{"id":38788,"date":"2018-04-23T17:00:42","date_gmt":"2018-04-23T07:00:42","guid":{"rendered":"https:\/\/www.aspistrategist.ru\/?p=38788"},"modified":"2018-04-23T16:55:59","modified_gmt":"2018-04-23T06:55:59","slug":"defence-industrial-capability-plan-two-steps-forward","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/defence-industrial-capability-plan-two-steps-forward\/","title":{"rendered":"The Defence Industrial Capability Plan\u2014two steps forward"},"content":{"rendered":"<figure><img loading=\"lazy\" decoding=\"async\" width=\"640\" height=\"427\" class=\"size-full wp-image-38789 aligncenter\" src=\"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2018\/04\/Pyne-e1524465983191.jpg\" \/><\/figure>\n<p>Minister Christopher Pyne\u2019s launch today of the Defence Industrial Capability Plan continues the production of industry policy information and initiatives under the Turnbull government. Given the material already released, it is a pretty dense field\u2014including the 2016 Defence White Paper, the 2016 Defence Industry Policy Statement and the 2016 Integrated Investment Program (IIP), as well as the Naval Shipbuilding Plan of 2017 and the Defence Export Strategy released in January this year.<\/p>\n<p>So, what\u2019s new in this new plan? There are three main things:<\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">a tighter definition of Australian defence industry<\/span><\/li>\n<li><span style=\"font-weight: 400;\">a list of 10 \u2018sovereign industry capability priorities\u2019, along with a framework for making them mean something when it comes to force design and contracting<\/span><\/li>\n<li><span style=\"font-weight: 400;\">more information on the capability streams that make up the $200<\/span> <span style=\"font-weight: 400;\">billion IIP.<\/span><\/li>\n<\/ul>\n<p>Here\u2019s what each of these means and why they matter:<\/p>\n<p>As recently as the Defence Export Strategy, released in January this year, Australian defence industry was defined as:<\/p>\n<blockquote><p><span style=\"font-weight: normal !msorm;\">businesses with an Australian Business Number who are providing or have the capacity to provide defence-specific or dual-use goods or services in a supply chain that leads to the Australian Department of Defence or an international defence force.<\/span><\/p><\/blockquote>\n<p>That\u2019s a pretty low bar. It left whether or not a particular company had any real investment in Australia, apart from applying for an ABN, an open question for the companies themselves to decide.<\/p>\n<p>If you want to have substantive industrial capability in Australia to do defence work, the big end of town matters. Beyond leaving it to individual projects, incentives are required to make the large primes that operate Australian subsidiaries invest more in them over time. The new definition of Australian industry seems to be moving in this direction. It emphasises that companies must have domestic capability and investment to be considered part of the Australian defence industry.<\/p>\n<p>A test of the new policy will be whether it drives the big primes\u2014and international owners of other firms wanting to win defence work\u2014to put more equity into their Australian operations\u2014along the lines of Lockheed Martin Australia\u2019s Stela Lab, or Boeing\u2019s long-term partnership with the CSIRO as examples. A further test will be whether defence companies raise the level of their research and development investment, noting that some 35%\u00a0of firms in a recent survey said they didn\u2019t invest in R&amp;D.<\/p>\n<p>The 10\u00a0sovereign industrial capability priorities cover a wide range of activity and technology\u2014from shipbuilding to combat clothing.<\/p>\n<p>No doubt, various sectors and companies will be unhappy that they don\u2019t see themselves in the list. What\u2019s interesting about the list, however, is that the areas involved are by no means just the iconic big platforms\u2014ships, aircraft, land vehicles and submarines. Three (enhanced active and passive array radar; advanced signal processing capability; and surveillance and intelligence data collection analysis and dissemination) are all about data analysis, sensors and software that can be used across multiple platforms. One is about test and evaluation (so you know what the system you are buying can actually do) and one is even about maintenance (aerospace platform deep maintenance).<\/p>\n<p>Maybe the Defence white paper\u2019s insistence that Defence capability planners and project managers pay more attention to enablers, ICT and through-life sustainment is starting to take more effect.<\/p>\n<p>The $17\u00a0million per annum in grants available to develop sovereign industrial capability priorities is obviously not much, particularly when spread over 10\u00a0different areas. That makes the government\u2019s intent to include these priorities in everything from early force design thinking through to tender evaluation and the Australian industry capability plans of companies that win Defence work critical.<\/p>\n<p>Adding an extra factor to an already complex process can only be justified if the results show that it works. We should look forward to published data about the effectiveness of Defence\u2019s embrace of this new policy framework in the annual updates that the Minister promises.<\/p>\n<p>The last feature of the new plan is the new information published on each of the six \u2018capability streams\u2019 in the IIP (chapter 3 and Annex B). It\u2019s certainly welcome to see additional information published on the directions and expected industry opportunities for each stream in the $200\u00a0billion plan, as transparency in policy and implementation allows it to be understood.<\/p>\n<p>However, the published data still falls short of the key things that small and medium-sized firms in particular need to know: when is a big investment in a particular \u2018stream\u2019 likely to be made? How much money is being invested, and when? These factors are described as important in today\u2019s plan, although perhaps it\u2019s the job of future work, like the foreshadowed industrial strategies to be released from mid-2019, to provide this information.<\/p>\n<p>Overall, today\u2019s plan represents an advance in policy and transparency. It\u2019s real effectiveness will only be able to be judged by metrics and data published by Defence that give a picture of what is changing and help identify lessons learned\u2014the good and the bad.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Minister Christopher Pyne\u2019s launch today of the Defence Industrial Capability Plan continues the production of industry policy information and initiatives under the Turnbull government. Given the material already released, it is a pretty dense field\u2014including &#8230;<\/p>\n","protected":false},"author":766,"featured_media":38789,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[126],"class_list":["post-38788","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-defence-industry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Defence Industrial Capability Plan\u2014two steps forward | The Strategist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aspistrategist.ru\/defence-industrial-capability-plan-two-steps-forward\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Defence Industrial Capability Plan\u2014two steps forward | The Strategist\" \/>\n<meta property=\"og:description\" content=\"Minister Christopher Pyne\u2019s launch today of the Defence Industrial Capability Plan continues the production of industry policy information and initiatives under the Turnbull government. 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