November 30, 2023

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Boosting Victoria’s Defence Industry and Digital Future

The Victorian Government is supporting Victorian defence industry companies to transform their operations by deploying digital technologies to drive value and productivity – spearheading their competitive advantage.

The Minister for Industry Support and Recovery recently announced the $1.36 million Smart Enough Factory program that will support small to medium-sized businesses in Victoria’s defence industry to modernise design and manufacturing processes.

Delivered by DMTC Limited (formerly the Defence Materials Technology Centre), the Smart Enough Factory program will assist participating businesses to adopt digital technologies, overcome barriers such as costs, skill shortages or security vulnerabilities, and create opportunities to enter defence supply chains.

To boost digital and Industry 4.0 capabilities, the program uses advances in data-driven production to enhance businesses’ operational performance and manufacturing productivity, leading to more efficient processes and significant cost savings.

The pilot program is underway with five Victorian small businesses. The full-scale program will run from the end of the year for an initial period of three years, with up to 20 Victorian defence businesses each year to reap the benefits of the program.

The program will also take on up to eight undergraduate or postgraduate interns a year from Victorian universities through a scheme administered by the Defence Science Institute (Victoria) to provide technical support, offering them valuable work experience, defence industry exposure and possible future employment.

By embracing advanced technology, the program will ultimately boost participating businesses’ prospects of participating in multi-billion-dollar defence programs, meaning more jobs and investment for Victoria’s defence sector.

Victoria’s defence sector contributes up to $8.4 billion to the state’s economy each year, employing around 24,000 people in 6,300 businesses that manufacture equipment and provide services for defence activities. Victorian businesses can express interest in the program via the website.

The Minister for Industry Support and Recovery said that the Victoria Government is supporting the local defence industry to become ever more responsive, adaptive and connected – ensuring the region leads the way in advanced manufacturing, innovation and technology.

He added that the program will help defence businesses to grow and transform, supporting jobs and economic growth and cementing Victoria’s status as the advanced manufacturing capital of Australia.

The DMTC Limited Chief Executive noted that the Smart Enough Factory program is not just about getting companies to the starting line, it’s about putting companies in a better position to compete and win work. It’s about tangible actions to put industrial capability in Australian hands.

A recent report titled Defence trends 2020: Investing in a digital future notes that technology has dramatically disrupted the defence industry. This is true not only of the platforms and systems increasingly in demand by armed forces but also the internal processes that defence firms use to get those products and services to market.

Western countries are trying to dramatically accelerate their procurement models to get promising technologies into the field faster, often adapting applications from the commercial world such as 5G. Emerging cyber, electromagnetic and biowarfare threats are adding to the urgency and changing the nature of defence, as well.

The report notes that new competition, increased digitisation and accelerated procurement timelines will continue to weigh on incumbent players. Focusing on large-scale shifts, the report identifies three current shifts underway that will radically alter the defence industry.

The first and most important is the need for digital transformation. Thus far, many defence companies have taken steps to incorporate technology in their products and services, but they lag behind other industries in their R&D investments in critical areas such as AI and automation. This will also include investment in areas such as hypersonics, advanced materials, autonomous technologies and space

The second major trend involves procurement. New technologies arrive far faster than they did in the traditional acquisition cycle and increasingly they come from new market entrants.

The third trend is a need for changes in the defence contracting workforce, which was the subject of a 2019 Workforce Aviation Study. The study found that the current workforce profile, with many older workers nearing retirement, represents a chance to dramatically reshape the workforce through large hiring waves.


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