Prime Minister Malcolm Turnbull has unveiled plans for a $230 million defence innovation centre in Adelaide.
The Centre for Defence Industry Capability will help small businesses to supply defence markets and open up export opportunities.
Mr Turnbull, who will host a cabinet meeting in Adelaide on Tuesday, says South Australia will be at the heart of the government's defence industry plans.
"This centre will ensure that the businesses, the innovators, the food growers of the future are able to connect with defence and defence is able to connect with them," he told reporters in Adelaide.
"If you put your faith and your dollars behind Australian innovation, as we are doing ... then you will drive the jobs."
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But Mr Turnbull declined to say whether the navy's new offshore patrol vessels would be built in SA amid concern about further job losses at shipbuilder ASC.
There are fears within government and industry that another state, such as Western Australia, will be chosen to build the vessels, leaving ASC with a lack of ongoing work to sustain its workforce before the future frigates build commences in 2020.
Defence Minister Marise Payne said the government was taking action to prevent jobs from being lost.
"We know there are serious issues and I treat them very seriously," she told reporters.
"Any job loss is a matter of concern but what we have under way is a program of naval reconstruction for the Australian navy to address precisely that."
Mr Turnbull is in Adelaide for a three-day visit and will meet SA Premier Jay Weatherill on Tuesday evening.
He earlier toured offshore surveying company Fugro, saying it represented a future for SA beyond traditional manufacturing.
"We've just seen how this technology is examining and mapping the seabed off Samoa, in the Gulf of Arabia," he said.
"This is a great story. This is the exciting future of the 21st-century economy that awaits Australians."
