Innovative Alliance: U.S.-Australian Defense Science and Technology Cooperation for a Dangerous Decade

Alliance Future: Rewiring Australia and the United States

The Carnegie Asia Program’s “Alliance Future” project aims to ensure that Canberra and Washington are working to operationalize and integrate their alliance in new ways. The project explores how to undertake difficult reforms, forge new modes of cooperation, harmonize outdated regulations, better align national strategies, address sovereignty concerns and risk thresholds, and ultimately reform the alliance for a more competitive era.

Introduction

The People’s Republic of China’s (PRC) rapid military modernization and fielding of next-generation systems could challenge the preeminence of the United States and its allies, like Australia, in the Indo‑Pacific. Maintaining an edge in defense science and technology is one part of the U.S. and Australian strategy to develop capabilities that could contribute to deterrence or increase the likelihood of victory in war. The integration of advanced technologies into military capabilities, decisionmaking, and operating concepts could provide qualitative or asymmetric advantages. For example, developments in fields like artificial intelligence (AI) and autonomy could result in battlefield applications of human-machine teaming that are cost‑effective and improve decisionmaking and survivability.

Innovation alone is insufficient. The speed and scale of innovation and adoption matter most in the rapidly shifting geopolitical and technological landscape. The United States and Australia are attempting to reform their defense innovation systems to deliver outcomes in months, not years. The United States, especially, is experimenting with research, development, testing, and evaluation (RDT&E) to harness commercial innovation. Together, the United States and Australia are pursuing innovation activities through the AUKUS strategic partnership between Australia, the United Kingdom and the United States. Progress is being made on hard issues, like defense trade controls, but implementation hurdles remain. Australia’s tech sector and defense industry are small but growing, although the cultural change needed to open collaboration between government and industry is still a work in progress.

This paper outlines the strategic imperative for allied technology leadership, discusses recent national and cooperative innovation initiatives, and identifies opportunities for progress. The paper argues that resource constraints and nearer-term strategic risk demand an even closer‑knit approach to collaboration between strategists, war fighters, innovators, and investors from the United States and Australia to foster technology development and to make better use of capabilities that already exist. The longer-term risks of the PRC’s growing military capabilities and hostile intent also necessitate a sustainable boost to technology and industry capacity in both countries.

Recommendations

The U.S. and Australian defense departments should:

1. Establish a rapid commercial and dual-use technology acquisition cell between U.S. and Australian defense contracting organizations.

A cadre of contracting officers should meet annually to discuss contracting strategies for nontraditional commercial technology providers. The cell should share lessons in acquisition, including from the U.S. Immersive Commercial Acquisition Program, to better support nontraditional providers to cooperate in each other’s defense activities in a time frame relevant to current and future strategic risks.

2. Establish a Future Warfare Strategy Team involving strategists, war fighters, technologists, researchers, innovators, and investors.

The team would meet biannually to explore possible operational responses to different Indo-Pacific contingencies (without preempting political decisions), like a Taiwan blockade or invasion, a Korean peninsula crisis, or an escalation in maritime coercion against the Philippines. The team would explore how existing capabilities might be used to achieve different military effects, identify ethical and safety issues around deploying new technologies, and select operational problems that could guide future technology acceleration activities. The activity would help companies, especially smaller and medium sized enterprises and researchers, as well as investors, better understand defense problems, and help defense organizations understand areas of technology opportunity.

3. Mobilize a group of venture capitalists from the United States and Australia to independently scope a new dual-use technology fund in Australia.

U.S. and Australian defense departments should seek interest from venture capital firms and family offices to establish a new dual-use technology fund in Australia. The fund should be able to access low-cost, long-term financing options from both governments, modelled on programs like the U.S. Small Business Investment Company Critical Technologies Initiative, to help leverage investment. A new fund could help diversify financing options for defense and dual-use technology startups in areas like quantum science, advanced materials and biotechnology.

4. Strengthen defense industry threat intelligence sharing among U.S. and Australian defense, intelligence, and law enforcement organizations.

The group would meet biannually to share threat intelligence and policy responses to espionage and technology transfer activities targeting U.S. and Australian defense research and industry. The group would support best practice research and industry security and help strengthen confidence between the United States and Australia regarding the protection of sensitive defense technologies.

5. Accelerate planned cooperation between the Defense Innovation Unit (DIU) and the Advanced Strategic Capabilities Accelerator (ASCA).

Both governments should set up exchange positions by early 2025 to facilitate an additional pathway for engagement between governments, investors, and innovators to break down historical, bureaucratic, cultural, and technical barriers to bilateral Australia‑U.S. defense collaboration. Their activities should complement and be deconflicted with defense trade facilitation organizations in each country.

Strategic Imperatives for an Innovative Alliance

Geopolitical Headwinds

The United States and Australia confront a dangerous and unpredictable geopolitical environment. The United States sees the PRC’s technological, military, and economic rise as its “pacing challenge.”¹ Australia has now concluded that it has lost its ten-year warning time for major conflict.² Beyond the PRC, other drivers of instability include Russia’s invasion of Ukraine, the Israel‑Hamas war, and long-standing flashpoints like the Korean peninsula. The United States’ and Australia’s recalibration of their diplomatic relationships with the PRC has largely improved the tactics and optics of engagement rather than underlying prospects of cooperation. PRC capability and intentions remain inimical to U.S. and Australian interests in a stable and prosperous Indo-Pacific. The PRC has shown its willingness to exploit economic interdependence for strategic gain. The PRC continues to entice, intimidate, and coerce third countries to act in line with its preferences, including in the South China Sea, the South Pacific, Southeast Asia, and beyond.

Risks that the PRC might move to reunify the democratic island of Taiwan with mainland China through force, blockade, or other means, persist. In 2022, Chinese President Xi Jinping’s report to the Twentieth Party Congress stated that “Taiwan is China’s Taiwan. . . . We will never promise to renounce the use of force, and we reserve the option of taking all measures necessary.”³ Some senior U.S. officials have warned that the PRC may be ready to try to invade Taiwan around 2027, which falls within “the period of greatest peril for a failure of deterrence,”⁴ when retirement of U.S. platforms will coincide with advances in the Chinese People’s Liberation Army’s counter‑intervention capabilities. Successfully preserving the status quo across the Taiwan Strait will involve both reassurance and deterrence, including the United States maintaining an edge across military platforms, supported by a strong enough defense industrial ecosystem to make the PRC doubt whether military action would succeed and could be sustained.⁵

The Changing Technology Order

The pace, scale, and intersection of advances in hardware and software is improving the speed, range, lethality, and cost-effectiveness of military systems. Advanced AI-enabled software can now analyze large amounts of data quickly to support decision advantage.⁶ Quantum-enabled positioning, navigating, and timing solutions are being developed for environments where global positioning systems are unavailable.⁷ Unmanned AI-enabled systems like the Boeing Australia Ghost Bat combat aerial vehicle have been developed to support and protect manned platforms. The proliferation of expendable unmanned systems in Ukraine is transforming the battlefield. New or concealed capabilities could support military surprise against or by adversaries, which may also add to miscalculation and escalation risks, especially where AI-enabled systems are deployed in the nuclear domain.⁸ With adversaries studying and seeking to overcome U.S. and allied advantages, the contest for a military technological edge is constant and long-term.

