The “AUKUS” agreement between Australia, United Kingdom and United States has emerged as the paragon of military-technological cooperation across the Euro-Atlantic and Indo-Pacific regions. There are considerable challenges to implementation. However, it is important that the AUKUS program be a success because it is a daring and novel approach to military cooperation and will enhance allied power in the Indo-Pacific region.
The tripartite arrangement is also about investing in emerging and disruptive technologies. It is an attempt by Australia, the United Kingdom and United States to harness technologies and enhance scientific innovation to counter China’s critical resource base, its scientific prowess and its application of disruptive technologies to warfighting domains such as missile defense and naval forces.
Despite the promise of AUKUS, the program faces critical questions. The three allies already face political challenges to allow for the transfer and sharing of technology between allies. I believe the benefits of and obstacles facing AUKUS could set an example for technological cooperation between the Euro-Atlantic and Indo-Pacific regions. This endeavor is important because deeper technological and industrial cooperation has the benefit of strengthening and interlinking alliance structures in both regions.
AUKUS and Defense innovation
After the establishment of AUKUS, the Australian government has sought to augment its defense-industrial base in profound ways. AUKUS has been billed as a potential locomotive for Western military-technological innovation. The first pillar of the trilateral pact is focused on Australia’s acquisition of conventional nuclear-powered submarines. The second pillar seeks to develop advanced technologies and capabilities. AUKUS’s obvious goal is to check China’s rise in the Indo-Pacific with the development of autonomous systems, quantum technologies, AI, cyber defense and electronic warfare and hypersonic technologies. AUKUS has stimulated Australia into revitalizing its national defense posture too.
The 2023 National Defence Strategic Review views pillar two of AUKUS, and technology development more generally, as key to maintaining an asymmetric technological advantage in the Indo-Pacific and to check China’s rise with partners. Australia has set aside multiple AUD$ billions until 2023 to invest in defense and innovation. The Australian government has built on its previous Australian Defence Innovation Hub (DIH) with a newly created Advanced Strategic Capabilities Accelerator (ASCA). Following Australia’s Strategic Review of 2023, the capabilities accelerator will invest AUD$ 3.4 billion over the next decade on priority areas such as hypersonic missiles, directed energy, autonomous systems, quantum technology, information warfare and long-range fires. Taking up and superseding the work of the Defense Innovation Hub and the Next Generation Technologies Fund, the Advanced Strategic Capabilities Accelerator comes with a unique mission to ensure that innovative technologies are rapidly tested, developed and procured for the military priorities identified in the 2023 Defence Strategic Review. This includes undersea warfare, enhanced targeting, amphibious, sea denial and control, air and missile defense and logistics capabilities.
Australia is following the approaches taken by its AUKUS partners and allies by placing far greater importance on defense innovation. It is striking that the Australian government’s evolving strategies on emerging and disruptive technologies and innovation share strong similarities with innovation initiatives presently being undertaken by Japan, South Korea and NATO and European Union members and allies.
Japan created the Acquisition, Technology and Logistics Agency (ATLA) in 2015. The government has since revised its national strategy for technology transfers to help stimulate innovation cooperation with partners and allies. France has created both a Defence Innovation Agency and a Defence Innovation Fund to promote innovation investments worth over €750 million each year up to 2025. NATO now has its own Innovation Fund worth over €660 million per year until about 2038. The Alliance has also put its brand to a Defense Innovation Accelerator for the North Atlantic that will combine part of the NATO Innovation Fund and venture capital for innovative projects. The European Union is also investing €2 billion under the E.U. Defence Innovation Scheme and it has created its own Defence Innovation Hub.
Sharing is caring?
Australia and its partners have clearly followed similar strategies when enhancing defense innovation and the development of emerging and disruptive technologies. Overall, this has come in the form of additional finances and investment but at the heart of initiatives such as the Advanced Strategic Capabilities Accelerator is a desire to bridge the innovation gap between public and private sectors. Specialized agencies and technology accelerators are designed to stimulate cooperation between militaries, defense establishments, researchers, scientists and venture capital investors. Beyond the technology buzzwords and new bodies, however, such bodies have to prove the worth of public investments. Ultimately, the only guide to success is whether emerging and disruptive technologies will make a real difference to the performance, endurance and sustainability of military capabilities. In this sense, more of a focus is needed on “defense” rather than just “innovation”.
Another key aspect of military-technological cooperation is the challenge posed by technology transfers and sharing. Exchanging information between governments on defense innovation and capability programs is notoriously difficult because governments and firms seek to protect their Intellectual Property Rights. In the case of AUKUS there are already fears that “antiquated legal and regulatory settings” could threaten the “realisation of the AUKUS agenda to its fullest potential.” The United States’ extra-territorial regulations and restrictions have been designed to both protect American industrial interests and ensure that no sensitive military technologies and know-how leak to adversaries. Yet, these same legitimate regulatory steps can have a dampening effect on allied cooperation with the United States through fear that technologies (including software and hardware) that include U.S.-made components, technologies and/or software could be subjected to controls.
Key allies and partners across the Euro-Atlantic and Indo-Pacific regions should not expect the United States to revise its export restrictions anytime soon, even if the imperative of sharing technologies between partners and allies on emerging and disruptive technologies is clear. One inadvertent effect of these regulations is that allied and partner nations may seek enhanced innovation efforts on a more bilateral basis. For example, Australia and France have used their bilateral consultations to call for more industrial cooperation in areas such as outer space, as well as closer operational and logistical collaboration on defense. Defense industrial ties between Australia and Germany have also deepened following one of Australia’s largest defense export deals to Germany for over 100 Boxer armed carriers. Spain and Australia also maintain strong defense industrial ties, with Spanish ship-builder Navantia being heavily involved in the construction of Royal Australian Navy surface vessels.
