Defence Business: NSW - the NCW state? | ADM Feb 2010

While a slogan has yet to appear, work has begun on identifying the details of how the structures and processes to support this plan will function.

Katherine Ziesing | Canberra

In an effort to bring some coordination to the issue, the NSW Government issued former Deputy Chief of Air Force AVM John Blackburn a challenge last year: what did NSW need to do to attract Defence companies to the state?

What do we need to do here to engage more strategically?

This led to a scoping study between March and May of 2009 about the business conditions in the state, what Defence was doing in terms of the White Paper and Defence Capability Plan and liasing with companies, both large and small, through industry groups and direct consultation.

"This study led to a Defence industry focused strategy to acknowledge existing processes and build some new ones," Blackburn, NSW's Defence Advisor explains.

"There were two other elements in that study.

"One was to go and have a look at Garden Island and the other was to examine RAAF Base Richmond.

"The idea was to make a series of recommendations and then sit down with the government to pursue them.

"The premier said ‘Let's do it' after being told that NSW was the lowest priority state to do defence industry business in.

"I talked to CEOs who said that if they had a choice to do business elsewhere, they would," Blackburn said.

"Putting Defence aside for a moment, what's the business opportunity for the state?

"How do you enable business and what are the networks?

"How do you set your goals and what are your relationships?

"The departments were focused on projects reactively.

"A project would pop up and they would sit down with a company and say ‘What can we do to help?' and support happened piece by piece."

Blackburn isn't aiming to reinvent the wheel in NSW.

More of a restructuring that makes better use of facilities in place and making sure that all levels of government and business have access to one another in a timely way.

The modest goal identified by Blackburn and the NSW Government is to target 30 per cent of Defence spending in the next 10 years, creating 1,500 jobs in the next four years.

Defence will be investing in excess of $100 billion in new equipment over the next decade.

The in-country defence expenditure (including in service support) is expected to grow from $8 billion annually to $13 billion annually over the next five to eight years.

If 30 per cent of that expenditure was made in
NSW within the next decade, the combined direct and indirect economic impact in NSW could be in the order of $7 billion to $10 billion annually.

"NSW has some good education and training programs," Blackburn said.

"NSW also has some good SME support and trial programs in place, up in the Hunter in particular.

"The Hunter is a good example of how to get the SMEs together with HunterNet and the Hunter Development Corporation and on a local level this system works well.

"What they have in place at the moment, it's at about 60 per cent of what they need in an ideal world but it's a good start.

"But if they keep doing business this way, they put all the work into the enabler but waiting for individual projects to come up is a very hit and miss way of operating.

"We need to create the right business environment."

Blackburn and his growing team have developed a capability hub concept that examines how skill sets, knowledge and expertise can be gathered as a foundation to future projects that can also be used in the commercial sector and infrastructure.

These first of these hubs is focusing on Newcastle with the Joint Strike Fighter under an Air Combat/Aerospace capability hub.

But the focus won't just be on the JSF.

"When the P-8 and AEW&C 737s need deeper level maintenance, what would it take to do that in NSW?" Blackburn asks.

Plans for a NCW hub are also in the works, given the high technology nature of capabilities offered in the state already.

This would also be a cross sector approach for the state government, bringing in gaming studios, IT companies and simulation specialists in a digital capability hub that could be based at Richmond, changing the cost model of the base.

This would also leverage off the virtual nature of the capability, enabling companies to work remotely.

"If you look at network centric warfare and all the theory of that concept, imagine if you apply the technology and doctrine and the approach to state infrastructure. You would have a networked smart state.

"A capability hub takes the best elements from technology hubs and integrates with other factors, such as education and training, to produce a broader capability, a system of systems for numerous parties, not just Defence."

A maritime strategy is also being developed.

Rather than focusing on only shipbuilding, NSW will look more towards systems integration, sustainment and componentry work, focussing on the strengths of the NSW workforce in high technology engineering and the supporting research, education and training institutions.

"Garden Island is getting crowded but we have confirmed that we do want Navy there in the long term with industry in an integrated industry support Facility so that companies can invest in the workforce and facilities.

"This is where Newcastle comes in for in-service support.

"We're looking at what needs to be done to make this a viable option, in terms of access and port infrastructure, for all parties."

Blackburn has also flagged the option of supporting the basing of half the Future Submarine fleet on the east coast.

This would tie into the push by Navy to base platforms and maintenance near population centres, making service conditions more family friendly.

"We just needed to streamline the process, bring together the fragments.

"An SME or even a Prime doesn't want to deal with a dozen different levels of government and bureaucracy.

"They want to go to a single point where planning, education and support can be addressed.

"This is where the State Industry Defence Forum will come into play."

A new construct, the State Industry Defence Forum brings together regional forums and bodies as a single point of contact between industry, government, Defence and industry groups.

Members can go back to their areas with the outcomes of an integrated approach.

Despite the tumultuous nature of NSW politics, Blackburn is confident that the strategy will be followed through.

Ian Macdonald, Minister for State and Regional Development, is the lead for the program and has a keen interest in developing the program holistically.