Innovation key to Indo-Pacific deterrence
Allies and Partners must generate, test and field capabilities faster than adversaries
Chris Mills/University of New South Wales Defence Research Institute
As strategic competition in the Indo-Pacific intensifies, Australia and the United
States have converged on complementary
approaches to deterrence. Australia’s National Defence Strategy frames deterrence by denial as preventing an adversary from achieving its objectives by making aggression infeasible or prohibitively costly by posturing and deploying resilient, survivable and networked military capabilities so that any attack risks failure or unacceptable losses.
The U.S., meanwhile, coordinates diplomatic, informational, military and economic tools, often with Allies and Partners, to shape adversary calculus and dissuade hostile action. Both approaches stand in contrast to the traditional model of deterrence by punishment, which relies primarily on the threat of retaliation after aggression to impose costs.
Both approaches also depend on more than platforms and optimized force posture; they demand continuous innovation grounded in focused research, agile development and adaptive operational concepts. Deterrence through denial must be particularly dynamic, evolving alongside emerging threats, technologies and operational concepts. In a world increasingly shaped by autonomous systems, gray-zone tactics and rapid technological change, static defenses and legacy systems quickly become obsolete. The capacity to continually evolve enables the fielding of smarter, faster and more resilient capabilities that detect, disrupt and neutralize threats before they materialize.
Amid fast-moving advances in artificial intelligence (AI) and autonomous systems, innovation has become the prerequisite for credible deterrence in the Indo-Pacific, where sea-lanes and the undersea domain are central to competition. A decisive factor in achieving denial will be the capacity to sustain a persistent, uncrewed presence across vast ocean spaces using advanced drones, autonomous surface and undersea vessels, and other AI-enabled platforms, while also keeping critical sea-lanes and ports clear of mines and other hostile undersea systems. Sustaining this posture requires continuous technological development, agile acquisition, and the rapid fielding and integration of emerging capabilities to enable deterrence to remain adaptive and credible as threats evolve.
Since 2009, Australia’s strategic posture has increasingly emphasized deterrence by denial, moving beyond a narrow focus on territorial defense toward a proactive, regionwide strategy. Yet, capability gaps persist. The U.S. concept of deterrence stresses a comprehensive strategy that aligns all instruments of national power and deepens collaboration with allies such as Australia. At the core of both approaches is a requirement that is often underprioritized: sustained investment in research, testing and evaluation. Innovation is not merely a string of projects; it also is an institutional capability. Australia’s Advanced Strategic Capabilities Accelerator and the U.S. Defense Advanced Research Projects Agency (DARPA) exemplify this, enabling rapid prototyping, iterative development and operational trials, while treating failure as learning rather than waste. Because innovation is cumulative, it demands steady funding and tight coordination across government, industry and academia.
Time Matters
In an era of sharpening strategic competition and rapid technological churn, timing is as decisive as capability. Systems that take a decade to field risk missing their strategic window, just as costly platforms can be outpaced by inexpensive countermeasures before they reach scale. Time-to-deploy and time-in-effect must be treated as core acquisition criteria. The practical response is a procurement model built for speed and iteration, including agile acquisition and flexible contracting to compress schedules and move usable capability to the field. In parallel, it also is critical to sustain the longer-horizon research that underwrites future overmatch. In short, deliver within two to five years while continuing to promote scientific investigation and innovation.
The U.S. pairs this timing discipline with a broad, well-resourced research and development architecture spanning federally funded and university-affiliated centers, and competitive grant programs, some of them open to Allies and Partners. This is backed up with substantial investment.
About 3% of Australia’s defense budget went to innovation, science and technology in 2024. The Australian Defence Science and Universities Network seeks to strengthen defense-university-industry links, although it operates at a smaller scale and with less institutional depth than comparable U.S. mechanisms.
Innovation is not an end in itself, however, and delivers little advantage unless it can be scaled. Prototypes deter little unless they can be produced affordably and at volume, which is why cost-to-scale and industrial readiness are decisive. As a result, industries must design for manufacturability, leveraging modular architecture, digital engineering and commercial off-the-shelf components, while governments strengthen supply chain resilience and workforce development.
Canberra and Washington are grappling with the challenge of scaling innovation, including through procurement and budgeting reforms, accelerated deployment and increased industrial capacity. To achieve overmatch this decade, they must accelerate entry for nontraditional vendors, reform acquisition systems, embrace disruption, and invest in production lines and enabling technology to scale at pace.
Innovation and Maritime Autonomy
In the maritime-dominated Indo-Pacific, autonomy is emerging as a game changer. Undersea and air-dropped drones offer persistence, stealth and rapid deployment for surveillance, interdiction and area-denial missions. When combined with AI-enabled command and control (C2), these platforms can form layered defense networks that complicate adversary planning and enhance deterrence. The U.S. Navy’s Orca extra-large uncrewed undersea vehicle (XLUUV) program and DARPA’s Manta Ray initiative to develop UUVs illustrate the trajectory. Australia is progressing in parallel, committing about $1.1 billion to a domestically built Ghost Shark XLUUV fleet under a five-year contract with Anduril Australia, with initial systems expected later in 2026.
Other regional actors also are moving quickly as demand fuels UUV market growth. Taiwan aims to deploy smaller drones, known as the Huilong or Smart Dragon, potentially capable of launching torpedoes.
To deliver results in maritime autonomy, the defense industrial base must be reformed to enable continuous innovation and durable deterrence. Procurement systems must prioritize speed, scalability and collaboration with nontraditional vendors, streamlining contracting, and incentivizing prototyping and field experimentation. Allied collaboration also is essential. Partnerships such as AUKUS, which comprises Australia, the United Kingdom and the U.S., and the Quad, which comprises Australia, India, Japan and the U.S., can pool resources, share intelligence, and develop technologies in undersea warfare, cyber defense and space, provided doctrines, standards and objectives are aligned.
Frontier technologies such as quantum computing, directed energy, hypersonics and advanced biotech will continue to shape deterrence; as such, governments must support foundational research and create transition pathways, with ethical, legal and safety guardrails embedded by design.
Deterrence in the Indo-Pacific depends on making innovation a standing institution, not a periodic initiative or patchwork of programs. It demands a force that can continually generate, test and field adaptive capabilities faster than adversaries can respond, especially at sea, where autonomous, layered systems such as UUVs
and AI-enabled C2 deliver persistent effects.
Meeting that bar requires three disciplines:
Time: Prioritize capabilities deliverable in two to five years while safeguarding long-horizon science.
Scale and sovereignty: Design for manufacturability, build production lines that can be surged, harden supply chains and expand the workforce.
System reform: Promote agile acquisition, open pathways for nontraditional vendors, and shared ranges, data and standards.
Allied integration also must be engineered through shared trials and interoperable architecture. If partners cannot build and field faster than threats evolve, deterrence will erode. If they can, it will endure. In the Indo-Pacific theater, innovation is the deterrent.
