Balancing the offensive and defensive in the AUKUS innovation agenda 

Intensifying geopolitical competition is having an adverse effect on the internet and innovation. Russia’s invasion of Ukraine, increasing Chinese aggression in the South China Sea and the lack of an Iran nuclear deal are contributing to the weaponisation of cyber technologies and the raising of technology barriers.

At the same time, Web3—a new iteration of the internet—and the technologies that enable it, such as blockchain, are developing systems that are increasingly decentralised, permissionless and not reliant on governments and organisations to facilitate trust. Amid these polarising tensions, Australia, the United Kingdom and the United States have proposed new levels of technology sharing through the AUKUS agreement.

‘Blocking’ the enemy has become a hallmark of modern hybrid warfare. The war in Ukraine has demonstrated the application of novel tactics and attempts by both sides to ‘unplug’ the adversary. Persistent, distributed denial-of-service attacks by Russian botnet armies, such as Killnet, against Ukraine and its supporters are now standard disruption and sabotage tactics. Ukraine’s more extreme approach of asking the Internet Corporation for Assigned Names and Numbers to restrict Russia’s internet access exemplifies a ‘digital iron curtain’ attempt to advance sovereign goals, the possible long-term consequences of which policymakers have yet to flesh out.

Outside of active conflicts, governments around the globe seek more digital sovereignty, self-sufficiency and, increasingly, restrictions on information sharing. The Chinese Communist Party has long sought to censor and disengage from the global internet through its ‘Great Firewall’, which involves a ban of Facebook and development of alternatives to Amazon, such as Alibaba. Beijing’s establishment of a ‘metaverse industry committee’ in November similarly speaks to a pre-emptive attempt to set the rules for the emergence of Web3 and metaverse-enabling technologies. Similar attempts have been made by AUKUS members. The ongoing campaign in the US to ban video-sharing platform TikTok is an example of geopolitical tensions and security concerns affecting the access developers and creators have to foreign technologies and networks.

President Joe Biden recently signed an executive order requiring the Committee on Foreign Investment in the United States to tighten its focus on advanced technologies, including information and communication technologies. The aim is to address the government’s concerns about what data Beijing can access, as well as to prevent supply-chain dependencies and the enabling of technology advances that aid Chinese military capabilities.

Similarly, the CHIPS and Science Act 2022 speaks to the Biden administration’s supply-chain concerns. The act announced US$52 billon in incentives for domestic production of semiconductors, which are used in computers and other electronic devices. Currently, 92% of the world’s supply is produced in Taiwan. The act also provides incentives for investment in critical sciences and technologies with the intention of strengthening homegrown capabilities.

What’s occurring is a trade-off between national security and access to global platforms, ideas and networks that aid innovation, and the market competitiveness that drives it. The by-product of innovation and market competition is more effective development of advanced technologies that have both commercial and defence applications. The need to develop compatible and effective channels for communication and technology sharing between AUKUS members is vital to the success of the agreement. Currently, however, this is not default government behaviour.

Despite the influence of geopolitical tensions on cyberspace and technology, entrepreneurs find ways to circumnavigate policy. Ukraine’s use of blockchain technology to fund defence efforts and Russia’s use to avoid economic sanctions demonstrate how these technologies operate without bias or morality. A hallmark of Web3 development is its resistance to censorship. Decentralised technology enables individuals to own their data and to select preferred platforms, since user communities rather than an overarching authority manage and moderate content and user data. The technology is still in its infancy, but the ability for governments to implement effective policy controls is limited. AUKUS is occurring in this context.

Under the AUKUS agreement, technology sharing is intended to result in increased capability among the three partners to strengthen regional deterrence against Chinese or other foreign adversary aggression. Using AUKUS as a vehicle to deepen ties between Australian, US and UK technology industrial bases is a sea change from traditional tendencies to favour sovereign capabilities over coordinated and open sharing of advanced technologies.

There is an opportunity and need to prioritise information and cyber technologies, such as Web3 and blockchain, that both aid in transparent and secure information sharing and ensure that innovation is compatible with their rapidly developing characteristics. The failure of AUKUS to do so could have a negative impact on the effectiveness of subsequent initiatives, already evidenced through the ability for emergent technologies to circumvent traditional policy and cyber barriers. It could also dampen industry’s incentive to innovate and commercialise these technologies, which could lead to an exodus of skilled labour to nations with laws that enable less constrained innovation and allow access to the necessary networks and data. For Australia, talent shortages are already a significant capability limitation that affects its ability to contribute to or retain technology gains achieved through AUKUS.

Eight of the 17 AUKUS working groups focus on advanced technology capabilities, and they should collectively consider the long-term implications of developments for industry and how they can focus on prioritising the strategies and frameworks that enable sharing between nations while strengthening their own commercial relationships. Ultimately, technology sharing, particularly in the advanced cyber, innovation, artificial intelligence and information-sharing working groups, should be constructive, be compatible with peacetime operations and reinforce secure and open digital connectivity with non-member nations, including long-term, stable engagement, at least commercially, with adversaries.

The internet and emergent technologies exist in a borderless domain. A defensive approach to innovation and ongoing efforts to block adversaries’ engagement in these spaces—or limit domestic engagement—are not sustainable. Technology will continue to find ways to overcome these efforts. Such behaviour is also likely to exacerbate tensions between governments and the private sector, which would be counterproductive to the cooperation required for technological advancement. AUKUS technology initiatives should be conscious of industry partners. The AUKUS members also need to think creatively about how defensive goals can be achieved in a way that’s compatible with the underlying characteristics of new technologies.

AUKUS’s technology-sharing goals represent a significant opportunity for Australia to bolster its capabilities, industry skills and expertise. The consequences will feed into the private sector. The challenge will be ensuring that defensive developments designed to protect AUKUS members are compatible with policy that encourages open but secure digital engagement.