Providing significant amounts of Defence funding to Australia’s universities could drive urgent national security research while ensuring the survival of the institutions and reducing their dependence on large numbers of students from China.

A new ASPI paper urges the establishment of a formal partnership involving the Defence Department, defence industry and Australian universities via the creation of an Australian Defence Advanced Research Projects Agency, or Australian DARPA—based on the highly successful American model.

In An Australian DARPA to turbocharge universities’ national security research: securely managed Defence-funded research partnerships in Five-Eyes universities ^[1], authors Robert Clark, a former chief defence scientist, and ASPI’s executive director, Peter Jennings, say there is a significant opportunity to boost international defence scientific and technical research cooperation with ‘Five Eyes’ partners the United States, Britain, Canada and New Zealand. The UK plans to establish its own DARPA equivalent next year.

‘Central to this partnership proposal is the need to restructure current arrangements for Defence funding of Australian universities,’ the authors say. And that would contribute significantly to a vital restructuring of the university sector’s research funding model.

‘An Australian DARPA, with robustly managed security, will enhance research “cut-through” in the defence sector and the wider economy.’

It’s vital that this work, underpinned by a DARPA-like culture of urgency and innovation and with potential to affect several portfolios beyond Defence, is championed at a senior government level, the authors say.

‘In the modern Australian system of government, that means the prime minister needs to be directly involved. Urgent means urgent. At least for the first few years of its life, an Australian DARPA should, in our view, report through Defence to the Prime Minister and the National Security Committee of Cabinet.’

They say significant financial and security risks of our universities becoming overdependent on funding sources from the People’s Republic of China has become painfully obvious because of the Covid-19 pandemic’s restrictions on international students. That’s led to major university job losses, with more to come, and recent foreign interference investigations of researchers’ links to schemes such as the PRC’s Thousand Talents Plan recruitment program. Those risks and their consequences are further amplified by geopolitical tensions that show no sign of abatement.

The authors stress that the central issue isn’t about international students per se. ‘International students, particularly from our ASEAN neighbours, have rightly been welcomed by our university sector dating back to the 1950 Colombo Plan. The problem is that what was once a diverse and proportionate international student cohort has grown to be significantly dominated by the PRC, and universities have locked their funding model on to that dominance to cross-subsidise research.

‘Further, our universities have pursued substantial and direct research funding from China. According to the peak body, Universities Australia, in 2018 there were 10,392 international agreements with our 39 tertiary institutions. The source of most agreements was China, with 1,741 agreements—nearly a fourfold increase in a decade. The US was a distant second, with 1,110 agreements.’

To complicate matters, the US is redefining the role of universities to include being an important part of the national security enterprise and thus subject to stronger regulation and oversight. Other nations are likely to follow.

‘In this hardened reality, the current largely open approach of Australian research universities to their international links is significantly exposed.’

The authors say there’s a view that the funding problem might be temporary, and that international students will return in numbers, particularly from China, but that is unlikely before a significant restructure of the university sector is required to meet the substantial projected funding shortfalls for 2021 and 2022.

‘Even if that were the case, does the Australian Government, the Australian public or the sector want to continue to carry the inherent financial and sovereignty risks of a return to the status quo ante, in which the impact of a pandemic could so easily be replicated by a future geopolitical incident? In our view, we’re in a “call to action” situation, in which the PRC-dependency of our university sector needs to be unlocked.’

They say more careful assessment and stronger direction by university management are needed to ensure that key ‘dual-use’ research areas—areas with potential military and civil applications—can make stronger contributions to Australia’s national and economic security.

The central issue for the university sector is financial, the authors say, and all roads lead back to sourcing necessary levels of research funding. Significant cross-subsidisation of research predominantly by international student fees from the PRC and direct research funds from PRC sources and programs has produced rivers of gold that have grown Australian universities and, to a limited extent, increased their world rankings.

‘For that financial dance, the music has stopped. We judge that, for strategic reasons, there will be no easy or quick return to that business model. Even if a return to easy cooperation with the PRC were possible, it wouldn’t be desirable for our universities to reinforce our dependence after we’ve seen Beijing’s willingness to use such dependence as a coercive instrument to “punish” Australian policy independence,’ they say.

‘We can’t lose sight of the necessity to maintain a strong and sovereign university research base with the capacity to support industry, the community and national security. This is clearly important for Australia’s future and can’t be allowed to fail.’