As defense tech goes commercial, does national security miss out?

Investors and educators called on to think more broadly at think tank event

Insufficient attention has been paid to the national security implications of private enterprise taking over from government as the main source of innovation for defence and intelligence applications, according to a panel at the Australian Strategic Policy Institute (ASPI)'s Sydney Dialogue on Tuesday.

"I think we've seen a significant change in the last 15–20 years where we've really moved from where government was the owner and controller of the best technology because they had deep pockets and things cost a lot, to a far more democratized view of technology," summarized AWS chief technologist Simon Elisha.

"What we are seeing here is the pace of innovation, the pace of change is so fast that controlling it at the institutional level is just not possible anymore," he added.

"Historically the role for innovation, particularly in Deep Tech, has always lain with government – even up until maybe 30 or 40 years ago. But really over the last two maybe three decades, four perhaps, we have seen a shift where private companies are really taking the lead in a lot of areas – innovation that traditionally would have been in remit of a government," said [video] CEO of QuintessenceLabs Vikram Sharma.

Sharma advocated that the only way for the West to face the rapid change of both technology and threat landscapes was through collaborations like the Australia/USA/UK "AUKUS" pact – which includes plans for collaboration on AI and quantum computing. Meanwhile other speakers called on entrepreneurs to shift mindsets to take on the role of protecting national security themselves.

Heather Richman of Defense Investor Network said between 2010 and 2018 at least $22 billion of Chinese capital was pumped into Silicon Valley, and "a lot of that was nefariously motivated, to steal IP and the like.: Richman said her organization is rooted in the idea of shaming investors into doing the right thing and thinking of the world through a national security lens.

"We aren't asking for you to do good for your country, just not bad," added Richman.

"Capitalism traditionally suggests you should solve for your shareholders, and I think there is a new form of capitalism emerging," said Jonathan Rubinsztein, CEO of Australian analytics vendor NUIX.

"'Do no evil' I don’t like for a purpose statement, and I would never have one. 'Don't do bad' isn’t exciting for me. Then how do you govern being a force for good? Private enterprise is complicated," conceded Rubinsztein.

Despite the transition to private industry, companies cannot expect to simply circumvent or ditch governments, said Richman. She drew on the space industry as an example of industries that touch on strategic matters being necessarily entangled with governments.

"You can't launch anything without working with government. Those relationships are not nice-to-haves, they are have-to-haves. With quantum, with space, with semiconductors – these industries require very patient private capital," said Richman.

But as the world is thrust into what feels like a time of sudden change, Elisha said unfortunately many politicians and policy-makers persist with a different view of government's role.

Some countries publicly recognize the public private changes afoot. Last week in a speech at a defence summit, Singapore's deputy prime minister Lawrence Wong acknowledged the government's need for private companies to further tech developments, citing low Earth orbit satellite communication and cloud computing infrastructure as examples of where the military has benefitted from private investment.

"As commercial enterprises continue to make technology breakthroughs across various fields, and I am sure they will, how can we guide their development to ensure these new technologies contribute to our collective security, rather than undermine it?" posed Wong.

The panel at the Sydney Dialogue also discussed the need for allied countries to keep the talent they train. Richman cited Carnegie Melon and Stanford as American universities that recently have had a majority of Chinese nationals in their incoming freshman computer science classes.

"We are looking at age of economic warfare, IP warfare, academic warfare, it's everywhere," said Richman.

Sharma said the reality of the geostrategic competition under discussion is that collaboration is not always possible – even absent geopolitical issues.

"We have some fantastic education systems with deep IP which can be transferred to individuals who then may go and work in other geographies where then those very learnings may not be working in interest or alignment with ourselves," warned Sharma.

The CEO said the reality of the world moving forward will include "less free flow."

"It's myopic to think you can control the flow of knowledge and information," countered Elisha.

"You don't get to choose – you can't grasp on to it. It's going to flow so how to cope with that world instead of believing the other is true," argued the AWS exec. ®