“But from what we’re seeing, New Zealand has very much an approach towards looking at environmental monitoring, telecommunications, and really aligned with New Zealand’s values and ethos on how we approach the defence industry.”

Aerospace, which already makes a $402m direct contribution to New Zealand manufacturing, could become a multibillion-dollar export business, Rocket said.

Keynote speaker Sam Vye, founder of Syos Aerospace, said the local aerospace industry should take advantage of what he called “New Zealand’s unfair advantage in defence tech”.

Vye, whose company’s drones have been used in the Ukraine conflict via a £30 million ($66m) contract signed with the British Defence Ministry last year, among other international deals, said his firm had benefited from Civil Aviation and Maritime New Zealand cutting red tape around testing uncrewed vehicles.

Successive Governments have not chipped much money directly into the aerospace sector, but they have lightened its regulatory load, creating “sandbox” areas at sea and in the air for repeated test missions without having to reapply for approval.

New Zealand also had “uncontested air and maritime environments” and enjoyed the defence industry trust that came from being a member of Five Eyes, Vye said.

We also have the under-appreciated “op-sec” (operational security) advantage of being “far from prying eyes”.

Syos has operations in Mount Maunganui, Ukraine (at an undisclosed location) and Fareham in Britain (Vye, now resident in Tauranga, is a British expat).

“When we test in the UK, the number of black Mercedes with tinted-out windows that turn up – it’s sad to say, but it’s not a joke. We have threats in the UK.”

There was more encouragement for NZ aerospace firms – who number around 230, many of them smaller or micro players beneath big guns Rocket Lab, Syos, Dawn Aerospace and Kea Aerospace – in an Aerospace Summit panel called “Leaning into defence contracts” that featured Vye, NZDF Air Commodore Andy Scott, NZDF Brigadier Matt Weston and NZDF Lieutenant Colonel Josh Wineera.

“If you look around the world, a lot of our partners and allies are investing heavily in defence at a level that we haven’t seen probably since World War II,” Weston said.

“With the unfortunate conflict and competition that’s going on, there’s a real demand for defence technology. Countries have realised they offshore too much manufacturing, and their national resilience and industrial capacity is too low.” Covid supply chain shock had also played a part.

“There are real opportunities for small to medium [companies]. Aerospace is an interesting sector,” Weston said.

Vye said he was not trying to sell to the NZDF, instead focusing Syos on larger offshore markets, but he encouraged small local players to band together and collaborate to bid for NZDF business. (While Vye hasn’t door-stopped our armed forces, NZDF has bought a “small number” of his drones in a “leaning capability” contract for an undisclosed sum. He told the Herald that while the deal was modest, it signalled good strategic intent.)

Wineera was already doing exactly that. The former NZDF officer now heads the Taranaki Alliance – a group of 80 or so firms cast adrift by the collapse of the offshore drilling and gas industry and now pursuing new opportunities, including aerospace and defence.

His efforts to sniff out opportunities for the alliance have made Wineera something of an expert in trade deals and procurement, but he hasn’t always liked the details he’s uncovered.

There was a “pretty big delta” between the promise of the defence technology accelerator and the funding allocated to it, he earlier told BusinessDesk.

The 2025 Defence Capability Plan gave an “indicative cost” of between $100m and $300m for the technology accelerator by 2028. But in the 2026 Budget, $17.67m in operational and capital funding was provided for the accelerator through to 2029/30.

“It’s hard now to see what that might look like in terms of supporting New Zealand companies, given that it’s just establishing it and maybe staff,” Wineera said.

And even with the limited spending so far, at least two tech contracts have gone across the Tasman.

In April, NZDF confirmed it had spent $1.9m on a counter-uncrewed aerial systems (UAS) system from Danish firm MyDefence, in a joint acquisition with the Australian Defence Force.

And just hours before the summit panel on defence contracts, invites were sent saying Rear Admiral Garin Golding, Chief of Navy, New Zealand, will open a new maintenance facility in Auckland for Australian-made Bluebottle uncrewed surface vessels (USVs).

