An Australia DARPA would

need to do development as
well as research | The
Strategist
29 Jul 2021 and

An Australia DARPA would need to do development as

well as research

In a recent ASPI report, Robert Clark and Peter Jennings

argued for the establishment of an Australian version of
the US Defense Advanced Research Projects Agency
(DARPA). Conceptually, it’s a very good suggestion.
However, we need to think deeper about how to take
advantage of Australia’s pools of private capital, which are
among the largest in the world due to compulsory
superannuation. The problem isn’t just about overcoming
current budget allocation issues in universities. We need
to industrialise innovation and marry it to our strategic
purposes.

The need for a new approach to domestic innovation was

also raised in a Strategist post by Charley Feros that
posed a very relevant question: ‘Why is it so hard for
Australia’s innovators to win acceptance by Defence?’

The same question has been asked by innovative

Australian companies over decades. To answer it simply,
the Department of Defence sees local innovations as
carrying a higher risk than those coming from traditional
providers overseas. The DARPA proposal advanced by
Clark and Jennings is unlikely to overcome this dynamic.
Nothing turns the private capital tap off faster than when
the pathway of technology development and
commercialisation is obscured by opaque and uncertain
bureaucracy.

The 2016 defence industry policy statement recognised

the problem highlighted by Feros, promising that ‘Defence
will change its culture and business processes to
systematically remove barriers to innovation’. But not
much has changed. In fact, no substantive improvements
have occurred since the Howard government’s 1998
strategic policy statement with its claim that ‘Defence and
industry will create a culture of one team—Team Australia.’

The strategic environment, however, has changed, and it

is becoming increasingly less forgiving. In the past we
could promote technological superiority over potential
regional adversaries to offset our obvious lack of
numbers, but now we are likely to have neither qualitative
nor quantitative advantages.

So, we have two significant challenges in addressing this

innovation problem. The first is the Defence Department’s
culture. The proposal to form an Australian DARPA is
correct, but to house it within the Defence Science and
Technology Group, with its department-oriented
organisational structure and reporting lines, is unlikely to
produce the outcomes that the nation needs.

The other challenge is developing asymmetric capabilities

to help balance the operational equation, for which we
need rapidity and risk-taking. Hans Ohff and Jon Stanford
have also highlighted the need for asymmetric capability
development.

The answer to both challenges is to establish an

Australian DARPA, but to bypass Defence’s culture and
bureaucracy. We need an organisation that fosters
innovation through constructive risk-taking that
addresses the highest potential payoff and develops the
most forward-looking technology, not just research. This
means a focus on technology readiness levels 4–7.
It also means bringing in people from industry who
understand risk in an organisational structure that is agile
and not burdened with process-oriented bureaucracy. At
the very least, such an organisation would have to have
independence from Defence, with its own budget and its
own staffing arrangements outside of the Australian
public service. It would need to be free to set its own
goals and it should have direct reporting lines to the
defence minister or an appropriate junior minister.
Everything will flow from getting the right people in place.

An Australian DARPA could also take advantage of the

immense pools of private investment capital in Australia to
augment public funding. Public funding can still provide
the backbone of the activity, but private investment could
be sought on a case-by-case basis to increase the capital
available, or to potentially accelerate the process. Private
investors typically have a considerably greater propensity
for risk-taking than public-sector organisations, and
private investor funding would conceivably be available if
innovation projects were likely to result in commercial
returns in commercially attractive timeframes.

A public–private partnership approach is therefore

necessary, with clear terms and a framework that
recognises that it won’t be the usual master–servant
relationship, but a partnership with mutual recognition of
each other’s needs. Agreements would need to be
reached about how and for how long private capital would
be tied up, and what the rights for use would be on
conclusion.

This type of Australian DARPA could be tasked specifically

to investigate and develop asymmetric technologies
within a sovereign construct so that we have maximum
flexibility to address a rapidly changing strategic
environment. Given the strategic nature of sought-after
ends, potential developmental projects that could provide
asymmetric effects could be regularly sought from
academic institutions, research organisations and the
private sector.

Collaboration with alliance partners would need to be

judiciously assessed. In this increasingly dynamic regional
environment, we want to avoid being restricted in what we
can do by the US International Traffic in Arms Regulations
and US policy more generally.

The benefits of a DARPA-esque organisation in Australia

during this time of increasing regional tension would be
immense. We would be able to identify projects and
technologies that would provide asymmetric effects of
direct relevance to our force structure and our modus
operandi. We would be better placed to take control of our
own destiny rather than relying upon external parties. The
Australian Defence Force would directly benefit from
being in an improved operational position.

We could use these projects to build the nation’s industrial

capability and capacity, not only in the defence industry
but in our wider industrial base.

In addition, we could harness the largely untapped funds

of private investors for the national good and the
development of national capability. And we could
potentially contribute to the efforts of our allies by being a
source of innovation rather than just a consumer.

Graeme Dunk is a PhD candidate at the Strategic and

Defence Studies Centre at the Australian National
University. He is also the head of strategy at Shoal Group,
a defence-oriented company. James Kruger is a former
senior executive from Macquarie Group in Asia. He has
been a personal investor in several deep tech projects
arising out of university research including Cambridge
Quantum Computing, and is an investor and board
director of the ANU’s Quantum Brilliance. Image:
Department of Defence.