Australia’s Defence Industry: From Procurement to Powerhouse

Top 10 Defence Companies in Australia for 2025

Here are the 10 most influential and fastest-growing defence companies in Australia for 2025:

1. Innovaero — Sovereign UAVs and loitering munitions
WA-based Innovaero designs and manufactures uncrewed systems and strike-class loitering munitions. It partnered with BAE Systems Australia (now a shareholder/JV partner) on the STRIX UAS and has Commonwealth-supported work on the OWL-B loitering munition, with the Army trialling the OWL capability via Insitu Pacific. innov.aeroABC

2. DroneShield — Counter-drone and electronic warfare
An Australian C-UAS leader providing RF sensing, AI/ML, and EW solutions, DroneShield signed the first-ever NATO NSPA procurement framework for counter-drone systems and has since announced record European military orders for handheld detection and counter-drone kits. DroneShieldInnovationAus.comAPDR

3. BAE Systems Australia — Hunter frigates and JORN upgrade
BAE is prime on the Royal Australian Navy’s Hunter-class frigates and leads the JORN over-the-horizon radar mid-life upgrade—two cornerstone programs in Australia’s maritime and surveillance capability. BAE SystemsDefence

4. Lockheed Martin Australia — Guided weapons enterprise partner
Lockheed Martin Australia is one of Defence’s initial Strategic Partners in the Guided Weapons and Explosive Ordnance (GWEO) Enterprise, focused on building sovereign missile/munitions capability alongside Raytheon Australia. Defence

5. Boeing Defence Australia — MQ-28 Ghost Bat autonomy
Boeing’s Brisbane-centred operation leads on autonomous air systems; the MQ-28A Ghost Bat (developed with the RAAF) continues test milestones, with fresh Australian government backing announced in 2025. The AviationistThe Australian

6. Northrop Grumman Australia — Space domain awareness
Northrop is supporting space surveillance in Australia with the US Space Force’s Deep Space Advanced Radar Capability (DARC) Site 1 in WA—a major sensor for tracking objects in deep space now demonstrating operational tests on-site. DefaultNautilus

7. Thales Australia — Munitions and sovereign small arms
Thales sustains key regional manufacturing: Bushmaster PMV production in Bendigo continues under new orders, and Lithgow’s advanced small-arms facility has been opened as part of a long-term sovereign weapons hub. ABClithgowarms.com

8. Raytheon Australia — Air and missile defence integrator
Raytheon is Defence’s prime system integrator for ground-based air and missile defence and is advancing NASAMS capabilities in Australia, including recent trials integrating an AIM-9X Sidewinder on a high-mobility launcher. raytheon.au.mediaroom.comArmy Recognition

9. Austal — Shipbuilding and naval autonomy
Australia’s premier shipbuilder is delivering evolved Cape-class patrol boats and leading the Patrol Boat Autonomy Trial, having completed sea acceptance trials of the autonomous/remote “Sentinel” vessel in 2024. Naval TodayAustralian Defence Magazine

10. Electro Optic Systems (EOS) — Remote weapons and directed energy
EOS supplies modular remote weapon stations (R400/R500 family) and, in 2025, secured a landmark export order for a 100kW-class counter-drone laser system with a European NATO member—an industry first for laser air-defence exports. Electro Optic Systems+1Army Recognition

The Strategic Edge: Why These Companies Matter

What sets these companies apart is not just scale, but strategic alignment. The future of warfare is multi-domain, data-driven, and contested. Australia’s top defence firms are not waiting for directives, they are building the future.

InnovAero and DroneShield, for example, are not just responding to tenders. They are anticipating threats and building modular, export-ready systems. BAE and Boeing are embedding AI and autonomy into platforms, while Austal and EOS are rethinking naval and space deterrence.

According to Deloitte’s 2024 Defence Outlook, agility, digital integration, and trusted supply chains will define success. The top companies are investing in cyber resilience, AI ethics, and human-machine teaming, not just hardware.

This means the distinction between defence and dual-use tech is blurring. Many of these firms are also active in disaster response, space, and critical infrastructure. That makes them not just defence contractors, but national enablers.

The Future of Defence Technology in Australia

Australia’s defence ecosystem is evolving from a buyer to a builder. The next frontier is integration: of data, domains, and decision-making. AI, edge computing, and quantum sensors will be critical. So will partnerships, not just with the US, but with Japan, India, and Southeast Asia.

Initiatives like the Advanced Strategic Capabilities Accelerator (ASCA) are designed to bridge the valley of death between R&D and deployment. But the real test is cultural, can Australia’s defence sector move at the speed of relevance?

Bushnote’s work with defence-adjacent sectors shows that narrative, trust, and behavioural framing are increasingly vital. Defence companies must not only deliver capability, but also explain it, to policymakers, investors, and the public.

How to Benchmark Defence Innovation in 2025

To assess who is truly leading, look beyond contracts. Innovation in defence is about:

Time-to-field:

How quickly can a prototype become a deployable system?  

Dual-use potential:

Can the tech serve both defence and civilian needs?  

Exportability:

Is the product interoperable with allies’ systems?  

Resilience:

Can the supply chain withstand shocks?  

Human integration:

Does the system enhance, not replace, human decision-making?

These criteria will define the next generation of defence leaders. And Australia, for the first time in decades, is building not just a defence force, but a defence industry.