any one sensor. It allows us to use what we have smarter and to shape what we have in the future by harnessing the potential of fifth-generation capability.

3. What advantages will joint operations and interoperability provide to the ADF?

All defence forces have a great need to maximise capability. In the end, it’s the capability they’re looking for, and they don’t care if it comes from a ground radar or a radar at sea—they just want the effect. I think the technology has advanced to the point where aspirations of old can become reality. Australians are very progressive in pushing the envelope around this thinking. For joint operations to work effectively, the stovepipe effect must be demolished. You take stock of what you have already, such as the Poseidon and the Wedgetail, and what’s coming, such as the F-35, the air warfare destroyer, the frigates and the new submarines. Then you look above that and ask, ‘How can you use it all together and better?’

4. What difference will C4ISR make to future combat and what advantages will it bring to forces involved in conflicts ranging from high-end fighting to counterterrorist operations?

That’s the glue, the systems that bring all this data together, fuse it and create this common operational picture that all the different services can use to make more informed and better real-time decisions.

5. How will Lockheed Martin’s contributions to Australia’s future submarine program make a difference for the navy and Australian industry?

The submarine community is referred to as the silent service because they live and breathe by staying just one notch ahead of the competition in terms of their submarine’s ability to be quiet and sense things in the ocean. The company has a long-standing partnership with the US Navy and many navies around the world on acoustics, acoustic processing, command and control, weapons systems and fire control systems. We bring that rich history and partnership with the US Navy. I think as the US government partners with the Australian government to make sure we’re thinking about interoperability while dealing with the threats that are continuing to emerge in this region of the world, everyone wants to make sure the Australian capability is on par.

6. What is the company doing to provide advanced technology for the ADF while also transferring skills to Australians?

The government-to-government partnership is very strong and assurances were given that top-shelf technology will be made available. As an industry partner, we’ll help that happen. We’re always interested in new ideas and we’ve invested heavily in the Science, Technology, Engineering Leadership and Research Laboratory (STELaRLab) in Melbourne to think through the workforce of the future. How do we get them to know who Lockheed Martin is, how do we invest in research that can help our products be better?

To support the growth of sustainable industry, we’re developing the capabilities of our local suppliers by providing technology transfer to grow sovereign Australian capability. We help strengthen the Australian supplier base via programs such as the global supply chain partnership with the Commonwealth. This develops the world-class competencies necessary for Australian suppliers to be both globally competitive and export-ready so that they can move up the value chain.

Reader response: mind the capability

I started to read Andrew Harrison’s recent Strategist post, ‘“Capability” saves lives’, with some interest, but that soon changed to disappointment as the narrowness of his definition of capability became clear. Like most military professionals I’ve encountered, Harrison considered capability to mean simply ‘pieces of kit’. There’s nothing wrong with kit, and having access to good equipment is certainly important for Australia’s soldiers, sailors, airmen and airwomen. For example, the army’s Diggerworks program has done impressive work in improving the soldier combat system.

However, I would maintain that equipment isn’t the ADF’s most important capability, despite the modernisation of kit receiving so much attention from the three services, the Department of Defence and industry. Instead, the nation’s most important military capability is the intellect of its uniformed personnel.

Military personnel know that war is waged first in the mind. It is a battle of wills. Equipment’s utility is to intensify the assault on an adversary’s will to carry on and to harden the resolve of one’s own personnel. Without human agency, the best equipment (however that’s defined) is no more useful than the worst. One need only be reminded that on the eve of World War II, the French Army possessed the best tanks in the world from a technical perspective. Yet it was the German Army that properly thought through the potential of mechanised warfare and as a result its inferior tanks ground to victory.

Equipment is the sexy part of a military organisation’s identity, but it is a well-trained and well-educated mind that gets the job done. I know Harrison knows this. All professional soldiers do. Still, it’s disappointing when the next shiny toy invariably receives the attention while the education of our warriors continues to receive less than its due. If Australia is to prepare for its future defence challenges for real, as much debate and resources need to be given to improving the minds of those who serve as is given to buying the next generation of … whatever.

The strategic role of submarines in the 21st century

This post is adapted from a presentation to the Australian Naval Institute’s 2017 Goldrick seminar.

