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All countries with a defense industry did not create it immediately, but gradually, based on the geopolitical situation, military-political blocs, economic opportunities and national military traditions. In order to understand the features of the development of the Australian defense industry, it is necessary to determine the time frame of the stages of its development in the XX century and at the present time. The overall evolution of the Australian defense industry includes five main stages.
Stage I (from 1901 to 1938) – the birth of defense production under the protectorate of Great Britain;
Stage II (from 1939 to 1950) – development of defense production in the conditions of the Second World War and in the post-war period;
Stage III (from 1951 to 1990) – attraction of foreign investments and innovative technologies to the economy, transfer of civilian technologies to defense production;
Stage IV (from 1991 to 2018) – licensing and permitting production ("assembly shop") for foreign manufacturers of weapons and military equipment;
Stage V (from 2018 to the present) is the national export strategy for the development of the defense industry.
Stage I (from 1901 to 1938) – the birth of defense production under the protectorate of Great Britain.#nbsp;
In the period from 1788 to 1901, the protection of the Australian colonies took place thanks to the regular troops of the British army. The army acted as a police force that guarded convicts in penitentiary institutions, suppressed rebellions of convicts and restrained the resistance of aborigines during the expansion of European settlements. For the most part, the army consisted of officers and soldiers who arrived from the metropolis, and to a lesser extent – of recruits from among the colonists.
In 1901, the Federation of Australia was formed and the united government decided to create an Australian army and naval forces under the leadership of Great Britain.#nbsp;
Until the beginning of 1911, the provision of all types of weapons was entrusted to the British government. As for the defense industry, until 1939 it was represented by two factories – explosive ammunition and weapons, which produced their products under license.
Stage II (from 1939 to 1945) – defense production during the Second World War and in the post-war period.The adjustment of the state military-technical policy of Australia was associated with its participation in the Second World War.#nbsp;
In fact, between 1939 and 1945, Australia participated in two wars: within the framework of the British Commonwealth, it fought against Germany and Italy in Europe and North Africa, and in alliance with the United States and Great Britain, it took part in military operations against Japan. It is important to note that the Australian government was already convinced during the Second World War that the UK was losing its former position in the world and it needed to look for a new powerful patron, which would later become the United States.
The Second World War brought major changes to the Australian economy, domestic and foreign policy. During this period, the Australian government has chosen a course to attract foreign investment and innovative technologies in various sectors of the economy. This accelerated the process of industrialization of the country and led to the development of certain segments of the defense industry.
The features of the second stage include:
- the military scientific, production and technological base in the defense sector was at a low level, which did not allow to provide the needs of the national Armed Forces with weapons in full;
- the high demand for supplies of military equipment from abroad made the state dependent on foreign suppliers;
- basically, repair and restoration workshops were created to maintain the combat readiness of the armed forces;
- defense production included state-owned and privately owned enterprises specializing in the production and repair of certain types of military equipment and was represented by a small segment of industry located in various sectors of the economy, without registration in a separate defense industry;
- a state program for the transfer of civilian technologies to defense production was adopted.
Stage III (from 1946 to 1990) – attraction of foreign investments and innovative technologies to the economy, transfer of civilian technologies to defense production;
After the Second World War, the foreign policy course of the Australian leadership was adjusted to strengthen military-political cooperation with the United States, which occupied a dominant position in the world not only as a manufacturer, but also as an exporter of military equipment.
During this period, Australia joined two military-political alliances – ANZUS in 1951 (Australia, New Zealand, USA) and ANZUC in 1971 (Australia, New Zealand, Great Britain), which was a natural result of the adoption of the strategic doctrine of "defense at the forefront". The goal was to work with the Western powers to stop the spread of communism as far as possible from the Australian continent. Within the framework of military-technical cooperation with the United States, Australia received gratuitous assistance in the form of the transfer of old samples of military equipment, bought new types of weapons, established licensed production and joint development.
