National Resilience – how to prepare Australian industry to support protracted conflict.
(The author’s presentation to the ANI’s 2025 Goldrick Seminar explored the themes in this paper.)
Dr Graeme Dunk*
Australia’s geopolitical environment is deteriorating. China is increasingly belligerent and is demonstrating a sense of strategic superiority in the Indo-Pacific. The 2024 National Defence Strategy (NDS) has highlighted that the current defence strategy is a strategy of denial; ‘[d]esigned to deter a potential adversary from taking actions that would be inimical to Australia’s interests and regional stability’.[1] The NDS has also warned that there is an increasing ‘risk of military escalation or miscalculation that could lead to a major conflict in the region’.[2] Major conflicts are, almost by definition, protracted and characterised by their ‘longevity, intractability and mutability’.[3]
Australia’s ability to undertake successful military operations in the current circumstances requires a capable industrial base. Protracted conflict requires a resilient industrial base. The importance of this relationship was recognised almost a decade ago in the 2016 Defence White Paper, with the statement that ‘[a] sustainable national support base that enables and sustains Defence and adds to Australia’s resilience will be fundamental to our future security and prosperity’.[4]
Resilience at the national level, not just in individual supply chains, therefore needs to be actively pursued to ensure the country, and its industry, is adaptable and sustainable under long term pressure. Writing for The Strategist, Marc Ablong has succinctly summarised resilience as:
the ability to plan for, adapt to, prepare for, resist, respond to and recover from change and crisis, whether natural or man-made, singly or concurrently. A national resilience approach to crises helps to frame an understanding of the interconnected and interdependent nature of the systems that a nation relies upon to function and provides a structure for making decisions during times of concurrent and cascading crises.[5]
This paper will address the preparation of Australian industry to support protracted conflict in the following manner. First, the links between sovereignty, resilience and deterrence will be briefly examined as these are important concepts and are often misused. Current challenges facing Australia, and the industrial implications of those challenges will then be addressed. A short analysis on types of resilience will then follow. Finally, the paper will consider practical measures that Australia can undertake to prepare the domestic industry. This paper is associated with a presentation to the 2025 Goldrick Seminar that couched its considerations to 2030. Within that context, options for preparation are somewhat limited.
Sovereignty, resilience and deterrence
Sovereignty, resilience and deterrence are linked. Indeed, ‘industrial sovereignty … is the foundation upon which the edifice of deterrence and resilience rests’.[6]
The sovereignty scholar Stephen Krasner has identified the ability to exercise control as a key factor in the determination of sovereignty.[7] With respect to sovereignty in the domestic industry, and the associated operational sovereignty that derives from that industrial sovereignty, the ability to exercise control over the industrial processes that go into the development and the sustainment of a defence system is the critical factor. This control derives from the extent to which the state has independent access to relevant intellectual property (IP), coupled with having the capability and capacity in both the local industry and in the relevant decision-makers to make use of that IP.[8]
The extent to which a state has independent access to military-related IP determines the form of the sovereignty that it has. Complete independence, coupled with the requisite capability and capacity, provides full sovereignty. Limited access to IP, for example is the IP is held in country, but the government cannot independently utilise it, gives limited sovereignty. When the IP is held by an offshore party, there is no sovereignty.
Resilience is similarly impacted by access to IP. Levels of sovereignty, and hence the degree to which a country has independent access to IP, therefore translate into levels of resilience.
Full IP access, together with in-country capability and capacity, provides resilience, or at least the opportunity to develop resilience should the political will and the investment be present. This means that we would be free to further develop that product, to augment or otherwise change manufacturing processes, and to distribute according to national requirements. Limited access to IP results in limited resilience. We can manufacture, typically under license with pre-determined processes, and the intellectual property may be held in country to support the manufacturing, but we don’t control the IP. We may have suitable capability and the capacity, but we cannot (legally) change it without the approval of the IP owner who will be offshore. If the IP is held offshore by a foreign actor, there is no resilience.