Let me start with something nice and uncontroversial. Submarines might be obsolete by the middle of the century. It’s possible that advances in artificial intelligence (AI), detection systems and signal processing, combined with swarming autonomous unmanned systems, could make it effectively impossible for submarines to maintain their stealth. To give just one example, quantum detection systems capable of picking up extremely subtle magnetic signals could be deployed on a large number of unmanned surface vessels, all networked together to provide an essential real-time map of the magnetic field over an extended area. (And, shameless plug time, my ASPI paper on quantum technologies should be out in the next week or two.)

But don’t worry—I’m not about to declare the submarine obsolete and then sit down. While others—such as the ANU’s Roger Bradbury—think the ocean might ‘become transparent’, I don’t think it will happen suddenly, or even soon. There’s a possibility that we’ll have to have a long, hard look at our investment long before the 12th future submarine is delivered in around 2050. But I think that it’ll be a matter of the characteristics of the submarine. In fact, I think that submarines will prove to have greater longevity than almost any other military platform. For example, I’d put money on the future submarine program outlasting the future frigate program. Being hard to detect is always going to be preferable to being easy to detect. And air will always be more transparent than seawater. The surface vessel menagerie will go the way of the battleship before the submarine does.

That means there’ll be a period when the submarine becomes more, rather than less, important in the navy’s order of battle. If power projection and sea denial can’t be done from the surface, then it will have to be done from space, from the air, or from below the surface. Note that I’m not writing surface vessels off completely. There’ll be many tasks short of high-end war for which their visibility and persistence are a positive. (Though I don’t think we’d want to be spending billions of dollars per hull for those characteristics, and corvettes will be better value than destroyers, but that’s a talk for another day.)

For now, let’s just work with the observation that superior—even if increasingly precarious—stealth is likely to keep the submarine in our inventory for some time to come. And note that my arguments work the other way for submarines; they aren’t terribly useful for operations short of war and there’s little point in having submarines with less than high-end warfighting capability.

But it’s worth bearing in mind that even if technology trends don’t completely best submarines, they’ll at the very least change the way that subs operate. Submarines of the future will probably have to operate their own swarm of unmanned underwater vehicles (UUVs), which collect data, deliver payloads and act as decoys, generating magnetic and acoustic signatures that clutter the environment and complicate the lives of anti-submarine warfare (ASW) practitioners. The UUV will be the platform of choice for operations in areas of significant risk, such as in littoral waters or choke points, where the adversary can focus its resources. Risks to submarines will outweigh any benefit they might be able to derive from going into those places.

You might ask, ‘Why not cut out the middle man? If UUVs are shouldering the burden of working in dangerous places, why not build a fleet of UUVs and skip the submarines altogether?’ If my list of technological advances comes to pass, that will be possible. An AI-enabled autonomous vessel could be given its mission brief before setting off for distant waters. But I’m not sure that you’d gain much by doing that. Long range and high endurance with useful speeds require size for fuel, so we’re talking about large UUVs just on those grounds alone. And if you want them to be able to deliver payloads when they get there, the required size just increased again.

We’re used to thinking about UUVs as relatively small machines, but they’ll start edging towards submarine size if we expect them to do a wide range of sophisticated tasks. While it’s a long way from being equivalent to an unmanned submarine in terms of the effects it could deliver, Boeing’s Echo Voyager UUV is over 15 metres long and weighs 50 tons.

If our main reason for keeping away from littorals and choke points is the risk to the platform from improved ASW technologies, we mightn’t want to put large, sophisticated—and thus expensive—platforms in harm’s way just because they don’t have a human crew. The best chance of mission success would probably come from being able to saturate detectors and defences in the area with a bunch of low-cost and essentially expendable platforms. They’d get the job done through numbers and having just enough capability.

Small UUVs could do that. Their small size would help avoid detection, but it would also limit the distances from which they could be deployed. They’d need a ‘mother ship’ platform that is large enough to get there from here, carries a useful payload, and is stealthy enough to avoid detection in less hostile places. That’s why I think the large submarine still has a future. Of course, the mother ship might one day be a large unmanned submarine. In short, it’s entirely possible that the 12th future submarine will bear little resemblance to the first one.

A fall-back option for the future submarines?

