In Tomorrows Australian


Local defence manufacturing export leader Ben Greene of Electro Optic Systems sees opportunities in Aukus pact

Prime Minister Scott Morrison at defence and space technology company Electro Optic Systems in Hume, Canberra. Picture: NCA NewsWire / Terry Cunningham

• ADAM CREIGHTON

  WASHINGTON CORRESPONDENT

  @Adam_Creighton

  
• 11 MINUTES AGOSEPTEMBER 30, 2021
• NO COMMENTS

The founder and CEO of Australia’s biggest defence exporter, Electro Optic Systems, says the AUKUS security pact with the US and UK will supercharge Australia’s defence industry, providing an unprecedented opportunity for smaller defence businesses to expand.

Ben Greene, chief executive of ASX-listed EOS since 1983, said focus on the acquisition of nuclear-powered submarines under the pact had overlooked broader benefits of the pact, which would boost Australian defence exports.

“Submarines are only the tip of the iceberg,” he said in New York for a dinner last week to celebrate the 70th anniversary of the ANZUS alliance, a defence treat between Australia, the US and New Zealand.

“I think you’ll find the experience we’ve had over the last 30 years is going to be imposed on the rest of the Australian defence industry,” he said, adding the sector would “have to lift very quickly in terms of horsepower of intellectual contribution”.

Dr Ben Greene, EO of Electro Optic Systems

The security agreement among the three nations, to share nuclear submarine and other defence technology, announced on September 16, to the surprise and fury of the French government, has been enthusiastically welcomed by Australian defence companies.

“There is a significant growth element for Australian defence industry where they have the tech base to be able to contribute,” Dr Greene said.

David Robinson, the founder and chief executive of internet 2.0, an Australian cybersecurity firm with 25 staff, said cyber was the “next largest priority for co-operation and technology sharing” after submarines. “It’s a closely guarded national asset; under AUKUS all three nations will benefit from greater technology co-operation,” he said.

Chris Poulter, founder of OSINT Combine, an open-source intelligence firm based in Sydney, said AUKUS was “great news” for Australian defence businesses beyond submarines.

“It really reaffirms our alliance with the US and the strong support for each other, where it matters in defence of our nations,” said Mr Poulter, who is in the US to establish a permanent footprint in Washington and the Midwest.

EOS, which formed an alliance with US defence giant Northrop Grumman in 2005, said renewed urgency and competition flowing from the deal would present challenges, too.

“It will sweep some of deadwood away, and there is some deadwood and non-performing programs,” Dr Greene said.

EOS is building a new satellite constellation system in the US, where it has about 100 staff. “This is the largest and most sensitive defence aerospace program ever undertaken by an Australian company in the US,” Dr Greene said.

“The Australian defence industry ecosystem is on the small side but has wonderful technology. This is an opportunity for some companies to be given growth opportunities so they can achieve much greater levels of scale and revenue.”

Dr Greene said he did not expect the government to increase its defence budget, which is a little over 2.1 per cent of GDP, above the median among OECD nations.

Since its founding in 1983, about 90 per cent of EOS’s revenues have been from exports of services related to software, laser and space.

“Although submarines are obviously important, it overlooks the real strategic import of the deal: a repositioning of Australia’s strategic posture, a shift in emphasis – and not a modest one – and renewed urgency,” Dr Greene said.

“There will be a huge emphasis in acceleration in the intelligent use of space to make more cost-effective defence programs on the ground and in the air.”

Dr Greene said he hoped EOS could help smaller Australian defence firms collaborate, given few wanted to be acquired. “Less than 10 per cent do, most just want to be decent size SMEs,” he said.

ADAM CREIGHTON

WASHINGTON CORRESPONDENT

Adam Creighton is an award-winning journalist with a special interest in tax and financial policy. He was a Journalist in Residence at the University of Chicago’s Booth School of Business in 2019. He’s written ...Read more

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