The ever-increasing anxiety about global security has led to an increase in security products worldwide. Australia’s know-how in this area is well respected, but what more can we do to increase defence and security exports?
Ask an average Australian what he or she thinks about defence exports, and you could end up in a debate about deploying troops to Afghanistan and Iraq. Or you might be lectured about Canberra’s plans to replace the RAAF’s ageing fighter aircraft. It is less likely citizens consider—or are even aware of—Australia’s own sophisticated and highly successful military and homeland security export industry. Even Paul Keating, as Federal Treasurer, once memorably declared: “Who cares about defence? What are we going to do? Invade New Zealand?”
The truth is that Australian exporters care a lot about defence and security. Their customers range from the mighty United States military establishment to the Singapore Police Department, and this very fact makes these exports, especially in the defence area, a source of special interest and concern to the Australian Government.
The difficulty anyone faces when contemplating the defence export industry is in trying to define exactly what it is. Secrecy—sometimes official, sometimes commercial—often means that some exports and their exporters remain faintly shadowy figures. Their activities are often classified in government documentation as ‘confidential’. Official estimates suggest Australia has 400 specialist defence companies operating at the present time, with 200 firms actively engaged in exporting.
New exporters: Young guns
Defence exports can be tricky but lucrative. Defence and defence-related products and services exports are now estimated to be worth some $600 million a year, covering everything from military hardware and infrastructure to software support and training, automotive components, even food.
Australian-designed non-military security is another big-ticket item in global markets even if it is more difficult to estimate how much the trade is worth.
New exporters in this industry need to know that the Federal Government maintains a Defence Export Control Office (DECO) to ensure “that Australian companies and individuals do not provide assistance to Weapons of Mass Destruction programs that threaten international peace and stability”. Last August, for instance, Canberra introduced new restrictions on the possession, manufacture, trafficking and export of plastic explosives, which cannot be sold overseas without a permit from DECO.
The United States is Australia’s key security market, Daniel Sullivan, Australia’s trade commissioner in Washington. Australia has an increasingly impressive track record in providing items like software and fibre optics to a vast law enforcement market that is extremely fragmented: it is estimated there are 1 .
Existing exporters: Target practice
The Middle East is emerging as a significant market for aviation and naval equipment so existing exporters already in the US market should look east, says Anastasios Angeloglou, CEO of Sydney-based security, surveillance and smart card technology specialist BQT Solutions. He observes that there is no recession in the Middle East where a vast building industry has made the region thirsty for security products. “Australians are well regarded in the region compared to, say, the Europeans, so I would urge them to consider the market because there are so few Australians based here when they could be enjoying considerable success,” he says.
Angeloglou counsels small and medium sized Australian companies wanting to operate in the Middle East to find a “well positioned, well respected partner” to ensure market penetration. “Partnerships deliver lower costs and fewer risks as well as complementing your market and technical know-how,” he says. “In the Arab world, personal relations with decision makers are vital because they believe it’s the human touch that’s most important.
Advanced exporters: Straight shooters
Often the smaller markets can be quite lucrative because they may not have the well-developed infrastructure of larger ones. Singapore has a high acceptance of technological security solutions and a number of Australian companies have found success there. Singapore even maintains one of its air force squadrons in Australia as part of Australia’s training program for allies, which has become a valuable source of revenue.
On a grander scale CGear Australia, based in Port Melbourne, is a classic example of Aussie innovation solving problems for major military establishments. CGear makes rapidly deployable helicopter landing mats for helicopters operating in harsh sand and dust environments and, not surprisingly, is active in the Middle East where its HeliMats can also be used as a field screen, as a wind break and as ground cover.
According to CGear CEO Glen Sinclair-Gibson, the company’s innovative product has also been discovered by the US Marine Corps that uses HeliMats throughout its operations to overcome dust-driven ‘brown outs’—a problem that has plagued helicopter services for more than 70 years.
Non-security exporters: Unlocked
The breadth of defence and security products and services currently being exported by Australia-based firms means industries external to the defence and security industry may already provide a link in the security export chain. Exports include training and education services, flight training, aircraft spares, IT and communication products, air traffic management, uniforms and protective equipment, aircraft maintenance and modification, engine overhauls and repairs and precision manufacturing, most of which already have established export streams across various other sectors.
Although Australia also exports specific defence and security products—weapons, armoured vehicles, patrol vessels, security services, building access and perimeter security applications and border controls—goods and services in other sectors, such as emergency, rescue and health equipment, are also required and can be supplied by external industries.