I was interested to see a new approach to submarine procurement pitched by Hugh White and Michael Keating last week. They got quite a bit of media coverage, as tends to be the case for criticism of the future submarine project. (Though I’d be the last person to complain about that …)

The Insight Economics report (PDF) they were fronting is well worth reading, even though I don’t agree with all of its conclusions. (Disclosure: I provided some comments on an earlier draft.) I don’t think it’s as easily dismissed as a ‘beat up’ as the defence minister’s response suggests. The report is partly an economists’ view of the future submarine project, with technical considerations less prominent. As the authors put it:

If the issue is framed in terms of the cost-effectiveness of a very substantial public investment, rather than solely in the narrow framework of the technical capability of the various platforms under consideration, we believe that economic and public policy specialists can make a considerable contribution to defence procurement and complement the technical expertise deployed within Defence.

That approach is both a strength and a weakness. It’s a strength because it makes sense to treat defence like any other area of government spending and policymaking. A dollar spent on submarines can’t be spent on health or welfare. Experienced eyes looking at the problem from another angle can help explore the cost–benefit calculus. But it’s a weakness when an insufficient appreciation of technical matters clouds judgements of alternatives. I think the report has the right diagnosis of risk in the future submarine project, but it’s wrong in its prescription for a ‘Plan B’.

Let’s start with the diagnosis of risk, where I think Insight Economics is on the steadiest ground. The report classifies risk into four categories: strategic, economic, technical and industrial. In fact, they can’t really be considered in isolation. For example, the report says that ‘Australia is paying too much for twelve conventional submarines’. But ‘too much’ is a term that doesn’t have an absolute meaning. If the admittedly eye-watering $50 billion (or more) that the fleet will cost retires a commensurate or greater amount of strategic risk, then it’s a prudent investment—as a group of economists should appreciate.

I think the answer to that cost–benefit question comes out as a resounding ‘no’. Not because I think we don’t need submarines to face an uncertain maritime security problem—I think we do. But the security problems we’re most worried about loom large now, and the government’s own experts think that they’ll come to a head between now and 2035—just about the time the first one or two submarines are entering service. It’s hard to argue with an assessment of unacceptable strategic risk in the submarine program. We could well end up paying ‘too much’ because our investment matures after the time that we really need the payoff.

As for technical risks, I think the report is also right to say that we’ve opted for a solution that pushes the boundaries of conventional submarine design. I was much happier when the ambition in the program seemed to have been wound back to something achievable with less technological stretch. If they are realised, technical risks could further exacerbate the strategic risk through schedule slippages. And, as Augustine’s work tells us, extra percentage points of capability drive the cost risk upwards.

Finally, the industrial risk relates to the other three. Deciding to build the boats here drives up the cost risk because we’ll be starting at the top of the learning curve (let’s hope it’s a steep one). And the more bespoke a project is, the greater the schedule risk, and hence the greater the strategic risk. So I agree that we’ve opted for a solution with higher than necessary risk. If it doesn’t work, we could be scrambling for an alternative.

The report’s preferred ‘Plan B’ is a rapid acquisition of ‘modified off-the-shelf’ submarines, which the authors argue would be a better use of resources than extending the life of type of the Collins. In that approach, the limited endurance of such boats (and of their crew) would be offset by operating from forward bases, with the support of a submarine tender vessel. It’s hard to see how that could work in a warlike setting. The whole point of wanting submarines in the waters of the 21st-century Asia–Pacific is that the surface is simply getting too dangerous—even for very well-armed warships. A tender vessel represents a significant vulnerability and, even if it could be adequately protected, its presence is a sure-fire indication of submarine operations.

But let’s be generous and assume that we can operate a submarine tender close enough to a hostile power’s waters to get smaller submarines into patrol areas for useful periods. There’s still a problem of payload. As the operating environment becomes more difficult, and detection methods more sophisticated, submarines will have to be able to stand off at longer ranges and remotely deploy sensors and weapon systems. Unmanned vehicles of various types will most likely be the preferred way to produce an effect on an adversary, and being able to deploy them in large numbers will be important if a sustained surveillance and strike capability is required. Small submarines will thus be more limited in what they can do than larger ones that can act as ‘mother ships’. (In fairness, the planned Shortfin Barracuda seems to have many extra tons of payload available, so it scores well in that respect.)