The opening follows our Navy’s purchase of two Bluebottle USVs from Sydney-based Ocius Technology in 2024 – despite USVs being a Syos speciality.

During his keynote, Vye said a May 2024 contract win in Britain, involving dozens of USVs, was a breakthrough moment for his company. He showed a video of the remotely controlled boats being made; he often posts clips to social media of them whizzing across the waves.

It hasn’t been disclosed what our Navy paid, but its Australian counterpart paid A$4.9m ($6.06m) for five Bluebottle USVs.

“The Bluebottle has been something our Navy has conducted a range of experiments with aligned with the Australian Navy, so that fits within policy settings around working together,” Weston said when the Herald asked why the Australian USVs were chosen over the Syos vessels.

Vye said, “At that point in time of the purchase of the Bluebottles, we didn’t have USVs available.”

The Syos founder added, “The New Zealand Defence Force is not there to grow New Zealand industry; it’s there to provide the capability requirement and defend the nation. If we can do so with New Zealand industry, then great.”

He understood the NZDF was small. Syos was focused on sales to larger offshore markets for the land, sea, air and underwater drones it makes from its Tauranga base.

Weston said it would be “several more months” before NZDF’s Technology Accelerator programme would be fully operational. An investment review would be held next year.

It was notable that Weston and Scott’s often downbeat tone was at times almost the opposite approach to that of United States Defence Secretary Pete Hegseth (who in January toured Rocket Lab’s Long Beach, California plant).

“Any dollar spent on defence is not going on hospitals or schools, and we’re very aware of that,” Scott said at one point, in the context of explaining NZDF’s extended, multi-review tenders, which he acknowledged did not suit the rapid-fire approach taken by start-ups, often low on capital and hoping for quick results.

“We think we’re incredibly responsive, taking 21 months to sign a contract,” Scott said.

Scott said the Government’s $12 billion Defence Capability Plan, which includes the new technology push as part of a drive to lift defence spending to 2% of GDP by 2040.

“There has been a lack of consistent investment over the last 30 years [that has] left us in a place where $12b sounds like a lot, but there’s a real tension about how we apply that money and where we apply it. Do we build better barracks for our soldiers, sailors, and aviators, or do we buy them better military kit? What will keep our skilled workforce with us? And then our Government has quite rightly given us an imperative to land investment in New Zealand, and we’re looking really hard at how we do that.”

A more military feel

There’s been more and more of a military air about Kiwi aerospace over the past little while.

That ranges from Rocket Lab’s multibillion US Department of Defence and Space Force contracts for various missile defence systems, to a Dawn Aerospace Aurora Spaceplane being used by the NZDF to test the frigate Te Kaha’s defences against high-speed projectiles, to Air Vice-Marshal Darryn Webb and other Royal New Zealand Air Force brass being on hand for the opening of Kea’s Burnside building.

Webb said Kea’s uncrewed aerial vehicles were in the running for a maritime surveillance contract.

The September 15 announcement by US Air Force Secretary Troy Meink that the US has put weapons in space for the first time (in some undefined form) raised the temperature worldwide.

And those suspicious about the growing defence element would not have been impressed to learn that a researcher with the US Space Force was a member of the party touring Dawn, Kea and other Christchurch sites.

The pre-summit tour heard from strategic development lead Nick Marshall – himself a recent recruit from Britain, where he had a British Army signals role – who said Dawn was recruiting for a defence lead in Germany as it opened an office in that country.

“We need a centre of mass in the centre of Europe for our defence engagement, as well as civilian commercial engagement. Demand signals from potential customers are huge.”

Asked about a possible tilt toward defence contracts, Marshall said:

“Dual-use is the phrase of the day. But I don’t see it as dual-use. I just see it as use.

“Everything that we currently have and the lessons that we are learning globally out of unfortunate conflict mean that everything that has a civilian use also has a defence use.”

Vye also brought up dual use at the Aerospace Summit, but from a slightly different angle. Revenue from defence would be boom-and-bust as conflicts came and went, he said. Making aerospace kit and drones that also had civilian uses would help produce a more consistent revenue stream.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.