Projecting power in a contested region
Australia needs to forge a high-tech defence ecosystem built on free enterprise principles in order to project real power in our region and credibly deter hostile actors, argues James Paterson in a speech to a Menzies Research Centre event.
I am particularly pleased to be speaking here today on “Projecting Power in a Contested Region: Forging a New High-Tech Defence Ecosystem”. Of course, this discussion has been made necessary by the unprecedented deterioration of Australia’s security environment, and my thinking on these issues has been influenced by the work being undertaken by defence and security experts in both the public and private sectors, not just here in Australia but also by our international friends and allies.
The Context
When I spoke to this breakfast forum earlier this year, I discussed the rapid shift in our geostrategic position as well as how the Australian government had hardened itself to defend against authoritarian actors seeking to harm our interests and overturn our liberal democratic order. Since that speech I have visited our closest allies in the United States on three occasions, and the UK once, on AUKUS related trips.
I met with legislative, executive, defence and security professionals, and regretfully I must share with you that their forecasts have not become rosier.
The risk of conflict in the Indo-Pacific is growing, not declining.
Even if we were not witness to the largest ground war in Europe since World War II in Ukraine, we have seen in recent months the most aggressive attempted intimidation of the people of Taiwan by the Chinese Communist Party since the end of China’s civil war in 1949.
The Chinese government remains engaged in the fastest military build-up since World War II, and after recently cementing his power with another five-year term, President Xi Jinping has doubled down on his warnings that China is willing to take Taiwan by force.
This is an assessment now shared even by Dr Kevin Rudd, who only three years ago attacked people like Andrew Hastie and myself for warning about the risks of a rising and more assertive China, but now tells us himself just this week that conflict in our region could arrive in as little as five years. While previously we talked about the “Davidson window”, named after former Indo Pacific Commander Admiral Davidson for his warning China would attempt to retake Taiwan by 2027, perhaps now we should refer to the “Rudd window.”
Australia is familiar with the Chinese government’s campaign of espionage, foreign interference and cyber-attacks, which our intelligence and security agencies consider to be the most intense in our history, even greater than at the height of the Cold War.
And showing their willingness to deploy all elements of state power in pursuit of their strategic objectives, the Chinese Government continues to pursue and invest in developing advanced dual-use technologies at a rapid rate.
The Challenge
The most important national task for Australia is to be a strong, credible deterrent - and we can only do this through our ability to project power in a highly contested region.
In September I spoke at the American Enterprise Institute in Washington D.C.
I had three simple propositions:
We live in resource-constrained times. All three AUKUS partners are running budget deficits, each face rising spending pressures on social care programs, and high inflation.
Especially following the war in Ukraine, we all have immediate conventional defence acquisition priorities, like restoring our spent stocks of precision guided munitions.
This means that governments cannot invest as much as we might like to on research and development on critical and emerging technologies like quantum computing and artificial intelligence, which will deliver a decisive strategic and economic advantage to whomever first and most successfully deploys them.
Therefore, we need to harness the private sector, particularly the tech industry, who have the resources to invest in this expensive, risky and sometimes speculative research. To do this I proposed a new compact with Big Tech.
Today I want to extend that thinking to the rest of the tech sector – the entrepreneurs, emerging, small and medium enterprises that are doing exciting things to tackle these challenges.
I will focus especially on the opportunities and challenges posed by the Pillar Two Advanced Capabilities component of AUKUS, essentially everything other than nuclear propelled submarines, which relate most directly to my responsibilities as Shadow Minister for Cyber Security and include critical and emerging technologies like cyber, AI and quantum.
Losing ground in advanced technology
The competitive advantage that Western democracies benefited from during the Cold War through America’s technological supremacy is fragile and is not guaranteed to deliver the decisive victories of the past. On current trajectories our strongest security partner is losing its competitive advantage in the tech race against China. If we do not arrest these trends, the consequences may very well be existential for Australia and indeed liberal democracies around the world.
The Australian Cyber Security Centre assessed in its latest annual threat report that cyber is the main domain for warfare and conflict, noting the escalating threat from nation state actors.
This position is supported by CIA Director Bill Burns, who maintains that advanced technology is the main battlefield for conflict and competition and that China is the most important geopolitical threat of our time.
In each of the foundational technological battlegrounds that will define this era – artificial intelligence, quantum information and science, green tech, semiconductors and 5G technology – China is either in the race or has already taken the lead.
To touch on just a few, Chinese AI surveillance companies already supply surveillance tech to 63 countries, according to a 2019 study by Steven Feldstein at the Carnegie Endowment for International Peace. China’s high-tech autocratic governing-model for surveillance technology is attractive to authoritarian regimes.
Meanwhile their advances in quantum communications could see state secrets stolen through broken encryptions. Particularly sobering is the Chinese government’s practice to “harvest now and decrypt later”, a policy which sees them hoover up classified and sensitive materials which are currently protected by encryption, but whose secrets will likely be revealed when they crack quantum decryption technology in the future.
Lengthy weapons acquisition timeframes
Aside from China’s growing technological innovations, their capacity to operationalise these at speed should be a very sobering wake-up call.
In 2018, Mike Griffin, the first Under Secretary for Research and Engineering, assessed that it takes the US on average 16 years to make a technological development field-ready compared to fewer than 7 years for China, stating: “The Chinese have tested several dozen hypersonic attack vehicles over the last ten years, and most have been successful.”