For those reasons, the recommendation of off-the-shelf boats is the new report’s Achilles’ heel, and it’s not surprising that the government has jumped on that to dismiss it. That’s a pity, because there’s otherwise a lot of sensible discussion in its pages. I’ll come back next time with my alternative Plan B, which builds on recent hard work on the Collins fleet. It’s not without problems too, but I think it does a much better job of matching risks and benefits.

Closing the ADF’s deterrence gap

The force structure proposed in the 2016 Defence White Paper lacks a long-range deterrence capability—at least until we get a credible fleet of submarines sometime in the distant 2040s. Short of nuclear threats, which are covered by US extended nuclear deterrence guarantees, Australia is vulnerable to threats at lower levels of hostility. We should address the gap and reinforce conventional systems by acquiring our own long-range, non-nuclear deterrence capability.

We lost such a capability when we retired the F-111C in 2010. The F-35A joint strike fighter has a shorter range than the F-111C (760 nautical miles versus 1,160) and carries a considerably smaller payload. Australian involvement with the Kongsberg joint strike missile project will add a limited medium-range (approximately 150-nautical-mile) strike capability. Possible future integration of longer range missiles, such as LRASM or JASSM-ER, would extend the F-35’s strike radius further, but at the expense of its stealth. That still wouldn’t allow us to hold at-risk targets in the South China Sea, let alone the Korean peninsula, without access to forward bases. But those bases are likely to be vulnerable in wartime, or may not be available. Alternatively, if we depend on KC-30 tanker support, those platforms may be exposed to unacceptable risks.

The best option to address this capability gap in the short term would be to install land-attack cruise missiles (LACMs) on the Hobart-class air warfare destroyers. Any Australian LACM capability must be very long range, given the growing reach of China’s A2AD (anti-access and area denial) capabilities. The requirement for long range, and the commonality between the US Navy’s systems and the RAN’s new destroyers, mean that it would make sense to buy long-range Tomahawk cruise missiles through the US foreign military sales process rather than trying to integrate a different weapon. Tomahawks are a mature missile, will remain in the US inventory until 2040, and are set to be given an anti-ship capability among other improvements. A second option would be ship-launched LRASM, which is stealthier than the Tomahawk. However, it’s considerably shorter range would expose the ship to greater risk, and it’s a much less mature capability.

RAN Tomahawks would rely on vital intelligence from the US for pre-launch targeting, at least until Australia could develop its own satellite-based intelligence systems. Furthermore, any purchase would need to meet Australia’s obligations under the Missile Technology Control Regime of 1987. Neither of those issues should be an impediment to acquiring such a capability. If we want a short-term, long-range strike missile, the naval Tomahawk seems an easy choice.

Where does that leave the RAAF? Two options with relevance for the air force emerge in the late 2020s. The first is the potential offered by long-range unmanned combat air systems (UCAS). The UCAS option may be the most cost-effective path to an air force long-range strike, but the risk is that organisational politics and cultural bias in the US military may slow the development of this new capability. The US Defense Department’s decision to ditch the proposed unmanned strike system (UCLASS) in favour of unmanned refuellers (CBARS) suggests that fighter pilots aren’t ready to give up the cockpit yet, and the ‘sixth-generation fighter’ looks set to remain a manned platform.

Second, the US is developing the B-21 ‘Raider’ bomber to replace the B-1B and B-52. It’s a true long-range bomber designed to penetrate deep into 21st-century integrated air defence environments and deliver precision strikes against high-value targets. Andrew Davies has suggested that the B-21 represents an ‘80% solution’ that could be ‘good enough to get the job done and affordable enough to buy’.

With two important caveats, it’s worth asking whether Australia should consider the B-21 as a future option for the RAAF. The first is whether the US would allow Australia to become involved in a highly classified project like the B-21. Getting an agreement for Australia to participate and potentially buy B-21s sometime in the next decade would have to be considered at the highest levels between Canberra and Washington. The Americans may say no.