Yet there are also limits to Euro-Atlantic and Indo-Pacific cooperation via NATO or the European Union. For example, the NATO Innovation Fund has just been initiated among several allies, but the fund is not yet officially open to cooperation with the Asia Pacific 4 countries. The same is true of Defense Innovation Accelerator for the North Atlantic, although companies from the Indo-Pacific that are headquartered in a NATO member nation can apply for support. The European Union’s Permanent Structured Cooperation (PESCO) projects on defense have recently been opened to partners like the United States and United Kingdom. Additionally, the European Defence Agency has administrative arrangements to exchange information on defense technologies with Norway, Switzerland, Serbia, Ukraine, the U.S., the European Space Agency and the Organisation for Joint Armament Cooperation. However, none of these E.U. frameworks include cooperation with states such as Australia, Japan or South Korea.
There is, today, no single cooperative framework where Euro-Atlantic and Indo-Pacific allies and partners can exchange technology or engage in joint defense innovation. Defense innovation cooperation is relatively well developed in the Euro-Atlantic region, but a key challenge will be bridging these efforts to the Indo-Pacific with partners such as the Asia Pacific 4. AUKUS and the Global Combat Air Program are attempts at such a bridging but they can hardly be considered a conclusive response to actions of revisionist powers such as China. If one of the aims is to increase military interoperability between the Indo-Pacific and the Euro-Atlantic regions, then exchange of information and the development of emerging and disruptive technologies will be vital.
The challenge of innovation
Even if the reform of export restrictions that could greatly facilitate technology exchange between the Euro-Atlantic and Indo-Pacific regions is currently off the cards, there is nothing stopping enhanced operational cooperation between militaries across the two regions. The Advanced Strategic Capabilities Accelerator demonstrates the need to develop innovative technologies into military advantage, which is a shared objective of all partners and allies across the Euro-Atlantic and Indo-Pacific regions. In particular, there is a need to avoid investing in innovation for innovation’s sake and to move as rapidly as possible to proof of concept and commercialization. To ensure that defense innovation is paying off, relevant nations will need proof of concept opportunities in the form of joint military exercises and technology demonstrations.
It is already known that individual navies are currently testing technology innovations such as directed-energy weapons, including the American, British, French and German navies. The U.S. Navy, for example, has already tested on land a new directed-energy weapon system in New Mexico to be eventually used to target drones and subsonic cruise missiles at sea. The French Navy already tested such a weapon system onboard an unnamed surface vessel in 2023. In time, many other states including Australia will have advanced directed-energy weapon systems. Accordingly, existing multilateral cooperation exercises at sea such as “La Perouse” or other formats would be an ideal opportunity to test and demonstrate emerging and disruptive technologies such as directed-energy weapons.
In addition, defense innovation cooperation between Euro-Atlantic and Indo-Pacific nations does not necessarily have to take on a research and development dimension. For example, Asia Pacific 4, European Union and NATO countries could continue to boost their cooperation on critical mineral supplies as a basis for securing technology supply chains. More broadly, Euro-Atlantic and Indo-Pacific nations can enhance efforts to enhance the exchange of scientists and researchers. In this sense, any discussion about defense innovation cooperation quickly becomes a reflection about broader economic relations than just the thorny issue of technology transfers and the regulation of Intellectual Property Rights.
All of this needs to be placed in a larger context. China, Russia and North Korea have been cultivating military and technology ties following the start of the Russo-Ukrainian war. With North Korea and Russia under sanctions, these countries have an added incentive to cooperate on technology areas that can enhance mutual “financial, cyber, and kinetic” capabilities. Analysis has also pointed to deepening Sino-Russia military technical cooperation in areas such as conventional submarines, tactical missiles, AI and space systems. Allies and partners across the Indo-Pacific and Euro-Atlantic regions need to ensure that this level of military-technological cooperation among revisionist states is kept in check.
The U.S. and its allies need to urgently focus on dragging technologies through to application. Each partner and ally has a responsibility to enhance defense investments in innovation and military-technology, but the familiar pattern of creating new innovation funds and/or agencies may not be enough to compete with revisionist powers. While the important steps to enhance military-technological cooperation – i.e. AUKUS, NATO-Asia Pacific 4, European Union and more – across the Euro-Atlantic and Indo-Pacific are essential, more ambition is needed. Owing to the war on Ukraine, many defense-industrial bases are being severely tested to produce basic equipment such as ammunition, but the bigger test of producing high-tech and disruptive systems in significant orders of magnitude is yet to come.
Prof. Dr. Daniel Fiott is head of the defence and statecraft programme at the Centre for Security, Diplomacy and Strategy (CSDS), Vrije Universiteit Brussel. He is also a non-resident fellow at the Madrid-based Elcano Royal Institute for International and Strategic Studies.
This paper was completed with the support of the NATO Science for Peace and Security programme. It is part of a project looking at the future of the Indo-Pacific region and NATO, and the author wishes to thank the participants of a conference organised under the project on 11 May 2023 in Canberra, Australia, which as hosted by the Australian Strategic Policy Institute.
Image: U.S. Navy photo courtesy of General Dynamics Electric Boat
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