A greater focus is needed on local innovation in areas such as artificial intelligence, cyber, quantum and hypersonics, a former defence economic adviser says.
In a newly released report, Dr Rob Bourke says Australia should drastically review how it acquires and builds military equipment, given the $1 trillion of public debt.
While the government should acquire weaponry from overseas where it can, more attention should be paid to domestic capability to boost efficiency in areas covered by the AUKUS agreement with the US and UK, Dr Bourke recommends.
Simply assembling weapons platforms designed abroad is not only inefficient, but is not the most effective path to increasing local jobs and fostering innovation, he argues.
"Avoiding price premiums for some materiel and using what's saved elsewhere should bolster the military preparedness and industrial productivity," he said.
"Australia should gain more jobs faster across a larger, more efficient, and increasingly diverse advanced manufacturing base."
The domestic boost can be achieved by funnelling resources into critical technologies and areas of innovation which encompass Australia's national interests, Dr Bourke says.
This includes areas such as artificial intelligence, cyber, quantum and hypersonics, with cooperation with the US and UK in these areas underpinned by AUKUS.
"Assembling weapons platforms designed abroad is neither the only, nor the most effective, path to boosting domestic employment, increasing industrial complexity and fostering innovation," he writes.
"If properly administered, redirected domestic investment has the potential to deliver the design-induced knowledge spillovers that drive economic expansion."
The report's release coincides with Defence Minister Richard Marles touring Europe and meeting with his British, German and French counterparts to foster further security cooperation.
Mr Marles will tour key British shipyards "which build some of the world's most capable ships and submarines".
The defence minister is due to visit the Govan shipyard in Glasgow on Tuesday before heading to the BAE shipyard in Barrow-in-Furness on Wednesday.
