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How should Canberra reform its approach to investment in defence innovation?
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Ahead of the AUKUS announcement last September, the Commonwealth government launched a comprehensive review of science, innovation, and technology-oriented Defence initiatives in a bid to identify ways to more effectively deliver next-generation capabilities to the ADF.
The review, to be led by David Peever, the former managing director of Rio Tinto Australia, involves assessing governance, management and financing of all Defence-funded innovation programs, including the Next Generation Technologies Fund and the Defence Innovation Hub.
Other terms of reference include:
- Strengthening and improving the links between academia and industry.
- Simplifying contractual arrangements to accelerate acquisitions and transitions from concept to capability.
- Identifying methods to better commercialise Defence-funded research and innovation.
- Refining, consolidating, and streamlining research, innovation and technology development priorities to strengthen participation of service capability managers to direct “mission-set” specific innovation.
- Transitioning between Defence and other departments’ innovation and manufacturing programs to support the continued development and commercialisation of technology that does not meet a direct Defence requirement.
Following the announcement, Minister for Defence Industry Melissa Price said the review would ensure the Defence ecosystem was more commercially driven and outcome-focused.
“We must ensure that we are taking full advantage of Australian innovations to maintain Defence’s capability edge while ensuring innovative businesses are given every chance of commercial success,” Minister Price said.
“We need a Defence organisation that can capitalise on the knowledge and skills of Australian industry and academia to develop mission-focused technology that can solve Defence’s unique capability challenges.
“Now, more than ever, we are looking to drive fit-for-purpose innovation where Australian industry and academia are partners in this critical mission.”
The minister stressed that the taxpayer-funded programs need to be scrutinised to ensure the government is investing funds appropriately.
Writing in ASPI’s The Strategist, Richard Williamson, an Australian Defence Force veteran and a senior project officer at the Defence Science Centre, lays out his assessment of the government’s current strategy.
According to Williamson, Peever should “re-table” his report from the 2015 first principles review, which flagged a “disconnection” between customers, the purchaser, and “unnecessary handover points” like the former Capability Development Group and the then Defence Materiel Organisation.
The 2015 review also recommended the establishment of a single, end-to-end capability development system, now referred to as “One Defence”.
This recommendation, Williamson observes, sought to ensure innovative ideas, concepts and initiatives were not proposed to the Defence Materiel Organisation without context, knowledge or support.
Williamson goes on to reference the Defence Innovation Hub’s activity, questioning the program’s recent performance.
“Attend any Defence Innovation Hub conference and the first thing you’ll hear from the spokesperson is that the hub doesn’t issue grants, it issues procurement contracts,” he writes.
“While the hub may pride itself on this distinction, it’s also important to note that this organisation doesn’t procure or deliver capability for the Australian Defence Force.
“In fact, after five years, more than 148 contracts and $240 million spent, the impact from the hub’s procurement contracts is questionable.”
Williamson claims such investments have delivered “so few if any tangible operational outcomes” for the ADF because the Capability Acquisition and Sustainment Group (CASG) alone bridges the gap between innovation and capability delivery.
As such, he states CASG should be the “first stakeholder in the assessment process, not the last”.
“The Defence Innovation Hub doesn’t support an end-to-end capability function as recommended by the first principles review, so it’s no wonder industry is frustrated with the process of engaging in the defence innovation system,” Williamson continues.
“The current processes don’t enable innovative products and sovereign business to scale up—and the best way to scale up is through a purchase order from a major acquisition project.”
However, the veteran stressed that reforming the process would not require “massive restructuring or burdensome administrative costs”.
Rather, decisionmakers could leverage the existing opportunities in the defence capability life cycle, particularly by facilitating access to new technology for ADF personnel.
“We don’t need to dilute our relatively low defence spending and create our own DARPA,” he writes.
“Instead, capability managers must drive innovation in CASG and the Defence Science and Technology Group by moving early-stage technology out of the lab and into the hands of the warfighter as an acquired, sustained capability.
“The chief defence scientist—who incidentally is the capability manager for innovation—has made great progress through the STaR Shots initiative. But more can be done for what the defence transformation strategy calls ‘relatively lower-risk incremental innovation from industry technology’.”
Williamson calls on Defence to “enforce the One Defence concept” and align the Defence Innovation Hub with CASG.
“That should entail the capability managers directing CASG to publish capability problems and technology needs for future acquisition projects,” he writes.
“…The alignment of the Defence Innovation Hub to the technology needs of upcoming acquisition projects will assists CASG to break down its barriers to innovation and increase the speed of acquisition.”
Williamson cites a recent Australian National Audit Office report on Defence’s major projects, which identified delays as a result of “the underestimation of both the scope and complexity of work, particularly for developmental projects”.
“This alignment will greatly benefit both Defence and defence industry in strengthening partnerships and provide a more agile and proactive approach to capability development and sustainment.”
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Charbel Kadib
News Editor – Defence and Security, Momentum Media
Prior to joining the defence and aerospace team in 2020, Charbel was news editor of The Adviser and Mortgage Business, where he covered developments in the banking and financial services sector for three years. Charbel has a keen interest in geopolitics and international relations, graduating from the University of Notre Dame with a double major in politics and journalism. Charbel has also completed internships with The Australian Department of Communications and the Arts and public relations agency Fifty Acres.