The evolving technological landscape is reshaping the global power balance, with the United States and its allies like Australia facing a relative decline in their competitiveness vis-à-vis the PRC. The U.S. National Science Board assessed in March 2024 that the PRC had surpassed the United States in producing science, technology, engineering, and mathematics (STEM) talent, research publications, patents, and knowledge- and technology‑intensive manufacturing.⁹ In June 2024, The Economist also concluded that the PRC was already “a leading scientific power” in areas like chemistry, physics, and materials science.¹⁰ Research by the Australian Strategic Policy Institute similarly shows that the PRC now leads high-impact scientific research in fifty-seven out of sixty-four critical technology areas, including AUKUS-relevant areas like hypersonics, electronic warfare, and undersea capabilities.¹¹ The Center for Security and Emerging Technology projects that the PRC will have nearly twice as many STEM PhD graduates as the United States by 2025.¹² The PRC continues to attract major research and development investments from foreign firms like Volkswagen, Apple, and AstraZeneca because of the country’s talent pool, lower wages, and strong work ethic.¹³

Nevertheless, the PRC faces broader challenges in its innovation ecosystem due to interventionist policy, inefficiency, waste, and stringent data and intellectual property rules, alongside wider economic problems. The United States remains the largest spender on research and development (R&D), with public and private spending totaling $806 billion compared to the PRC’s $668 billion in 2021. Restrictions on access to foreign technology appear to have had some success in throwing sand in the gears of PRC firms and slowing high-tech production in areas like advanced semiconductor chips.¹⁴ The United States’ planned rules to limit U.S. capital flows into Chinese high-tech companies could further impact the growth of Chinese AI, semiconductor, and other companies. Nevertheless, the PRC’s political will, talent pipeline, industrial capacity, and university and commercial sectors mean that it is still likely a question of when, not if, the PRC becomes a leading science and technology power.¹⁵

Industrial Capacity Pressures

Both the United States and Australia face constraints in their defense industrial bases, creating a potential mismatch between their strategic defense objectives and their capability and capacity to meet current and future needs. The manufacturing base is important for stockpiling and pre-positioning, as well as replenishing materiel and surging production in the event of war, especially if it is protracted.¹⁶ Successive U.S. administrations have recognized the need for a greater industrial capacity, including in both former president Donald Trump’s 2017 National Security Strategy and current President Joe Biden’s 2022 National Security Strategy. Ukraine’s need for materiel to defend itself against Russia and U.S. arms support to Israel have provided recent impetus for accelerating defense industrial production amid pressures on military inventories.

Despite growing production rates, experts assess current U.S. production capacity as more suitable for peacetime than intensifying strategic competition.¹⁷ There is a risk of “empty bins,” or inadequate quantities of materiel like munitions in the event of a conflict.¹⁸ A war game by the Center for Strategic and International Studies that simulated a U.S. response to a PRC invasion of Taiwan showed high munitions use by U.S. forces, especially of long-range precision missiles.¹⁹ In three to four weeks of expected conflict, the U.S. global inventory of long-range anti-ship missiles was exhausted in the first few days of a conflict, with joint air-to-surface standoff missile inventories sufficient until the third or fourth week. Current demands on industrial capacity, in addition to future needs, have created a generational opportunity for defense industrial transformation.²⁰

U.S. Efforts for Innovation at Speed and Scale

In a challenging global climate, innovation is seen by U.S. leaders as an enduring source of U.S. military advantage.²¹ However, it is no longer enough to be at the forefront of innovation. The United States recognizes it needs to more quickly innovate and adopt technology at scale to maintain its historic advantages over potential adversaries. The U.S. Department of Defense, White House, and Congress have pursued wide-ranging strategy, policy, infrastructure, workforce, and industrial base initiatives. These are supported by large RDT&E budgets, which make up around 17 percent of the overall defense budget (compared with under 5 percent in Australia). For FY 2025, Biden requested $143.2 billion for RDT&E (about four times Australia’s entire annual defense budget for 2024–2025), and the U.S. Senate Committee on Appropriations approved even more than the requested amount to provide the Department of Defense with $145.1 billion.²²

Private Sector Innovation and Capital

The United States has sought to leverage its dynamic, venture capital–powered innovation ecosystem to spur development of commercial and dual‑use technologies like unmanned systems (see Case Study 1: The U.S. Replicator Initiative below). The United States wants to increase the speed, capability, and capacity of its industrial ecosystem to meet defense needs in line with the 2022 National Defense Strategy’s commitment to “act urgently to build enduring advantages across the defense ecosystem.”²³ This includes promoting competition in a highly consolidated defense industrial base where the Department of Defense primarily relies on five prime contractors to develop, maintain, and project military power.²⁴ The department has its sights on breaking down barriers and creating incentives for a broader pool of small companies and new entrants to enter the defense ecosystem.²⁵

Decentralization, diversity, and risk acceptance characterize the United States’ approach to fostering national security–relevant innovation. In 2023, RAND Corporation identified some seventy-two organizations with a role in accelerating the identification, development, and adoption of commercial technology for the U.S. military.²⁶ These include long-standing organizations like the Defense Advanced Research Projects Agency and the Intelligence Advanced Research Projects Activity, which invest in breakthrough technologies for national security. There are also more recent creations like the DIU, established in Silicon Valley in 2015, which has a high profile in seeking to expand and accelerate the delivery of commercial and dual‑use technology to the U.S. military, although its budget of $1 billion in 2024 is a relatively small share of U.S. RDT&E funding.²⁷ There are service‑specific organizations like xTechSearch and AFWERX, as well as specialized organizations like In-Q-Tel and SOFWERX. Entities like the Rapid Defense Experimentation Reserve (RDER), created in 2021, have been stood up to support the innovative application and absorption of existing and bleeding‑edge technologies through agile prototyping and experimentation, such as the Vanilla ultra-long endurance unmanned aerial vehicle, with plans to undertake some activities in Australia this year. RDER aims to reduce the timeline for delivering capability by years, but its future is a little uncertain; U.S. Senate appropriators have recently scrutinized RDER’s efficacy in accelerating fielding outcomes and recommended a slowdown in the program’s funding.²⁸

Better harnessing of diverse sources of capital to help national security relevant start-ups to scale and bringing their products or services into market has been a growing area of interest to the U.S. Even though private equity and venture capital investment into the U.S. defense industry has slowed over the past couple of years, it has otherwise been on an upward trajectory.²⁹ Initiatives like the Small Business Investment Company (SBIC) Critical Technology Initiative, a joint venture between the Small Business Administration and the Department of Defense (through the Office of Strategic Capital), are focused on scaling public-private partnered capital by providing low-cost, long-term financing. The SBIC Critical Technology Initiative aims to drive investment into technology areas that traditionally have high, up-front research and development costs, like semiconductors and biotechnology, from mission‑driven venture capital firms like America’s Frontier Fund, Shield Capital and Dyne Asset Management or offices of high-net-worth individuals and families whose investment thesis aligns with national security and defense objectives. Such investors recognize the value of “clean” or trusted capital, without any links to potentially adversarial states, when funding technologies for the U.S. government. Some of these investment sources, like family offices, may also not be seeking quick returns, thereby providing “patient” capital that supports opportunities to fund longer‑term, deep-tech projects. The SBIC Critical Technology Initiative is complemented by other programs like the Pentagon’s National Security Innovation Capital initiative, which receives around $15 million annually to invest specifically in dual-use hardware startups, noting early-stage hardware companies have historically only received about 10 percent of private U.S. venture capital.³⁰

Streamlining Acquisition and Adoption

Despite the range of U.S. initiatives in place, there remain challenges for companies in bridging the gap between prototyping and procurement. Reforms to Department of Defense acquisition authorities aim to support greater flexibility and speed in contracting.³¹ Other transaction agreements for research, prototypes, or production support faster and more cost‑effective project design and a wider range of collaborations with industry, which may also help to quickly expand defense production when needed.³² The Immersive Commercial Acquisition Program created in 2022 also aims to equip contracting officers with the expertise to keep pace with commercial technology providers and product cycles. Such initiatives can help nontraditional partners, startups and smaller companies that might otherwise find it difficult to work within defense timelines and processes.

