Managing Principal John Dower points out that those of you in the Antipodean R&D sector will no doubt have picked up on the Australian government’s joint media release* on 2 December last year, announcing the long awaited Landmark review of the R&D system to unlock growth. This is being led by Robyn Denholm, Chair of Tesla, and is seen as a key pillar of the Government’s $23 Billion “Future Made in Australia Plan” (when spread over ten years this investment does not look quite as impressive).
One of the triggers for the review was the “alarming slide over the last decade” in Australia’s R&D performance, which is borne out by some concerning stats. Australia’s gross R&D investment as a % of GDP has slipped from 15th out of 34 OECD countries in 2011/12 to 21st in 2021/22. At 1.68% of GDP Australia spent proportionately less than a third of Korea and half of the US on R&D, lagging behind Portugal, Estonia and the Czech Republic. One indicator of Australia’s shrinking R&D spend and status as a net importer of technology is the low proportion of locally originating patent filings, which hovers around 8%.
The actual breakdown of Australia’s gross $38Billion R&D spend in 21/22 is revealing. Less than 10% is government spending, 68% is business spending and higher education makes up most of the balance. So government spending is the smallest contributor, and it appears that most of the heavy lifting will need to be taken up by business investment.
The Panel is being asked to “assess the benefits to economic growth and productivity from a more purposeful approach to R&D” and is due to report at the end of this year. I remain cautiously hopeful that their findings and recommendations will ultimately result in altered mindsets and a reversal of the “alarming” trend, and will not be disrupted by policy shifts in the future political landscape.
*Read full press release here.
