This opinion article by Business Council of Australia Chief Executive Bran Black was published in The Australian on 17 August 2024.

We need a national wake-up call if we are to avoid letting our greatest industrial opportunity slip.

I am in Adelaide this week, taking part in discussions with Premier Peter Malinauskas and the Committee for Adelaide on the economic opportunities and challenges ahead for South Australia. And you can’t talk about South Australian economic opportunity without talking about AUKUS.

That said, it would be a serious mistake to see AUKUS as Adelaide-centric policy. For a start, we are going to need an east coast submarine base too.

To date, SA is clearly the Australian region showing the most urgency in mobilising towards the industrial and economic change needed to see AUKUS succeed. But as Premier Malinauskas has identified, our whole nation needs to step up too.

The complexity of the tasks set out in Pillars 1 and 2 of AUKUS will need a team Australia effort—national policy settings in education, migration, taxation, housing and infrastructure will be critical. As Premier Malinauskas said, it will be our “biggest industrial undertaking in the history of the Federation”. Federation is the key word there.

Pillar 1 (the submarines) requires 20,000 more direct workers over the next 30 years. That’s a national challenge that will require massive coordination across governments. Perhaps controversially, our migration strategy must be part of that picture.

We also currently rank 55^th (just behind Vietnam and well behind New Zealand) in the Coursera 2024 Global Skills Report—that too will require national urgency to turn around if we are to gain the advanced capabilities needed for AUKUS.

Succeeding will also yield nationwide rewards in deeply modernising our industrial base and wider economy. By deepening our skills-base and technological know-how we will see tangible benefits throughout our economy, with diverse industries becoming more productive, better paid and future-safe.

Just as it’s a mistake to identify AUKUS only with South Australia, it would also be a serious mistake to define AUKUS only as defence policy. It has the potential to drive us towards a once in a lifetime, whole-of-economy transformation. Almost all of the technologies and skills which AUKUS investment will help us develop will have significant utility across all areas of our economy.

Yes, under Pillar 1 the acquisition and building of nuclear-powered submarines in Australia is a critical augmentation of our defence capabilities. But there is even bigger whole-of-economy potential (and more immediately realisable timelines) within the ‘advanced capabilities’ stream of Pillar 2. This needs to be a bigger part of our national debate and drive a greater sense of national urgency.

Under Pillar 2 Australian industry will collaborate closely with US and UK counterparts to develop a seamless three-way research and innovation system that will give us advantages in technologies like quantum computing and AI, high-tech manufacturing and engineering skills.

The partnership will open doors for many kinds of Australian businesses to participate in global supply chains and projects, expanding their market reach. These advantages will flow into far more of our industrial base than subs. We can also start realising some of these benefits right now, not just rolling out of shipyards in decades to come.

Australian research and development will be another benefit from AUKUS policy. Our 2021–2022 R&D spend of 1.68 per cent of GDP is half the OECD average, down from about 2.25 per cent in 2008–09. AUKUS should be catalysing a huge uptick.

The relationships between universities, research institutions, industry and governments across the nation will need more focus and guidance. Those partnerships will also need a higher tolerance for failure as it is likely we will fail (hopefully fast) many times and in many areas before we show success.

Investment in our skills and research under AUKUS momentum will be the golden goose which keeps on laying, because these strengths will extend well beyond defence. After all, the precursor of the internet, ARPANET, began as a defence research project.

And the money is there. Defence is a priority funding area for the $15 billion National Reconstruction Fund, and funds could be going towards research and skills in critical technologies that help boost both our defence and other industries.

The shift which we need to see is from viewing AUKUS as defence policy, to viewing it as nation-building policy—or even economic future-proofing policy. AUKUS isn’t just about South Australian subs. To dismiss it as such is a gross disservice to our national potential.

The correct question to be asking is ‘how does Australia use this once in a generation motivating factor to modernise and diversify our economy?’

And I can only hope that every government is as excited about answering this question as we are.