The government has spelled out priorities for improving defence capabilities through clever ideas, with boosting intelligence, surveillance, electronic warfare and cyber heading the list.
Defence Industry Minister Christopher Pyne says the new $640 million Defence Innovation Hub to be launched later this year will drive growth in defence industry innovation.
The government has set six areas for research and innovation, with three given top priority for 2016-17.
"In the intelligence, surveillance, reconnaissance, electronic warfare, space and cyber capability stream we will focus on improving intelligence collection, analysis and dissemination," he said in the keynote address to the Land Forces conference dinner in Adelaide.
Mr Pyne said that would include biometric data and cyber innovation to support intelligence capability development.
Next priority is capabilities to better enable defence operations, including command and control systems, satellite communication and simulation.
Third priority will be capabilities to enhance land combat and amphibious warfare, including remotely operated armed reconnaissance aircraft.
"Of course, the beauty of innovation is that we do not yet know what great ideas or fields will yield us the most success," he said.
Mr Pyne said he wanted to ensure that when the government spent taxpayer money, it was spent on what serving men and women need.
That's the best possible equipment with funding invested in Australia where possible.
"We are determined to use the defence dollar to drive a high technology, advanced manufacturing future," he said.
Mr Pyne said the relationship with industry must change.
"We must involve industry earlier in our capacity development processes to understand just what they can contribute," he said.
Mr Pyne said Defence, industry and state and territory governments all had to work together to maximise return on investment and guarantee the best capability available and support for the Australian Defence Force