On June 25, 1969, the United States adopted the Guam Doctrine, according to which the United States renounced its obligation to protect its allies from external aggression by its army, except in cases of aggression by major powers such as China or the USSR. The Soviet invasions of Vietnam and Cambodia in 1979 increased tensions in the region.
Features of the third stage:
First.#nbsp;Within the framework of the military-technical cooperation, gratuitous assistance was provided in the form of the transfer to the Australian armed forces of surplus and obsolete samples of the US armed forces.
Second.#nbsp;There was still a high dependence on imports of military equipment from the allied countries, contracts for the sale of military equipment were carried out in barter, credit or for cash.
The third.A favorable investment climate was created for the creation of joint ventures for the production of military equipment. At civilian enterprises, licensing and permitting production of military goods was carried out with the participation of foreign entities, within the framework of cooperation, conditions were created for the promotion of foreign weapons or Australian systems with foreign components to the world market.
Fourth.The ADI company was formed, which is designed to provide a unified financial, production and technological policy at machine-building enterprises for the production of dual-use products. The company included large objects of defense enterprises that are in public-private ownership, including with the participation of foreign capital. The production base of ADI was represented by aviation, shipbuilding, armored industries, as well as small arms and ammunition industries. ADI has become Australia's leading defense contractor, with revenues of about 550 million Australian dollars (335 million euros) and a staff of 2,800 employees.
Fifth.The Institute of Defense Science and Technology of Australia (DCTO, 1974) was created by combining the Australian Defense Science Service and the Scientific Department of the Ministry of Defense. The Institute was a subordinate organization of the Australian Ministry of Defense, which researched and developed new technologies for use in the Australian defense industry in the production of military equipment.
Sixth.Two-thirds of defense production was already in the private sector. For example, small and medium-sized businesses (SMEs) were represented by about 3,000 organizations and accounted for about 50% of employment in the defense sector.
Seventh.In the 1980s, the government adopted a military defense strategy that included:
1) rationalization of defense production in the public and private sectors;
2) expansion of activities in the field of defense R&D (it was planned to allocate up to 3% of the total budget allocated to the country's defense annually for R&D);
3) participation of the local private sector in the development of new technologies for the production of military and dual–use products - light aircraft, components for electronic equipment, construction of ships, boats, etc.;
4) promotion of defense exports by:

- consolidation of existing R&D, project documentation and other intellectual property to create military and dual-use products that are in demand on the foreign market;
- providing marketing assistance to defense industry enterprises in exporting their products and services to new world markets at the level of the Trade Commission and diplomatic missions in foreign countries;
- export of spare parts and components manufactured under license;
- providing offset loans to potential buyers of Australian military and dual-use goods and services;#nbsp;
- creation of joint ventures between national and foreign participants to expand market share for specific products;
- creation of a Center of Excellence that consolidates the best practices of companies and areas of knowledge into a single information space;
- Creation of the Australian Industrial Group Defense Council. The Council's activities covered the entire spectrum of the defense business – from the development of systems and platforms, production and end-to-end life support and construction of facilities, to the provision of support and personnel services. The work of the Council was carried out under the leadership of the national executive body, which included the CEOs and heads of defense departments of leading Australian companies, as well as key small and medium-sized enterprises working with and supporting the Australian Defense Forces.
The Defence Council of the Australian Industry Group pursued three key objectives – to ensure:
- effective contribution of the defense industry to Australia's defense capability based on defense-related expenditure planning;
- the positive contribution of the defense industry to the Australian economy;
- to ensure that the Australian industrial potential is an integral part of the country's defense on the basis of a genuine partnership between defense and civilian industry.
Stage IV (from 1991 to 2018) – licensing and permitting production ("assembly shop") for foreign manufacturers of weapons and military equipment.
In the early 2000s, the Australian leadership granted the United States the right to use about 20 facilities on its territory, for which the United States, as part of the settlement for the lease of the territory, supplied the IWT.#nbsp;
Further, the Australian government decided to create branches of foreign companies such as BAE Systems, Raytheon, Thales, Airbus and Boeing.
