Sunday, September 1, 2019

Defence Innovation - catching on

I've been writing a series of columns for Australian Defence Magazine on innovation in the defence community - not sector, but community - that word's important because successful innovation doesn't happen in isolation: it needs effective engagement between the innovator and the end-user, so industry needs Defence if it is to innovate successfully while Defence needs to understand what it needs to do and how industry and research sector innovators can help it achieve that. This is a community wide challenge.

 The ADM columns can be found here: https://www.australiandefence.com.au

Meanwhile, here's the first of those columns, published back in July - my thanks to ADM's Editor,  Katherine Ziesing, for allowing me the space and freedom to write this.

Defence innovation catching on 

INTRO: Defence is serious about innovation. Industry needs to share the journey, and help where necessary.
Gregor FergusonSydney
The 2016 Defence White Paper and Defence Industry Policy Statement broke new ground in Australia by enshrining industry as a Fundamental Input to Capability, and by committing to an ongoing investment in defence industry innovation and development. 
The DIPS quotes the then-Chief of Army, now CDF, General Angus Campbell: “Our operations in Afghanistan, and elsewhere over recent years, remind us that if we don’t innovate we won’t sustain an advantage over a future adversary – war can be very Darwinian.” 
The DWP is blunt: “The Government’s approach to Australian defence industry and innovation policy aims to maximise the defence capability necessary to achieve the Government’s defence strategy supported by an internationally competitive and innovative Australian industrial base. The focus will be on the small to medium enterprises that are the incubators for advanced defence capability in Australia.” 
There’s logic behind Defence’s embrace of industry policy and innovation: the high-technology defence sector delivers a very high pay-off for both Defence and industry innovators.
So what is innovation? There’s no Defence-endorsed official definition as yet. The Aerospace Maritime Defence and Security Foundation of Australia, organiser of the Pacific 2019 Innovation Awards, says ‘An innovation can be defined very broadly as a new idea that gets adopted and used; it’s an all-new product or service that solves an identified problem or saves somebody a lot of money, or that creates an opportunity for the user to do something important that he couldn’t before.’
Different parts of Defence are running with this broad definition. The three services, DST and the Chief Information Officer’s Group, CIOG, are heavily focussed on technology capability innovation and so this definition shapes their interface with industry. The rest of the organisation, however, also has a mandate to be more efficient, an innovation push encouraged by Defence’s First Principles Reform program. 
But there’s a definite limit to what innovators can change and achieve in any of the public agencies and departments. Public service regulations and guidelines on spending taxpayers’ money are rightly determined by probity and caution. This is famously antithetical to successful innovation, which is all about embracing risk and exploring uncertainties while pursuing a better outcome, faster. 
One answer to this contradiction lies in programs such as the RAAF’s Plan Jericho. This ‘seeds’ promising technologies and projects and so de-risks them significantly while helping the RAAF plan its own future direction before serious money gets spent on acquiring new equipment. Recent ‘smart buyer’ changes within Defence mean this approach might deliver a better outcome faster and without sacrificing probity – look at Project Land 19 Ph.7B. 
Defence’s stated policy goal is to develop “an internationally competitive and innovative Australian industrial base”. Its challenge is to foster innovation by the SMEs, in particular, and then determine a mechanism for ensuring the results are incorporated efficiently into capital equipment acquisition, upgrade and sustainment programs. The Defence Innovation Hub and Next Generation Technologies Fund (NGTF) are paths on that journey.
Industry R&D and innovation is essential to develop new products and services; industry also needs to refresh business skills and processes regularly to become more efficient and competitive, domestically and in export markets. Situational awareness is vital: industry needs to understand in some detail what Defence users need, as well as its own strengths and weaknesses in the market - Defence must be part of this process. Many SMEs already do this instinctively, calling it creativity, lateral thinking or continuous improvement and not realizing (or caring) that this is part of the innovation process.
Australia’s defence industry is abnormally polarised between a small number of foreign-owned prime contractors and a large number of indigenous SMEs. A policy focus on the SMEs’ capacity for agility and innovation is understandable. But big, hairy, ambitious projects need lots of money and people. Designing new combat aircraft, warships and submarines requires massive R&D investment by prime contractors and government research agencies. 
That’s why SMEs are lower-tier players: their contributions are vital, but they are necessarily in niche technology areas. This means their customers are often other companies higher up the supply chain. Innovation for the SMEs is as much about developing their technology and product base as it is about making them more competitive and sustainable as businesses. 
Defence and government have a key role here. There’s a collective win-win if Australia gets this right. ADM will explore this theme further next month

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