The United States is also seeking to make it easier for more companies to enter the defense ecosystem. In 2025, Congress appropriated $400 million for the pilot program to Accelerate the Procurement and Fielding of Innovative Technologies to enable Department of Defense programs to procure technology from small and nontraditional contractors.³³ The Common Entry Point for Small Businesses program helps small businesses navigate Department of Defense opportunities and processes. The Tradewinds Solutions Marketplace, launched in 2022, also provides a virtual portal to connect technology solutions from companies and academia with demand from Department of Defense organizations. Before becoming available in the marketplace, data, analytics, digital, and AI/machine learning solutions are assessed and vetted in accordance with relevant Defense regulations and policies. This allows Defense organizations to move to rapid acquisition procedures to source what they need. However, smaller and nontraditional partners continue to face challenges in working with Defense, such as meeting cybersecurity requirements, mitigating risks of foreign ownership control and influence, and navigating points of entry into the department.³⁴ Small businesses’ share of the department’s prime procurement contracts has hovered around 25 percent for years, notwithstanding various initiatives to improve their piece of the pie.³⁵

Beyond procurement, the Department of Defense is looking at systemwide approaches to the integration of technology solutions, especially data and AI-enabled software, to scale the advantages they afford. The highest-profile initiative, the Combined Joint All-Domain Command and Control (CJADC2) capability, aims to provide information and decision advantage to war fighters by connecting sensors and communications across air, sea, land, space, and cyber domains. Deputy Secretary Kathleen Hicks says the capability shows “the beauty of what software can do for hard power.”³⁶ The CJADC2 will be enabled by new data infrastructure, like the Open Data and Applications Government-owned Interoperable Repositories (Open DAGIR). Led by the Department of Defense’s Chief Digital and Artificial Intelligence Office, the Open DAGIR seeks to enable government and industry to integrate their data infrastructure in a way that preserves government ownership but supports industry to develop applications for Defense. As new technology applications are integrated and rolled out, issues of trust and confidence will continue to be critical to achieving the department’s goal of being both “responsible and rapid.”³⁷

Case Study 1: The U.S. Replicator Initiative

In August 2023, the Pentagon announced its Replicator Initiative: a process to get at hard, long-standing problems like breaking down organizational barriers and institutionalizing leadership needed to accelerate the fielding of capabilities.³⁸ The first iteration (Replicator 1) aims to acquire and field thousands of all‑domain attritable autonomous systems (ADA2) in around two years, by August 2025.[1] The lessons from Replicator 1 will be used to build future iterations to address other capability gaps. Replicator 2 is expected to focus on software that connects platforms and enables multiplatform collaboration. Around $1 billion was allocated to Replicator across FY 2024 and FY 2025.

ADA2 systems are cheap, reduce risks to personnel, can be improved upon quickly, and can enhance the lethality and survivability of exquisite and manned platforms like aircraft, ships, and tanks.³⁹ Replicator 1 aims to “counter China’s military buildup”⁴⁰ and support the U.S. Indo-Pacific commander’s plan to create an “unmanned hellscape,” ⁴¹ or lethal shield, to slow or defeat the PRC if the United States comes to Taiwan’s aid in the event of a Chinese invasion. The use of drones by all parties in a Taiwan contingency is expected to speed target identification and execution.⁴² In February 2024, the DIU announced that the Pentagon had selected the capabilities under the first iteration. These include the Switchblade 600 extended-range loitering munition, an unmanned system armed with an anti-armor warhead with a range of 25-plus miles and endurance of forty-plus minutes. Nevertheless, it is not yet clear whether Replicator’s current funding levels can support the quantities of systems needed to create an “unmanned hellscape” with the range and endurance necessary for the Indo‑Pacific theatre.

Another key challenge is U.S. manufacturing capacity, which will be critical to achieving the quantities that the Pentagon is seeking through Replicator, and to support the possibility of a large and/or protracted conflict.⁴³ However, U.S. industry has voiced concerns over its capacity to rapidly increase production of unmanned systems.⁴⁴ U.S. manufacturing capabilities are already facing challenges in scaling to meet demand from Ukraine.⁴⁵ This is partly attributable to drone companies competing for skilled labor, materials, and parts with the broader and growing aerospace market.⁴⁶ On top of this, U.S. industry also faces challenges in competing with subsidized PRC drones and components.⁴⁷ As of June this year, the Association for Uncrewed Vehicle Systems International assessed that Chinese‑made drones like those made by Shenzhen-based company DJI accounted for more than 90 percent of the U.S. consumer market, 70 percent of the industrial market (drones as tools) and over 90 percent of the first responder market.⁴⁸ Companies have said they need sustained commitment and demand signals from the Pentagon, including multiyear block-buy contracts and stable portfolio funding, which could help derisk investments by venture capitalists.⁴⁹ However, such an approach would also need to be flexible enough to allow for rapid updating of contracts and system requirements, given the pace of technological change. Some have also called for new acquisition policies, noting the difference between procuring low-cost, attritable unmanned systems compared to other defense materiel.⁵⁰ 

Australia’s Defense Innovation Potential

In 2021, the Defence Innovation Review (DIR) concluded that Australia’s defense innovation ecosystem “need[ed] a much stronger sense of urgency”⁵¹ to contend with a deteriorating strategic environment international climate, the changing character of warfare, and new technology, including through improved government-industry collaboration. Similar conclusions were drawn in the 2015 First Principles Review. Most recently, Australia’s 2023 Defence Strategic Review again identified the same challenges and said that “Defence must have a national science and technology system that enables the development of disruptive military capabilities.”⁵² These recurring messages reflect the complexities and challenges of innovation in general, but also the fact that Australia’s defense innovation programs have not had the right institutional, financial, procedural, and cultural foundations to succeed.

Broader Barriers and Constraints

The success or otherwise of Australia’s defense innovation programs is shaped by the broader state of the science and technology ecosystem. Compared to the United States, Australia has a small—albeit growing—tech sector and defense industry. Australia conducts world-leading research in areas like AI and quantum physics and possesses a highly skilled STEM workforce. From a supply chain perspective, Australia is resource-rich, with vast reserves of critical minerals (a key input into high-tech military equipment) and is prioritizing supply chain derisking from the PRC in favor of the United States and other partners, like Japan. Historically, Australian scientists and companies have produced cutting-edge military capabilities, such as the Jindalee Operational Radar Network, the Nulka ship missile decoy, and the Bushmaster Protected Mobility Vehicle.⁵³ Australia’s tech sector has shown in its ability to scale companies, producing more than twenty unicorns over the past twenty years, especially in software as a service businesses like Atlassian and Canva.⁵⁴

Australia’s scientific and technological achievements have occurred despite barriers. Australia’s economy generally does not produce diverse or highly sophisticated exports, ranking ninety-third in the Harvard Atlas of Economic Complexity (the United States ranks fourteenth).⁵⁵ R&D spending is low, especially by government. In 2021 and 2022, Australian R&D funding sat at 1.68 percent of the country’s gross domestic product, well below the Organisation for Economic Co-operation and Development (OECD) average of 2.7 percent.⁵⁶ Australia, like many countries, struggles with the “valley of death:” the financing (and broader cultural, expert, and institutional support) between R&D and commercial-scale production. The high concentration of small businesses in the economy (around 93 percent) creates structural barriers to investing in, adopting, and scaling innovation. This lowers the overall demand for innovation.⁵⁷ Labor productivity has declined over the past two decades as a result.⁵⁸ Australia has a simplified manufacturing base—the smallest in the OECD—creating vulnerabilities for production and scaling in the event of crisis or conflict.

