Patrick Durrant | Sydney
Of the many recommendations provided by defence industry leaders and advocates at a NSW Government hearing last week the most compelling was the call for governments both State and Federal to take more action on what they see as an impending STEM crisis.
The NSW Standing Committee on State Development conducted the 'Defence Industry in NSW' hearing on Thursday, with representatives from defence advocacy groups, SMEs and primes all giving evidence. With NSW seeking to reinvigorate its own defence industry and catch up with the likes of SA and Victoria, the panel sought advice on the best course of action to take to create a more favourable environment.
Defence spends almost $8 billion per annum within the state which has more defence bases (80) than any other; there are approximately 26,500 people either directly or indirectly employed by the industry in NSW.
With the panel keen to find out ways in which NSW could get a bigger slice of the pie, both NSW Defence Advocate John Harvey and others sought to encourage a focus towards working with the other states and territories on ‘growing the pie’.
New director of Defence NSW Peter Scott said the body would seek to understand the challenges faced by SMEs and the support they required by engaging closely with industry groups such as the Ai Group, AIDN, and SADIG.
Some of the suggestions voiced by industry witnesses included speeding up R&D tax incentive refunds which in a particular example had numbered in the hundreds of thousands of dollars and had restricted the company's cashflow situation for a months.
A common challenge for many SME's was getting word of what they could do to out to other local companies, many of which were sourcing technology from overseas when it could be provided locally.
Similarly there were many companies that weren't aware of what applications their product might have for the defence industry. Government to government communications, particularly in the form of introductions, could get SMEs into places, as Carbonix executive general manager Jeff Eager put it, “where we could wave our arms for a long time and never be seen”. Eager added that with the amount companies such as his (a UAS manufacturer) were investing in R&D, they could ill afford to attend many of the international trade shows where they could show off their wares.
Thales Australia CEO Chris Jenkins said the scale of the current investment in defence capability meant that in order for the ADF to get the platforms and systems it required, each state and territory needed to focus on its strengths.
Referring to the major shipbuilding programs in train he said: “While construction will occur in SA, the smart systems that will go into these naval platforms have yet to be selected and represent a major opportunity for defence industry in NSW”.
“We believe NSW's strengths are the smart systems and sustainment that enable the next generations of platforms to deliver the highest levels of capability for the ADF – if NSW was to capture its fair share of these systems it would drive investment and employment well beyond the timeframe of these programs and would generate second and third order economic benefits for the NSW economy.
New Quickstep CEO Mark Burgess said his business faced a shortage of local TAFE training for avionics manufacturing and maintenance and the “desire to fuel the pipeline of skills was substantial”.
“We've grown by over 100 employees in just the last three years and for a business of our size that is quite a pipeline of employee growth to sustain and continue.”
Jenkins agreed, highlighting STEM as a major obstacle to defence industry prosperity.
“I think the biggest thing that is going to negatively affect our sector and the State as a consequence and all of Australasia is the STEM shortfall coming through schools.”
He cited some great examples of universities having provided solutions – such as the University of Wollongong's welding smarts contribution to the Bushmaster's success – but said a lot of this had happened quietly inside the boundaries of the university.
“What would be helpful I think is to have a catalyst of really positive messaging from the State Government level about the future as the State as a technology leader ... unless we change gears on that I worry that we will see a fall-off in engineers and scientists coming through the schools and universities.”