AUKUS is a multigenerational project, and it’s time to admit that the trilateral effort between the United States, Australia, and the United Kingdom to develop and share defense technology is still in its infancy. The enabling environment must be tended to before advanced capabilities can be developed and delivered. Progress has been made in this first phase, but concrete steps should be taken to realize the agreement's potential concerning “AUKUS Pillar 2.” 

The goal of AUKUS Pillar 2 is to accelerate the development and delivery of advanced military technology to the militaries of the member nations. To achieve this, it zeroes in on lowering barriers to information sharing and streamlining joint and cross-nation funding pathways while establishing reciprocal export controls. Underpinning these efforts are the continual efforts to strengthen and deepen the culture of trust among the participants. Significant work is underway already. Two new policy recommendations will add to this and help create the enabling environment required for AUKUS to truly thrive and for the successful creation of a more integrated defense industrial ecosystem.

First, independent AUKUS advisory boards should be created to improve institutional knowledge retention. Second, creating AUKUS business parks with shared labs and workspaces would foster closer collaboration between government and industry while lowering entry costs for small and medium enterprises (SMEs), who wouldn’t normally have access to classified networks and government experts. The name of the game is improving collaboration and efficiency to bolster innovation and deliver advanced capabilities.

Creating and Retaining Expertise

Given the sheer scope and complexity of AUKUS, there needs to be dedicated staff focused on implementation over the longer term. Currently, government officials within the partner nations are responsible for all aspects of AUKUS, from problem diagnosis and analysis to implementation. While these individuals are highly competent and driven to see AUKUS succeed, they often wear multiple hats and are tied to pushing official government positions. This does not enable the same freedom of inquiry and debate that an independent advisory board would provide. Additionally, ensconcing this staff exclusively within the government risks not only missing vital information from the industry but also exposing senior staff to electoral churn every few years. Even within the mid to lower levels of government, there is a culture of movement with talented individuals hopping between departments, often as a way to move up in the service. Losing expertise continuously will hamstring efforts at creating the enabling environment needed for AUKUS to succeed.

Thankfully, most of the work is done by career officials and attached military forces on orders or assignments for a few years, and they are, therefore, less exposed to political changes. This ensures some continuity and institutional knowledge retention within the organizations. However, this system can still be improved. Independent advisory boards would allow for institutional expertise to be cultivated and retained and policies pressure tested. Creating budgetary line items to fund these bodies would ensure proper staffing and resourcing of the organizations while avoiding the pitfalls of government agencies, such as bureaucratic bloat and changes due to political appointments or shifts. This should extend past the national level and take a two-tiered approach. A national body within each of the AUKUS partner nations should be complemented by a trilateral secretariat run by the heads of the national bodies.

At the national level, these advisory boards should be formed from a mix of trade and industry leaders, government officials, and military experts. The advisory board would then be ideally situated to capture lessons learned and feedback from all key stakeholders. These boards would examine the regulatory environment, proposed legislation, and obstacles to implementation within their respective country. They could give annual reports to the legislative and executive branches or the parliament. This ensures governmental oversight and would allow lawmakers to identify areas for improvement within their control.

The trilateral secretariat would be ideally placed to coordinate between the three advisory boards to identify obstacles and opportunities that cannot be solved within the national infrastructure of a single partner. Dual hatting the leaders of the national bodies as members of the secretariat would increase buy-in within the national advisory boards, improving their effectiveness and efficiency. This would also reward talented individuals within the organization and thus facilitate knowledge retention. 

Aside from its engagement with the national advisory boards, the council should at least engage at the minister level across all three countries, providing briefings and soliciting inputs from the government. These engagements could take place every couple of years, limiting bureaucratic and political fatigue while maintaining momentum. Given the complexity and novelty of the endeavor, there are sure to be unforeseeable friction points and obstacles, so this coordination body would be pivotal in ensuring all partners operate from the same playbook as they are tackled.

Sharing Info by Sharing Spaces

As it stands, defense research and development is highly siloed and concentrated in the hands of a small number of “primes,” the biggest defense industrial companies, that have the institutional capacity and budget to manage the Byzantine legal requirements involved in defense manufacturing. The costs of building a classified workspace, known as a SCIF, can add up to hundreds or thousands of dollars to the cost per square foot, drastically increasing the upfront costs of competing in the classified space. Additionally, each organization manages its SCIF and pays for its employee’s clearances, which adds to the overhead.

This process becomes even more complex when dealing with geographically separated offices, and those within the AUKUS countries are no exception. Given the price and complexity of establishing even a single SCIF, many SMEs are precluded from operating in the classified space, a requirement for higher-level defense development and contracting. This limits the inflow of potentially disruptive technology into the procurement process and complicates collaborative development.

The government can dramatically lower these barriers by funding the creation of co-workspaces with certified SCIFs. Developing business parks that facilitate businesses with complementary capabilities operating in a shared area is nothing new, but applying this model to AUKUS endeavors could supercharge research and development. These AUKUS parks should be based around both classified and unclassified workspaces that companies can share, thereby maximizing utility while minimizing costs. This allows for synergistic collaborations within the industry and access to government expertise. 

Governments could staff these parks with export control experts, rotate through military members to test prototypes early in development, provide feedback, and evaluate prospective projects for contracts. Leveraging their combined experience, these routine interactions among the researchers, government, and defense would propel innovation. Ideally, engaging with end users early in the process would allow minimum viable capabilities, or “problem sets” that need solutions, to be shared with the industry and minimum viable products to be developed rapidly. 

Having government officials on site to continuously evaluate these developments would allow for built-in maturity paths. Rapid, responsive iteration with avenues to official contracts would supercharge the defense industry. AUKUS parks would have the additional advantage of capitalizing on economies of scale with respect to security. By centralizing these facilities, security protocols could be standardized, easier to manage, and ensure better safeguarding of critical technology from potential sabotage or theft from adversaries. Providing these services would offset the steep upfront costs associated with classified work, opening the door to SMEs that are usually excluded from competing and collaborating in the space.

Governments don’t have to construct and manage these spaces themselves. However, they could leverage the private sector to manage the construction and daily operations of the SCIFs. Within the United States, some movement exists within the private sector to establish shared and mobile SCIFs. Still, these efforts could be amplified across all three AUKUS partners to significant effect. If a public-private partnership is pursued, there could be a planned transition to fully privatized funding and operations of the business parks, further limiting government overheads in the future while enabling collaboration. This would help derisk the investments made by private industry and facilitate rapid expansion into the field.

And Now, for Something Completely Different

With AUKUS still in its initial phase of enabling environment creation, there is no better time than now to lay a foundation to ensure the greatest returns on investment. The feedback mechanisms provided by advisory councils and secretariats will be immensely valuable in refining processes and policies. AUKUS parks will facilitate greater collaboration during development and push the focus toward solution-based, minimum-viable product thinking and rapid iteration. Radical changes and thinking are what will ensure success. All three partner nations must push to create new systems and structures to create a truly integrated enabling environment.

Eric Lies is an analyst at the Australian Strategic Policy Institute’s Washington, D.C. office, specializing in security strategy and military affairs. He previously served in the U.S. Navy as a nuclear-trained surface warfare officer. He holds a bachelor’s of science with a major in international affairs from the U.S. Naval Academy and a master’s in international service from American University.

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