The second major factor is cost. The US will seek to avoid the unpleasant experience of the B-2A project, when a classical death spiral of acquisition cuts sent the price per aircraft soaring to US$2.1bn and only 21 out of a proposed 100 were acquired. With B-21 proponents arguing for a minimum of 164 aircraft to replace the B-1B and the B-52 from the late 2020s, the unit cost must remain stable if that goal is to be realised. The current projected unit cost is US$511 million per aircraft, but the chances of that being realised are very slim. If the unit cost doubles to US$1 billion, 12 B-21s for the RAAF would start at A$15 billion just for the airframes (based on today’s dollars; the figure will vary depending on exchange rates and other economic factors).

If the unit cost rose, the ADF would have to spend more or get fewer aircraft. Australia would also have to contribute towards developmental funds, and factor in operating costs in terms of flying and maintaining the aircraft. That looks an expensive option, but in reality it’s half the cost of the future submarines, which are a $36 billion investment. A commitment to support R&D for the B-21 doesn’t necessarily imply an automatic commitment to buy the aircraft. That would be for a later government to decide. However, making such a bold move would give Australia new options, boost defence industry and provide us with greater access to the US defence science and technology community. That, in turn, would strengthen our alliance relationship, and reinforce deterrence.

Thrills, spills and industry spillovers

Recent public discussion on defence industry has highlighted the contribution that domestic production of defence capital equipment makes to broader technological development within Australia and, in turn, to economic growth.

Much of the discussion relies on a single proposition, namely that many—or even most—defence capital equipment projects are technically complex. From that, it’s assumed that new knowledge generated as a result invariably ‘spills over’ into other applications and improves Australia’s overall economic outlook. Positive overall economic outcomes are held to arise even if projects attract substantial price premiums for local production.

Defence capital equipment projects rely on some of the most advanced technical knowledge available globally. For example, a submarine is often considered the second most difficult thing in the world to build (the first is a space shuttle). However, the knowledge underpinning that complexity doesn’t necessarily spill over to promote broader economic growth on a significant scale. For spillovers to occur, a number of conditions must hold—conditions that go largely unnoticed in the public debate.

The knowledge in question must not only be new to the defence project that it’s being developed for or applied in, but also new (or at least in short supply) to the economy as a whole. It must be able to move easily from that project into other projects and other industries. When a price premium is paid, the contribution to economic growth associated with the knowledge spillovers from a project should ideally exceed the contribution that would accrue if the premium was put to another purpose. A brief review of these conditions suggests the need for caution.

If only new knowledge is used to build defence capital equipment, the cost, quality, performance and even safety of that equipment might be placed at risk. So, in practice, only a portion of the total cost of a project might be ascribed to knowledge creation and its potential spillover effects. Even if new to the Australian economy, some knowledge might be so specialised that it has few alternative uses.

Some new knowledge might be sensitive from a military-strategic standpoint and therefore off limits to others. And any new knowledge could be at least partly owned by companies supporting defence projects, providing them with a competitive commercial advantage. To maintain their market positions, those companies have an incentive to keep their intellectual property to themselves. In a sense, spillovers depend on new knowledge escaping from its owners.

Wider distribution could depend on surrounding industry clusters, which may or may not exist. In the absence of clusters, it might be necessary for defence-oriented companies to have a diversified domestic business structure of their own to disseminate new knowledge to additional users.

To boost national productivity, new knowledge must be available to others at a cost below the value of the benefit it generates. If what a user pays to obtain new knowledge from a defence capital equipment project equals the value it gets from directing that knowledge to new endeavours, one area of the economy simply gains at the expense of another.

Finally, unlike the deliverables from many other types of projects that might add to Australia’s economic growth, defence capital equipment can’t be used by the general public. Try hiring one of the navy’s patrol boats for a spot of commercial fishing, or tapping into Defence’s communication networks to help your business overcome poor NBN coverage.

Defence equipment undoubtedly adds to national welfare, including economic welfare, by helping to defend the country. It may even be a partial antidote to the sluggish economic growth that’s followed the global financial crisis. Nonetheless, the equipment can’t be accessed by individuals or companies to enhance their economic prospects in the same way as some other infrastructure can. In terms of accessibility, more reliable and cheaper electricity generation and distribution, improved telecommunication networks, more efficient transport systems, and better-funded universities and hospitals might all generate larger spillovers.

