AUKUS Pillar 2 and the opportunities for Australia’s defence industry

This article is an extract of Gary Stewart's presentation to the Australian British Chamber of Commerce's Victorian Defence Forum, 31 May.

The opportunity in front of defence industry exists due to the emergence of AUKUS Pillar II, an ambitious initiative aimed at bolstering Australia’s defence capabilities through collaboration with the United Kingdom and the United States.

While the spotlight often shines on the acquisition of nuclear-powered submarines, Pillar II represents far more than a single capability upgrade. It embodies a strategic partnership committed to harnessing cutting-edge technologies to address the complex security challenges of the Indo-Pacific region.

Pillar II encompasses a diverse range of domains, including advanced cyber warfare, artificial intelligence, electronic warfare, hypersonics, quantum technologies, and undersea capabilities. These areas have been meticulously selected to ensure Australia’s readiness to counter evolving threats and maintain deterrence in an ever-changing geopolitical landscape.

Crucially, Pillar II presents an unparalleled opportunity for our defence industry to thrive by investing in targeted research and development (R&D), driving innovation and technological breakthroughs. The Advanced Strategic Capabilities Accelerator (ASCA) program, led by the Defence Science and Technology Group (DSTG), serves as the linchpin for Pillar II initiatives in Australia, catalysing collaboration between industry, academia, and government.

By embracing Pillar II, Australia can leverage its existing strengths in R&D and engineering to contribute meaningfully to the development of advanced military capabilities. This collaborative approach not only enhances Australia’s defence posture but also strengthens ties with key allies, fostering greater interoperability and strategic alignment.

However, innovation alone is insufficient without a mechanism to accelerate technology development and deployment. Test and Evaluation (T&E) is emerging as the key enabler in this endeavour, bridging the gap between concept and reality. In today’s fast-paced security environment, the ability to swiftly transition from prototype to operational capability is paramount.

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But for T&E to play the crucial role it can in accelerating capability from the lab to the battlefield, we must modernise the way we do it in Australia. We must, for want of a better phrase, “do it better” if we are to meet the demands of Pillar II initiatives. By embracing digital technologies and adopting a more agile and iterative approach, Australia can streamline the development cycle and expedite the delivery of critical capabilities to the frontlines. Moreover, by enhancing collaboration between industry and defence stakeholders, together, industry can ensure that T&E efforts are aligned with strategic priorities and operational requirements.

In many ways, our defence industry stands at a crossroads, poised to redefine the future of warfare through innovation and ingenuity. By harnessing the power of AUKUS Pillar II and reimagining traditional approaches to technology development, Australia can play a bigger role in sovereign defence innovation.

Today, QinetiQ is responding to this challenge, using our global leadership in bringing together research, development, with test and evaluation capability. With a rich history of collaboration with defence forces in the UK, the US and Australia, QinetiQ exemplifies the spirit of innovation and partnership that defines the vision of AUKUS.

At QinetiQ, we see our role as an industrial steward, committed to supporting the acceleration of new technologies from concept to frontline deployment. Through partnerships with organisations like the UK Defence Science and Technology Laboratory and the US Department of Defence, QinetiQ has a reputation of spearheading groundbreaking research in areas such as laser directed energy weapons and robotic solutions for counter-IED operations.

In Australia, we actively work with DSTG to advance technology readiness levels ensuring the efficacy and safety of new capabilities. And today we are leveraging our state-of-the-art facilities and multidisciplinary expertise at a new technology and engineering centre called QTEC at Fisherman’s Bend in Melbourne to allow us to play a pivotal role in accelerating the development and deployment of critical defence technologies. Here, we work hand in glove with our defence customers to advance their concepts every day, all year round.

QTEC is not an isolated example, it is simply a part of the ecosystem we have built here in Australia that has seen us invest over $100 million and create over 350 jobs locally since 2023, demonstrating our commitment to the nation. The work we do at QTEC is connected to our Advanced Manufacturing Centre in Nowra, and with the operation and training of University of Melbourne’s workshop and creator spaces and alongside the operation of the Army MakerSpace program.

The technology challenge is here. Through ASCA, DSTG is active in inviting industry and academia to provide solutions to specific challenges that will help solve our most relevant and urgent capability problems. This will only be aided by the combination of R&D and better T&E.

The opportunity presented through AUKUS Pillar II must be grasped with both hands. Through this, Australia can mobilise its industrial and scientific capacity, charting a new course towards a more secure and prosperous future.

Gary Stewart is the chief executive of QinetiQ’s Australia Sector