By Darian Macey, August 7 2024
The shifting of priorities under the Integrated Investment Program (IIP) has left supply chain gaps for defence primes. SMEs can find opportunities by identifying where they fit. This was a key takeaway from the session titled “Primes & SMEs Working Together” at last week’s Defence + Industry Conference. The session featured a Q&A with prominent leaders: Kate Louis, Executive Director of the AiGroup Defence Council; Brent Clark, CEO of the Australian Industry & Defence Network; Amy List, Managing Director of Boeing Defence Australia; Rohan Stocker, CEO of ASDAM/Marand; and Dr. James Palmer, CEO of Silentium Defence.
As the session began, I was immediately drawn into the conversation about the collaborative dynamics between large defence primes and small-to-medium enterprises (SMEs). The dialogue underscored the importance of fostering partnerships at all levels to enhance innovation and capability within the defence sector.
Amy List shared a compelling anecdote about her recent visit to Complete Wiring, a small company of 22 people. This company creates bespoke cables for Boeing’s communication systems, illustrating how intricate and critical SME contributions can be. Her story highlighted the artistry and dedication within these smaller firms and how mid-tier companies facilitate essential connections.
Brent Clark then took the floor, emphasising the seismic shift currently occurring in the defence industry as a result of the Defence Strategic Review. He pointed out that many industry players must now align with the Australian Defence Industry Development Strategy to remain relevant. His advice was clear: focus on the IIP as it delineates where future investments and opportunities lie. For SMEs, this means identifying where they can fit into larger supply chains and establishing strong relationships with primes and medium-sized enterprises.
Kate Louis brought a unique perspective, reflecting on her extensive experience in the defence sector. She noted the profound changes since the 2016 Defence Industry Policy, particularly the narrowing focus on sovereign industrial defence priorities. Her remarks about the evolving regulatory environment, including significant shifts in export control policies, were particularly insightful. This regulatory evolution necessitates that both primes and SMEs adapt swiftly to maintain compliance and leverage new opportunities.
Rohan Stocker and Dr. James Palmer provided practical advice for SMEs looking to break into the defence market. Rohan emphasised the need for SMEs to understand their customers and manage stakeholder relationships across multiple levels. He stressed the importance of finding the right partners to collaborate with and not aiming too high initially. Dr. Palmer echoed this sentiment, suggesting that defence’s role should be to facilitate an environment conducive to these collaborations rather than acting as a direct matchmaker.
The discussion then pivoted to the role of defence industry associations. Kate Louis highlighted how these associations bring together nimble organisations across the nation, fostering partnerships between SMEs and primes. She also pointed out the importance of creating environments where companies can organically form consortia to address larger projects collectively.
One of the session’s key takeaways was the shared responsibility between defence and industry to ensure effective collaboration. Brent Clark noted that while primes might be willing to take on risk, they need industry’s support to do so. He called on SMEs to listen to the clear demand signals from defence to understand where they can contribute most effectively.
As the session concluded, I felt a renewed sense of optimism about the potential for collaboration in the defence sector. The insights shared by these industry leaders underscored the importance of strategic partnerships, clear communication, and a willingness to embrace change. For SMEs, the path to success lies in understanding the broader strategic landscape, leveraging relationships, and being prepared to adapt to the evolving defence environment.
Author: Darian Macey
Darian is a former Engineering Officer with the RAE with tertiary qualifications in Engineering and Project Management. He is a leading practitioner within Australia's NSI sector with previous employment in Government, project management and building contractor organisations.