Australian policymakers are aware of these challenges and are focused on derisking innovation and commercialization through initiatives like concessional finance, grants, and business advisory services.⁵⁹ Planned investments like the $1 billion AUD toward critical technologies as part of the National Reconstruction Fund and the reform agenda set out by Future Made in Australia are intended to support Australian industry transformation, including strategic and national security-related projects. Experts still consider that further work is needed to drive not just supply but demand for innovation across the economy, including support to businesses aiming to grow export opportunities.⁶⁰

The Defense Innovation Reform Journey

Added layers of complexity exist in the Australian defense context. Australia’s defense innovation apparatus is centralized and slow, compared to the United States’ generally diffuse and dynamic ecosystem. The Australian Department of Defence is the primary purchaser of items from Australia’s defense industry, and the department can be a difficult customer. Companies face cumbersome tendering and acquisition processes, insufficient clarity over or changing requirements and demand signals, and risk‑averse decisionmaking. For startups and small companies, the resources and time they must invest before gaining a contract mean they face funding gaps and shortfalls. Importantly, their systems and timelines are not geared toward working with a big government client where delays in government processes could impact the survivability of smaller companies. These challenges can be compounded by lack of security-cleared staff, which impedes access to classified briefings and collaborations, and generally low levels of mobility between government, industry, and academia (only 1.3 percent of Australian government officials moved into the private, academic, and nonprofit sectors in 2021).⁶¹

Relative to the U.S., the smaller size of the Australian Department of Defence as a client can limit the scalability and profitability of Australian companies. A viable business model may therefore depend on export opportunities. Historically, this has meant that Australian companies with promise move to the United States. While overseas success of Australian businesses is positive, sometimes it results from a missed opportunity and lack of risk appetite by the Department of Defence to purchase Australian products and contribute to higher local production and a stronger sovereign industrial base. It can also create further challenges in cases where Australia must navigate the U.S. International Traffic in Arms Regulations (ITAR) to access U.S.‑based, Australian‑origin technology.

The Australian Department of Defence, supported by reviews and experts, has recognized these challenges and embarked upon various reform agendas. In June 2023, the Australian government kicked off its latest initiative, the Advanced Strategic Capabilities Accelerator (ASCA) (see Case Study 2: ASCA). Alongside ASCA, a broader agenda is being built to strengthen Australia’s military industrial base. Steps are being taken to streamline “some of the densest and most bureaucratic processes for procuring capability.”⁶² Tender response documentation requirements have reportedly halved this year, which has reduced paperwork by 45 percent. The Australian Department of Defence now has a more streamlined process for returning companies doing business with the organization. However, there remains a broader opportunity to minimize and fast‑track acquisition processes beyond the initial tendering phase (see Recommendation 1). Australia is also investing in defense industry development and export opportunities and updating export control regulations to ease collaboration with the United States and the United Kingdom. Later this year, Australia’s Department of Defence will also release a refreshed defense innovation strategy, which offers an opportunity to reform defense innovation beyond ASCA, including how defense innovation can better feed into strategy and concepts to achieve useful effects, both in a national setting and bilaterally with the United States (see Recommendation 2).⁶³

These are all steps in the right direction, though many are yet to be fully implemented or implemented with a strong sense of urgency and appetite for risk. Australia still needs a broader shift in how national security technologies are financed to address market failures in funding of emerging industries that could support a “defence‑finance-tech ecosystem.”⁶⁴ Australia could better combine U.S. and Australian expertise to support venture capital financing of early-stage or high‑growth startups in defense and dual-use areas, including tapping into Australia’s $3.5 trillion AUD superannuation industry (see Recommendation 3). Moreover, many initiatives like ASCA are not yet getting at key cultural challenges impeding collaboration, like bringing in outside expertise and the devolution of decisionmaking and calculated risk‑taking. While current initiatives are well-meaning, and the aspiration for change exists at and is being signaled by the highest levels of government, the scale and speed of activity on the ground and the push from leaders at all levels does not yet match the transformation necessary for near and longer-term strategic risk. Opportunities for timely progress at scale remain.

Case Study 2: Advanced Strategic Capabilities Accelerator

ASCA was established in June 2023, following the Defence Strategic Review. ASCA aims to streamline Australian defense innovation programs and drive capability development and acquisition pathways in response to defined operational challenges. ASCA’s activities are akin to the U.S. DIU, with an aim to deliver solutions for military end users within a few years. The Australian government committed up to $3.8 billion AUD in funding over the decade, with $748 million AUD for the next four years, resulting in $50 million AUD additional annual innovation funding.

ASCA is focused on driving missions focused on strategically directed defense priorities that aim to lead to the codesign of a minimum viable capability with industry. The Ghost Shark program is ASCA’s “Mission Zero” and aims to deliver a stealthy, autonomous long‑range undersea capability to enable intelligence, surveillance, reconnaissance (ISR) and strike. The capability is being developed by Department of Defence and U.S.‑owned Anduril Australia. The program is seen as ASCA’s proof of concept, since it delivered its first prototype a year ahead of schedule with a pathway and funding to transition into service. However, Ghost Shark commenced pre-ASCA. So, ASCA’s second planned mission, following Ghost Shark, will offer a better test of how ASCA works from start to finish and areas of improvement. The second mission is expected to be focused on two different military problems: how to degrade and infiltrate advanced air defense systems to support long-range strike, and how to process and synthesize data to better use intelligence platforms. The next stage of the mission is in development, although the companies involved remain classified so as not to reveal to potential adversaries the solutions and capabilities being pursued. An industry expert is yet to be appointed to lead the mission.

Alongside missions, ASCA’s Innovation Incubation program aims to acquire new or commercial technology. The program focused its first innovation challenge on small and cost-effective aerial drones, which resulted in $1.2 million AUD in contracts across eleven companies. These have since been down selected to three companies to produce one hundred systems each. A second innovation challenge on electronic warfare is underway with the United States and the UK. ASCA will run a third innovation challenge in September with the Australian Army, seeking industry solutions on littoral operations. ASCA has retained a function to fund longer-term research through its Emerging and Disruptive Technologies program, with the initial priority on information warfare (synthetic media and disinformation).

In its first year, ASCA announced that it had signed around $200 million AUD (its full budget allocation) in contracts for over 160 companies, a majority of which are small or medium-sized enterprises. Around 25 percent of the funding ($50 million AUD) was for new ASCA work, with the remainder for legacy innovation programs. Moving forward, ASCA still needs to demonstrate its willingness and ability to attract talent into its ranks from research and the private sector to help drive missions and disrupt the organizational culture.⁶⁵ Its key measure of success, however, will be how quickly ASCA can either fail or succeed in supporting the development and fielding of new capabilities. Speed, scale, and effort are key, with the aim that at least some projects result in outcomes that make a difference to war fighters.

The Alliance Innovation Opportunity

On October 25, 2023, Biden and Australian Prime Minister Anthony Albanese “inaugurated a new era of U.S.-Australia strategic cooperation.” A hallmark of this era would be the pursuit of an “Innovative Alliance” through enhanced and wide‑ranging cooperation on critical and emerging technologies in areas like data and AI, clean energy, and space.⁶⁶ This follows a long legacy of scientific cooperation through the alliance across security, economic, and now climate and clean energy pillars, and in trusted multilateral groupings like the Five Eyes Technical Cooperation Program.

The United States recognizes it cannot work alone in building its capabilities and capacity to deter hostile actors in the Indo-Pacific.⁶⁷ The United States is seeking increased scientific cooperation and defense industrial integration with trusted allies like Australia to build a collective strategic advantage against potential adversaries like the PRC and strengthen the resilience of allied defense supply chains in the Indo-Pacific. The United States sees bilateral cooperation, and the AUKUS partnership, with Australia as part of its broader approach of “integrated deterrence,” which it defines as “working seamlessly across warfighting domains, theatres, the spectrum of conflict, all instruments of U.S. national power, and [its] network of Alliances and partnerships.”⁶⁸ In the nearer term, the greatest deterrence benefits of AUKUS are likely to arise from the rotation of American and British submarines through HMAS Stirling in Western Australia from 2027.

Laying the Foundations

AUKUS is now the flagship science and technology initiative of the United States-Australia alliance. Announced in September 2021, AUKUS initiated a step-change in the scope and substance of technological and industrial cooperation between the United States and Australia, as well as the UK.

