Hostilities in Ukraine have continued to demonstrate the compelling case for unmanned aerial systems (UAS) on any future battlefield. Australian Industry must capitalise on this. Many Australian companies have the knowledge and capability to be world leaders in the still emerging UAS market. What industry is missing, however, is the high-level strategy and direction which would empower companies to take the risks required to develop and produce world-class capability. The Australian Government needs to implement a National UAS Strategy (NUASS) that ties together existing programs, incentivises investment in Australian technology, and supports export opportunities with the intent to promote Australia as a preferred security partner.
Current capability and policy
Australia has the demonstrated expertise and infrastructure available to become a world leader in UAS technology. There are currently Australian offerings at all categories of UAS capability. At the large and complex, high end of the scale is Boeing’s MQ-28A Ghost Bat. It is one of the highest profile UAS platforms with large scale applications. Designed to operate alongside manned aircraft or independently, the Ghost Bat is intended to provide combat mass and increase the effectiveness of human aircrew. Another Australian company – Insitu Pacific – has supported Australian ScanEagle customers for over a decade and was recently awarded a contract to locally manufacture and assemble the Integrator UAS for the Australian Army. The Integrator will provide intelligence, surveillance and reconnaissance (ISR) capability without the need for a runway. There are also other smaller-scale platforms being developed by Australian companies, one of these being DefendTex with their Drone40, a loitering UAS capable of providing kinetic and non-kinetic effects. Development of these systems has been funded by the Australian Government, and the British Army and US Marines are included as customers.
Despite the growth within the sector, government policy generally remains lacking. That said, there is a couple of notable attempts with certain government departments acknowledging the growth potential of the UAS market, and potential benefits for the Australian economy and defence sector. The Department of Defence for instance includes ‘Robotics, Autonomous Systems, and Artificial Intelligence’ as one of its Sovereign Industrial Capability Priorities (SICPs). While this is a good start, the priorities don’t acknowledge the breadth and depth of the industry, nor does the policy accurately convey the importance or large-scale applicability – especially considering that combat clothing and radar technology are SICPs in their own right.
The Queensland Government has developed a QLD Drone Strategy, which was released in 2018. Queensland’s vision is to make the state a “world leader in drone technology and application” and is supported by a $14.5 million investment in order to create a Flight Test Range. Possessing local test capability is critical to developing technology in a timely manner, while providing access to foreign companies will further attract investment and talent to the industry.
Scaling Industry Capacity
To successfully develop and produce military technology, a company must overcome two main challenges; high initial capital, and limited customer scope (relative to commercial technologies). These issues are compounded when viewed together. If a customer cannot or will not commit to buying a sufficient quantity, the required funding becomes less accessible and the product’s commercial viability is compromised.
Within a National UAS Strategy, the government can address these key issues in three ways. Firstly, through the provision of grants for assistance in covering large, one-off capital expenditures, such as the construction of manufacturing facilities. Initial start-up costs significantly extend the time to profitability and divert resources from R&D and business development.
Secondly, the government could then consider the use of tax credits and incentives. By reducing the tax burden for companies who are able to find military customers, they are guaranteeing additional future cash flow which helps these companies grow. This strategy also incentivises private investment.
Lastly, the Australian Government must trust these companies to solve problems that they themselves do not have the answers to and purchase equipment accordingly. The best examples of this are the successes of both Palantir and Anduril. These companies pitched independently developed products, solving problems that hadn’t yet been defined in engineering specifications and have become large prime contractors in their own rights. To say nothing of how this approach will drive innovation, local companies will have more opportunities to demonstrate proven technologies to a global market.
Through the implementation of these three options within a National UAS Strategy, the Australian Government could effectively signal to local industry that UAS technology is a long-term priority, and consequently provide a degree of certainty to invest in R&D.
The Australian User
A National UAS Strategy must also outline a concerted Government effort to purchase locally designed and built UAS to enhance ADF capability.
Sovereign production increases supply chain resilience and improves the ability to quickly replace combat losses in the event of conflict. According to Stockholm International Peace Research Institute, Australia is the world’s fourth largest arms importer, but only the sixteenth largest exporter. The use of the Javelin missile by Ukraine provides an insight into the risks of this imbalance. Between February and May 2022, the US provided approximately one third of its Javelin missiles to Ukraine, with the manufacturer Lockheed Martin stating it may take “a couple of years” to meet current demand. A sovereign UAS production capability would immediately reduce the risk to ADF personnel in a hostile environment and would further reduce our dependence on the US who may prioritise the replacement of its own assets.
Finally, a National UAS Strategy must seek to establish Australia as a security and UAS leader. Exporting Australian designed and built technology provides an opportunity to secure Australia’s position as a security leader, and partner of choice for nations across the globe. More importantly, we should establish the use case for countries closer to home in the Asia Pacific region. Within the pacific islands, UAS technology could be a cost-effective and simple option to address a number of security challenges they are currently faced with. UAS could offer an ISR capability to maintain situational awareness of their large ocean territories. Alternatively, UAS could provide logistical capability to supply remote communities, or mapping capabilities to monitor the effects of climate change.
A National UAS strategy presents a unique opportunity for the Australian Government. Consolidating and building on existing programs, incentivising R&D through grants, tax incentives and committing to purchase Australian technology will signal to companies and investors alike that UAS development is a risk worth taking.
The rapidly deteriorating strategic environment is reason enough to implement a National UAS strategy; however, the windows of opportunity in emerging markets are fleeting. If we do not act now, the nation will lose an important opportunity to grow Australian industry and secure our supply chains.
Tim Sullivan is an Officer in the Royal Australian Air Force. Prior to joining Defence, he spent time in the defence industry in both engineering and commercial roles. The views expressed are his alone and do not reflect the opinion of the Royal Australian Air Force, the Department of Defence, or the Australian Government. He can be found on LinkedIn.
This article was published recently on Central Blue.