Australia’s intelligence agencies must adapt to stay match fit as international contest intensifies. Even with recent transformational investments, the business model of the national intelligence community (NIC) is being challenged, including how the NIC collects and analyses intelligence, and provides the material impactfully to busy customers. Meeting this challenge requires technology solutions, effective partnerships and, crucially, persistent and sustainable innovation.
That’s a finding from a unique ASPI research project based on interviews with 28 former and current Australian national-security officials, and industry figures. These interviews inform an ASPI Special Report, Match-fit for the global contest? Innovation, leadership, culture and the future of Australia’s National Intelligence Community, released today, that provides unique organisational insights into Australian intelligence and is a future reference for NIC decision-making.
Innovation isn’t primarily about cutting-edge tools or kit. Asked about what determines success and failure for intelligence community innovation, leaders and former leaders highlighted the importance of culture and leadership. They also acknowledged the importance of self-knowledge and learning, leveraging disruptive but constructive voices (and expertise), conducive organisational structures and environments, community collaboration and adopting purposeful transparency.
Most importantly they identified a key vulnerability—and opportunity—around risk and experimentation. Many interviewees suggested non-operational risk aversion was common, although identified sources varied, including, for example, top-down cautionary signals, middle management’s lack of confidence, or over-broad consultation within large organisations. Some interviewees saw a misalignment between expertise, decision-making and risk within organisations, often associated with significant and rapid growth. This apparent aversion mirrored a landmark 2021 examination of the US intelligence community, but surprised given agencies engage so effectively with very significant operational risk.
Key to overcoming risk aversion was, according to others, effectively conceptualising experimentation in national-security (with suitable guardrails) and embracing ‘intelligent failure’—especially in dealing with challenges where not only answers are unknown but the questions being asked are unavoidably unclear.
Incentives were seen as critical. One former intelligence officer explained that too narrow a focus on specific outcomes could produce perverse results:
We reward dumb luck. The equivalent of the drunk driver who makes it home safe. We punish intelligent failure—even when the decision-making was right, although the outcome wasn’t what we hoped for.
There were also success stories. Current leaders pointed to continually improving approaches to risk and innovation. In one instance, an organisation recognised a need to ‘risk to de-risk’, by applying novel data techniques (including AI tools) to identify otherwise obscure threats and leads hidden in vast information holdings.
Additionally, to explore the future of NIC innovation, interviewees addressed specific intelligence challenges and opportunities put to them by the interviewer. This included changing technological and workplace expectations of employees (and how those run up against security requirements), affecting attraction, retention and staff satisfaction; the imperative (or not) of sovereign capability, amid complex international developments and the underlying relationship between agencies and Australian industry; and, evolving product requirements as intelligence customers’ information consumption patterns are transformed by technology. Contextualised by the cautionary tale of Signal-gate (and the inadvisability of ‘innovation by workarounds’).
Having analysed these issues and interviewees’ responses, the report recommends:
—Agencies incorporate its categorisation and findings on factors influencing success and failure into future innovation planning and evaluation, including by developing internal policy advice and communications to actively promote the concept and practice of ‘intelligent failure’.
—In designing and operating secure workspaces, agencies should actively consider not just security and amenity, but also the impact of that design and operation on the effectiveness of working within them (and thus staff effectiveness).
—Acting quickly on relevant 2024 Independent Intelligence Review (IIR) recommendations on technology including scoping a ‘national security focused technology fund’ (emulating Britain’s National Security Strategic Investment Fund) and a NIC technology strategy. But that strategy should also consider Australian industry’s needs, particularly small and medium-sized enterprises, including procurement and investment opportunities.
—The Office of National Intelligence (ONI) lead an urgent, classified audit of sovereign intelligence capability resilience and identify vulnerabilities, complemented by mapping Australia’s national-security industrial base.
—Agencies, led by ONI (and drawing on external assistance), expand on IIR recommendations relating to future intelligence delivery to more generally prepare for future reinventions of intelligence product, for example the incorporation of AI into customer interfaces, to meet evolving customer needs and information-consumption preferences.
Despite challenges, the NIC keeps on achieving. As the IIR found,
Australia’s intelligence community is performing well and generally effectively meeting the needs of government… The NIC has proved its ability to adapt and innovate in a challenging environment.
But to sustain success, keep pace with partners and stay ahead of adversaries, the NIC needs a roadmap. After all, as one interviewee observed:
[A senior foreign intelligence officer] said that there are only going to be four or five intelligence agencies in the world who will survive digital transformation, by being able to dominate in the information space …. Australia is also in the race, but is significantly underpowered and smaller than the other runners.
By taking the proactive steps recommended, the NIC can continue providing Australia an intelligence edge. For, as interviewees commented, there is presently a window of opportunity to act before crisis strikes and any mistaken (and thus unaddressed) assumptions about our intelligence capabilities are found wanting.
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