Resilience is also a central aspect of effective deterrence.[9] The North Atlantic Treaty Organisation (NATO) is explicit in recognising that ‘national and collective resilience is an integral part of NATO’s deterrence and defence posture’.[10] The strategist Colin Gray goes further in his assessment that deterrence is essentially a state of mind that has developed in the potential aggressor and ‘what matters most is not our capability, but rather what the enemy believes our capability to be’.[11]
Our pursuit of resilience must therefore have two important features for it to contribute to deterrence: it must be visible, and it must be believable. That is, an external party must be able to see that we have the capability and the capacity to sustain ourselves through the conflict. Gray also highlights an important caveat regarding deterrence, and the development of resilience as a feature of the deterrence by denial strategy:
An intended deterrent may not deter if the intended deterree believes we will not fight, or will not fight very hard (regardless of the size of our forces); if he is confident (however foolish such a belief) of securing military victory; if he believes (incorrectly) that war is absolutely inevitable anyway; or if he is totally or substantially indifferent either to threats in general or to the particular threats he receives from us.[12]
Given that the discussion here is about protracted conflict, resilience must be seen as the ability to control the pursuit of the outcomes that we need to successfully work our way through that conflict.
As resilience refers to the ability of a system to recover from misfortune or shock it is associated with risk, and cost.[13] The risk of a shock occurring, and the costs associated with the recovery, or preventing or minimising the shock so that recovery can, as far as possible, be avoided.
Current challenges facing Australia’s defence
We currently face two major challenges if we are to successfully pursue the government’s strategy of deterrence. Time and mass. Whilst the immediacy of the former is obvious, particularly given the timeframe imposed for the Goldrick Seminar, there are also other important factors to consider.
For decades, time has been a crutch for Australian policy makers. The concept of matching warning time to lead times for force expansion, development and preparation was first raised in the 1976 Defence White Paper,[14] and discussed in successive White Papers until it was specifically discounted as an appropriate basis for defence planning in the 2020 Defence Strategic Update.[15]
For industry, the repeated reliance on warning time has had a profound impact, resulting in a focus on economic rather than strategic outcomes, and a domestic industrial base for defence that is heavily skewed against Australian companies. Analysis of data from the Government’s austender website shows that only ten per cent of acquisition contracts placed by the Department of Defence are with companies controlled and operated within Australia.[16] The ability of Australian industry to ‘harness the leading-edge Australian innovation and technological expertise that can provide unique capability advantages for the Australian Defence Force’ is therefore questionable. [17] Concerted and focused effort is therefore required to build resilience into the domestic industrial base.
The second challenge is mass. Another crutch of strategic policy has been the concept that we enjoyed a technological or capability edge over regional military forces. This edge was seen as critical to offset our deficiency in numbers. For many years this was true. Now Australia has a deficit in quantity, and a decreasing edge (if it exists at all) in quality.[18]
We also have a small population, an area of direct interest that extends over 10% of the earth’s surface, and other interests at significant distance from Australia. We have, and in any reasonable timeframe are going to have, an insufficient number of advanced military platforms.
The mass challenge will increase in conflict, and particularly in protracted conflict, as there will be platform losses, either as a complete loss or requiring extensive repair. These losses are unlikely to be replaced in the numbers required, and the timeframe required, by the local industry in a manner that will make a difference to the conduct of that conflict. The number of already scarce platforms will therefore reduce.
Given the national limitations, the mass challenge can only be addressed through autonomy. The war in Ukraine has demonstrated the utility of uncrewed systems (drones) in a variety of operational circumstances, across different operational environments. Oleksandra Molloy has summarised this as:
Drones are being used for various purposes, including surveillance, reconnaissance, and targeted strikes. Drone technology has proliferated in the air, in the sea, and recently on Ukrainian soil. Uncrewed systems operations have included uncrewed aerial vehicles (UAV) that track enemy forces, identify targets, guide artillery, and drop ordnance and other weapons; uncrewed combat aerial vehicles (UCAV) used for long-range strikes deep into Russian territory; uncrewed surface vehicles (USV) used to launch attacks on Russian naval forces in the Black Sea; and uncrewed ground vehicles (UGV) used for logistics and mining or de-mining purposes.[19]
Given the wide range of potential applications for drones, and the cost imbalance that develops from countering drones with highly capable but expensive missile systems, low-cost unmanned systems can provide an asymmetric advantage. A recent review of the Royal Navy has concluded that drones, in concert with traditional naval platforms, can contribute to sea power.[20] One of the important paths for Australia in advance of, and during, protracted conflict is to ensure that there is a domestic capability to manufacture attritable drones at scale. The requirement is, therefore, for multiple suppliers rather than just one or two.
Preparing Australia and industry for protracted conflict
This article has discussed the links between resilience and deterrence, and the challenges of time and mass. The following section addresses the steps that Australia can take to prepare industry for protracted conflict, noting that the selected timeframe of 2030 does not leave much time.
