Disclaimer: The following article presents the opinions and viewpoints of the authors and does not necessarily reflect the views of Kiah.

Overcoming Defence Process Inertia: Embracing Industry as a Force Multiplier

In an era marked by dynamic geopolitical shifts and ever-evolving security challenges, the need for military forces to adapt quickly and effectively has never been more critical. The security situation in the Red Sea serves as a poignant illustration, with the Houthis adopting relatively cheap drones—deployed from land—to threaten commercial shipping and surface combatants. 

This littoral scenario is a real-time example of the kind the operating environment the Defence Strategic Review (DSR) envisioned for our next conflict. The adaptation and proliferation of commercial-off-the-shelf (COTS) drones by military and terrorist organisations, as lethal and effective tools in asymmetric warfare operations, is just one example where Australia’s Defence enterprise is so far behind both conventional and extremist adversaries that our ADF would be crippled by COTS items that can sell for less than $1000 a piece. 

The cumbersome and sub-glacial One Defence Capability System has outgrown its purpose, as highlighted in the DSR. Its peacetime processes have multiplied and become adversarial toward industry. This has led to prolonged acquisition timelines and often late or no delivery of the lethal or protective capabilities it continues to promise the Australian taxpayer. This is at stark odds with the Government’s repeated declaration that strategic warning time is almost non-existent. 

The One Defence Capability System has not evolved in response; the threat OODA loop completes a cycle quicker than the friendly one. The ability to efficiently adapt, and cost-effectively proliferate, COTS or MOTS products to deliver and counter lethal effects is critical in asymmetric warfare—noting that a conflict against China is asymmetric for our ADF. We must start treating industry as a genuine partner in collaboration otherwise our bureaucratic processes will continue to deliver sub-par solutions 10-years late.

So how can we adapt the capability development system to genuinely harness industry as a force multiplier and unlock the ability to evolve our technology against changing threats? 

We need a paradigm shift. We need to move towards iterative development cycles with industry as a business partner rather than treating industry like a necessary evil. The Advanced Strategic Capabilities Accelerator has taken a step towards transparency with industry by shining a very small sliver of light onto some capability requirements; but really all its done is put a new hat on the RFQTS and grants process—the big players like Lockheed will still win the big contracts and the start-ups still have no pathway from development to acquisition.

The Australian Signals Directorate (ASD) provides an exemplar in their National Partnerships program. Under the leadership of Rachel Noble and Abigail Bradshaw, the ASD has fostered genuine collaboration with the cyber industry and across Australian and international government. The ASD has focussed on two-way partnerships that deliver mutual benefit with business and it has actively facilitated those collaborative efforts. This has demonstrably uplifted Australia’s cyber resilience and our national ability to defend against evolving cyber threats to Australia’s security. 

Internationally, the US Defense Innovation Unit (DIU) has developed a culture of innovation supported by common-sense contracting arrangements with non-traditional defence contractors. This has delivered swift development and deployment of cutting-edge technologies; and there is an Australian story here. In November 2023, the DIU purchased some tactical watercraft from an Australian, veteran-owned firm, the Whiskey Project, for around $19 million AUD for rapid experimentation, concept development and acquisition by the US Marine Corps.

In another example and from an industry angle, Lockheed Martin’s Skunk Works has an industry R&D unit consistently delivering innovative solutions from R&D through to acquisition. Since WWII, Skunk Works have been brought into the US Defense tent on variously classified projects and treated as a trusted partner by the US Defense forces. Just some of the many examples of innovations delivered by Skunk Works include the U-2 reconnaissance aircraft and the SR-71 Blackbird.

In the context of littoral conflict scenarios that the DSR has effectively re-postured the ADF toward—with a live example occurring in the Red Sea—genuine industry partnership in the development of solutions is paramount. By using some business acumen to be a better buyer, Defence can use its enormous purchasing power to foster industry-wide innovation and production facilities. In an ideal scenario, a Defence-driven industry-wide collaboration will enable our ADF to respond to emerging threats while civilian applications of those technologies and facilities advance other aspects of our national economy.

The current capability development system’s inadequacies present a formidable obstacle to adapting swiftly to new threats. The proposed paradigm shift towards a more collaborative model, inspired by examples such as the ASD, DIU and Skunk Works, holds the key to unlocking innovation and scaling up our national capacity for generating the right capabilities at the right time.

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