Page 55 - Australian Defence Magazine June 2022

JUNE 2022 | WWW.AUSTRALIANDEFENCE.COM.AU
SMALL TO MEDIUM ENTERPRISES DEFENDTEX 55
ADM spoke with CEO Travis Reddy about DefendTex’s experience as an SME in Australia, including some of the challenges around commercialisation and export.
ADM: What are the barriers you face with Defence’s ca- pability procurement process and how do you think that process can be improved for SMEs?
REDDY: We’re a big recipient of projects out of the Defence Innovation Hub (DIH), and we’ve also been supported through Sovereign Industry Capability grants and other types of funding through what was the
competing in the US market is difficult because the US tends to buy things made in the US. The UK is far more open and accessible, and indeed the UK is our largest ex- port market by far for that reason.
We have to be able to prove ourselves as Australian defence industry. There are sound social, economic and national se- curity reasons for Australian industry content requirements. But how can we prove ourselves if we can’t export? The easi- est way for DefendTex to prove that the systems are valuable is to export them to a conflict area to validate that they are
Centre for Defence Industry Capability (CDIC), now the Office of Defence In- dustry Support (ODIS). So, there’s been a lot of support from government to get capability developed, but what we’re not seeing specifically is a transition from developing capability into the acquisi- tion of capability.
“THERE’S BEEN A LOT OF SUPPORT FROM GOVERNMENT TO GET CAPABILITY DEVELOPED, BUT WHAT WE’RE NOT SEEING SPECIFICALLY IS A TRANSITION FROM DEVELOPING CAPABILITY INTO THE ACQUISITION OF CAPABILITY”
operationally relevant. If DEC restrict the ability to do that, we have a chicken and an egg problem. And honestly, it’s not Defence that causes that problem, that problem is caused by Foreign Affairs and Trade.
There’s a whole innovation journey there and that innovation journey is disconnect- ed from the acquisition journey, and none of that is connected to the export oppor- tunities, which is where the problem lies.
ADM: What would you like to see moving forward from Defence to rectify that? REDDY: The Capability Acquisition and Sustainment Group (CASG) needs to be
The DIH is a very good example of
that, where money goes in through the
innovation budget to develop a new ca-
pability. Yet there’s no clearly identified
pathway from the objectives of the DIH
project to an acquisition. If it doesn’t
lead to an acquisition, you have to question: what is the point of investing the money in the R&D in the first place? Innovation for innovation’s sake doesn’t really achieve much.
involved in the Defence Innovation Hub, without a doubt, from the start. If the capability managers within CASG don’t see the opportunity for a product to enter into service if successful, then we should be saving precious innovation money and spending it just where we need it.
CASG like to buy things that have been proven. Yet, you can’t have proof with innovation. You’re either going to be first, and you’re going to be forward leaning and adapt new technologies, or you’re going to follow in the footsteps of others. And at the moment, I don’t see unity of purpose be- tween those two approaches of innovation and acquisition of proven and interoperable systems.
Australia is very good at innovating but typically, Austra- lian companies have been very poor at covering that ‘valley of death’ – the time between an innovation maturing to the
Our particular approach to this is that we use the DIH for our lower TRL (Technology Readiness Level) development, uptosayTRL7.AfterthatwegototheUKandtheUSwho have demonstrated a preparedness to progress technology development and then to deploy it. The aim is that once it’s deployed with our allies it may lead to an acquisition again back through the ADF. This approach creates interoper- ability by first creating the need in allied markets, rather than driving it from the domestic market.
We have to understand Australia is a very small country. If we design product purely to be consumed by the ADF, that will never support a company of our size. We have to export or perish. And the export is where the challenges are.
ADM: Can you elaborate on those challenges?
REDDY: We’re finding particular challenges here around De- fence Export Control (DEC). Our products would easily be consumed in the Middle East market, but we can’t get per- mission to export to any of the Middle Eastern countries. I can’t sell to Saudi, I can’t sell to UAE, I can’t sell to Jordan. By closing off these markets, it makes it very difficult for a company like us to become an export company, to not be reliant on the ADF. There are a number of limitations as- sociated with confining exports to Five Eyes. For instance,
ABOVE LEFT: DefendTex is an Australian SME currently employing around 100 people
RIGHT: Drone 40 was first exhibited at Army Innovation Day in 2016 and has since been picked up by all Five Eyes countries
DEFENDTEX