Geopolitics and technological innovation are transforming the economic base on which nations build national security. They are also transforming how Australia relates to its closest allies, particularly the United States.

National security no longer rests on fielding operational weaponry alone; it requires the ability to link warfighters in all domains of conflict—sea, air, land, space and cyber—with actionable information from global arrays of sensors, through fast, resilient and secure networks.

Geostrategic competition has also changed. In contrast to the Cold War with the Soviet Union, today Australia, the US and their allies face a Chinese competitor that is their peer not only militarily, but also technologically and economically.

Policymakers in the US and Australia must recognise that circumstances are changing the ways in which governments and militaries relate to their economies—and the ways allies relate to each other. This new environment presents Australia with both a strategic imperative and an enormous commercial opportunity.

The unprecedented scale of the Chinese challenge is transforming a US national security system that was built to counter the Soviet threat. During the Cold War, the US system grew to reflect its Soviet rival in its bureaucratic weight and wastefulness. China’s rise has forced US policymakers to recognise that this system is no longer fit for purpose. Transformation in the US will affect Australia directly.

The most striking feature of the plodding US defence system is its disconnection from the underlying US economy that generates consistent waves of disruptive technological innovation. Responding to China, US policymakers seek to reconnect national security to the dynamic commercial sector.

This means adapting technologies of the hyperconnected commercial world for military use. US defence planners are harnessing the latest commercial technologies to magnify the speed, agility and lethality of forces. They are drawing forces together in a ‘joint all-domain warfighting concept’.

The backbone of this posture is a decentralised, artificial-intelligence-driven joint all-domain command and control system that uses a resilient, space-based network to link ‘every sensor to every shooter’ with actionable information. Building this military internet of things requires that the Pentagon access Silicon Valley’s latest gadgets and motivate companies to solve the most pressing defence problems—without stifling innovation.

To attract innovators and private investors, each of the US armed services has constructed an alternative acquisition agency equipped with unconventional contracting authorities: the air force created AFWERX, the special forces have SOFWERX, the navy has NavalX and the army has the Army Futures Command. There’s also the Defense Innovation Unit, which covers the defence and intelligence communities.

Pentagon leaders have special plans for the new US Space Force, which stands at the centre of the emerging joint all-domain force. Rather than giving it an adjunct Silicon Valley agency, they are waging a battle against defenders of the status quo to build an entirely new acquisition system. The aim is to bypass the dysfunctions of the Cold War–spawned Pentagon–Congress nexus and construct channels directly between the space force and the innovative, ‘new space’ commercial sector.

A joint all-domain strategy, of course, does not sit easily within the geographical boundaries of national borders. At the same time, a decade of state-sponsored attacks and disinformation operations demonstrates that geostrategic competition has become transnational.

The joint all-domain concept is also transforming alliances. US policymakers no longer believe they can win alone in a competition with China. The logic of a joint all-domain security system—and its underlying technologies—is expansive; it draws allies and the data they generate into a network. Recognising the new network logic of alliances, Congress redefined the US national technology and industrial base in 2016 to include Australia and the UK. In doing so, it sought to expand the material, technological and innovation base on which security is built.

Recent events indicate that Australia cannot sit on the geostrategic sidelines, and no palatable or practicable alternative exists to integration into the joint all-domain system. A free and open Australian society and an international system organised to support the Chinese Communist Party elite are incompatible. Only a US-led coalition can marshal the material, ideal and leadership resources to sustain a liberal, rules-based alternative.

Embracing these developments as a ‘fast follower’ promises significant commercial rewards. The ‘iron triangles’ of Pentagon program offices, congressional committees and defence prime integrators that have a lock on conventional defence procurement in the US—and Australia—do not dominate emerging acquisition channels. This creates openings for innovative Australian businesses to offer solutions into the emerging joint all-domain security structure, a market with truly global reach. Recent Australian company successes demonstrate that US policymakers’ overtures ensuring these channels are open to allies are genuine.

To embrace the opportunities of the emerging system, Australia must engage US counterparts at three levels. First, at a strategic level, senior politicians and defence planners will need to discuss with the US and its allies how to integrate operational capabilities into a joint all-domain structure.

Engagement must also take place at the level of acquisition processes. US policymakers have discovered that a joint all-domain structure requires not only different capabilities, but also a completely different system for acquiring capabilities. Over the past five years, they have experimented with processes to accelerate the pace of innovation and procurement. Australian defence acquisition professionals can learn from, and import, this experience, but they can also link directly to it, by running joint procurement programs, where possible. It’s noteworthy that the venture capital organisation serving the US intelligence community, In-Q-Tel, was established in Sydney (and London) in 2019.

Finally, Australian government agencies can work with US counterparts to reduce barriers that inhibit the movement of capabilities between allies. This is a task where Austrade offers a powerful complement to the Defence Department’s Capability Acquisition and Sustainment Group and Defence Export Controls, the Department of the Treasury and the Department of Home Affairs. Charged under the defence export strategy with building Australia’s sovereign defence capabilities and defence exports, Austrade confronts daily the trade and investment barriers that inhibit the flow of companies, capital, labour and technology between Australia, the US and other allies.

Indeed, while the logic of joint all-domain operation points towards closer allied integration, Austrade’s work with tech companies shows geostrategic competition raising new barriers that are fast becoming the biggest challenge to this approach. To prevent adversary ownership, influence or control over sensitive technologies, critical infrastructure and personal data, the US, Australia, Canada, the UK and the EU have significantly increased their scrutiny of the national security implications of foreign investment. Similar measures in the US and elsewhere seek to mitigate the risks of adversarial influence in supply chains. While the motivations for such measures are laudable, their indiscriminate application captures desirable transactions (those between allies) as well as undesirable ones. In doing so, they threaten the rapid innovation and procurement on which a joint all-domain security system rests.

As a fast follower and one of the US’s most trusted allies, Australia can identify and raise these barriers with US counterparts and propose solutions that could be extended to other partners. That would not only serve Australia’s security interests, but also provide innovative Australian companies with commercial first-mover advantages in the emerging acquisition channels that will supply the US and its allies.