Liquid fuel
As noted in a previous section, resilience is associated with risk. A fundamental requirement for the development of national resilience is therefore to address strategic risk. Our ongoing need for resupply of fuel from foreign suppliers using foreign-flagged ships is arguably our most serious strategic risk. The Department of Climate Change, Energy, the Environment and Water has stated that ‘Australia relies on liquid fuels for more than half of our final energy demand’.[21] These imports come from between 750-1000 fuel tanker arrivals per year[22], mostly with refined fuel. In 2023, for example, Australia imported $35.3 billion of refined petroleum.[23]
Further complicating the fuel issue is that, while Australia has a lot of import ports, they are typically quite isolated from each other, therefore making it difficult to provide land transport back-up due to the large distances involved and, in some circumstances, the lack of disaster-resilience infrastructure.[24] Ongoing availability to fuel underpins society and the economy, and is therefore a national risk, not just a military one. Furthermore, it is a risk than cannot be avoided or transferred.
The Royal Australian Navy simply cannot protect this critical shipping with a small number of manned platforms. And there will be other shipping that also requires protection, notably the Army’s Littoral Manoeuvre Vessels.[25]
The only available mitigation is to reduce the risk as quickly as possible. We need, rapidly, to electrify as much as we can, and to invest heavily in liquid fuel alternatives that we can control, and source, from domestic suppliers.
Prioritisation
Whilst risk is a principal driver for the development of resilience, cost is the other. Funds are always finite, so we need to properly prioritise our effort. Given the current geopolitical situation, the deteriorating situation, investment decisions need to address strategic vulnerabilities and to mitigate risks, not simply for economic outcomes. And the government needs to accept that prioritisation will bring commercial winners and losers.
Prioritisation also needs to consider the type of resilience we want for each capability and activity. Are we happy to have none? Do we want to manufacture to someone else’s IP? Do we need to be in the position to control? We cannot sensibly proceed without this step.
And lastly on prioritisation, we need to know how degradation affects outcomes. For example, what if we have a 50% reduction in the availability of fuel? And how does that impact on other elements within the broader economy that will be required to continue operating during the protracted conflict – both for society’s use, and for the provision of goods and services to the defence force?
All-of-nation approach
Resilience at the national level is a system of systems and needs to be treated as such. A clear understanding of how society works as a system of systems is therefore required to ensure that investment benefits can be maximised, and that unintended consequences can be avoided. This will also mean moving away from the ‘statism’, the state versus state competition, that has bedevilled the development of the domestic industry for defence in this country.[26] This competition is based on achieving economic outcomes for the individual states, not strategic ones that will benefit the entire country.
Treating resilience as a national endeavour has implications for how defence and industry relate and interact. One of the implications is that a “defence industry” is not appropriate, and the discussion needs to evolve to consider industry for defence. If Australia is to be resilient in the face of a protracted conflict, then it will be an all-of-industry activity. This also means that discussion of industry as a Fundamental Input to Capability (FIC) also needs to stop as this only further constrains the thinking about how industry contributes to the defence effort.
Under a national resilience construct, industry is a national capability, not just something that can be compartmentalised in the support of the defence effort.[27] Therefore, we need to consider how elements within the industrial base that have not traditionally been involved with defence, can become involved.
The government needs to unambiguously accept that industrial resilience in support of protracted conflict will be, is, a national endeavour. And it needs to be treated as such.
This will be required for redundancy but will also be needed to understand how society and the economy work as a system. For example, if fuel is requisitioned for military purposes, what are the implications on the distribution of food, or the provision of emergency services such as fire and ambulance.
Commonwealth reform
One of the actions that can be undertaken, in the short term, that will have an immediate beneficial effect on the development of national resilience, is to reform the Commonwealth Procurement Rules.[28] At the moment, the way that the Rules are written work against the development of national resilience. The rules themselves still explicitly state that companies cannot be discriminated against on the “degree of foreign affiliation or ownership”.[29] The Rules therefore promote participation for economic, not strategic, outcomes.
The Government recently introduced a long overdue definition of an Australian company. It is a good definition. But it’s just a data collection exercise to look at the participation of Australian businesses in Commonwealth procurement.[30] The definition doesn’t actually do anything to promote or support the development of a resilient Australia.
The supply chains and industry sectors required for resilience cannot be built under this limitation. Priority supply chains must be given preferential treatment. After all, the assessment will have been made that these are critically important for the mitigation of strategic risks.
