Reflecting on “Accelerating the opportunities around critical technologies - AUKUS Pillar 2”

On Tuesday night, we co-hosted a dynamic discussion on “Accelerating the Opportunities around Critical Technologies - AUKUS Pillar 2” at Australia House with Telstra and the UK-Australia Chamber of Commerce. You might say we predicted it, but the conversation couldn’t have been more timely.

In recent weeks, Japan has been catapulted into a quasi-official AUKUS Plus partnership (South Korea will likely follow) and the UK’s DASA launched the AUKUS Electronic Warfare Challenge, the first innovation challenge series for AUKUS Pillar 2.

After months of treading water and uncertainty, particularly for SMEs, there is a shift from uncertainty to forward momentum.

AUKUS partners are beginning to make the progress we all hoped they would. But while progress is evident, the event underscored the significant work required to translate ambition into regional security and capability.

In the demand for action, we often forget the underlying purpose of AUKUS, or in fact, we need reminding of it because, after more than 2 years, the end goal - or structure - of AUKUS is not entirely clear.

However, the sheer scale of the region AUKUS aims to safeguard highlights the importance of the endeavor. The Pacific Ocean encompasses a staggering 64 million square miles, cradling over 25,000 islands and a population exceeding 4 billion people across 35 countries.

It also straddles the Ring of Fire, a hotbed of seismic and volcanic activity. This geographic reality makes secure communication and collaboration across the region particularly complex.

The initial and driving goal of AUKUS - intertwined security and economic advancement - remains paramount. However, the path forward is still being charted. Patience is key, as the potential rewards - both in security and economic terms - are substantial.

A diverse sea of participants and questions

The event buzzed with optimism. The evening was graced by a distinguished opening address from the High Commissioner of Australia to the United Kingdom, The Hon. Steven Smith, setting the tone for a night of insightful dialogue.

The audience, a diverse mix of industry leaders, government representatives from Australia, the UK, and Japan, and policy enthusiasts, was encouraged to actively engage with the discussion.

Some of the most thought-provoking questions to come out of the event delved into the funding and future of AUKUS Pillar 2. Let’s go through them briefly here:

The Role of Private Capital in AUKUS: How can we incentivize private sector investment in critical technologies to accelerate innovation within the AUKUS framework?

While private capital is undeniably crucial for AUKUS Pillar 2’s success, the landscape is uneven. The United States, a major military spender, possesses the resources to consistently support these initiatives. However, the challenge lies with smaller partners like Australia. Limited domestic capital, cultural hesitancy towards defense investment, and restrictive investment mandates all hinder significant private sector involvement.

However, AUKUS can circumvent these issues by focusing on dual-use technologies with both military and commercial applications. This approach broadens the investor pool by appealing to those interested in the technology’s commercial potential (e.g., advanced communication infrastructure), reduces perceived risk by showcasing civilian use cases, and aligns with the mandates of institutions restricted from purely defense-related investments. Ultimately, emphasizing dual-use technologies incentivizes private sector participation, fosters a robust innovation ecosystem within AUKUS, and benefits the military by providing a readily available and tested technology base.

AUKUS Pillar 2 expansion: Is there potential for expanding collaboration to include other key regional partners like Japan and South Korea? What does AUKUS look like in 5 years?

The potential expansion of AUKUS to include Japan and South Korea would undoubtedly present a more formidable force for regional security. China might perceive this as an increase in defense pressure, particularly with the development of advanced technologies like hypersonic weapons. However, it’s unlikely to lead to immediate, drastic shifts in power dynamics. The focus of AUKUS Pillar 2 lies in collaboration on critical technologies, not necessarily direct military confrontation.

The concern that AUKUS might be perceived as an “Anglo-Saxon club” is understandable. Expanding membership to include regional partners like Japan and South Korea could be a significant step towards dispelling this image. By incorporating diverse perspectives and expertise, AUKUS can demonstrate its commitment to a broader regional security architecture.

The question of AUKUS’s ultimate objective is a valid one. While fostering military cooperation is undoubtedly a key aspect, there’s likely more to the picture. The emphasis on critical technology collaboration in Pillar 2 suggests broader ambitions to create a resilient and technologically advanced Indo-Pacific. Openly discussing these goals and fostering transparent dialogue with regional partners can help alleviate concerns about AUKUS being solely a military alliance.

Ultimately, these questions highlight the multifaceted nature of AUKUS and the ongoing need for collaborative solutions to ensure a secure and prosperous Indo-Pacific.

The event served as a powerful reminder that the challenges and opportunities presented by AUKUS can only be addressed through a united front. As we move forward, the discussions sparked last night will undoubtedly play a part in shaping a more secure and technologically advanced future for the region.

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