UPDATE: IN DETAIL – Defence to invest $3.4 billion in new defence accelerator

Deputy Prime Minister and Minister for Defence Richard Marles and the Minister for Defence Industry Pat Conroy MP with Chief Defence Scientist Professor Tanya Monro announcing the establishment of the Advanced Strategic Capabilities Accelerator. Image: Defence

Defence will invest $3.4 billion over the next decade to establish the Advanced Strategic Capabilities Accelerator (ASCA). The new Accelerator will replace the Defence Innovation Hub and Next Generation Technologies Fund (NGTF), which the Defence portfolio Ministers have said are no longer fit for purpose in Australia’s current strategic environment. The $3.4 billion budget includes some $557.5 million in additional funding over and above what it currently plans to spend on innovation over the decade.

“What this represents…is one of the biggest Defence investments in innovation in our country for decades,” said Minister for Defence Richard Marles to reporters in a press conference at Garden Island. “It is a game changer in terms of getting the brightest and best Australian technologies into operation. And ultimately that is our objective here.

“Central to this will be our ongoing work to operationalise Pillar Two of the AUKUS agreement, which seeks to develop and provide capabilities such as undersea warfare and hypersonics for Australia, the United Kingdom and the United States.”

However, ASCA and AUKUS Pillar 2 are quite separate, says Minister for Defence Industry Pat Conroy. While there may be an overlap, the ASCA core priorities were set following Defence advice: they will harness investment that delivers military advantage and asymmetric capabilities to the ADF.

Australia’s AUKUS Pillar 2 engagement is being handled by Defence’s Strategic Policy and International Engagement Division but there are overlaps with ASCA, Conroy acknowledges, telling EX², “I think there’s opportunities to work together.”

To be stood up at the start of the next financial year on 1 July, ASCA will have a phased start up over the first 18 months to develop, test and refine the operating model. It will be a key element of Defence’s innovation, science and technology program. Priorities for the program are hypersonics, directed energy, trusted autonomy, quantum technology, information warfare and long-range fires. These map well onto the AUKUS Pillar 2 technology priorities which differ only in their focus on Electronic Warfare and Cyber rather than long-range fires and directed energy.

“ASCA will do two things,” Conroy said. “It will help solve technology challenges for the ADF so that they get new advanced capabilities to give them greater firepower and greater protection. And secondly, it will grow the defence companies of the future.

“For this to work properly, we need to speed up the acquisition cycle and speed up the innovation cycle. So, we’ll be getting a yes faster. And importantly for defence industry, they’ll be getting faster no’s.”

The Accelerator will have three principal roles, Conroy told EX²: “The main one is working on missions that are specific and time-limited – typically, three years.” The main purpose of ASCA will be to tighten the link between defence innovation, or problem solving, and the ADF’s short-medium-term capability requirements. Defence has allocated $2.19 billion for this.

The second program is the invention incubation program which, says Conroy, “Is all about identifying innovations that can be rapidly adapted, tested and acquired for military purposes.” Defence has allocated $250 million for this activity.

The third role pf ASCA is the emerging disruptive technologies program – not dissimilar to DSTG’s existing EDTAS program – which will monitor, investigate and research technologies that may either disrupt existing capabilities or provide opportunities for the development of an asymmetric warfighting capability. Defence has allocated $610 million to this across the decade.

The remaining $350 million will be found by rolling up various externally facing innovation programs. Conroy noted that the US spends 13% of its defence budget on innovation; the UK spends about 7%. Before the announcement of ASCA Australia was spending about 3% on innovation.

The introduction of ASCA will be phased so that companies who have contracts under the Defence Innovation Hub, for example, will transition over to ASCA so they can complete their important work. Similarly, activities funded by the NGTF such as the Trusted Autonomous Systems Defence CRC and the development of the Ghost Shark Extra Large Autonomous Undersea Vessel (XL-AUV) will continue until they reach their planned termination stage.

At individual project level the ASCA innovation missions will be run jointly between an experienced senior defence scientist, someone from the services and someone from the Capability Acquisition Sustainment Group (CASG), said Conroy. And governance will be through a triumvirate of the Chief Defence Scientist, the Vice Chief of the Defence Force representing the services and the head of Capability Acquisition and Sustainment Group.

“This is a new way of working and we are focussed on making sure that we can provide that bridge between what industry can do and what our military need it to do,” said the Chief Defence Scientist, Professor Tanya Monro AC, who is head of DSTG. “So… our missions, which are the centrepiece of ASCA, will not kick off unless we’ve identified a transition path into acquisition. That does not mean they won’t fail and we’ll try and fail forward so that we understand what can go wrong early and make sure that our money is spent on things that will be used by our warfighters.”

“When we see innovative technology anywhere in our ecosystem, we’ll have the ability to procure it, to get it into the hands of our warfighters, to get it into exercises,” added Professor Monro. “What I want ASCA to do is to challenge the broader DSTG to move faster and with more urgency.”

Defence hasn’t said which innovation projects ASCA will pursue first, said Conroy: “Priorities will be based on the list of ASCA priorities,” he told EX², adding that industry engagement to help identify key missions in these priority areas will begin soon.

The ASCA investment acknowledges that Australia has lost the ten-year warning time cushion that had shaped previous Science and technology (S&T) policy. The DSR concluded that Australia needs more effective support for innovation, faster acquisition and better links between Defence and industry to deliver the capabilities the Australian Defence Force (ADF) needs.

“We can’t put large armies or navies into the field, but one thing we can do is invest in asymmetric technology,” Marles said. “And that, in many ways, is the most value for money investment that we can make. And we need to have a much greater focus on defence innovation as we go into the future.”

This has obvious implications for DSTG’s relationship with the ADF, to whom it has always been responsive. It’s not so much about bring DSTG closer to Defence, though that is a by-product, says Conroy: “I think it’s about bringing our defence innovation funding programs closer to the ADF.”

External innovation programs such as ASCA are going to be much more tightly related to ADF missions and capability needs and much more easily accessible says Conroy.  He has heard the criticism levelled at the Defence Innovation Hub in particular (and by implication the Capability and Technology Demonstrator (CTD) program before it): getting a DIH contract can be a torturous, lengthy process but all too often contract winners find when they have delivered that there is no acquisition project to fund the commercialisation of the technology in question. Companies have therefore sought overseas funding or the project has died in the so-called ‘Valley of Death’.

“The entire point of ASCA is that the $3.4 billion has to be totally focussed on supporting the capability requirements the ADF needs,” insists Conroy. And no innovation project will be supported, he adds, “unless there’s a capability manager saying ‘this can give us an advantage in three or five or seven years’ time.’ ”

There will then be an obligation for those capability managers to align the innovation project with an acquisition program to bring that innovation into operational service.

“It nails that capability manager’s feet to the floor,” said Conroy. “And then on top of that we have things like the National Reconstruction Fund (NRF) that can provide capital to help commercialise technology and grow companies and lead to Australian jobs.

“So for me this is about bringing the innovation aspects of the defence industry much closer to the ADF, and that’s to benefit both parties.”

Professor Monro added, “[ASCA] is focussed on Australia and Australian industry, but with that knowledge of where we in Australia have niche leading advantage so that we can play into global supply chains and so we can support Australian industry in being part of those global ecosystems.”