Analysis and Commentary


Towards 3% R&D – a Future Made in Australia needs innovation boost

Analysis and Commentary




By Peter Roberts

@AuManufacturing’s editorial series – Towards 3% R&D – turbocharging our national innovation effort which is now seeking your input – has been made more relevant with the announcement by Prime Minister Anthony Albanese of a Future Made in Australia Act.

Australia’s manufacturing future lies in technology and skills based products, as well as in adding value to our resources onshore before export.

Both rely heavily on innovation, innovation policy and innovation skills – factors which are wanting and which @AuManufacturing wants to address through its new editorial series which begins shortly and will culminate in a published e-book.

Yet Australia’s innovation effort as measured by R&D spending is faltering, falling steadily for more than a decade.

@AuManufacturing will begin publishing contributions for our series – Towards 3% R&D – turbocharging our national innovation effort – shortly and we urge you to contribute. Call Peter Roberts, 0419 140679 or write to [email protected].

As argued by industry policy specialise Dr John Howard in our editorial series launch (here), both government and business R&D is falling, and worryingly so.

Dr Howard said: “Australian Government Investment in R&D now stands at 0.49% of GDP.

“Investment peaked at 0.73% of GDP in 1993-94, then trended down and up again to a new peak of 0.64% in 2012-13. It then trended down again to the current level—two-thirds of what it was 30 years ago.”

Similarly, from 1993-94, there had been a substantial increase in business R&D investment.

However, since 2012-13, the level of investment has been falling mainly due to changes in eligibility for the R&D Tax Incentives (RDTI) programme.

The result is laid bare in data from the Harvard Kennedy School which shows that Australia’s Economic Complexity Index (ECI) rating has plummeted to 93rd, down 12 positions in the past ten years.

The Harvard Index systematically ranks 133 countries and now places Australia between Uganda and Pakistan in the bottom third of monitored nations for economic complexity.

To those minority of whingers and naysayers who have responded negatively to a Future Made in Australia Act – this is an intolerable situation which is leading us towards national impoverishment and irrelevancy.

Just as companies must invest in their future by developing new products, processes and the skills of people, so too must nations to compete, especially in a world where leading nations are increasing the intensity of their R&D and innovation.

Australia cannot continue to underinvest – that’s why @AuManufacturing is crowd sourcing input from readers as to what has gone wrong, and right, and what can be done to boost national innovation effort.

This series is brought to you through the support of our principal sponsor, public accounting, tax, consulting and business advisory BDO, and R&D tax incentive consultancy Michael Johnson Associates.

Further reading:
Towards 3% R&D – the statistics tell us national innovation is faltering
Australia’s lack of economic complexity on display – again



Share this Story
Analysis and Commentary



Stay Informed


Go to Top