For example, the Australian Aviation Consortium consisted of government aircraft factories, the Commonwealth Aviation Corporation and Hawker de Havilland.#nbsp;
Hawker de Havilland was a licensed manufacturer of the Swiss PC-9 training aircraft. Under the license of the USA, this company also assembled Blackhawk and Seahawk helicopters, produced a glider and landing gear for the F/A-18 Hornet carrier-based fighter-bomber.
It is important to note that the transfer of technologies to the defense industry through the civilian sector has allowed two enterprises "Luerssen Australia" and "ASC Pty Ltd" (Australian Submarine Corporation), specializing in the design and construction of aluminum ships, ships and submarines, since 2013 to enter the list of the 100 best arms exporting companies.
Since 1988, Austal has designed and built more than 260 vessels, including civil ones, for more than 100 customers in 50 countries. Basically, patrol boats, coastal warships and high-speed catamarans descended from the Austal shipyards. In addition, the company specialized in the construction of ferries.
In May 2017, the Prime Minister of Australia officially launched the "Naval Shipbuilding Plan" program for re-equipping the fleet, designed for 35 years.#nbsp;
As for ASC Pty Ltd, in August 2017, the French company Naval Group opened a representative office in Adelaide to erect a shipyard where new submarines for the Australian fleet will be built.
Currently, the shipbuilding industry is represented by the following major companies – "Luerssen Australia", "ASC Pty Ltd", "Civmec", "Saab Australia Ltd", "Taylor Bros", "Penske", "Barrington Slipways Pty".
As for the defense sector for the production of small arms and ammunition, it included 9 factories that carried out their licensed activities for the production of various calibers of ammunition and small arms, which actually covered the needs of the armed forces and law enforcement agencies of Australia.
For example, small arms were manufactured by Lithgow Arms and Tenix Defense, the Australian branch of the French company Thales.
The geopolitical factor required the Australian Government in 2009 to begin implementing a new military modernization plan in order to counter the threat posed by the growth of global terrorism, changing political dynamics in the Asia-Pacific region and an increase in the number of peacekeeping operations carried out by the Australian armed forces.
As a response to these changes, a number of defense industry enterprises were reoriented to receive transfers for the development and production of information systems, UAVs, robotics, with elements of artificial intelligence, helicopters, modernization of vehicles, weapons, underwater rescue vehicles, sonar systems, means of protection of troops, patrol ships, monitoring and security equipment.
The features of the Australian defense industry of the IV stage can be attributed.
First.As part of the implementation of the Defense White Paper (2016), the Australian Defense Ministry adopted the "Defense Industrial Potential Plan", in which it outlined the government's vision to create a strong, sustainable and internationally competitive base for the defense industry, which will, to a greater extent, contribute to meeting the needs of defense potential and economic development Australia.
The plan contained a description of state strategies and programs aimed at strengthening the capacity of local industry to ensure defense capability. It determined the entry points of enterprises wishing to join the Australian defense industry, as well as programs available to enterprises that have already supplied goods and services for defense needs. The plan introduced a new framework for assessing sovereign industrial potential and a list of their priorities. The plan summarized a comprehensive investment program and signaled future investment opportunities.
The goal of the Australian government is to create a defense industry with the potential and sustainability to meet Australia's defense needs by 2028 [1].
Five strategic approaches of the Plan:
1. A broader and deeper defence industrial base where flexible small and medium-sized enterprises (SMEs) interact better with local defence and global defence companies and are not solely dependent on the Australian Defence Force.
2. Government investment in defence is a priority and Australian businesses are given the maximum opportunity to participate.
3. The innovative and competitive defense industry is developing due to the expansion of cooperation between defense enterprises, universities and the research sector.
4. Development of a strong export potential of the defense industry by stimulating domestic demand.
5. A defence and industrial partnership that will enable Australia to prepare for the future. This can be achieved by having the right people, with the right skills, in the right places, at the right time to respond to changes in the strategic environment, seize opportunities and manage the growing strategic and technological complexity.
