Wednesday, August 16, 2017

State governments, defence exports and industry development

I was struck by a recent article in Defence Connect about the detrimental effect of State vs State competition on the prospects for Australia’s defence industry. The article cites some key industry players, including Chris Jenkins from Thales, Mark Burgess from Quickstep and Victorian defence advocate and former cabinet minister Greg Combat. They all agree that the State vs State model is ‘less than optimal’, to use Combet’s words.

The subsequent conversation on LinkedIn was driven by Grant Sanderson’s comment: “If the Federal Government is intent on building a self sustaining, export oriented defence industry then it needs to internalize two critical lessons. Firstly locally developed IP is the well spring of innovation and international competitiveness. Buying overseas designs where local capability exists is detrimental to their strategy. Secondly there needs to be a constructive approach to the development of strategic centres of excellence rather than a Darwinian free for all between states and regions.”

I couldn’t agree with Grant more, and I’m encouraged that recently appointed State government defence ambassadors and advocates such as John Harvey and Peter Scott (NSW) and Raydon Gates (WA) understand the need for a strategic, national approach.

I’d like to make a couple of points of my own, however.

Firstly, State governments will always try to look as if they’re doing something useful for their voters. That usually means chasing exports or winning something off another state – essentially, treating business and industry development as a zero-sum game.

Secondly, State governments have often stepped in where the Federal government has been conspicuously absent in supporting industry’s efforts to grow and become exporters. They’ve been trying to fill a vacuum that doesn’t exist (at least to anything like the same degree) in most other industrialised nations. However, competition between the States has sometimes confused potential export customers, especially when there hasn't been a moderating Federal government presence.

Thirdly, The Federal government has turned on a sixpence (in strategic and policy terms) by suddenly becoming a vocal (and I believe committed) champion of industry development, innovation and exports, across all sectors of manufacturing and related industry. This has happened over little more than 18 months, since December 2015; the defence focus dates back to the release of the Defence White Paper and Defence Industry Policy Statement in February 2016.

So there’s been a bit of a perfect storm: we suddenly have a defence shopping list that’s worth nearly $300 million over the next quarter-century; we have a government that’s committed to spending as much of this money as possible in Australia (alright, still a minority share, but more than we could have hoped for previously); a government acknowledging that a competitive industry needs to broaden its mental horizons and pursue innovation; and a university and research sector that’s woken up to the fact that there’s likely to be unprecedented and growing demand for its research and knowledge ‘smarts’.

Oh, and we need our new submarines, frigates, patrol boats and armoured vehicles in a bit of a rush, which goes counter to the idea of a measured, integrated whole-of-Australia approach. It should be noted that we’re only facing this rush because the Rudd and Gillard governments shamefully refused over some six years to commit any money towards the Navy’s submarine and frigate programs, resulting in the current ‘valley of death’ and the haste to get design and construction work under way.   

So my response to Grant’s comment was this: “You don’t build export-ready industry capability without addressing the local market first and we haven’t seen the REAL money flow through the looming maritime and land projects as yet. And turning around the Australian government’s previous deliberate policy of allowing market forces to shape industry – and then refusing to act as a market player – will take time. Meanwhile, the Navy needs submarines, the Army needs new armoured vehicles and the urgency of those requirements doesn’t sit comfortably with the deliberate, concurrent development of industry capability across many technology domains and industry sectors. We’re talking about trying to achieve a generational task in only a few years.  I think we need to calibrate expectations and achieve the greatest leverage possible for every bit of industry activity over the next 5-10 years.”

Export-ready means having world-class product. That takes time to develop. It also requires an understanding of the market and the customer. That doesn’t happen overnight. Today’s exporters started on their journey years ago; tomorrow’s exporters need to start now – or better still, yesterday.

So what’s the role of the State governments in all this? They don’t sign contracts with the Federal government. They don’t build ships and submarines and armoured vehicles. They don’t re-paint and service warships. They don’t train soldiers, sailors and airmen and women. At best, they can help create local business conditions that favour investment decisions by industry and the Federal government.

They can invest in education and training; they can adjust local taxes and charges to make a city or region more attractive; they can support investment in market knowledge and a physical market presence at trade shows domestically and overseas; they can be advocates for an entire industry sector – and South Australia is the standout example of this. But they can’t award defence contracts and they can’t make promises to export customers on behalf of either the Federal government or industry. 

Ultimately, their power is limited.

The Federal government is looking to become more engaged with industry, to support industry development by championing both innovation and exports. It is filling the vacuum previously exploited by the State governments.