As William Greenwalt of the American Enterprise Institute and Dan Patt of the Hudson Institute argue, emerging technologies are central to future conflict and the ability to operationalise technological developments at speed will deliver the decisive advantage.
In Australia, transitioning to nuclear-powered submarines is critical for Australia’s ability to project power in the region, but this will take time and there is a risk of a capability gap emerging. That gap will have to be filled in part by the rapid deployment of advanced capabilities in Pillar Two of AUKUS.
While the AUKUS partnership presents enormous opportunities to plug this capability gap with collaboration on cyber capabilities, artificial intelligence, quantum technologies and additional undersea capabilities, all of this could be torpedoed by bureaucracy. There are many obstacles, erected for good reasons to protect intellectual property or halt proliferation of dangerous weapons technologies. But they are not fit for purpose for AUKUS or our new strategic environment.
ITAR - the International Traffic in Arms Regulations – is just one. It presents a significant regulatory barrier in sharing defence weaponry and technology. Of course, similar regulatory barriers within the Australian and UK systems also threaten AUKUS’ ability to share technological developments and make them field-ready at speed.
We must blast through these bureaucratic obstacles if AUKUS is to succeed on the timelines we need it to.
Limited resources
You cannot secure field-ready high-tech defence systems, let alone at speed, if the finances aren’t there to support it.
To win the tech race, we need to win the economic race. In what Dr Greenwalt describes as the “techno-economic competition”, technology is the key to economic success and, to take it further, economic success is the key to securing capability to project power in the region.
Unfortunately, advanced economies are struggling with high inflation, high interest rates, rising energy prices and strained supply chains. The billions of dollars allotted to Australia’s defence spending is being eroded by high inflation across economies and must also compete with spending pressures from interest on growing debt, the National Disability Insurance Scheme, and health and aged care, and, as Mark Hellyer from the Australian Strategic Policy Institute has observed, that’s before any increase to the existing defence funding line.
While overall the Australian economy is strong, resilient and has successfully weathered many storms including COVID-19, the reality is the Australian Government has limited resources and cannot be relied on as the sole financier of Australia’s national security.
The Solution
To be a credible deterrent in the region with an ability to project real power, Australia must forge a new high-tech defence ecosystem built on the principles of free enterprise. And it must encompass more than just the Big Tech industry I spoke about in my speech to AEI in September. Critically, this must be done in lockstep with our AUKUS allies.
Australia’s national security cannot rely solely on the devices of government - ours or America and the UK’s. Because these challenges do not belong to Australia alone. America and the United Kingdom are under equal, if not more, pressure to strengthen their economies against high inflation and high interest, address skills shortages and improve the delivery to field-ready tech.
For the AUKUS partnership to live up to its full potential, we need to incentivise and build on a robust private defence-technology base to help solve national security problems.
For Western democracies, the private sector is our key advantage over authoritarian adversaries. We need to leverage this advantage to enhance technological ingenuity, shorten acquisition cycles, turbocharge spending power, and capitalise on skills and expertise. Because Western governments cannot out-innovate, out-spend, and out-perform our adversaries on our own.
Small and medium-sized tech-startups like Internet 2.0, Penten, and Quintessence Labs, are already making significant contributions to cutting edge dual-use technology to make cost-effective transformations to the battle space at speed. All three are Australian, have had global recognition and success, and are based here in Canberra.
Australia’s own pool of cyber and tech start-ups are delivering valuable solutions to national security challenges, with Penten, led by Matthew Wilson, offering advanced applications in AI and tactical communications technology exported to our closest allies.
Internet 2.0, led by Robert Potter, among other things commercialises military-grade cybersecurity. Rob recently participated in a ransomware round table at the White House.
QuintessenceLabs – led by CEO Dr Vikram Sharma – is using quantum physics to better generate truly random numbers, the bedrock of any encryption system. Vikram is backed by In-Q-Tel, the CIA’s venture capital arm, also supported by the Australian intelligence community.
These are the sort of businesses which need to thrive if AUKUS is to succeed.
We need whole-of-system reform to build and leverage a defence-technology base in Australia that is accessible on a reciprocal basis to our AUKUS partners.
While AUKUS itself is movement in this direction, to succeed we need to overcome regulatory barriers like ITAR to enable cost-effective, time-efficient tech transfer between our countries. When we already share the most sensitive intelligence information through the Five Eyes network, it seems more like an oversight that this level of trust and cooperation hasn't been extended to broader defence-tech transfers and the mobility of talent. That’s why addressing regulatory barriers should be a priority for AUKUS.
If instead we engage in an exercise of hording talent, intellectual property or jobs between the AUKUS partners we will fail.
Conclusion
If forecasts are true that conflict in our immediate region is closer than ever before, then we need to forge a high-tech defence ecosystem to overcome a range of technological, economic, bureaucratic and regulatory barriers that currently weakens our defence posture.
Only by doing this can Australia be a credible deterrent capable of projecting power in the region.
This is an edited transcript of a speech given by Senator James Paterson to a Menzies Research Centre National Security Network Breakfast event on 23 November. Senator Paterson is the Shadow Minister for Cyber Security & Countering Foreign Interference