The capability question boards can no longer defer

The Adelaide Economic Development Agency (AEDA) helps business to access the cutting edge of Australian thought leadership.

Presented by Adelaide Economic Development Agency

For three decades, globalisation allowed organisations to assume critical capability could be bought when needed rather than built and retained. Al, digital infrastructure and specialised hardware could be sourced readily from global markets. That assumption is now weakening. Tariffs applied to allies as readily as rivals, and secondary sanctions capable of severing supply chains overnight, are turning external dependence from a procurement choice into a strategic vulnerability.

"Your sovereignty starts to matter because you could find yourself in a position where somebody else cuts you off from supply chains," says Gavin Artz, Investment Attraction Advisor at AEDA.

COVID gave governments and businesses direct experience of what reconfiguring supply chains to meet a sovereign need actually required. But the deeper shift is structural. As Al commoditises generic software capability, the assets that are hard to replicate - proprietary data, domain expertise, physical infrastructure, regulatory standing and trusted relationships - increasingly underpin the capabilities organisations need greater control over. "It takes 30 years to build these types of things, even if you have an infinite amount of money," says Artz.

Deep tech innovation

Adelaide had internationally recognised Al capability through the Australian Institute for Machine Learning well before the current wave of generative Al. That sits alongside deep capability built through decades of demanding work in defence and space, reflected in companies like Myriota and QuantX Labs.

Research institutions, defence/space agencies and a biomedical precinct sit within walking distance of each other.

Communication and collaboration are part of daily working life. "Those people bump into each other on a daily basis," says Artz. "If you're a medical researcher and need that data person, the likelihood is you'll run into them."

Adelaide's advantage lies in turning specialised research capability into practical application by connecting it with organisations that already have real demand. The CommBank Centre for Foundational Al and Qantas' Product Innovation Centre show the model in practice, pairing university research capability with businesses that have real problems, proprietary assets and pathways to deployment. This model won't suit every business or capability.

"We're not trying to be all things to all people," says Artz, "but we're very good at very specific things." It matters most to organisations making long-horizon bets on deep-tech capability because, as he says, "the next 10 years will be nothing like the past 30". AEDA's Insight Series sets out the evidence behind this shift.

Read the evidence.