Business R&D up, total Australian R&D vs GDP continues to fall: ABS

Australia’s expenditure on innovation public and private has fallen for the past decade, and continues to fall under the new federal government.

Business expenditure on research and development (BERD) was up 14 per cent over 2021-22, new Australian Bureau of Statistics figures show, though the nation’s total spend on R&D as a proportion of GDP continued to fall.

According to ABS figures released on Friday, BERD rose to $20,642 million in the last recorded financial year. 

“While there was a large rise in Business R&D spending in 2021-22, spending as a share of GDP has remained unchanged since 2017-18 at 0.9 per cent,” said Robert Ewing, ABS head of business statistics.

By industry, professional, scientific and technical services made up for 34 per cent of BERD in 2021-22 ($6,972 million), followed by manufacturing (25 per cent) and the financial and insurance services industry (15 per cent.)

Manufacturing R&D spending rose from $4,763 million in 2019-20 to $5,203 million.

Gross expenditure on R&D – GERD, a combination of R&D spend by business, government, higher education and private non-profit sectors – rose eight per cent over the two-year period to an estimated $38,751 million.

However, this total figure for Australian R&D spending continued to decline relative to GDP, dropping 0.12 per cent in two years to 1.68 per cent. This continues a decline in GERD versus GDP, with this at 2.09 per cent in 2013-14

Universities Australia was quick to claim the figures as confirmation that the nation’s investment R&D is “going backwards”. Chief Executive Catriona Jackson said this was “jeopardising our ability to advance as a nation” and citing a fall from the “OECD average of 2.24 per cent of GDP in 2008 to [the current] 1.68 per cent.”

A pledge by the Labor party to boost the R&D to three per cent of GDP was “a worthy and essential ambition that government, industry and unis must work together to meet,” added Jackson.

“We need R&D to boost our flagging productivity and drive economic growth, and we need it to navigate every challenge and every opportunity before us – from defence and energy needs to adding much-needed complexity to our economy through new industries.”

Picture: credit CSIRO

Further reading

Husic calls for R&D lift to 3% of GDP – report

Australia’s low economic complexity – infographic