The US Department of Defense’s third offset strategy has prompted much discussion since it was first announced in November 2014. The strategy, which has been allocated a US$18 billion budget, aims to ‘offset’ growing Chinese and Russian military capability by investing in game-changing technologies, such as artificial intelligence and autonomous vehicles. Although much of that funding will no doubt end up in the hands of US government research agencies, private research institutes and tech companies, there are still significant opportunities for US allies and partners, including Australia.

In January 2015, Deputy Secretary of Defense, Bob Work, spoke ^[1] of the importance of interdependence with US allies to achieve the objectives of the third offset strategy. Work argued that, ‘It’s important that we look at this as an alliance. Each of our alliance members have certain key advantages or certain key things that they really, really are good at.’ Australian industry and research institutes offer a number of key advantages, something that has only become clearer in the period since the third offset was announced.

Recently, the Australian Defence Science and Technology Group (DSTG) announced a partnership ^[2] with Agent Oriented Software, Insitu and Deakin University to develop a prototype robotic teaming system that can autonomously monitor base perimeters. Capabilities such as this align with the third offset strategy’s goal of achieving a new era of human-machine collaboration ^[3]. The emphasis here isn’t on the exclusion of humans from military operations, but rather the teaming of humans with new autonomous machine capabilities.

There are many examples of Australian researchers and companies developing machines, platforms and IT systems that fit into the broad category of game-changing technologies. At the DSTG Emerging Disruptive Technologies Assessment Symposium ^[4] last year, a wide range of new capabilities currently in development were showcased. From autonomous unmanned surface vessels to cognitive sensor fusion, and swarm intelligence, there was a diverse array of Australian expertise and knowledge on display. Technological developments in those areas could make a valuable contribution to the third offset strategy and benefit from the significant funding channels that may become available through its large budget.

The third offset strategy could provide significant opportunities for Australian industry and research institutes, but how funding may be accessed is less clear. The Defense Department has already begun engaging industry within the US. Outreach offices are being established in Silicon Valley and Boston to encourage the development of capabilities with a defence application. Much of the funding will also be allocated internally to the Pentagon’s secretive research agencies, such as the Defense Advanced Research Projects Agency (DARPA). One of the most promising funding opportunities may come from the Office of Naval Research ^[5], which funds scientific research and industry internationally.

Despite the large amount of funding and a science fiction inspired vision of the future, the third offset isn’t without its critics. Writing for the National Interest, Dan Goure has argued ^[6] that the third offset is something of a smokescreen to hide the fact that the Obama administration is shrinking the size of the armed forces. The third offset has also been criticised for generating activity without an actual strategy to guide it ^[7]. Then there’s the issue of the upcoming US presidential election in November, which adds some uncertainty to the ongoing implementation of the strategy. Those are all valid concerns but they don’t undermine the potential impact the third offset may have for defence industry and research institutes, both in the US and abroad.

The impact of the third offset on Australian defence industry and research institutes hinges on effective engagement across the Pacific. Fortunately, Australia already plays host to a number of large US defence companies including Boeing, Raytheon and Lockheed Martin. Likewise, Australian defence companies and research institutes are expanding their presence in the American market and increasing cooperation with research partners.

To maximise Australia’s involvement in the third offset, engagement must also take place at a higher, government-directed level. That raises strategic questions about the nature of Australia’s alliance with the US, but cooperation in the development of new defence technologies would fit with the existing pattern of close military partnership. It may also enhance Australia’s access to emerging autonomous capabilities that would otherwise not be available. Cooperation with the US may result in technological and economic benefits that would be hard to reach if those capabilities were developed in isolation.

Whatever the future holds for the implementation of the third offset strategy, there’s little doubt that the Australian defence industry and research institutes have plenty to offer in the way of game-changing technological capabilities.