USSC Non-Resident Fellow Jennifer Jackett authored the following report for the Carnegie Endowment for International Peace's “Alliance Future” project.

Introduction

The People’s Republic of China’s (PRC) rapid military modernization and fielding of next-generation systems could challenge the preeminence of the United States and its allies, like Australia, in the Indo‑Pacific. Maintaining an edge in defense science and technology is one part of the U.S. and Australian strategy to develop capabilities that could contribute to deterrence or increase the likelihood of victory in war. The integration of advanced technologies into military capabilities, decisionmaking, and operating concepts could provide qualitative or asymmetric advantages. For example, developments in fields like artificial intelligence (AI) and autonomy could result in battlefield applications of human-machine teaming that are cost‑effective and improve decisionmaking and survivability.

Innovation alone is insufficient. The speed and scale of innovation and adoption matter most in the rapidly shifting geopolitical and technological landscape. The United States and Australia are attempting to reform their defense innovation systems to deliver outcomes in months, not years. The United States, especially, is experimenting with research, development, testing, and evaluation (RDT&E) to harness commercial innovation. Together, the United States and Australia are pursuing innovation activities through the AUKUS strategic partnership between Australia, the United Kingdom and the United States. Progress is being made on hard issues, like defense trade controls, but implementation hurdles remain. Australia’s tech sector and defense industry are small but growing, although the cultural change needed to open collaboration between government and industry is still a work in progress.

This paper outlines the strategic imperative for allied technology leadership, discusses recent national and cooperative innovation initiatives, and identifies opportunities for progress. The paper argues that resource constraints and nearer-term strategic risk demand an even closer‑knit approach to collaboration between strategists, war fighters, innovators, and investors from the United States and Australia to foster technology development and to make better use of capabilities that already exist. The longer-term risks of the PRC’s growing military capabilities and hostile intent also necessitate a sustainable boost to technology and industry capacity in both countries.

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