New Zealand is taking bold steps to overhaul its defence procurement strategy, with a focus on strengthening local industry and fostering innovation. The government has announced plans to create a military technology fund and impose new requirements on international suppliers, marking a significant shift in how the country equips its defence force.
Under the new rules, international defence suppliers will be required to demonstrate how they will engage local industry in delivering and sustaining defence capabilities. This initiative extends to the New Zealand Defence Force (NZDF), which will actively seek opportunities for small and medium-sized enterprises (SMEs) to supply equipment and systems, often as subcontractors to major manufacturers. While New Zealand boasts around 800 suppliers, most major defence equipment purchases currently come from multinational firms. The new strategy aims to change that dynamic.
A cornerstone of this revamp is the establishment of a military technology fund, expected to range between 100 million and 300 million New Zealand dollars ($58 million to $174 million). This fund will support the development of advanced military technologies, providing a much-needed boost to the local defence sector.
“We have the talent and the will. We now need to build the support and clear the way for innovation,” said New Zealand Defence Minister Judith Collins. “When the world around us is changing at such a pace, we need to change our approach to how we equip our Defence Force, and we need to work in partnership with industry to be better together.”
This announcement aligns with Wellington’s broader efforts to modernise its military strategy, increase defence spending, and enhance security. The Defence Capability Plan, a 15-year strategy, prioritises key investments over the next four years to maintain readiness and address evolving global security challenges. In April, the government unveiled plans to increase defence spending by $5 billion over the next four years, with the goal of raising it from 1 percent to over 2 percent of GDP within the next decade. The plan also underscores closer military cooperation with regional ally Australia.
The move reflects a growing trend among nations to bolster domestic defence industries amid rising geopolitical tensions. By prioritising local suppliers and fostering innovation, New Zealand aims to reduce reliance on foreign manufacturers and enhance its strategic autonomy. The initiative could also spur economic growth, creating high-skilled jobs and stimulating technological advancements in the defence sector.
However, challenges remain. Integrating SMEs into the defence supply chain will require significant coordination and support, while ensuring that local suppliers meet the rigorous standards of the defence industry. The success of the military technology fund will also hinge on effective governance and targeted investments in high-potential areas.
As New Zealand navigates these complexities, the revamped procurement strategy could set a precedent for other nations looking to strengthen their defence sectors. By fostering collaboration between government, industry, and academia, the country is positioning itself to meet future security challenges with homegrown innovation and resilience.