Second. The "Skilling Australian Defense Industry" (SADI) program was adopted, which focused on creating a favorable business climate for foreign capital investment in defense enterprises, with the fulfillment of offset obligations and technology transfer. For most foreign manufacturers seeking to enter the Australian defense market, the main condition was the creation of a subsidiary in the country or the acquisition of an Australian company. The Government hoped that companies wishing to work in the defense sector would have Australian participation and Australian leadership, including at the level of senior management and boards of directors.

If we analyze the list of the 40 largest Australian defense companies, we can conclude that Australia is dominated by large international multinational associations. 27 out of 40 are foreign players. The 28th company is a joint Australian-New Zealand enterprise (which, after all, can be attributed to the list of Australian). Most of the foreign companies (14) are so–called "blue chips" whose shares are listed on the London and New York Stock Exchanges (Table 1).

The third.The introduction of an OEM product to enter the market at enterprises that produced military and dual-use products, by subcontracting foreign investors with Australian industry or involving Australian industry in the global supply chain through foreign direct investment.
Fourth. Abandonment of its own development of military equipment, licensing and permitting the production of high-tech and high-precision weapons.
Fifth.Localization and cooperation of national enterprises for the production and production of high-tech military and dual-use products.
Stage V (from 2018 to the present) is the national export strategy for the development of the defense industry.
In 2018, the Australian government set itself an ambitious goal – to take the ninth place in the ranking of the largest arms exporters in the world. A striking example is the speech in the media by Australian Prime Minister Malcolm Turnbull, where he said that the country expects to enter the top ten world arms exporters in 10 years and match the volume of arms exports with Great Britain and Germany. The Government is ready to allocate funds from the budget for crediting companies and creating favorable conditions for increasing exports of military goods and services.
The dynamics of the growth of the Australian defense budget is observed. If in 2016 defense expenditures amounted to $24.6 billion – 2% of the country's GDP, then by 2023 they will amount to $45 billion, i.e. almost twice as much. Currently, Australia ranks 12th in the world in terms of defense budget.#nbsp;
The features of the Australian defense industry of the V stage include:
First.Adoption of the national export strategy for the development of the defense industry, aimed at forming a unified and holistic state policy to ensure conditions for the growth of exports of defense products by supporting domestic enterprises and creating a favorable investment climate for foreign companies.
Second.Creation of a Special Export Fund (hereinafter referred to as the Fund), the authorized capital of which is $3 billion. The purpose of the Fund is to provide preferential loans for working capital replenishment to defense industry entities focused on the export of military goods and services;
The third.Adoption of a comprehensive investment program in six areas:intelligence, surveillance, electronic warfare, space and cybernetics; human resources, infrastructure, information and communication technologies, logistics, etc.; air and sea mobility; naval and anti-submarine warfare; aerospace forces; ground forces.
The Government has prepared industrial strategies for each of the six areas since mid-2019. The strategies take into account the main decisions of the government of 2018, the initial implementation of the priorities of the sovereign industrial potential and the initiatives of the defense industry.
Fourth.#nbsp; Determination of sovereign priorities of defense industrial potential:
1. The creation of shipyards of the XXI century for the design, construction and optimal production efficiency of future submarines, frigates and small military vessels is crucial to achieve the necessary capabilities and efficiency in the shipbuilding industry.
2. Modernization of ground combat vehicles to the level of the next generation, while the level of technology will be much higher than that of previous generations. Australian industry, including participants in the supply chains of motor vehicles, must have the capacity and capabilities to design, develop, manufacture and integrate new systems and equipment, as well as the ability to update and modernize them so that land combat vehicles can meet modern challenges.
3. Increasing the radar capabilities of active and passive phased arrays is just one element of a broader system, but it is a critical element in which Australia occupies a leading position. The ability to detect enemy forces will be crucial for offensive and defensive operations in all environments. Australian industry needs to strengthen the ability to design, develop, manufacture, maintain and upgrade passive and active radar systems with electronic scanning.