US and international literature surveys, together with the latest research, indicate that, at best, military expenditure tends to have a neutral economic impact. That’s consistent with limited spillovers and the advantages of alternative forms of prudent public and private investment (noting, too, that the experience of individual countries like Australia and the defence projects it funds can vary from international norms). The little evidence of spillovers from Australian industry participation in the joint strike fighter global supply chain reinforces those findings.

The moral of the story is that, just because domestic production of defence capital equipment relies heavily on high-technology inputs, that doesn’t necessarily mean it’ll catalyse broader innovation and growth. To assume a clear path from defence industry to spillovers and economic growth seems rather optimistic, especially in the absence of a policy strategy for identifying economically efficient forms of spillover facilitation.

Shaping and hedging in a time of Trump

Image courtesy of Flickr user frankieleon.

Donald J. Trump is president-elect of the United States. What are the consequences for Australia?

Following a 15 minute phone call with Mr Trump, Prime Minister Turnbull moved to reassure a shell-shocked public that it’s business as usual. Shared values, long history, nothing to see here, move on.

What else could he say?

The reality is that everyone involved in defence, trade and foreign policy in Australia—politicians, officials and commentators—are scrambling to answer the same question; to what extent and in what ways do we need to rethink our policies in light of Trump’s victory?

Nowhere is that question more acute than in defence and strategic policy. As I pointed out in May, the 2016 Defence White Paper blithely asserts that the US will continue to play a stabilising role in the region into the foreseeable future. On the basis of Trump’s statements about US alliances, we now have a defence strategy that has at its heart a manifestly flawed planning assumption.

What’s more, the question itself has metastasised. We now have to ask whether the United State under Trump might not just be indifferent to our part of the world, but might actively erode the security of the region. Nuclear weapons for Seoul and Tokyo, anyone?

We need to act on two fronts. First, we need to explore ways to shape US policy consistent with our interests. As always, we’ll stand ready to provide counsel to our ally as the new administration finds its way in a volatile world. But given the avowed ‘America first’ slant of Trump’s campaign and its singular domestic focus, our influence is likely to be even more limited than usual.

A more transactional approach will probably be needed. Larger contributions to US operations, further expansion of our defence force and more extensive US access to our ports and airfields are all likely to be the currencies of the day. Spending 2% of GDP on defence may only be the first installment of what’s needed to convince the new deal-maker-in-chief.

The second thing we need to do is hedge against a US retrenchment by increasing our self-reliance. By that I don’t mean developing a more extensive domestic defence industry—we’ll never be industrially self-reliant—nor do I advocate changes to the planned shape of the ADF (but only because it’s pointless to try and wrest control from the military). Rather, it’s a question of timing.

At the risk of stating the bleeding obvious, our ability to provide for our own defence is proportional to the size of defence force. The 2016 White Paper set out a plan to expand and modernise the ADF, but in critical areas—such as submarines and frigates—the delivery schedule is glacial. Trump’s election is just another reminder that the strategic landscape is changing quickly, and in ways inimical to our interests. What’s more, as the increasing obsolescence of the 2016 White Paper demonstrates, it’s changing in ways we (or at least our officials) have been unable to anticipate.

The planned slow-motion domestic construction of ships and submarines is an indulgence we can no longer afford. On current plans, our first new ASW capable frigate won’t enter service until the late 2020s, and our submarine flotilla won’t have its 12th boat before 2048. And that’s assuming that our local shipbuilders can avoid repeating the Collins and Air Warfare Destroyer debacles. If not, things will be much worse.

If we must build vessels in country for the sake of a couple of thousand jobs, so be it. But let’s not ignore the option of bolstering our naval defences more quickly through concurrent rapid purchases. The RAAF has shown the way in recent years by smoothly introducing potent off-the-shelf platforms into service, such as the F-18 Super Hornet .

Of course, there’s a host of nuances ignored by the forgoing analysis. For example, there’s the question of how we manage our defence relationships with other US allies in the region. That and other questions can and should be considered carefully as the new US administration’s foreign policy becomes clear. And we’ll have to find a way to cut through the layers of process that impede too many of our defence purchases. But none of that’s an excuse for sitting on our hands when it comes to the concrete question of defence capability.