There is a current carve out for national security within the rules, but it is as an exception.[31] In the current circumstances, with a deteriorating geostrategic situation and an increasingly unreliable major ally, strategic issues need to come to the fore, not just be an exception.
Non-military assets
Given that there will be losses of platforms during protracted conflict that will not be able to be replaced in scale and in timeliness, it is critical that the ADF has fall back options and operational flexibility. To this end, it is important that an audit of non-military vehicles, ships, boats, infrastructure be conducted to identify those that could be used for military purposes, and where they are located. This must include both commercial assets and those owned by State governments. For logistic resupply. For activities such as ad-hoc minelaying or mine clearance. For fitting of containerised or cannisterised weapon systems.
Associated with this, is the requirement to identify infrastructure that could be used for Defence purposes, and that which needs to be improved to provide logistic flexibility. A Mt Isa to Tennant Creek rail line, as an example, to link Townsville to Darwin. Which ports across northern Australia to be augmented, and access improved. And disaster-resilient connections in prioritised areas, or for prioritised resupply. In this regard all relevant Federal and State Governments and Departments need to work together. Disaster-resilience logistic connections will have economic as well as strategic benefits.
In addition to understanding what assets might be available, where they are, and how they might be used, it is important to put in place the legislative and regulatory changes necessary to support requisition or other activities. The Government needs to ensure that there is flexibility to move as required, particularly as tension mounts and if the situation were to deteriorate further, and does not have to declare war before the legal frameworks become available.
Conclusions
This article has focused on resilience. It could just as easily have discussed deterrence. The two are linked. A resilient society, replete with resilient supply chains and flexible logistics connections, has a deterrent effect. External observers take note and factor the ability of a society to withstand pressure into their strategic calculations.
Australia’s key challenges in the current environment are associated with time and mass. There is not enough of either. The time challenge can only be addressed by moving with alacrity. The mass challenge requires a deliberate move to autonomous systems as we currently have insufficient platforms and are highly unlikely to replace losses in a timeframe that will have any impact.
There are, however, actions that can be taken, now, to improve the nation’s ability to address these challenges. The Government must prioritise for strategic, not economic outcomes, and it must reform the Commonwealth Procurement Rules. Without these two steps we are unlikely to achieve the resilience that we seek.
Dr Graeme Dunk
After specialising in Anti-Submarine Warfare (ASW) in the Royal Australian Navy (RAN), Graeme has undertaken roles in industry as a business manager, project manager and business developer. He is currently Head of Strategy at Shoal Group.
Graeme has a PhD in operational and defence industry sovereignty from the Australian National University, a Master of Defence Studies degree, a Master of Science in defence technology, a Bachelor of Science in pure mathematics, and a Diploma of Maritime Studies. He has been awarded an Insignia Award in Technology from the City and Guilds of London Institute.
[1] National Defence Strategy 2024; p. 22.
[2] National Defence Strategy 2024; p. 11.
[3] International Committee of the Red Cross, Protracted armed conflict, 2017. https://international-review.icrc.org/articles/protracted-armed-conflict
[4] Defence White Paper 2016; p.30.
[5] Marc Ablong, National resilience for Australia – learning the lessons. The Strategist, 15 February 2024. https://www.aspistrategist.org.au/national-resilience-for-australia-learning-the-lessons/
[6] Graeme Dunk, Sovereignty costs. If you won/t pay for it, you don’t have it. Strategic Analysis Australia, 29 September 2025. https://strategicanalysis.org/sovereignty-costs-if-you-wont-pay-for-it-you-dont-have-it/
[7] Stephen D. Krasner, Sovereignty: Organized Hypocrisy. Princeton, NJ: Princeton University Press, 1999. The other factors are authority, non-intervention, recognition and territoriality.
[8] For a detailed analysis of the importance of control on industrial sovereignty see Graeme Dunk, Sovereignty in Defence Industry: from policy to capability, PhD thesis, Australian National University, 2023.
[9] National Defence Strategy 2024; p. 27.
[10] Deterrence and defence, NATO, 19 September 2025. https://www.nato.int/cps/en/natohq/topics_133127.htm#resilience
[11] Colin S. Gray, Gaining Compliance: The Theory of Deterrence and its Modern Application, Comparative Strategy, Vol 29, Iss 3, 2010. https://www.tandfonline.com/doi/abs/10.1080/01495933.2010.492198
[12] Colin S. Gray, Deterrence Resurrected: Revisiting Some Fundamentals, Parameters 40, no. 40, 2010.
