SYPAQ wins for the cardboard drone – AFR Article 27 Sept 2023 27 September 2023

Flat-pack technology The design has won the 2023 AFR BOSS Most Innovative award, writes Paul Smith.

The technology industry is awash with start-up entrepreneurs who insist that their product is life-changing and globally significant, when the reality is less exciting.

The opposite is the case at SYPAQ Systems, a 31-year-old Melbourne-based engineering and technology company, which has created ingenious drone technology that has become an essential part of Ukraine’s attempts to repel the Russian army.

SYPAQ is the overall winner of the 2023 AFR Boss Most Innovative Companies Award, for its Corvo Precision Payload Delivery System (PPDS), an unmanned aircraft system that takes the IKEA flatpack principle and applies it to the battlefield.

This is the 12th year that the AFR Boss Most Innovative Companies Awards have been held, and this year they attracted more than 700 entries.

The PPDS packs into a cardboard drone world-class guidance, navigation and control systems, with running software designed by its own experts that can fly accurately and reliably in hostile environments. And the drone can be assembled by soldiers in the field with minimal tools.

‘‘When my dad George left the Air Force to start SYPAQ in 1992 – and even when we established our sensors and surveillance business unit more than ten years ago – the idea of making a cardboard drone was not on the road map,’’ SYPAQ’s managing director David Vicino tells The Australian Financial Review.

‘‘Fundamentally, the Corvo PPDS was dreamed up because we hired smart people and created a culture of innovation, aimed at solving specific problems for our customers – exploring the art of the possible as part of this process.’’

As well as the overall award, SYPAQ won the most innovative medium-sized company award for companies of 100-499 people, and the most innovative technology company category.

The Corvo PPDS was originally pitched to the Australian Army in 2018 at an annual innovation day it runs to encourage local industry development.

The concept was simple: a flat packed, easy to assemble and operate, low cost, expendable drone, made from sturdy wax-covered cardboard to protect them from rain. They could be used for ‘‘last mile’’ delivery of humanitarian supplies like ration packs and blood bags in a compartment about the size of a shoebox.

It was awarded a contract in 2019, and delivered a successful demonstration model that year.

Vicino says the first prototype was conceived, built, and flown in about a week, and that it was enough to prove its feasibility, before COVID-19 slowed down its development.

Russia’s invasion of Ukraine in early 2022 was the catalyst for SYPAQ to swing back into action. The Army asked the company to ramp up development and production, so they could be used in the conflict.

SYPAQ mobilised production, and had an initial batch of PPDS delivered in six weeks, which the Australian Government then gifted to Ukraine.

It has since provided at least 500 of its drones to the Ukraine forces.

‘‘Since that initial delivery, we have had feedback from end users, and have made modifications to suit that environment,’’ Vicino says.

‘‘One of the emerging trends from Ukraine was increased demands for drones to support capture of aerial imagery. To meet that need we developed an intelligence, surveillance and reconnaissance module to help improve that process.’’

If reports are to be believed its drones have also taken on an even more dramatic wartime purpose, after soldiers modified them to carry explosives.

In August Ukraine claimed to have struck five Russian fighter jets in a kamikaze drone attack at an airfield inside Russia, about 170 km from the Ukrainian-Russian border. A former Russian fighter pilot wrote in a Telegram message that the ‘‘swarm’’ of drones included the easy-to-spot cardboard designs of SYPAQ.

In September Russia’s Foreign Ministry then accused Australia of helping escalate the war by supplying military aid to Kyiv.

‘‘Australian drones are actually used to strike targets in Russia,’’ Foreign Ministry spokeswoman Maria Zakharova said at the time.

The Australian Defence Department did not confirm or deny the account, simply saying that the manner of drone use was a matter for the Ukrainian government, and that all exports of equipment to support Ukraine had been subject to Australia’s export control legislation, including consideration of international obligations and humanitarian laws. Understandably, Vicino is unwilling to comment on how he thinks the drones have been used by Ukraine outside their original purpose.

‘‘As you can appreciate, whilst we are providing the technology, we aren’t on the ground in Ukraine, so it isn’t appropriate for us to comment on media reports,’’ he says.

However, he says the company’s involvement in the Ukraine conflict was a source of great pride for its employees.

He says SYPAQ established its headquarters in Fishermans Bend – the birthplace of Australian military aircraft design and manufacturing – to draw inspiration from the pioneers of military aviation and aerospace technology, and to prove to the world that the same pioneering spirit, engineering expertise and Aussie ingenuity still exists almost 100 years later.

When news of SYPAQ’s drones being used in Ukraine started being reported, Vicino says he and his staff saw a video of a primary school student, who had designed and built a cardboard drone as a science experiment, inspired by PPDS.

‘‘Our team got a real kick out of seeing how their work is inspiring future generations.

The success of PPDS has invigorated SYPAQ’s workforce and inspired the entire defence industry, proving that innovation is alive and well in Australia,’’ Vicino says. ‘‘It sounds cliché, but all of us at SYPAQ are driven by a purpose beyond the standard business metrics. We take our responsibility seriously. On a daily basis we receive emails and phone calls of support from around the world. We don’t do what we do for accolades, but it is definitely a source of pride.

‘‘Seeing and hearing how PPDS is having a material impact in Ukraine has provided us with a timely dose of perspective and has only reinforced our commitment to the cause, knowing that we are making a real difference.’’

Other Most Innovative Companies award winners include marketing agency whiteGREY, which won the most innovative small company category for the Hope Narratives, a modular language system that helps people impacted by ambiguous loss to tell their stories and navigate their grief.

CSL meanwhile won the best product innovation for Hemgenix, the world’s first and only gene therapy for haemophilia B; DataMesh Group won best service innovation for an in-store payments solution that lets consumers pay for everyday items with cryptocurrency via point of sales terminals; and Social Ventures Australia was awarded the best corporate social responsibility innovation award for its Synergis Fund, which raises capital and forms industry partnerships to build much-needed specialist disability housing.

Vicino says SYPAQ’s success with PPDS has given a ‘‘halo effect’’ for its wider range of unmanned aircraft systems under the Corvo brand, and had been a big commercial success for a company that has been selling to Defence and government for three decades.

He says it is possible that further uses for its disposable drones are likely to emerge when the Ukraine conflict eventually ends.

‘‘Because of its flexible and modular design, there are probably more uses for PPDS than we have thought of,’’ Vicino says.

‘‘Really, that is the core of the PPDS – it allows its users to be truly innovative in how they choose to deploy the technology.’’