The good news is that there’s no conflict between the requirements of shaping and hedging. A more rapid development of a stronger defence force would both increase our self-reliance and bolster our value as an ally. Even if you believe, as at least one ex-prime minister does, that it’s time to distance ourselves from the United States and ‘make our way in Asia ourselves’, the imperative to bolster our defences remains. We should get on with it.

The ephemeral offset strategy

Image courtesy of Flickr user anika

As a long term critic of the ‘silver bullet’ approach to military capability development, Gareth Robinson’s recent piece on the Third Offset Strategy got me thinking. Given the wealth of technical capability and capacity within American industry and academia, leveraging technology to stay ahead of the pack sounds a reasonable enough proposition. But I’m not at all convinced that it’s a winning approach.

Let’s look at the previous two offset strategies. Both were a product of different times and, for different reasons, neither looks particularly applicable today. The First Offset was the development of the New Look nuclear deterrence strategy (PDF) in the early Cold War days as a counter to the massive conventional forces of the Soviet Union. Despite qualitative superiority, US-led forces could only fight the numerically superior North Koreans and Chinese to a bitter draw in Korea. Soviet forces were an even more daunting prospect, so an asymmetric approach made sense.

The First Offset strategy was arguably successful (though one trial doesn’t produce statistics). But the asymmetric advantage was short lived as the Soviet Union built its own nuclear arsenal, blunting much of the desired deterrent capability in the conventional domain (PDF, p79). Looking at potential major US adversaries today, both China and (especially) Russia have credible second strike nuclear capability, so a similar dynamic applies.

The Second Offset was a consequence of the lessening relevance of the first. By the 1970s the huge Soviet nuclear arsenal had blunted any American nuclear advantage, and another unhappy experience of Asian land warfare showed that American warfighting capability was under serious challenge. The Reagan period saw new technologies developed to put American forces back at the forefront of global capabilities. Those efforts produced stealth and precision guided weapons, including the enabling technology of GPS. The results were on display for the world to see in the 1991 Gulf War, when high technology weapons soundly defeated Iraq’s forces with little cost to the coalition forces. The only caveat to this success is that the Gulf War didn’t pit the Second Offset against the numerical strength of the Soviet Union, so we’ll never know the extent to which it could compensate for a significant difference in numbers.

Only now are competitors really catching up with the Second Offset. China and Russia have both flown prototype stealth fighters. They won’t match the American F-22 and F-35, but they’re likely to overmatch previous generation western aircraft. Precision guided weapons are now relatively commonplace, and several countries have their own GPS satellite systems. In response, the Third Offset is intended to once again vault the United States well ahead of the pack and to recreate the capability difference that came as a shock to the Chinese and Russian militaries in the 1990s.

But it’s worth remembering what was going on in the 1980s. The Soviet Union was in the process of falling over due to inherent structural weaknesses in its economic system. China was yet to begin the remarkable transformation wrought by a quarter century of consistently high economic growth. To a large extent, the US had the field to itself. Today the picture’s very different. Russia still has economic problems, but its military is stronger than it has been for the past couple of decades, and it’s defence spend is the fourth largest in the world.

China’s the world’s second biggest spender and, largely because of what it saw on display from American forces in Kuwait and Iraq, has been moving towards the ‘informationalisation’ of its armed forces. It has described its approach in defence white papers as ‘the RMA with Chinese characteristics’. While still lagging the US in many areas, some Chinese systems, such as the DF-21 and -26 anti-shipping ballistic missiles, present a credible (if unproven) threat to American forces.

If we add to that the obviously sophisticated espionage capabilities that have apparently allowed China to obtain information about American systems like the F-35, B-2, nuclear weapons and radars, it’s difficult to see how another multi-decade advantage could be sustainable. In the history of warfare, that’s an unusual circumstance; technologies tend to spread rapidly and advantages tend to be ephemeral. For systems based on software and electronics, that’s likely to be even more the case—just think about how often commercial technologies are overtaken by new developments.

Waiting for a ‘once in a generation’ capability breakthrough isn’t likely to be a winning strategy. Agility, the rapid exploitation of new technologies and the clever application of low cost systems that can be built in large numbers (R2-D2s rather than Death Stars) looks like a better bet. The Strategic Capabilities Office within the American procurement system is doing that sort of work. It reportedly sees itself as ‘buying time’ for development of the Third Offset. I’m inclined to think it’ll replace it.