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Why a focus on sovereign industrial capabilities is central to a strong defence policy

defence force

The emphasis within Defence – and the wider defence industry – on building sovereign capabilities, both domestically and globally, is all pervasive at the moment.

The emphasis within Defence – and the wider defence industry – on building sovereign capabilities, both domestically and globally, is all pervasive at the moment.

The concept – perhaps best defined as a concerted effort towards establishing a foundational self-reliance within our industrial capabilities to deliver the core requirements Defence will need to rely on now, and into the future – has sound justification taking into account current worldwide geopolitical jostling and a global security environment that appears to be weakening daily.


As a nation (and as primes and SMEs supplying the ADF) we should embrace the notion of sovereign capabilities and corresponding moves to incorporate this into our forward-looking defence strategy.

In a podcast recorded with Defence Connect at the time of launch of the Centre for Defence Industry Capability (CDIC), First Assistant Secretary of the Defence Industry Policy Division Kate Louis said that the identification of the core sovereign capabilities remains a key focus for Defence – and will be central to affirming the capabilities of our armed forces, and delivering on defence strategy.

A number of months on and the imperative remains.

Strategic imperative
Louis, for her part, described the idea behind sovereign capabilities as ensuring Defence’s ongoing access to locally available industrial capabilities.

“[These are] the things that we really must invest in in Australia and keep here in terms of an industrial capability,” she said.


“These are the things that we have to have here rather than import, and we will invest in those capabilities to make sure that we have them here.”

One of a number of key themes to the 2016 Defence White Paper, the concept of sovereign industrial capability inevitably includes a set of vital strategic considerations.  

The document flagged in no uncertain terms the sobering reality that our geographical location in the Indo‐Pacific is undergoing “a period of unprecedented transformation as the distribution of economic and political power shifts to our region”.

While acknowledging Australia looks set to be offered huge opportunities for greater prosperity and development in coming decades, the White Paper signalled that at the same time the nation is likely to face complex security challenges and greater uncertainty in our strategic environment.

In addition, the paper highlighted the federal government’s high priority on maximising the innovation potential of the Australian economy.

“Innovation will be re‐positioned as an essential driver to generate new capabilities for Defence and new opportunities for Australian industry,” it added.

A further benefit from the agenda to enhance Australia’s sovereign industrial capabilities lies in the major programs and Defence contracts shaping up as a veritable bonanza to those stakeholders able to capitalise on the increasingly accessible avenues to connect with Defence.

Key to this opportunity is the CDIC, which was unveiled to industry in December of last year.

At the time if its launch, the CDIC said one priority will be to develop a framework for mapping industrial capabilities and assist the collection, cataloguing and mapping of Australia’s industrial capabilities.

It also said that existing contracts and programs underpinning the current Priority and Strategic Industry Capability policy would continue until the transition to a new Sovereign Industrial Capabilities policy, slated to come into force by mid-2017.

Speaking of the CDIC, Louis told Defence Connect, “The big programs are really important, and as part of that a really important stream of work that we've been working on is the Australian Industry Capability Plans.

“That's really where the rubber hits the road with all of this work that we're doing. Because that's where an Australian industry capability plan is part of the big project and program that's part of an acquisition plan.”

Louis said the Australian Defence market was structured around a number of large primes, driving into their subcontractors.

“Our job … is to make sure that we have a very strong Australian industry capability plan supporting that; that we give Australian industry as much opportunity as we can through the initiatives that my area is driving through.”

Developing high-tech skills in workforce transition
The white paper also touched on the need to develop the advanced skills required to continue to deliver to Defence the fighting and technological capabilities into the future.

The government has expressed a commitment to maximising opportunities for competitive Australian businesses and to building export potential, depth of skills and diversification for defence industry.

It also aims to step up efforts to cut red tape, making it simpler and less costly for Australian industry to support Defence.

The idea is to bring Defence and industry closer together and “drive the changes we need to ensure industry becomes more competitive and highly skilled, and to encourage investment both at the local and international level”.

Louis explained that in this context it was crucial to have strong, skilled, talented public servants as well as industry players.

Expanding on some of the innovation programs being developed, she said, “There's just nothing that could be more exciting in my view than that absolute cutting-edge capability that could go onto a battlefield and save someone's life.

“It'd be hard to imagine being involved in something more exciting than that, but again we have to have the right skilling, training and STEM programs [as well as] that infrastructure to support that right across the board.”

“Clearly, with the huge investment in capability and the huge investment program that we have, we're obviously looking for industry to lean into this and to support us, and be a real partnership,” Louis concluded.


Why a focus on sovereign industrial capabilities is central to a strong defence policy
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