Page 24 - Australian Defence Magazine June 2021
P. 24

                    24 DEFENCE BUSINESS PARTNERING
JUNE 2021 | WWW.AUSTRALIANDEFENCE.COM.AU
  third share of the acquisition budget, industry will need to absorb approximately $7 billion of Defence spend.
That means that if Defence is to maintain its invest- ment in Australian products and services at approximately one third of the whole acquisition budget, within 10 years Australian industry will need to absorb around triple the spend that is currently invested today.
Government clearly has no intention to stop at one third Australian content. If the 60 per cent Australian Industry Content agreement between Defence and Naval Group for the Future Submarine Program is an indication (as outlined in the Department of Defence press release in March 2021), then we can expect the Australian industry spend to increase at least six-fold over the next 10 years if the budget spend with Australian industry hits 60 per cent in that period.
The challenge then, and also the opportunity for Aus- tralia, is two-fold.
1)Australian businesses need to transform, seek new mar-
kets and future proof themselves.
2)Defence, and the Defence industry, needs to unlock la-
tent Sovereign Industrial Capability that is already sit- ting within Australia to futureproof its high-level strate- gic agenda.
PUTTING THIS INTO CONTEXT
Growing the Australian industry capability in the Defence sector is serious business, and government is seriously in- vested in ensuring that it high level agenda is delivered.
So how can Defence and Australian industry partner, or join forces?
Let’s look at a hypothetical example of Aussie Foundry Pty Ltd, which have products and services (e.g. ferrous cast- ing, lab and heat treatment services, machining, parts en- gineering) that are critical for Defence projects and needs.
The company is an ideal partner for Defence because it: • is Australian-owned and operated – not just a post box
with an Australian ABN
• owns sizeable, scalable infrastructure in Sydney, locat- ed near a transport hub
• has developed specialist technical skills, and transferred them into a loyal and committed workforce
• has invested in training and re-skilling their teams
• has developed unique IP and solutions for over 60 years • continues to innovate and digitise through a university
partnership
• has a solid reputation of delivering complex materials to
industries with high assurance and technical require- ments in a number of adjacent industries.
The board of Aussie Foundry knows that if they don’t
adapt, and seek new markets, they may have to eventu- ally close their doors. Right now, they don’t have sufficient work to recruit and train more junior STEM workforce team members. The Aussie Foundry Board isn’t aware of just how important their latent capability for Defence ap- plications is to Defence and the ADF. Even if they were, they lack the know-how and know-who to access the de- fence market effectively.
Yet while the company may know about the opportunity and have done ‘a bit of work for Defence back in the day’, they have heard that dealing with Defence and their con- tracts and compliance requirements is such a headache they haven’t done a thing about it and don’t know whether it’s worth it at all these days.
Defence, on the other hand, has a mandate to grow sov- ereign shipbuilding, submarine and sustainment capabili- ties, and pivoting into the space domain (amongst others). Aussie Foundry’s products and services, and underlying capability, fits squarely within a number of the Sover- eign Industrial Capability Priorities, and the maritime and space domains – or market sectors as industry sees them. Yet they are not on Defence’s radar. In fact, Defence doesn’t even know Aussie Foundry exist.
Even if Defence did know they exist, teams in the seri- ously constrained Defence work force (program sponsors,
GETTY






































































   22   23   24   25   26