The US Department of Defense has released a report entitled ‘Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the US’.
The report is a whole-of-government effort to identify and assess risks in the US manufacturing and defence industrial base, and informs recommendations made by Defense Secretary James Mattis to the White House to ensure a “robust, resilient, secure, and ready” manufacturing and defence industrial base.
The report is a further demonstration of the importance the US places on the strength and resilience of its defence industrial base as a critical element of the country’s national security and economic prosperity.
It is an international exemplar from which Australia may be able to draw relevant advice and assessment of the implications for our own industrial base. While the US is much larger in scale, the methodology by which the US has completed this assessment could be a broad guide for Australia in future, and for development of the implementation plans associated with our Defence Industrial Capability Plan released earlier this year.
There are a range of key findings which should be of interest to Australia, including where the report notes that:
- Macro forces have led to impacts primarily in the sub-tiers of the defence supply chain, including such issues as the uncertainty about future budgets, and the decline of US manufacturing capability and capacity;
- The level of foreign dependence on competitor nations; and
- Workforce challenges which face employers across all sectors.
From an Australian point of view, it is particularly pleasing to see the following proposal embedded in the recommendations: ‘Working with allies and partners on joint industrial base challenges through the National Technology Industrial Base and similar structures.’ This follows on from recent US legislation which expanded the definition of the National Technology and Industrial Base to include the UK and Australia.
While the specifics of what this means are still being fleshed out, the continued impetus the report will give to this legislative initiative will be important for our defence industrial relationship with the US in the future, including potentially increased access to innovation and interoperability.
Note: Kate Louis is the head of Defence and Industry policy at Ai Group.