• Pillar I aims to equip the Australian Defence Force with conventionally armed, nuclear-powered submarines, as early as the 2030s, to expand the individual and collective undersea presence of AUKUS partners in the Indo-Pacific. This will entail building or increasing the capacity of all three nations to produce and sustain nuclear-powered submarines.

• Pillar II supports broader military technological cooperation in areas like AI and autonomy, undersea warfare, and hypersonic systems, which (once integrated into military forces) could provide an asymmetric advantage on the battlefield, including enhancing the capabilities of nuclear-powered submarines. For example, AUKUS partners are sharing and integrating algorithms to analyze sound signatures of P-8 Poseidon aircraft used for roles like maritime ISR.⁶⁹ A Defense Investor Network of more than 300 venture capital firms and family offices collectively worth more than $265 billion has been established across AUKUS nations to spur financing opportunities for Pillar II projects.⁷⁰

For Australia, AUKUS has strong bipartisan support, and is seen as an initiative that must not fail, despite the complex and ever-present political, bureaucratic, regulatory, financial, and industry implementation risks. For the United States, the AUKUS partnership has bipartisan support, although Australia will likely need to work hard to sell its advantages to maintain support for all elements should there be a change of administration in the United States next year.⁷¹

A less immediately tangible but important element of AUKUS is improving the innovation and regulatory enablers to support joint research, production, and trade (see Case Study 3: AUKUS Innovation Challenge). Notably, AUKUS has provided the impetus for defense trade rule reform. In late 2023, the U.S. Congress passed the National Defense Authorization Act for FYr 2024, which provides a pathway for an historic export control exemption for Australia and the UK. In March 2024, Australia passed a reciprocal national exemption for the United States and the UK through the Defence Trade Controls Amendment Act 2024. The UK is pursuing similar exemptions through an AUKUS specific open general license. Together, these initiatives are expected to result in license-free trade for 70 percent of defense exports from the United States to Australia, and over 80 percent from Australia to the United States.⁷²

Notwithstanding the significance of in-progress export control reform, some of the historic impediments to closer allied integration created by the indiscriminate and extraterritorial reach of the ITAR will still exist. Thirty percent of trade without the AUKUS exemption falls onto the excluded technologies list. This includes items and services that may be relevant to Pillar II, like electronic warfare and uncrewed underwater vehicles, which will be subject to licensing requirements.⁷³ In such cases, the possibility of expedited treatment is being explored for AUKUS partners.⁷⁴ This will be important to address previous barriers that slowed and disincentivized collaborative capability development and technology transfer.⁷⁵

Culturally, implementation of defense trade control reforms once they are finalized later this year will be important to the success of AUKUS. Within the U.S. State Department, that will require a faster and more open approach to sensitive technology collaboration with AUKUS partners than in the past. However, more streamlined defense trade is occurring in a context where Australia, like the United States and the UK, faces persistent espionage threats to its defense industry, which are only likely to increase because of AUKUS. Indeed, the 2024 annual threat assessment by Australia’s director general of security revealed that a foreign intelligence service had offered “Australian defence industry employees money in return for reports on AUKUS, submarine technology, missile systems, and many other sensitive topics.”⁷⁶ Successful implementation of the defense trade reforms will require increased monitoring and assurances, especially from Australian and British partners, that U.S. technology will be protected (see Recommendation 4), building on existing industrial base security strategies.⁷⁷

Case Study 3: AUKUS Innovation Challenge

On March 26, 2024, AUKUS partners kicked off their first complementary set of innovation challenges on technologies and capabilities that support, or provide protection to AUKUS partners from, electromagnetic targeting. This challenge is an opportunity for each country to showcase what it can offer to a trilateral industrial base, especially for Australia as the smallest defense industrial player among the three AUKUS partners—but with cutting‑edge research and technology to contribute.

The challenges aim to foster government, industry, and academic collaboration on solutions to operational problems. They have a nearer term focus to develop solutions that could be fielded in a one- to three-year timeframe. According to Australia’s Chief Defence Scientist Tanya Monro, the launch will “quickly accelerate the best of the breed from each of our nations” and there will be a “regular drumbeat” of similar challenges.⁷⁸ Modest sums of money, around $150,000, will be awarded to winners of the first challenge in each nation. It is a start, but the small pools of funding mean scale is lacking. Even though researchers, startups, and small- to medium-size companies are likely the key audience, the innovation challenges are unlikely to incentivize defense primes—key sources of defense technology development—to operate within the innovation challenge construct.

While the outcomes of the first challenge are yet to be finalized, getting it off the ground shows that the hard work of closer defense industrial integration is underway. The three nations must first agree on a shared operational problem set, and then simultaneously organize their administrative and bureaucratic machinery to mobilize their academic and research sectors. The Australian government has described one objective of the challenge as learning “how each of our innovation systems work[s].”⁷⁹ Mutual understanding of each other’s systems is important, but the differing financial, legal, and administrative systems among the three partners mean that impediments to collaboration are likely to remain. Breaking down historic budgetary, bureaucratic, cultural, and technical barriers, among others, could be facilitated by more permanent exchange positions among the three countries into each other’s defense innovation accelerators at a senior enough level to drive change (see Recommendation 5).⁸⁰

While the winning solutions will be trilaterally available, there are no commitments to codevelop or coproduce solutions, at least not yet.⁸¹ The Australian government has said it is ultimately “a sovereign decision based on national interests”⁸² when it comes to how each AUKUS nation will use the solutions and whether they will fund further development. An ideal outcome would be U.S. and UK companies purchasing and fielding Australian solutions, and vice versa, as well as an increase in collaboration among research organizations in the AUKUS nations on defense-relevant research and development. This would prove the concept for AUKUS Pillar II in line with national leaders’ objectives to leverage each other’s strengths and more closely integrate the three industrial bases.⁸³

Conclusion

The dangerous geopolitical landscape is driving innovative approaches to defense science, technology, and innovation in both the United States and Australia, notwithstanding substantial differences in the scope and scale of these efforts. Through the alliance, and in broader Five Eyes contexts, defense science and technology cooperation between Australia and the United States is already wide-ranging. AUKUS initiated a step-change in the ambition, scale, and scope of defense cooperation into the most sensitive and advanced capability projects. Early work in the AUKUS partnership has focused on improving innovation and regulatory enablers to support joint research, production, and trade. Notably, promising defense trade rule reforms are being put in place to enable more seamless advanced capability collaboration and procurement between the two nations. AUKUS will continue to occupy a huge amount of energy between the two countries, particularly in Australia, to manage political, bureaucratic, financial, and industry risks associated with both Pillars I and II. This may mean there will be limited bandwidth, time, and money to develop and pursue new initiatives.

Nevertheless, near- and longer-term strategic risk necessitate a constant evolution in thinking and approach about what more both the United States and Australia can do to deliver on their shared political and strategic objectives. Learning from each other, and playing to each other’s strengths, could help frontload and expedite the work needed and better use capabilities and resources already at the countries’ disposal. The national contexts and reform agendas of both countries, especially the United States, provide lessons into issues like private sector financing of defense and dual-use technologies and acquisition approaches that can be used to strengthen alliance and AUKUS activities. The recommendations of this paper across issues of strategy, structure, investment, process, and security, aim to reinforce the likely success of existing collaborative defense science and technology initiatives. If implemented, they could help support the longer-term techno-industrial uplift of both countries needed to deter conflict in the Indo-Pacific and support a protracted strategic contest for military and technological leadership with countries like the PRC.

Notes

¹ “National Defense Strategy of The United States of America,” U.S. Department of Defense, October 27, 2022, https://media.defense.gov/2022/Oct/27/2003103845/-1/-1/1/2022-NATIONAL-DEFENSE-STRATEGY-NPR-MDR.PDF.

² “National Defence: Defence Strategic Review 2023,” Australian Government, 2023, https://www.defence.gov.au/about/reviews-inquiries/defence-strategic-review.

³ “Full Text of the Report to the Twentieth National Congress of the Communist Party of China,” Chinese Ministry of Foreign Affairs, 2022, https://www.mfa.gov.cn/.

