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For defence manufacturers, domestic and international partnerships with other businesses and research organisations are essential for successful operation within the broader defence industry. Ongoing and increased collaboration with research institutions will enable defence manufacturers to leverage Australia’s world-class research base and commercialise Australian ideas.

Continued investment in innovation and collaborative practices in the areas of R&D, late stage commercialisation and other related innovative activities will be critical. This investment helps defence manufacturers achieve the technical or operational standards required to supply defence markets, scale their operations, and increase the resilience of supply chains.

International partnerships

Globally, Australia is seen as a trusted export and trading partner. Australia’s bilateral collaborations with countries such as the US and the UK have enabled us to play a significant role in the delivery of capabilities such as the electronic warfare suite on the EA-18G Growler aircraft and the Nulka active missile decoy.

The 2017 US National Defense Authorisation Act expanded the definition of the US National Technology and Industrial Base (NTIB) to include Australia and the UK, in addition to Canada. Defence continues to work with the US to address defence trade issues and industrial barriers to leverage our inclusion in the US NTIB. It is critical that our defence industries work closer together, and Australia’s inclusion provides an opportunity for us to collaborate on emerging technologies with the US and other close partners.

There are also numerous collaborative projects which provide Australia’s defence manufacturing sector with access to global opportunities and support diversification.

F-35 Joint Strike Fighter Program

Australia is acquiring the F-35A aircraft as part of the Joint Strike Fighter Program, an international co-operative program led by the US. Along with other international partners, Australia contributes to the management and development of the F-35 air system. Under the co-operative agreement, international partners bid for and win work on the global program on a best‑value basis.

The F-35 Program is helping to further build the capability of Australian industry as it contributes to the global production of F-35 capability. To date, Australian industry has won over $2.7 billion of work with more than 50 companies involved, with many more indirectly benefitting through supply chain work. Additionally, Australia is becoming a regional support hub after being selected as the maintenance, repair, overhaul and upgrade depot for the Southeast Asia region.

The program is also creating opportunities for companies which originally supplied to the F-35 program and are now breaking into adjacent sectors, leveraging their expertise in manufacturing extremely high-end products and systems.

Global Supply Chain Program

The Global Supply Chain (GSC) Program helps Australian businesses find opportunities in the international supply chains of multinational defence companies. Since 2007 the participating prime companies have awarded over $1 billion of work to Australian businesses, most of them SMEs. Bid opportunities are weighed against other overseas bids, requiring the Australian business to be globally competitive.

Through the GSC program, primes are required to establish a GSC team within their company. In addition to providing bid opportunities, the GSC primes advocate on behalf of Australian industry, train and mentor companies in the primes purchasing practices and methods, and provide market assistance including facilitating visits and meetings with key decision makers.

Domestic partnerships

Partnerships present an avenue for local defence manufacturers to enter defence supply chains and increase their capability to supply the ADF. Due to the large scale and complex nature of defence projects, numerous manufacturers may be required to supply different components of a project. These partnerships are likely to encourage increased innovative activities due to higher levels of collaboration, which could result in greater levels of IP development and open new markets for goods and services. They also provide opportunities for Australian firms to account for a larger share of manufacturing activities, for example, manufacturing component parts.

Bushmaster Protected Mobility Vehicle

The Bushmaster is a locally produced protected vehicle from the Thales Group built in Bendigo, Victoria. It has so far been successfully deployed by 3 armies on operations and is in service with 6 countries.[32]

The delivery of this capability has provided opportunities for Australian firms to partner with primes and other businesses and to manufacture and supply sophisticated components to support the project. For example, more than 80% of the parts of the vehicle’s remote weapons stations are sourced through the Australian supply chain.[33]

Collaboration

To realise the benefits of innovation and deliver the Australian Defence capability priorities, research organisations, defence industry and all levels of governments must collaborate in order to translate good ideas into commercial outcomes. This includes creating connections between research and businesses, facilitating collaborative activities through partnerships, and attracting investment for R&D. Collaboration is essential in Defence—it is not possible for an individual business or research group to develop, test and provide every component of a complex military capability.

Collaboration also strengthens supply chains by providing access for small and medium companies to contribute to large projects, creating opportunities for innovation and to scale‑up their businesses. In the Defence context, business to business collaboration is the key for Australian SMEs to establish linkages with primes, integrate in their supply chains and contribute to the delivery of large capabilities. Knowledge transfer through collaboration also increases the likelihood of a business taking ownership of IP for their products or processes, which is critical to developing a sovereign defence industrial base and accessing longer term sustainment opportunities.

With the majority of large scale Defence capabilities delivered through primes, there are many examples of successful collaborations driven by industry.

Boeing Loyal Wingman Drone Development Program

The unmanned Loyal Wingman is the first aircraft to be designed, engineered and manufactured in Australia in over 50 years. The Government is investing up to a total of $155 million in its development, alongside Boeing’s largest investment in a new unmanned aircraft. The investment will support the project’s workforce and key industries, including high technology aircraft manufacturing and flight testing. There are more than 35 Australian businesses on the project’s Australian industry team who are closely collaborating to progress the project.[34] The first Loyal Wingman completed its first flight on 2 March 2021.

R&D collaborations

Defence, in conjunction with the defence industry, has a number of initiatives that are aimed at supporting collaboration and partnerships in the sector, including:

  • DST Group Partnerships with both large and small defence companies including as well as universities and CSIRO to conduct R&D, including for example with:
    • Airbus Group on defence aircraft systems and communications
    • ASC on Collins Class submarine-related technologies
    • BAE Systems on cyber security and electronic warfare.
  • Next Generation Technologies Fund managed by DST Group identifies priorities for focused R&D over the next decade including quantum technologies, trusted autonomous systems and advanced sensors, hypersonics and directed energy capabilities.[35]
  • Defence Innovation Hub funds the development of innovative technologies that have the potential to deliver Defence a capability edge while supporting local industry. International experience demonstrates that hubs and clusters provide the foundations for increased levels of innovation and R&D, exports, and new jobs; while signalling globally that a country is making long-term investments in its innovation ecosystem. To date, the Defence Innovation Hub has invested over $306m in contracts with over 96 Australian businesses and 13 universities and research institutions.

Funding available

The Modern Manufacturing Initiative is now open for defence manufacturing projects that meet eligibility under its Translation and Integration streams.

Footnotes

32 Thales Group, Bushmaster, accessed 11 March 2021.

33 Prime Minister of Australia, New Weapons Boost Army Capability and Secure Jobs, July 2020, accessed 11 March 2021.

34 Boeing, Loyal Wingman Australian industry team, accessed 20 January 2021.

35 Department of Defence, Next Generation Technologies Fund, accessed 24 February 2021.

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