Barriers: The Fortress
Bad news for SMEs: a substantial portion of the defence supply base is the hands of a few big companies like BAE Systems, Thales Australia, Boeing, Raytheon, Australian Aerospace, Spotless Group, ASC Defence Maritime Services and Austal. Some of these firms have a high degree of foreign ownership and most are defined as ‘primes’ or prime contractors. The main focus of the primes is on delivering integrated projects rather than singular products to one or more main customers, such as the Australian Defence Force (ADF) or the Defence Materiel Organisation (DMO).
Angeloglou says exporters would also benefit from extra government support. “It would help if the Australian Government got behind Australian firms by endorsing them in the market and an even greater help if Canberra bought more products and services from local companies. Believe me, it would be one hell of a reference overseas if I could say the Australian government bought security products from me.”
The Future: Reconnaissance
Defence and security exports have come to the fore since September 11, 2001 and it’s possible our defence relationship with the American market could get a whole lot stronger. If US Congress decides to give a required two-thirds majority vote to ratify a Defence Trade Cooperation treaty with Australia, originally signed in September 2007, significant opportunities could open up exporters to work cooperatively with the United States on sensitive defence technology initiatives. But any vote on the treaty may be some way off yet, as Congress becomes increasingly engaged in the lead-up to the American Presidential election.
One project that continues to excite Australia’s defence industry pundits is America’s international Joint Strike Fighter (JSF) program. In 2002, the RAAF joined eight other partner countries—the United States, Britain, Italy, the Netherlands, Turkey, Canada, Denmark, and Norway—with ‘security’ associates, Israel and Singapore, to back development of the Lockheed Martin F-35 Lightning II as a fifth-generation, stealth, multi-role fighter.
Australia was originally expected to buy around 100 aircraft to replace its Air Force FA-18C Hornets and F-111s from 2012 but, despite investing about $150 million towards the aircraft’s development, a final government decision by Canberra on buying the fighters is not expected until early next year.
In the meantime, Australian companies have grabbed hold of opportunities to export their design skills, aircraft parts and ground equipment for the multi-function jet fighter. An RAAF spokesman said the JSF program was opening doors for Australia to access capability and technology a generation ahead of other contemporary aircraft. “Australian industry [can] compete for JSF work, and participate in the development, production and through-life support phases of the program.”
While that occurs, Australia is placing some emphasis on getting other irons into defence and security fires. Significant sales of defence and security goods and services are being concluded with nations in the Middle East, the Association of South East Asian Nations (ASEAN) countries, and New Zealand.
Minding your language
Terrorists and underworld thugs are not the only security targets that demand the attention of American organisations like police and the FBI. A major security issue they face is gravely familiarity to Australian authorities: childhood protection. The internet has become a battleground to ensure the safety of children and American authorities wanted software that would prove, for instance, that an email purporting to come from a 16-year-old boy was, in reality, from a 45-year-old male predator. And not just that, but who the predator was.
This has led to extraordinary success for Sydney company Appen Pty Ltd, which specialises in speech and language technology.
The US Department of Homeland Security, along with a substantial list of other agencies, originally set out to identify ways to effectively deal with—and identify—the origins of the massive amounts of data that pour endlessly into their systems, all day, every day, with only limited human resources to deal with it. They invited tenders from expert suppliers, including Appen, in a process known as Broad Agency Announcements (BAA). This system is used to discover quantum leaps in product design and this time the agencies wanted to produce a software solution that would deal with the problem of authorship attribution, the real identity behind communications that arrive in various security organisations.
Appen faced competition from some 50 organisations but ultimately won the bid with a software solution that, in addition to keyword search, provided a profile of an unknown writer’s gender, age bracket, education level and even native language, along with psychometric traits including emotion and psychosis. It works in English and Arabic and, potentially, many other languages as well.
Appen’s business development manager Phil Hall, says major sponsors of the work, including the US Department of Homeland Security, later requested a second stage of the project: a Data Stream Profiling tool that would actually identify authors. The solution that Appen produced provides a biometric profile based on keystroke signatures of writers; individual typing styles, such as the way keystrokes were strung together, how long the author’s fingers waited on computer keys and the time lag between strokes.
American agencies like the FBI, the Secret Service, Celebrity Protection Units and a host of police departments, now create biometric profiles of computer users, and identify them regardless of the name and password used to log in. Hall says the tools are now being readied for broader release and Appen is in discussion with a number of American and British agencies that have given “a very enthusiastic response”, although Australia has been slower to pick up on the potential of Appen’s work.
“We’d like to see more interest from Australia but this kind of technology is quite a stretch even for the deeper pockets of US buyers,” Hall says. “There are Australian organisations in the child welfare and similar fields who are really interested in our systems but, in the long run, this kind of work is most often internet-based and, therefore, it’s a global issue, requiring international cooperation.”