‘Defence acquisition has to improve. We have to get equipment faster and we have to make sure we spend our limited funds on the best possible equipment, to give our troops a capability edge.’

— Minister for Defence Industry Pat Conroy, ABC interview ^[1], 28 April 2023

The Advanced Strategic Capabilities Accelerator ^[2] began operations on 1 July with an ambitious mission to address the shortcomings of the Defence Innovation Hub and the Next Generation Technology Fund. Prior to being replaced by ASCA, these two initiatives had been the focus of defence-related innovation for Australian industry, yet after seven years failed to transition their innovative projects into service with the Australian Defence Force.

Which raises a provocative question: does Australia have an innovation problem?

Initially, the Defence Innovation Hub appeared promising. It consolidated six different innovation programs into one streamlined portal and facilitated more than 150 contracts. It invested more than $240 million in innovative technologies developed by Australian primes, small and medium-sized enterprises, and academia.

And the outputs from those investments appeared good. Innovations sponsored by the Defence Innovation Hub have been supporting Ukraine against Russia’s illegal invasion, including the SYPAQ cardboard drones ^[3] and the DefendTex Drone40 ^[4]. That’s great for Australian exports. And it’s great for Ukraine. Yet it’s a failure for the ADF. Why? Because you won’t find a cardboard drone or a Drone40 in any Q-store of the ADF.

Australia doesn’t have an innovation problem. What we have is an innovation-adoption problem.

In 2021, the Peever review was commissioned ^[5] to look into the problem of how Defence-funded research and innovation could be more effectively commercialised. Fast-forward $2 million and one election cycle later, and Defence hid behind the implausible excuse that the report somehow wasn’t transferable ^[6]to the new government, regardless of its national security significance.

What was in the report we may never know, particularly as the freedom of information disclosure ^[7]presented very little for public consumption beyond some deadpan humour of life imitating art ^[8]. So what could have been the causes for poor commercialisation and the lack of adoption by Defence?

In part, the Defence Innovation Hub and Next Generation Technology Fund lacked alignment ^[9]with the specific technology needs of major projects, and in the few cases where there was alignment, Defence was reluctant to readily acquire the product upon the conclusion of the grant. Moreover, the schemes made it exceedingly difficult for the innovation needs of the grassroots warfighter to be considered due to unreasonable probity rules excluding engagement with serving ADF members.

Defence Industry Minister Pat Conroy recognised this as a problem when he announced the establishment of the ASCA, stating: ‘When the technology does get proven up … there’s an acquisition program to fund the commercialisation of it so that it doesn’t get forced to go overseas.’

But what does that look like in practice? While it’s commendable that ASCA is aligning innovation with pathways to acquisition, the procurement and sustainment of materiel capability for the ADF remains the responsibility of Defence’s Capability Acquisition and Sustainment Group.

Yet CASG is anything but an accelerator. The Australian National Audit Office regularly reports on defence procurement schedule overruns in its major projects report ^[10], with the latest published data indicating 405 months (33 years) of accumulated schedule slippage. Simple procurements are also exposed to astonishing delays; in one case, a civilian off-the-shelf safety beacon purchasable from any recreational boat shop took CASG an eye-watering 587 days to deliver to the warfighter. This is what the defence strategic review referred to as ‘capability acquisition … not fit for purpose’.

With such lethargy, how are we going to introduce into service quantum technologies, hypersonics or artificial intelligence? How does an organisation that takes a year and a half to purchase a commercial off-the-shelf item from BCF ^[11] reorganise to deliver at speed?

While reform is underway by Deputy Secretary Chris Deeble, Defence should increase its speed by broadening the definition of industry as a fundamental input to capability and utilising industry far earlier in the capability life cycle.

Every acquisition program carries technology risks that should be documented in a technology risk assessment ^[12] and reported to government as part of the Gate 1 approval process. Critically, the assessment should document ‘the risk that the project will not achieve its objectives due to an underpinning technology not maturing in the required timeframe’. If an acquisition program is carrying the risk of immature technology—also known as ‘low technical-readiness level’—why hasn’t that been informing Defence’s innovation priorities and investment?

The Defence Science Centre’s Defence Research Teaming ^[13] events and the Defence Innovation Network’s Sandpit workshops ^[14] have both been informally de-risking immature technological needs for land-domain projects in areas such as underwater communications, animal welfare and maritime projection. These specific problem statements are not only aligned to future acquisition, but also provide industry with actionable problems to solve, in contrast to previous descriptions of innovation priorities in such enigmatic detail as ‘Space’.

Defence must consider reforming the way technology risk assessments are treated. They shouldn’t be seen as just a box-ticking activity towards Gate 1, but rather a method to engage Australian industry to collaboratively de-risk future technology needs ahead of formal acquisition.

There’s hope that ASCA has been designed to address some of the criticisms ^[15]levelled at the Defence Innovation Hub. It has, for example, indicated that innovation proposals need to be targeted to problem statements ^[16]. Yet the outcomes from these programs require agreed and funded capability off-ramps into acquisition. With any innovation grant, the project directors from major projects (acquisition) and/or product schedules (sustainment) need to agree to issue limited tenders ^[17] if and when the innovation proves successful. Anything less is simply innovation theatre.

Some of the public discussion on reforming capability acquisition indicates a desire to lock cost and schedule, while relegating the final capability as the ‘dependant variable ^[18]’. How that will achieve the minister’s intent ‘to give our troops a capability edge’ is questionable.

Instead, to ensure that capability isn’t sacrificed, we should engage academia and industry through detailed problem statements, as has been proven by organisations like the Defence Science Centre and the Defence Innovation Network ^[19], which de-risk the technology needs for developmental projects—addressing a reported contribution ^[20] to schedule slippage. But to do so, we need Defence and CASG equally motivated to issue the follow-on purchase order and deliver at speed—not sometime in the next 587 days.