Inside Defence – What Primes, Investors & Trailblazers Seek from SMEs event wrap-up

Earlier this week as part of Indo-Pacific Maritime Exposition, AMGC hosted an audience of defence ecosystem leaders to discuss what primes, the Department of Defence, and others expect from SME manufacturers, coupled with realistic advice for companies wanting to enter or play a bigger role within the industry.

The Inside Defence – What Primes, Investors & Trailblazers seek from SMEs event gave participants the simple answer is that there is no simple answer. Despite the need for novel, money-saving solutions, any opportunity to work in this specialised area requires deep commitment.

“You’re not just trying to sell a widget and run away. When you embark on a sale into defence, it’s a relationship that endures for many, many years,” explained Troy Stephen, Vice President, Underwater Systems, Avionics and Secure Communications – Thales Australia and New Zealand.

“And the excitement of that first sale needs to be supported by years of sustainment, the product needs to be supported, and Defence needs to know that they can rely on the supply chain to get repairs and maintenance done quickly.”

Christopher Hess, Head of Industry Strategy and Engagement Office of Australian Industrial Participation, Lockheed Martin Australia (LMA), said there are 11 partner primes who do similar work to LMA, helping Australian enterprises locate opportunities within its group of companies.

Primes are eager to engage and potential suppliers need to clearly demonstrate their usefulness.

To be considered, an SME should offer a product or service that’s “cheaper, stronger, lighter or faster,” and be able to clearly articulate its benefits.

Entering the defence supply chain requires wide-scale engagement with defence, said Liz Kobold, Innovation Portfolio Manager, Defence Trailblazer.

She advised ask questions of users and others, have hundreds of conversations, and strive to understand the language, and attend as many expos and other events as possible.

“Defence is a relationship-based organisation.”

Benefits of developing dual-use technology include diversification, with defence opportunities too infrequent for many companies, and agility.

“One of the hardest parts of being involved in the supply chain is seeing good companies not do well,” said Hess.

“So when you’ve got suppliers that are struggling because they’re so focussed on defence, we actually encourage them to look elsewhere. LiDAR is a really good example with massive applications of that in the commercial space as well.”

Stephen added: “If you have a technology that you can sell to the commercial market whilst at the same time providing an application in defence you will be in a much better position to manage your cash flow.

“Finding ways to adapt commercial technology for a defence use is [also] a really smart way of going about developing minimum capability quickly. I think the emergence of autonomy and uncrewed platforms is a fantastic market sector that is really perfect for dual-use.”

Kobold said that of 200 companies she had dealt with, all had been in dual-use.

On what companies need to get right, Jake Bostock, Capability Scout at VC firm Beaten Zone Ventures said he would like to see more startups hiring reservists and veterans.

“Half the battle is just knowing the lingo and the acronyms that defence has in Australia… and the nuances,” said Bostock.

“I’m not saying that people who have never served don’t get it, the passion’s there, the patriotism’s there. It just makes a big difference having people who speak the language. Having networks inside defence is important as well.”

For Kobold, it’s, “Communicating in the right language to the right people, mission-relevance, sovereign capability, dual-use potential, and innovation and agility.”

For those new to defence, there may be initial disappointments around the timeframes involved.

“That’s probably the biggest assumption I find, when I get companies that are newly looking at defence,” said Hess.

“They’re coming from a different sector, and they assume it’s going to be quick and easy. It’s not.”