Delivering AUKUS Pillar 2: Now is the moment to unleash a truly allied private sector

It is a good time to reflect not only due to the anniversary, but also because in the intervening period we have again been reminded of the importance of enduring international relationships by the appalling development of longstanding geopolitical tensions into conflict, notably in Ukraine and the Middle East. Taken together with continued and deepening instability elsewhere around the world, and the long-term strategic threat still posed by China, AUKUS remains both as relevant as when it was announced and our best existing strategy to ensure that the UK and its allies are able to prosper in a more chaotic and uncertain world. 

Over the past two years, progress against the objectives of the AUKUS agreement have primarily been focused on Pillar 1: Supporting Australia’s acquisition of nuclear-powered submarines. Sadly, we have heard much less about how the allies are progressing Pillar 2: Cooperation on advanced capabilities.

Given the two pillars were designed to be complementary and to ensure that the AUKUS allies had both critical conventional and technological capabilities, which combined would reinforce an overall strategic advantage, it is a prerequisite of success that progression against both pillars is contemporaneous. Given the time frames involved in Pillar 1, making headway on Pillar 2 is where more immediate progress was anticipated and practically possible. Moreover, if the geostrategic situation we face as allies is at its very core a global techno-economic competition, the apparent absence of any tangible progress on Pillar 2 appears nothing short of negligent.

In the same period, industry has made huge strides in overcoming barriers, creating new trust mechanisms, sharing knowledge, building new partnerships, and sowing the seeds for what will be a competitive industrial base in the critical technologies that will deliver military advantage in the coming decades. At Adarga, we’ve just opened a new office in Austin, Texas to be closer to talent and US defence R&D centres, are expanding our existing footprint in Australia and having some exciting conversations with partner firms in our closest allied countries. AUKUS can’t happen without the private sector’s innovative zeal but there are both demand and supply side reforms that do need to happen in order for the AUKUS culture to flourish. This is both an important and an urgent issue. 

The importance is highlighted by the June update of the Australian Strategic Priorities Institute’s critical AUKUS technology tracker. This found that China is leading in high-impact research in 19 of the 23 technologies it tracks, when viewed on a country-by-country basis. When the high-impact research output of the three AUKUS partners was combined, this reduced to 15, showing both the value of greater integration of critical technological capabilities, but also the scale of the challenge our combined nations face. 

The urgency is evident from the investments in new technology that our adversaries are making and the speed at which AI and software-defined capabilities, among other emerging technologies, are developing. 

So, what do we need to do to respond to the importance and urgency of the Pillar 2 challenge, to ensure that we are closer to our objectives when the third anniversary comes around? 

This has to start with a much more concerted effort from the AUKUS partner governments towards faster adoption and integration not just of technological solutions in the defence and national security sphere, but of the foundations upon which those technological solutions are built. Technological progress does not happen in isolation. It is fuelled by innovative brilliance, technical and engineering know-how and, critically, money. Governments can, at times, provide some of this fuel, but its ability to do so is often limited and outsized by the formidable contribution potential of an unleashed private sector. What governments can do, however, is to set a much clearer demand signal and create the conditions both for the private sector to mobilise and for the delivery of this support to happen across borders unhindered. 

To deliver the ambition of Pillar 2 in the timeframes needed to build and preserve the allies’ strategic advantage, we must now see a concerted effort to integrate the foundations on which our technological progress will be built. This requires a reimagined and much more intimate relationship between the state and its technology builders in the private sector. It also means facilitating flows of skills, knowledge and financing into critical technologies. There have been promising signs in this regard, most notably President Biden’s attempt to amend the Defence Production Act (alongside measures to prevent funding and the most advanced chips from reaching China). But it is clear that more can be done to facilitate transfers of financing and skills, which will also achieve broader strategic ‘friendshoring’ goals that are shared across the British, American and Australian governments.  

This integration of the foundational elements must also be matched by adoption of the technologies themselves. To enable this to happen at pace we cannot wait for technologies to be developed and retrofit measures to enable them to be deployed. Instead, AUKUS standards need to be devised and made available to developers, to ensure that once a new technology is ready to be deployed it is not delayed by the need for further adaptations or unnecessary procedural bureaucracy. This will encourage companies to develop products which, from inception, are designed for use by the three militaries, which in turn provides a broader customer base, greater commercial opportunity and further incentives to innovate. ITAR and OGEL reforms are technocratic and tricky, but they are badly needed if true technology transfer is to take place across a technology life cycle. The three governments must also make better and more immediate use of available commercial technologies that have already “solved problems” in comparable private sector use cases. AUKUS also needs to become more clearly owned and defined by governments as a collective national security endeavour and not just be defence programme concepts.

Laying these foundations will be crucial to setting AUKUS Pillar 2 – and by association the AUKUS agreement – up for success. Without it, the AUKUS partners risk missing the opportunity to ensure that they build and maintain strategic advantage and, in turn, undermining our collective security in an increasingly unstable world. This is an ambitious shopping list I know, but it is one which will truly unleash some incredible collective industrial efforts, the prosperity effects of which will be to the benefit of all in society, not just the defence and security community.

Government committees, new civil service appointments, summits and meetings don’t write code or imagine and train new AI models. They don’t found and build companies, invest in emerging technologies, or invent novel solutions to the worlds hardest to solve problems. The fundamental basis of military power in our Information Age is our collective ability to innovate faster than our adversaries. If we are to deter those who oppose western values our strategic success can only be measured by the speed of technology adoption across this vital alliance. This is where industry has an opportunity to lead by example, setting the innovation pace for the alliance.

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