Towards 3% R&D – budget responds to slump in Australian innovation effort


By Peter Roberts

The 2024 budget has responded to the issues being raised by @AuManufacturing’s one-month long series of articles around the theme Towards 3% R&D – turbocharging Australia’s innovation efforts.

Treasurer Jim Chalmers announced a ‘strategic examination of Australian research and development’ as part of the Future Made in Australia package of measures.

According to a statement by Industry and Science Minister Ed Husic: “Greater investment in research and development (R&D) by businesses in Australia is fundamental to maximising the impact of science, research and innovation on Australia’s long-term prosperity, security and wellbeing.

“The Government will commission a strategic examination of Australia’s R&D system to determine how we can get more value from every taxpayer dollar invested in research, maximise the contribution of science and R&D to the broader economy, and maintain our competitive edge.”

While @AuManufacturing cannot claim to have sparked this announcement, we have been publishing opinion articles daily charting the precipitous fall in government and business spending on R&D since at least 2009, as well as ways to improve it and highlighting some of the growth areas of innovation.

Innovation almost everywhere you look is faltering, threatening the community’s investment bin the long term health of our companies and the economy as a whole.

The figures are stark compared to the government’s stated aim of achieving 3% of GDP devoted to R&D and innovation.

Australian R&D reached a peak of 2.24% of GDP which was close to the OECD average of 2.28% – then it collapsed, reaching 1.68% of GDP in 2021.

Business research has also fallen from a peak of 1.37% of GDP in 2007 to 0.92% in 2019.

And between 2020 and 2022 higher education spending fell as a share of GDP from 0.61 percent to 0.55 percent – the biggest decline in the higher education component of R&D expenditure since the ABS started collecting this data.

Our series Towards 3% – Turbocharging Australia’s innovation effort continues for the rest of this week, after which we will publish an e-book.

However if you want to catch up on what you have missed:

Further reading:
Towards 3% R&D – Boosting industry and research collaboration, by Dr Tony Peacock
Towards 3% R&D – The Statistics Do Not Lie By Dr John Howard
Towards 3% R&D – the role of industry policy by Roy Green
Towards 3% R&D – continuous improvement in manufacturing by Serena Ross
Towards 3% R&D – Australia’s climate opportunity by Dr Katherine Woodthorpe
Towards 3% R&D – Tax incentive is alive and kicking by Kris Gale
Towards 3% R&D – Why business innovation is faltering by Dr John Howard
Towards 3% R&D – government and business leadership by David Martin
Towards 3% R&D – Reach for the Moon to innovate by Xavier Orr
Towards 3% R&D – the lesson of the SBIR model of innovation by Jefferson Harcourt
Towards 3% R&D – Medical manufacturing to propel the economy by Dig Howitt of Cochlear
Towards 3% R&D – intelligent systems for defence innovation by Saeid Navahandi
Towards 3% R&D – The right question? Or are there bigger issues by Allen Roberts
Towards 3% R%D – Building innovation capability by Danny Samson
Towards 3% R&D – innovation in biofuels by Geoff Bell of MicroBioGen
Towards 3% R&D – Higher education in its biggest-ever decline by Professor Roy Green
Towards 3% R&D – patent box still missing from innovation system by BDO
Towards 3% R&D – Training the innovation workforce by Michael Edwards of Boeing
Towards 3% R&D – A national strategy to reverse innovation slide by Dr John Howard
Towards 3% R&D – Factory of the future by Philipp Dautel
Towards 3% R&D – patent box still missing from innovation system by BDO
Towards 3% R&D – Australia should choose a better target by Dr Matthew Young
Towards 3% R&D – Innovation for process heat by Dr Mahesh Venkataraman
Towards 3% R&D – Commercial outcomes from public sector research by Professor Cori Stewart
Towards 3% R&D – Innovation bolsters defence industry by Minister Pat Conroy

Picture: Ed Husic

Share this Story

Stay Informed

Go to Top