⁴ Tom Shugart, “Trends, Timelines, and Uncertainty: An Assessment of the Military Balance in the Indo-Pacific: Testimony Before the Senate Foreign Relations Committee,” Center for a New American Security, March 17, 2021, https://www.cnas.org/publications/congressional-testimony/trends-timelines-and-uncertainty-an-assessment-of-the-military-balance-in-the-indo-pacific.

⁵ Kevin Rudd, “The Complex Challenges of Integrated Deterrence, China, and Taiwan,” Australian Embassy in the United States, April 10, 2024, https://usa.embassy.gov.au/node/386.

⁶ Vera Bergengruen, “How Tech Giants Turned Ukraine Into an AI War Lab,” TIME Magazine, February 8, 2024, https://time.com/6691662/ai-ukraine-war-palantir/.

⁷ “Q-CTRL to Partner with Defence on Quantum Navigation Technologies,” Q-CTRL, July 11, 2023, https://q-ctrl.com/blog/q-ctrl-to-partner-with-defence-on-quantum-navigation-technologies.

⁸ Edward Geist and Andrew J. Lohn, “How Might Artificial Intelligence Affect the Risk of Nuclear War,” RAND Corporation, 2018, https://www.rand.org/content/dam/rand/pubs/perspectives/PE200/PE296/RAND_PE296.pdf.

⁹ “The State of U.S. Science and Engineering 2024,” National Science Board, March 2024, https://ncses.nsf.gov/pubs/nsb20243.

¹⁰ “China has become a scientific superpower,” Economist, June 2024, https://www.economist.com/science-and-technology/2024/06/12/china-has-become-a-scientific-superpower, p.11.

¹¹ Dr Jennifer Wong-Leung, Stephan Robin and Danielle Cave, “Critical Technology Tracker,” Australian Strategic Policy Institute, 2024, https://techtracker.aspi.org.au/.

¹² Remco Zwetsloot et al, “China is Fast Outpacing U.S. STEM PhD Growth,” Centre for Security and Emerging Technology, August 2021, https://cset.georgetown.edu/publication/china-is-fast-outpacing-u-s-stem-phd-growth/.

¹³ “China is the West’s corporate R&D lab. Can it remain so?,” Economist, July 2024, https://www.economist.com/business/2024/07/18/china-is-the-wests-corporate-r-and-d-lab-can-it-remain-so.

¹⁴ Rishi Iyengar, “The Technocrat: Gina Raimondo has reshaped the Commerce Department for technological competition with China,” Foreign Policy, August 16, 2024, https://foreignpolicy.com/2024/08/16/gina-raimondo-us-china-tech-competition-chips-ai/.

¹⁵ “The State of U.S. Science and Engineering 2024,” National Science Board, March 2024, https://ncses.nsf.gov/pubs/nsb20243.

¹⁶ Luke A. Nicastro, “The U.S. Defense Industrial Base: Background and Issues for Congress,” Congressional Research Service, October 12, 2023, https://crsreports.congress.gov/product/pdf/R/R47751.

¹⁷ Elbridge Colby, “America Must Prepare for a War Over Taiwan: Beijing Ready Is the Best Way to Prevent a Fight With China, Foreign Affairs, August 10, 2022, https://www.foreignaffairs.com/united-states/america-must-prepare-war-over-taiwan.

¹⁸ Seth G. Jones ,“Empty Bins in a Wartime Environment: The Challenge to the U.S. Defense Industrial Base,” Center for Strategic & International Studies, January 23, 2023, https://www.csis.org/analysis/empty-bins-wartime-environment-challenge-us-defense-industrial-base.

¹⁹ Mark F. Cancian, Matthew Cancian and Eric Heginbotham, “The First Battle of the Next War: Wargaming a Chinese Invasion of Taiwan, Centre for Strategic & International Studies, January 9, 2023, https://www.csis.org/analysis/first-battle-next-war-wargaming-chinese-invasion-taiwan.

²⁰ Elizabeth Hoffman et al, “How Supporting Ukraine Is Revitalizing the U.S. Defense Industrial Base,” Centre for Strategic & International Studies, April 18, 2024, https://www.csis.org/analysis/how-supporting-ukraine-revitalizing-us-defense-industrial-base.

²¹ “Deputy Secretary of Defense Kathleen Hicks Keynote Address: ‘The Urgency to Innovate,” U.S. Department of Defense, August 28, 2023, https://www.defense.gov/News/Speeches/Speech/Article/3507156/deputy-secretary-of-defense-kathleen-hicks-keynote-address-the-urgency-to-innov/; “The Decisive Decade: Remarks by Secretary of Defense Lloyd J. Austin III at the Reagan National Defense Forum,” U.S. Department of Defense, December 3, 2022, https://www.defense.gov/News/Speeches/Speech/Article/3235391/the-decisive-decade-remarks-by-secretary-of-defense-lloyd-j-austin-iii-at-the-r/.

²² “Senate Committee Approves FY 2025 Defense Appropriations Bill,” U.S. Senate Committee on Appropriations, August 1, 2024, https://www.appropriations.senate.gov/news/minority/senate-committee-approves-fy-2025-defense-appropriations-bill; “Department of Defense Releases the President’s Fiscal Year 2025 Defense Budget,” U.S. Department of Defense, March 11, 2024, https://www.defense.gov/News/Releases/Release/Article/3703410/department-of-defense-releases-the-presidents-fiscal-year-2025-defense-budget/#:~:text=On%20March%2011%2C%202024%2C%20the,Act%20(FRA)%20of%202023.

²³ “National Defense Strategy of The United States of America,” U.S. Department of Defense, October, 2022, https://media.defense.gov/2022/Oct/27/2003103845/-1/-1/1/2022-NATIONAL-DEFENSE-STRATEGY-NPR-MDR.PDF, p.2.

²⁴ “State of Competition within the Defense Industrial Base,” U.S. Department of Defense, 2022, https://media.defense.gov/2022/feb/15/2002939087/-1/-1/1/state-of-competition-within-the-defense-industrial-base.pdf.

²⁵ “DoD Announces First Set of Projects to Receive Funding From the Pilot Program to Accelerate the Procurement and Fielding of Innovative Technologies,” U.S. Department of Defense, July 19, 2022, https://www.defense.gov/News/Releases/Release/Article/3098211/dod-announces-first-set-of-projects-to-receive-funding-from-the-pilot-program-t/.

²⁶ Brodi Kotila et al, “Strengthening the Defense Innovation Ecosystem,” RAND Corporation, 2023, https://www.rand.org/content/dam/rand/pubs/research_reports/RRA1300/RRA1352-1/RAND_RRA1352-1.pdf.

²⁷ Carley Welch, “Here’s how DIU will spend almost $1B this year,” Breaking Defense, June 20, 2024, https://breakingdefense.com/2024/06/heres-how-diu-will-spend-almost-1b-this-year/.

²⁸ Anastasia Orbis, “Senate appropriators want DoD to reassess RDER program,” Federal News Network, August 2, 2024, https://federalnewsnetwork.com/defense-main/2024/08/senate-appropriators-want-dod-to-reassess-rder-program/.

²⁹ “Private equity’s presence grows in US, EU defense sectors save for 2023 blip,” S&P Global, February 23, 2024, https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/private-equity-s-presence-grows-in-us-eu-defense-sectors-save-for-2023-blip-80538438/.

³⁰ “U.S. Department of Defense Launches National Security Innovation Capital With $15M Congressional Appropriation,” Defense Innovation Unit, September 14, 2021, https://www.diu.mil/latest/u-s-department-of-defense-launches-national-security-innovation-capital-with.

³¹ “National Defense Industrial Strategy,” U.S. Department of Defense, 2023, https://www.businessdefense.gov/docs/ndis/2023-NDIS.pdf, p. 34.