[13] Graeme Dunk, The importance and development of national resilience, Shoal Group Pty Ltd, 2025. https://shoalgroup.com/wp-content/uploads/2025/05/National-resilience-a-Shoal-Group-discussion-paper.pdf
[14] Australian Defence, Australian Government Publishing Service, Canberra, 1976; p. 12.
[15] Defence Strategic Update 2020; p. 14
[16] Graeme Dunk, Sovereignty in Defence Industry: from policy to capability, PhD thesis, 2023; p. 268.
[17] Defence White Paper 2016; p. 10.
[18] The concept of Australia having a technological or capability advantage over potential regional adversaries first appeared in the 1987 Defence White Paper. The need to retain an edge was repeated in subsequent policy documents but by the 2007 Defence Update it had been recognised that ‘military forces in the Asia–Pacific region are becoming increasingly sophisticated and Australia must work harder to ensure that our forces retain an edge in leading military capabilities’. (p. 10)
[19] Oleksandra Molloy, Drones in Modern Warfare: Lessons Learnt from the War in Ukraine, Australian Army Occasional Paper No. 29, 2024; p. 1.
[20] William Freer and Emma Salisbury, A more lethal Royal Navy: Sharpening Britain’s naval power, Geostrategy Programme No.GSPR01, Council on Geostrategy, 2024. https://www.geostrategy.org.uk/app/uploads/2024/05/GSPR01.A-more-lethal-Royal-Navy_-Sharpening-Britains-naval-power.pdf
[21] Australia’s fuel security, https://www.dcceew.gov.au/energy/security/australias-fuel-security
[22] https://www.infrastructure.gov.au/sites/default/files/documents/strategic-fleet-taskforce-final-report.pdf
[23] https://oec.world/en/profile/bilateral-product/refined-petroleum/reporter/aus
[24] https://www.aip.com.au/sites/default/files/download-files/2017-09/Report_into_Australias_Maritime_Petroleum_Supply_Chain.pdf
[25] For a treatment of the acquisition of the Littoral Manoeuvre Vessels see Mark Mankowski, What is Littoral Manoeuvre? – Part 1, Land Power Forum, Australian Army Research Centre, 23 August 2023, and Mark Mankowski, What is Littoral Manoeuvre? – Part 2, Land Power Forum, Australian Army Research Centre, 19 September 2023. https://researchcentre.army.gov.au/library/land-power-forum/what-littoral-manoeuvre-part-1 and https://researchcentre.army.gov.au/library/land-power-forum/what-littoral-manoeuvre-part-two
[26] Graeme Dunk & James Kruger, “Shaking Australia’s ‘state vs state’ attitude to innovation”, The Strategist, Australian Strategic Policy Institute, 06 June 2023. https://www.aspistrategist.org.au/shaking-australias-state-vs-state-attitude-to-innovation/
[27] Stephan Frühling, Kate Louis, Jeffrey Wilson and Graeme Dunk (2023), Defence Industry in National Defence: Rethinking the future of Australian defence industry policy, Australian Industry Group and Strategic and Defence Studies Centre, Australian National University. https://www.aigroup.com.au/news/reports/2023/defence-industry-in-national-defence/
[28] https://www.finance.gov.au/government/procurement/commonwealth-procurement-rules
[29] https://www.finance.gov.au/sites/default/files/2024-06/Commonwealth_Procurement_Rules-1-July-2024.pdf; p. 15.
[30] An Australian business, in the context of the Commonwealth procurement framework, is defined as:
- is a business, including any parent business, that:
- has 50% or more Australian ownership, or is principally traded on an Australian equities market; and
- is an Australian resident for tax purposes; and
- is a business that has its principal place of business in Australia.
The Department of Finance has stated that ‘the definition of an Australian business will be used to collect information on the participation of Australian businesses in Commonwealth procurement, providing a more comprehensive picture on the number of Australian businesses that interact with the Commonwealth procurement framework. The data captured will also enable and inform targeted engagement with businesses and industry sectors, to help lift their capability to compete for Australian government contracts.’ (March 2025) https://www.finance.gov.au/government/procurement/defining-australian-business-commonwealth-procurement/definition-australian-business
[31] https://www.finance.gov.au/sites/default/files/2024-06/Commonwealth_Procurement_Rules-1-July-2024.pdf; p. 6.
