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Writer's pictureTerry Cuddy
Aug 153 min read

Strengthening Australia's Defence Industry: The Imperative for Individual Companies to Champion Their Success

Australia's renewed focus on building sovereign defence capabilities places immense pressure on domestic manufacturers to meet the rigorous demands of defence contracts. For many Australian-owned companies, scaling up production, acquiring advanced technology, and meeting stringent security requirements are just some of the significant challenges they face. Moreover, the reliance on imported components exposes vulnerabilities within the supply chain, particularly during global disruptions such as pandemics or geopolitical tensions.

One of the critical hurdles for these companies is the limited understanding both the government and defence sectors have of the capabilities of advanced precision manufacturers within Australia. This gap in knowledge has led to the underutilisation of domestic resources and missed opportunities for collaboration between manufacturers and defence agencies. Despite many manufacturers being members of various industry associations and networks, there is a perception that these associations are not effectively addressing their marketing needs to the defence sector. This underscores the need for companies to develop their own strategies to communicate their value propositions more effectively to government bodies and defence stakeholders.

There is a clear gap in the current approach, and it points to the pressing need for better marketing and communication strategies within the defence supply chain. By enhancing how they showcase their capabilities, manufacturers can not only increase their visibility to government agencies but also foster greater collaboration with universities and other companies in the industry. Enhanced marketing efforts could include:

  • Targeted outreach to government decision-makers

  • Participation in industry forums led by the companies themselves

  • Creation of detailed case studies that demonstrate the success of past projects

The AUKUS Pillar 2 initiative, which focuses on advanced technology collaboration among Australia, the UK, and the US, offers new possibilities for Australian-owned companies. This initiative encourages the development of multiple disruptive new defence technologies through increased collaboration. Australian manufacturers can leverage these opportunities not only to contribute to global defence innovations but also to solidify their position within the domestic supply chain by aligning with international standards and expectations.

The role of the Advanced Strategic Capability Agency (ASCA), established in July 2023 out of the Defence Strategic Review, remains to be fully defined. While it has the potential to set challenges for local industry to provide disruptive solutions, there is a risk that it may become open to any company with an ABN, diluting its focus on Australian-owned enterprises. Whether ASCA will select and fund significant projects, such as prototype hypersonic missiles, that can catalyse the identification and engagement of Australian manufacturers remains to be seen. Conversely, there is also potential for companies to collaborate on developing novel technologies to meet defence requirements, particularly given AUKUS Pillar 2's role in fostering innovation.

To bridge the gap in government understanding, companies must work closely with all levels of government to secure funding, grants, and contracts that support domestic manufacturing. This includes advocating for policies that favour Australian-owned enterprises, the development of local supply chains, and reducing dependence on foreign suppliers. Importantly, companies should engage in proactive marketing and relationship-building activities to better inform government and defence stakeholders of their capabilities. This will not only enhance their chances of securing contracts but also contribute to a more resilient and self-reliant defence industry in Australia.

At Markstone Group, we work with numerous companies in the defence sector to actively and productively link them together, helping them to navigate these challenges and seize the opportunities that lie ahead.



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