³² “Other Transactions Guide,” U.S. Department of Defense, July 2023, https://www.acq.osd.mil/asda/dpc/cp/policy/docs/guidebook/TAB%20A1%20-%20DoD%20OT%20Guide%20JUL%202023_final.pdf.

³³ “Defense Appropriations Bill, 2025,” U.S. House Committee on Appropriations, June 4, 2024, https://appropriations.house.gov/sites/evo-subsites/appropriations.house.gov/files/evo-media-document/fy25-defense-subcommittee-bill-summary.pdf.

³⁴ “DOD Increases Efforts to Bring Small Businesses Into Defense Industrial Base,” U.S. Department of Defense, March 24, 2023, https://www.defense.gov/News/News-Stories/Article/Article/3339784/dod-increases-efforts-to-bring-small-businesses-into-defense-industrial-base/.

³⁵ “Department of Defense: FY2023 Small Business Procurement Scorecard,” U.S. Small Business Administration, 2023, https://www.sba.gov/agency-scorecards/scorecard.html?agency=DOD&year=2023.

³⁶ “Hicks Announces Delivery of Initial CJADC2 Capability,” U.S. Department of Defense, February 21, 2024, https://www.defense.gov/News/News-Stories/Article/Article/3683482/hicks-announces-delivery-of-initial-cjadc2-capability/.

³⁷ “Hicks Announces Delivery of Initial CJADC2 Capability,” U.S. Department of Defense, February 21, 2024, https://www.defense.gov/News/News-Stories/Article/Article/3683482/hicks-announces-delivery-of-initial-cjadc2-capability/.

³⁸ “Defense Budget Overview,” U.S. Department of Defense, March 2024, https://comptroller.defense.gov/Portals/45/Documents/defbudget/FY2025/FY2025_Budget_Request_Overview_Book.pdf, Chapter 4, p. 20.

³⁹ “Replicator,” Defense Innovation Unit, 2024, https://www.diu.mil/replicator.

⁴⁰ “Defense Budget Overview,” U.S. Department of Defense, March 2024, https://comptroller.defense.gov/Portals/45/Documents/defbudget/FY2025/FY2025_Budget_Request_Overview_Book.pdf, Chapter 4, p. 20.

⁴¹ “US Plans to Turn Taiwan Strait Into ‘Unmanned Hellscape’ if China Invades: Top Admiral,” South China Morning Post, June 11, 2024, https://www.scmp.com/news/world/united-states-canada/article/3266092/us-plans-turn-taiwan-strait-unmanned-hellscape-if-china-invades-top-admiral.

⁴² Stacie Pettyjohn, Hannah Dennis and Molly Campbell, “Swarms over the Strait,” Center for a New American Security, June 20, 2024, https://www.cnas.org/publications/reports/swarms-over-the-strait.

⁴³ Mark Valentine, “The Replicator Program is right: The Time for Small, Smart, Survivable Drone Fleets Is Now,” Skydio, September 13, 2023, https://www.skydio.com/blog/the-replicator-program-is-right-the-time-for-small-smart-survivable-drone-fleets-is-now. 

⁴⁴ Courtney Albon and Stephen Losey, “Production capacity, readiness key to Replicator success,” C4ISRNET, September 14, 2023, https://www.c4isrnet.com/battlefield-tech/2023/09/14/production-capacity-readiness-key-to-replicator-success/.

⁴⁵ Andrew Cote, “Ukraine Invented the Drone War. The US Can’t Fight One Without Chinese Equipment,” Defense Post, October 13, 2023, https://www.thedefensepost.com/2023/10/13/drone-war-chinese-equipment/?expand_article=1.

⁴⁶ Greg Ip, “The U.S. Can Afford a Bigger Military. We Just Can’t Build It,” Wall Street Journal, December 6, 2023, https://www.wsj.com/economy/the-u-s-can-afford-a-bigger-military-we-just-cant-build-it-7edd0e74.

⁴⁷ “Re: Hearing: “Can it Work? Outside Perspectives on DOD’s Replicator Program,” Association for Uncrewed Vehicle Systems International, October 17, 2023, https://www.auvsi.org/sites/default/files/CITI-HEARING-CAN%20IT%20WORK-OUTSIDE-PERSPECTIVES-ON-DOD%27S-REPLICATOR%20PROGRAM-AUVSI-Testimony-for-the-Record.pdf.

⁴⁸ “Whitepaper: AUVSI Partnership for Drone Competitiveness,” Association for Uncrewed Vehicle Systems International, 2024, https://www.auvsi.org/sites/default/files/AUVSI-Partnership-for-Drone-Competitiveness-White-Paper.pdf.

⁴⁹ “Re: Hearing: “Can it Work? Outside Perspectives on DOD’s Replicator Program,” Association for Uncrewed Vehicle Systems International, October 17, 2023, https://www.auvsi.org/sites/default/files/CITI-HEARING-CAN%20IT%20WORK-OUTSIDE-PERSPECTIVES-ON-DOD%27S-REPLICATOR%20PROGRAM-AUVSI-Testimony-for-the-Record.pdf; Matt Berg, “’Disorganized and confusing’: Lawmakers, industry rip Pentagon plans for drones,” Politico, December 17, 2023, https://www.politico.com/news/2023/12/17/pentagon-drones-replicator-program-funding-00132092.

⁵⁰ Georgina DiNardo, “Saronic raises $55M for autonomous ships amid DOD’s Replicator push,” Inside Defense, October 10, 2023, https://insidedefense.com/daily-news/saronic-raises-55m-autonomous-ships-amid-dods-replicator-push.

⁵¹ David Peever, “Defence Innovation Review,” 2021, released by the Department of Defence under Freedom of Information Act request number 231/22/23, https://www.defence.gov.au/sites/default/files/2023-03/defence_foi_231_2223_final_document_for_release.pdf.

⁵² “National Defence: Defence Strategic Review,” Australian Government, Canberra, April 24, 2023, https://www.defence.gov.au/about/reviews-inquiries/defence-strategic-review, p. 72.

⁵³ Jennifer Jackett, “Laying the Foundations for AUKUS: Strengthening Australia’s High-Tech Ecosystem in Support of Advanced Capabilities,” United States Studies Centre, Sydney University, 2022, https://www.ussc.edu.au/strengthening-australias-high-tech-ecosystem-in-support-of-advanced-capabilities.

⁵⁴ “Shots on Goal: A Strategy for Global Success in Tech,” Technology Council of Australia, Canberra, 2023, https://techcouncil.com.au/wp-content/uploads/2023/07/Shots-on-Goal-vF.pdf, p. 6.

⁵⁵ “Country & Product Complexity Rankings,” Growth Lab, Harvard University, 2024, https://atlas.cid.harvard.edu/rankings.

⁵⁶ “Gross domestic spending on R&D,” Organisation for Economic Cooperation and Development, 2024, https://www.oecd.org/en/data/indicators/gross-domestic-spending-on-r-d.html.

⁵⁷ “Barriers to Collaboration and Commercialisation,” Industry, Innovation and Science Australia, Australian Government, Canberra, 2023, https://www.industry.gov.au/sites/default/files/2023-11/barriers-to-collaboration-and-commercialisation-iisa.pdf, p.11.

⁵⁸ 5-year Productivity Inquiry: Advancing Prosperity, 2023, Inquiry report – volume 1, Productivity Commission, Australian Government, Canberra, 2023, https://www.pc.gov.au/inquiries/completed/productivity/report/productivity-volume1-advancing-prosperity.pdf.

⁵⁹ “Barriers to Collaboration and Commercialisation,” Industry, Innovation and Science Australia, Australian Government, Canberra, 2023, https://www.industry.gov.au/sites/default/files/2023-11/barriers-to-collaboration-and-commercialisation-iisa.pdf, p. 17.

