Risk and reward in industrial innovation

Writing for the Australian Financial Review, DMTC CEO Dr Mark Hodge discussed the importance of getting the macro, national policy settings right as an enabler of successful innovation and technology development activities in Australia’s defence and national security sectors.

The role of industry in defence capability has seldom been more clearly articulated than in the seminal 2016 Defence Industry Policy Statement. The document was extraordinarily well-received and remains so today.

In the defence arena we have, on occasion, seen well-intentioned policy documents fade into relative obscurity as they are overtaken by practical concerns and the complexities of implementation. By contrast, the current DIPS continues to enjoy broad support across industry and has clearly benefited from strong leadership in the department, and bipartisan political support. Doubtless, this is due in no small part to the depth and quality of sector consultation which underpinned the development of the original document.

Creating an environment for success was no easy or short-term task

Policy implementation has been notably lumpy in parts, as any significant change to a business-as-usual posture might be expected to be, and there remains work to be done in some segments of the policy delivery landscape.

That said, for a sector which craves continuity and certainty, there seems to be little appetite for anything other than a broad “stay the course” approach for the foreseeable future, with a continuous improvement posture to ensure that the system remains fit for purpose.

The difficulty and complexity of the task of establishing the Defence Innovation System from the proverbial “clean sheet of paper” shouldn’t be underestimated. While the groundwork in this regard has been exemplary, more work will always remain to provide and maintain “structural flexibility”.

Innovation demands an appetite for risk, and it’s worth remembering that achieving something less than the anticipated delta of technology development or technical performance is not synonymous with “getting innovation wrong”. A thriving innovation ecosystem requires its leaders to balance the risk of falling short of a target with the risk of not doing anything at all.
Innovation – when done well – fundamentally changes and resets the base state and boundary conditions of the environment in which it operates. It is critical that assumptions are tested and retested, that lessons learned are deployed and redeployed along the way, and an active approach to diversity in approach and mindset is applied.

The 2016 white paper was quite clear in its intent to develop an innovation mindset not only across industry, but across the defence organisation, with the goal of becoming a smarter developer, buyer, user, maintainer and upgrader of defence equipment.

Along with that, it brought an increased focus on collaboration within and outside the department and within and outside Australia. In this context, it is worth remembering that individual innovations funded through, for example, the Defence Innovation Hub are but one of the necessary tools in delivering this required mindset. The hub has supported some astonishing new innovations.

Capability perspective
The challenge now is to augment this by recognising and supporting the complementary models of innovation currently and prospectively available to the sector. While it’s critical to have access to new, innovative products and services, deploying a whole-of-sector mindset rather than transactional, piecemeal approach to innovation will achieve persistent change and support deployments of innovations into multiple domains, platforms and tasks.

This is not a clarion call for more money, but a recognition of the importance of alignment and focus in the strategic investment of resources to support innovation. Critical investments such as those made by Defence – with little requisite fanfare – ensure that an innovation mindset exists across the National Naval Shipbuilding Enterprise with a focus less on products and more on underpinning responses to capability, design, procurement and sustainment challenges. Harnessing the necessary industrial and research sector inputs to support outcomes is, in this regard, an example of “structural flexibility” in practice.

The new STaR Shots initiative from DST is another such example, and a very welcome one. Challenges are framed from a capability perspective, drawing in multiple technical themes and engagement pathways. The STaR Shots initiative will involve industry from the inception of long-term challenges and create opportunity for Australian industry to engage in and benefit from opportunities underpinned by Australian science to support critical new defence capability, and will encourage and support co-location and greater mobility in both directions to foster a shared understanding and ensure different approaches are considered.

With continued vigilance and flexibility in how we deploy our innovation efforts we can capitalise on the opportunity and strategic imperative before us. Getting the balance right between the strategic and tactical for industry and innovation, and between the discrete focus of product innovation and a broader-based innovation capability will be one of the decisive next challenges.

Dr Mark Hodge
27 November 2019

Posted by Harry Baxter on February 7th, 2020 Tagged: , , , , , , , ,