4. Technologies to reduce the vulnerability and enhance the survivability of a soldier's combat ammunition – The Australian industry must improve and modernize stealth and survivability technologies, the level of ballistic protection that gives soldiers an advantage in combat.
5. Development of technological applications for signal processing in the field of cybersecurity, radar, sonar and acoustic technologies, operational support for electronic warfare.#nbsp;
6. Surveillance and intelligence gathering, analysis, dissemination and integration of complex systems – The defense industry must have the ability to design, develop, maintain and modernize surveillance capabilities so that large amounts of data can be collected, analyzed and disseminated. This includes the development and modernization of sensors and software, over-the-horizon radar systems, space situational surveillance systems, reliable autonomous systems, cryptographic equipment, integration of intelligence and information systems into command and control, communications, computers and intelligence networks, high-end integration between platforms and weapons systems that provide protection with improved situational awareness.
7. Initial and operational testing, evaluation, certification and provision of defense platforms and systems is a common defense and industrial goal. This requires skilled labor and equipment capable of ensuring the safety, accessibility and usability of defense platforms and systems both in peacetime and during operations. These capabilities should allow for the development and implementation of modifications and upgrades at the local level.
8. The research, design, development and production of ammunition, small arms and kinetic weapons will continue to serve as the basis of the military potential of the Australian Defence Force over the next decade. They will be carried out mainly by industrial enterprises within the framework of a number of large purchases and project support.#nbsp;
9. Deep maintenance of aerospace platforms – comprehensive or specialized maintenance of helicopters and aircraft of the Australian Defense Forces, such as F-35A joint strike fighters and large remotely piloted aircraft – is crucial for both deterrence and effective conduct of offensive operations. The Australian defense industry must provide different levels of their repair and maintenance at different stages of the work cycle. This requires skills and technologies to reduce strategic and operational risks.
In conclusion, for greater clarity, we present the chronology of the evolutionary development of the Australian defense industry (Table 2).

Brief conclusions on the development of the Australian defense industry and what can be learned from it for our defense industry.
1. Global trends have put pressure on the local defense industry, as sophisticated equipment for the production of high-tech weapons is becoming more expensive and resource-intensive. This has led to the presence of multinational companies in the country, whose suppliers, in many cases, are local small and medium-sized enterprises.#nbsp;
2. The Australian defense industry has managed to introduce innovations that can provide export opportunities even in a competitive global market.
3. The Special Export Fund is one of the tools for implementing the export strategy. This will allow the subjects of the defense industry focused on the export of military and dual-use goods and services to provide preferential loans to replenish working capital.
4. For the defense industry of Kazakhstan, the Australian experience is interesting:
- to introduce an OEM product at enterprises producing military and dual-use products that allows them to enter the foreign market by concluding subcontracting agreements with a foreign investor and domestic defense enterprises or to involve them in the global supply chain through foreign direct investment;
- to create a favorable business climate for the investment of foreign capital in defense enterprises, with the fulfillment of offset obligations and technology transfer. For the majority of foreign manufacturers seeking to enter the Kazakh defense market, the main condition should be the creation of a joint venture with an external market for military or dual-use products;
- on the joint development with interested state bodies of a Strategic personnel plan for the training and retraining of defense industry specialists until 2050. In addition, the Plan provides quotas (state grants) for promising young people to study at universities and colleges in popular professions in the medium and long term;
- to create a Center of Excellence, consolidating into a single information space best practices in the areas of the defense industry and areas of knowledge;
- on the diversification of the defense industry.
List of sources:
1. The Australian Defense White Paper. The official website of the Ministry of Defense of Australia, an online resource .
2. The Australian dilemma: China vs USA, online resource https://www.vestifinance . ru/articles/84897.
3. "Assembly Shop": will Australia be able to enter the top ten world arms exporters, online resource .
4. If you want peace. Australia has chosen three major military projects for itself, an online resource. /.
5. Defense industry of Australia - Defense industry of Australia, online resource .