⁶⁰ “Barriers to Collaboration and Commercialisation,” Industry, Innovation and Science Australia, Australian Government, Canberra, 2023, https://www.industry.gov.au/sites/default/files/2023-11/barriers-to-collaboration-and-commercialisation-iisa.pdf, p.11

⁶¹ Martin Callinan. et al, “Defence and Security R&D: A Sovereign Strategic Advantage,” Australian Strategic Policy Institute, Canberra, 2019, https://ad-aspi.s3.ap-southeast-2.amazonaws.com/2019-01/SR%20133%20Defence%20and%20security%20R%26D_0.pdf?VersionId=GfF5UBmvPp.lxJfDypxHAzbu3phlb5zj; “Delivering for Tomorrow: APS Workforce Strategy 2025,” Australian Government, Canberra, 2021, https://www.apsc.gov.au/sites/default/files/2021-03/APS_Workforce_strategy.pdf; “The APS Mobility Framework,” Australian Public Service Commission, April 29, 2021, https://www.apsc.gov.au/initiatives-and-programs/aps-mobility-framework#current-state-of-mobility.

⁶² Joseph Brookes, “Defence Opens Up On Its Innovation Imperative,” InnovationAus, June 24, 2024, https://www.innovationaus.com/defence-opens-up-on-its-innovation-imperative/#:~:text=Defence%20has%20put%20local%20dual,that%20is%20demanding%20capability%20sooner..

⁶³ Jennifer Jackett, “Defence Innovation and the Australian National Interest,” Black Swan Strategy Paper, University of Western Australia Defence & Security Institute, Perth, June 2023, https://defenceuwa.com.au/wp-content/uploads/2023/06/Black-Swan-Strategy-Paper-Issue09_Defence-Innovation.pdf.

⁶⁴ David McKeague, “Powering industry development with venture capital,” InnovationAus, August 23, 2022, https://www.innovationaus.com/powering-industry-development-with-venture-capital/; Hayley Channer and John Kunkel, “UPSCALE: Using Private Sector Capital for the Alliance,” United States Studies Centre, Sydney University, October 5, 2023, https://www.ussc.edu.au/upscale.

⁶⁵ Jennifer Jackett, “Defence Innovation and the Australian National Interest,” Black Swan Strategy Paper, University of Western Australia Defence & Security Institute, Perth, June 2023, https://defenceuwa.com.au/wp-content/uploads/2023/06/Black-Swan-Strategy-Paper-Issue09_Defence-Innovation.pdf.; David Peever, “Defence Innovation Review,” 2021, released by the Department of Defence under Freedom of Information Act request number 231/22/23, https://www.defence.gov.au/sites/default/files/2023-03/defence_foi_231_2223_final_document_for_release.pdf.

⁶⁶ “United States-Australia Joint Leaders’ Statement: Building an Innovation Alliance,” White House, October 25, 2023, https://www.whitehouse.gov/briefing-room/statements-releases/2023/10/25/united-states-australia-joint-leaders-statementbuilding-an-innovation-alliance/.

⁶⁷ “Remarks by President Biden Before the 76^th Session of the United Nations General Assembly,” White House, September 21, 2021, https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/09/21/remarks-by-president-biden-before-the-76th-session-of-the-united-nations-general-assembly/.

⁶⁸ “National Defense Strategy of The United States of America,” U.S. Department of Defense, October, 2022, https://media.defense.gov/2022/Oct/27/2003103845/-1/-1/1/2022-NATIONAL-DEFENSE-STRATEGY-NPR-MDR.PDF, p.1.

⁶⁹ “The Hon Pat Conroy MP: Q&A 2024 ASPI Defence Conference,” Australian Government, June 4, 2024, https://www.minister.defence.gov.au/transcripts/2024-06-04/qa-2024-aspi-defence-conference.

⁷⁰ “AUKUS Defence Investor Network launches,” Asia-Pacific Defence Reporter, December 11, 2023, https://asiapacificdefencereporter.com/aukus-defence-investor-network-launches/.

⁷¹ Jennifer Jackett and Justin Bassi, “Four lessons for four more years of Trump,” The Strategist, Australian Strategic Policy Institute, July 22, 2024, https://www.aspistrategist.org.au/four-lessons-for-four-more-years-of-trump/.

⁷² “AUKUS countries export licence-free environment takes flight,” Department of Defence, Canberra, May 1, 2024, https://www.defence.gov.au/news-events/releases/2024-05-01/aukus-countries-export-licence-free-environment-takes-flight#:~:text=Australia%2C%20the%20United%20Kingdom%20and,export%20controls%20between%20AUKUS%20partners.

⁷³ “International Traffic in Arms Regulations: Exemption for Defense Trade and Cooperation Among Australia, the United Kingdom, and the United States,” May 1, 2024, https://www.federalregister.gov/documents/2024/05/01/2024-08829/international-traffic-in-arms-regulations-exemption-for-defense-trade-and-cooperation-among; Tom Corben, “Even with intended reforms, US defence trade rules threaten AUKUS cooperation,” The Strategist, ASPI, Canberra, June 18, 2024, https://www.aspistrategist.org.au/even-with-intended-reforms-us-defence-trade-rules-threaten-aukus-cooperation/.

⁷⁴ David R. Allman et al, “State Department Aims to Streamline Export Controls for Future Collaboration Among the United States, United Kingdom and Australia,” K&L Gates, May 7, 2024, https://www.klgates.com/State-Department-Aims-to-Streamline-Export-Controls-for-Future-Collaboration-Among-the-United-States-United-Kingdom-and-Australia-5-7-2024.

⁷⁵ Tom Corben and William Greenwalt, “Breaking the barriers: Reforming US export controls to realise the potential of AUKUS,” United States Studies Centre, Sydney University, May 17, 2023, https://www.ussc.edu.au/breaking-the-barriers-reforming-us-export-controls-to-realise-the-potential-of-aukus.

⁷⁶ “ASIO Annual Threat Assessment 2024,” Mike Burgess, Director-General of Security, Australian Government, 2024, https://www.oni.gov.au/news/asio-annual-threat-assessment-2024.

⁷⁷ “Defence Industry Development Strategy,” Department of Defence, Canberra; “Defense Industrial Base Cybersecurity Strategy 2024,” Department of Defense, March 21, 2024, https://media.defense.gov/2024/Mar/28/2003424523/-1/-1/1/DOD_DOB_CS_STRATEGY_DSD_SIGNED_20240325.PDF.

⁷⁸ Brandon How, “AUKUS innovation challenge in Defence’s industry export plans,” InnovationAus, February 29, 2024, https://www.innovationaus.com/aukus-innovation-challenge-in-defences-industry-export-plans/.

⁷⁹ “AUKUS Electronic Warfare Innovation Challenge: Australian Market Briefing,” Advanced Strategic Capabilities Accelerator, Department of Defence, April 2024, https://www.asca.gov.au/sites/default/files/2024-04/AUKUS-EW-Innovation-Challenge-Market-Briefing-Presentation_0.pdf.

⁸⁰ Jennifer Moroney et al, Overcoming Barriers to Working with Highly Capable Allies and Partners in the Air, Space, and Cyber Domains: An Exploratory Analysis, RAND Corporation, Santa Monica, California, 2023.

⁸¹ “Launch of AUKUS Pillar II’s first trilateral innovation challenge,” Australian Government, March 26, 2024, https://www.defence.gov.au/news-events/releases/2024-03-26/launch-aukus-pillar-iis-first-trilateral-innovation-challenge.

⁸² “AUKUS Electronic Warfare Innovation Challenge: Australian Market Briefing,” Advanced Strategic Capabilities Accelerator, Department of Defence, April 2024, https://www.asca.gov.au/sites/default/files/2024-04/AUKUS-EW-Innovation-Challenge-Market-Briefing-Presentation_0.pdf.

⁸³ “AUKUS Defence Ministers’ Joint Statement,” April 9, 2024, Australian Government, https://www.minister.defence.gov.au/statements/2024-04-09/aukus-defence-ministers-joint-statement.