If the current business environment persists and develops the way that industry hopes, it seems to me the States need to re-consider their roles. If the Federal government is looking, for the first time in ages, to think and act strategically, then there’ll be more work around than Australian industry can handle in its present state. Helping to increase industry capacity by growing the trained workforce, and increasing capability by enhancing innovativeness, is a critical role the State governments must play. This isn’t a zero-sum game any longer: all States can share a much bigger prize, but they must be willing to work for a common benefit.

Saturday, June 3, 2017

Moderate Islam is the heart of the solution

Once the shock of last night's horrifying terrorist attack in London and last month’s terrorist atrocity in Manchester had subsided, the media commentary that followed had me thinking. 

There’s a battle raging for the hearts and minds of the Muslim world and it’s essential that Moderate Islam wins. Because if the moderates don’t win we risk a much bigger war between Islam generally and the western, or secular, world. Moderate Muslims don’t want that and nor does the west because it could be a fight to the death, and they’re usually brutal and bloody - especially for the losers.

The perpetrator last month was an Islamist terrorist. That we know. It’s almost certain the perpetrators last night were Islamists as well. They justify both their cause and methods using Muslim scriptures. In one sense – their willingness to inflict terrible violence on those with whom they disagree – they’re little different from the murderous zealots who committed terrible atrocities in the name of Catholicism or Protestantism a few centuries ago, and those of us brought up in the Christian tradition (if not the faith itself) would do well to remember this.

However, the Islamist cause and methods are generally denounced by a majority of Muslims, just as the majority of people brought up in the Christian tradition have renounced and denounced the sectarian prejudice and violence that have disfigured their faiths from time to time.

There’s a difference, however. In modern times the liberal Christian tradition has generally promoted something approaching a benign and tolerant democracy. Liberal societies can tolerate difference and dissent – some better than others, admittedly, as any Irishman or southern European could tell you. And as a result the temper of a Liberal society as a whole, both spiritual and temporal, makes political and sectarian violence a thing of evil. The same isn’t true in many (though not all) Muslim countries.

During the years of the ‘Troubles’ in Northern Ireland, and during the terrorist campaigns of the 1970s and ‘80s in places like Italy and Germany, national and spiritual leaders repeatedly condemned violence in the strongest terms.

Moderation and tolerance had a voice that mostly drowned out the message of violence. This voice was heard in homes, at schools, at places of worship. It argued for peace, it argued that the terrorist was the grotesque ‘other’ whose taste for violence placed both him (or her) and the cause itself beyond the pale. This same tolerant, inclusive voice made welcome immigrants from a diversity of faiths and backgrounds, not least Muslims.

In most free countries this voice of reason and tolerance (helped by an open and honest media) has helped prevent the radicalisation of generations of passionate, grumpy youths. It has spoken through the law, through the media, through governments and national leaders to deny terrorists the legitimacy they crave and the support that follows. In the West, the general de-legitimisation of extremist movements, whether terrorist or not, has been a victory for the common people, for human values and for the societies that sustain them.

Are we seeing the same in the Muslim community? That’s a genuine question: notwithstanding the lonely courage of a few Imams and community leaders, is the voice of reason and tolerance being heard enough in the Muslim community?

The point is that Moderate Islam risks being painted crudely with the same brush as the Islamists if Muslim leaders won’t emerge who can champion the cause of peace and tolerance and give a voice to these values which can then be amplified in family homes, in schools and in mosques.

Moderate Islam must give voice to reason and tolerance – especially tolerance, where Muslims choose to live in or alongside a secular or non-Muslim nation - and deny radicals the sense of legitimacy that empowers them to carry out barbarous acts of murder.

It seems to me that the prevention of radicalisation and the de-radicalisation of Islamist would-be-terrorists must begin among the Muslim community at large. You see, not all Muslims are Islamists, but all Islamists are Muslims. If the voice of Moderate Islam is not heard then the atrocities committed in the name of Islam will define the faith as a whole in the minds of onlookers. The consequences for the majority of peace-loving, tolerant Muslims living in Western countries who are good citizens and decent members of society, could be serious.

That’s the battle that’s being fought for the hearts and minds of Muslims, and it’s essential that Moderate Islam wins. And Moderate Islam needs the patience and support of the wider non-Muslim community if it is to win. This must be a shared endeavour because the consequences of defeat will be catastrophic. But first we need to hear the voice of Moderate Islam, of Muslim leaders who can promote and defend peace, reason and tolerance. If Moderate Islam has no voice, or if that voice is silenced, then the faith as a whole will have been hijacked by an extremist minority that, by default, has placed Islam at war with the rest of the world. 

In the meantime, we mourn those poor innocent souls who have died violently at the hands of murderous terrorists, and try to comfort their loved ones, and thank God for the kindness, and courage, of strangers who sought to help them.