The Australian Industry Group has released a report today providing an industry perspective on AUKUS Pillar 2 – the security pact between Australia, the United Kingdom and the United States focussed on joint development of advanced capabilities.
Based on extensive consultations with industry stakeholders, the report finds that AUKUS Pillar 2 must evolve from a perceived policy-oriented initiative to a capability-focused program. While early steps have laid an excellent foundation through policy reforms, export control alignment and innovation pathways, the next stage – delivering advanced capabilities through commercialisation and acquisition – must be properly funded and continue to develop apace.
"AUKUS Pillar 2 offers Australian companies an opportunity to work with leading UK and US defence sectors, creating high-tech jobs, boosting Australia's defence innovation and – most importantly – delivering advanced capabilities to the Australian Defence Force. Our research shows that while there is strong political backing for AUKUS Pillar 2, the initiative must be given clear capability and acquisition pathways and specific, designated funding," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"There is a lack of clarity across industry as to what AUKUS Pillar 2 is trying to accomplish. Some see it as a research program, others as a procurement initiative, and still others as about policy reform. This is hampering industry engagement and investment decisions."
To address these issues, the report proposes five practical steps:
- Release a clear national strategy: The Australian Government should publish a detailed plan explaining AUKUS Pillar 2's purpose, projects, funding, timelines and measures of success.
- Focus on capability delivery: Move from policy development to defined and innovative pathways for developing and acquiring capabilities.
- Provide dedicated funding: Establish specific, streamlined funding for AUKUS Pillar 2 to support both short-term capability goals and broader supply chain efforts.
- Expand supporting policies: Harmonise policies on cyber security, accelerate innovative procurement efforts, and provide a strategy for workforce development to enable participation.
- Improve coordination: Strengthen collaboration between AUKUS partners and create consistent and meaningful industry engagement processes.
"The groundwork is set, but progress must speed up," Mr. Willox said. "Australian Industry Group encourages decision-makers, industry and broader stakeholders to review this report and collaborate to make AUKUS Pillar 2 a driver of Australia's national security and economic future."
The full report is available here: Developing industry capability and partnerships for AUKUS Pillar 2
This report was supported by the Department of Defence strategic policy grants program. The views expressed are those of the authors and do not necessarily reflect those of the Australian Government or the Australian Department of Defence.
