Why do we need to innovate, and why is innovation the bed rock of a thriving Australian defence industry? Good questions, and I’ll start answering by first asking another question: can you spot the difference between the ‘export’ version of an F-15 Eagle or Su-35 or T-80 main battle tank, and the version the manufacturer’s government buys?
The vast majority of differences between the ‘export’ and ’domestic’ versions of any bit of military equipment are invisible until you actually send them to war. What does that tell us? A good platform may be important (and it is!), but it’s the performance of its sensors and weapons and the effectiveness of the systems integration binding them all together that provide the combat edge operators are looking for. Which is why the Americans, Russians and Europeans keep their crown jewels to themselves, regardless of their export aspirations.
Which brings us to Australia’s defence innovation system. Being realistic, Australia will probably never design and build an entire guided weapon, nor a main battle tank, nor a manned fighter - though Boeing’s Loyal Wingman program will likely see us design and build simpler, stealthy unmanned combat aircraft. And although we build them in-country, we probably couldn’t contemplate at present designing a surface combatant entirely from scratch, nor a submarine, though that might change in 20 years’ time.
But those platforms in themselves don’t give the ADF its combat edge, not today. The ADF gets its combat edge from a combination of leading-edge sensors and weapons, effective systems integration and good training - and the ability to change and upgrade them quickly.
This is where money invested in R&D, innovation and industry capability development can deliver the most significant return.
In unconventional warfare against, typically, agile non-state players, the likelihood is that the ADF’s adversaries will pursue an asymmetric advantage by adopting new technologies and new tactics – look at the West’s bitter experiences in Iraq and Afghanistan. The ADF needs to be able to learn, adapt and respond – it needs to be able to develop and field both new tactics and new equipment, quickly.
In conventional warfare, the ADF might be fighting what looks like an old-fashioned, industrial-era slugging match against an adversary who fields similar weapons and equipment. Good tactics and training make a huge difference, but so does an incremental technical advantage, one that needs to be maintained and extended constantly. Every conventional war that has lasted more than a few months demonstrates this.
The cost of both defeat and victory is counted partly in human lives destroyed, and partly in the unimaginable social and infrastructure damage both sides suffer. In conventional war, the cost to the loser is usually much, much higher. In an unconventional conflict the arithmetic is more complicated: a non-state player fighting for a cause may not give a damn – and may even welcome human, social and infrastructure damage because of its propaganda value, especially if a poorly equipped conventional force’s only response to asymmetry is needless, destructive violence.
So winning is important. Therefore, so are the moral and technical means of securing victory. And that’s why a strong, responsive national R&D and industry base is so important – because a national research and industry base that understands the needs of the ADF is able to respond to those needs, and any sudden changes, very quickly.
We’re not talking about designing and building new ships, aircraft, tanks and submarines. Those platform designs, for the most part, can’t be changed quickly or affordably. But we can enhance and change on-board sensors and weapons; we can improve combat management systems; we can improve our C4ISR systems and processes; we can improve simple things like body armour and personal weapon sights quickly; we can enhance the counter-IED capabilities we field quickly; if necessary we can completely change the way we do things and achieve an immediate and unexpected advantage. We’re talking about making the rapid, incremental changes to our operational capability that provide the ADF with a combat edge, that can save lives and prevent injuries and, we hope, deliver victory.
We can do all of this quickly, but only if we can do it in-country. If we need to depend on a foreign company in a foreign country, we get what they’re allowed to give us, whether or not we’ve asked for the right thing or not (and they may not be able to correct us if we’re asking for the wrong thing). And their delivery schedule may, or may not, reflect our own sense of urgency.
That is why it is important to have a strong, sustainable domestic R&D and industry base. The cost of such a base can’t be counted in dollar terms alone. If that were the sole measure, we wouldn’t have a domestic industry base at all – Defence would simply buy everything we need from an overseas supplier and then wait patiently (or impatiently) for design changes and upgrades, at the pleasure of an overseas government. The ADF’s combat capability would be dictated and limited by a foreign power.
The value of a strong, sustainable domestic R&D and industry base ought to be unarguable: it allows us the freedom to respond quickly to the contingencies that matter to us; it allows us the freedom both to choose how we respond to emergent threats and to think for ourselves about how and why those threats might emerge and what else we can and should do to address them. It allows us to think strategically and to set our own R&D and capability priorities.
If we’re going to set capability priorities, and revise them rapidly in the face of emerging threats and contingencies, we need a strategy for analysing problems quickly and then developing and delivering the smart equipment or tactics the situation demands.
The ability to identify and solve problems and improve our circumstances significantly is called ‘innovation’.
The strategy that delivers an innovative capacity is one that welcomes lateral thinkers and fast movers; sometimes this involves making judgement calls and picking winners. The strategy we need as a nation is one that creates and sustains the intellectual and cultural environment in which the right judgement calls are made and, if necessary, the right winners are selected. That means selecting and training people who can operate effectively and thrive in this environment – and who can live with the fact they may never be more than about 80-90 per cent right. Making a quick call that’s roughly correct has been shown repeatedly to be better than taking ages to try and be 100 per cent correct – you’ll never be exactly right, and if you take too long it won’t matter anyway: you’ll be a goner. That’s the nature of innovation: you may not be entirely right, but that doesn’t matter as long as you’re successful.
All of which leads us to where we are today: we have a defence innovation system that will spend about $1.5 billion over a decade on short- and long-range R&D and innovation and on developing Australia’s industry capacity. This forms part of a broader National Innovation and Science Agenda (NISA) which deserves far more credit than it has received for the scale and ambition of the national economic transformation it set out to achieve.
The former Secretary of Defence Sir Arthur Tange once famously said, “Until you’re talking dollars, you’re not talking strategy.” Thanks to the NISA and the 2016 Defence White Paper and Defence Industry Policy Statement, Australia has the policy foundations and some of the budgetary tools it needs to deliver this economic transformation, but we as a nation need two things: the promise of continued funding for this transformation process, and consistency in both funding and policy. Without these, we don’t have a workable innovation and industry strategy; and without that strategy, we won’t deliver our defence and industry capability goals.