The race for dominance in certain technologies sits at the core of the ever-intensifying competition for strategic advantage, and Australia is part of this dynamic. It will have to remain competitive and avoid becoming a mere onlooker. This requires a more robust domestic research and innovation engine; diverse, trusted and reliable international partnerships; and efforts to grow and retain talent.
The European Union’s chief negotiator for Horizon Europe—the EU’s key funding program for research and innovation—visited Canberra last week, underscoring interest in what Australian research has to offer. But the visit also showed Brussels’s continued interest in stronger alignment with Indo-Pacific partners.
Australia’s foreign and defence policy is understandably dominated by its relationships with the two major powers: the United States and China. While both relationships involve economic interests and research and development collaboration, the US is our most important ally, and China is a strategic rival. But the focus on these two risks creating a false equivalence that’s exacerbated by insufficient focus on other relationships.
The Australian government has rightly increased engagement with Southeast Asia and the Pacific for this very reason. But, at least until recently, Australia’s combined focus on China, the US and its immediate region has come at the expense of a deepened partnership with Europe, specifically the EU—which as a collective is akin to the globe’s third major power.
Prime Minister Anthony Albanese’s decision to commit to a security and defence partnership with the EU is a timely recognition of Australia’s national interests and should be applauded.
Horizon Europe is another initiative that is similarly in Australia’s national interest, but over which Canberra has so far hesitated. The tide in this regard may be shifting. It stands in stark contrast with regional partners: New Zealand is fully associated with Horizon, as are Canada and South Korea; Japan has started negotiations; Singapore has expressed interest in joining the EU’s funding envelope of nearly €100 billion; and Britain has fully signed on, despite its secession from the EU.
Europe has been rightly critiqued for being slow to recognise the extent of threats posed by Russia and China. But as the EU has come alive to its geostrategic position and brought a suite of multi-billion innovation initiatives online, now is the right moment for Canberra and Brussels to seal a nascent partnership of strategic convergence.
The EU benefits from the scale of an internal market comprised of 460 million people and 26 million businesses worth €18 trillion. The EU’s administration, the European Commission, has a depth of techno-legal expertise unmatched by any national government. Additionally, and quite fundamentally, the EU—as part of its seven-year budget cycle—has introduced a suite of strategic funding schemes. This includes ReArm Europe, an initiative to mobilise €800 billion to strengthen European defence capabilities; and InvestAI, an initiative to mobilise €200 billion including a new fund of €20 billion for AI gigafactories.
Despite world-class talent and research capability, Australia’s spends 1.7 percent of GDP on research and development, well below the OECD average of 2.7 percent. Australia’s peers spend more, including the US (3.5 percent), Japan (3.3 percent), Britain (2.9 percent) and Singapore (1.9 percent).
Horizon provides for a total funding envelope of €93.5 billion. The EU has offered Australia an official association for years, but Canberra has so far held off. Without full association, Australian entities remain ineligible.
Australia, like Europe, is facing significant threats to the integrity of its research ecosystem. A report published by ASPI last month highlighted that protecting research isn’t just a security issue; it makes economic and strategic sense. Universities need to be supported to secure trusted third-party funding.
A June Strategist article by Bethany Allen, Danielle Cave and Adam Ziogas revealed that despite sanctions, some Western universities continue to engage in joint ventures with Chinese institutions known to be supplying China’s armed forces and even supporting Russia’s war effort. The previously unreported links highlight the risks posed by foreign science, technology and academic partnerships in China in a period of heightened geopolitical rivalry, intensifying technological competition and deepening cooperation between Russia and China.
This means Australia needs a trusted space for advanced, high-impact and frontier technology research. Full participation in Horizon offers that foundation and opportunity, and one that reinforces the prime minister’s decision to start negotiations on a security and defence partnership with the EU, and the government’s aspiration to reach a free trade agreement soon.
Where Europe brings institutional and financial depth, Australia offers partners a pioneering aptitude and alertness to national security policy. The latter includes the government’s work on industrial policy, cybersecurity, countering foreign interference, and developing multi-nation defence technology capacity.
Nurturing multiple parallel and complementary relations at once is a challenge, but it’s one Canberra can meet with ease. The prime minister has set Australia on the right trajectory to engage Europe, and the EU in particular, more broadly and deeply. The next logical step is for Australia to sign onto Europe’s research and innovation ecosystem—not because it’s an answer in itself, but because it’s part of a multidimensional strategic relationship across security, trade, technology and innovation founded on an ironclad commitment to the rules-based order.
This article has been updated following the announcement that South Korea reached association status with EU’s Horizon on 17 July.