Getting SMEs on board with defence industry innovation

The Defence White Paper 2016, released on 25 February this year, along with the accompanying Defence Industry Policy Statement (DIPS), recognised defence industry as a Fundamental Input to Capability (FIC) for the Australian Defence Force (ADF).

Lockheed Martin Australia, in partnership with Ai Group, recently held a series of defence industry forums to lead a conversation on how industry can meet its responsibilities as a FIC. Doing so is essential if the $250 billion of Australian Government investment in new capabilities for the ADF over the next decade and beyond is to be achieved efficiently. A discussion paper was prepared following the forums, drawing on keynote presentations and participants’ views.

The discussion paper highlights, among other things, the importance of investment in innovation as a key element in transitioning the Australian economy’s focus on advanced manufacturing. Defence industry is a world leader in this regard, including its expertise in transferring advanced technology into a range of non-defence sectors.

One example, drawing from Lockheed Martin’s F-35 Joint Strike Fighter technology, is its expertise in operating remotely piloted trains in Western Australia’s northwest mining sector. Another is Thales Australia’s world-class aircraft management system operating from Docklands in Melbourne. Did you know that two out of three aircraft flying today in the world are managed through this system?

Dr Leonie Walsh, the Victorian Government’s Lead Scientist, said that on a global innovation index, Australia was ranked 17 out of 143 OECD countries yet ranked 81 in Innovation Efficiency. She said that while a lot of innovation was coming out of large corporations, there was comparatively little coming from SMEs.

SMEs, which account for 90 per cent of the defence industry sector, don’t have the resources – cash and skills – to improve this situation. The Turnbull Government has recognised this fact and has allocated funds in the DIPS to work with Australian SMEs to address this. The Ai Group Defence Council is playing an important role to assist.

According to Dr Walsh, greater industry collaboration is another element to engendering stronger innovation. Dr Walsh said: “It’s how you collaborate, how you measure the success, how you work together that’s important and they’re the pieces we aren’t doing as well as we could or should.”

For the ADF is to meet its many operational responsibilities, including in the Middle East, defence industry must work harder and smarter, drawing on the program opportunities being offered to meet this imperative.

Ai Group members who wish to find out more about the discussion paper may contact John O’Callaghan, Ai Group’s Director – Defence and Government Relations.

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'Johnno' is Director – Defence and Government Relations at Ai Group, and Executive Director to the Ai Group Defence Council – the principle employer organisation representing the interests of Australia’s defence industry. Its membership comprises Australia’s leading defence industry firms.

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