Australia has excellent capabilities in basic research through our universities
and our publicly funded research organisations. However, without effective
commercialisation the full benefit to the economy will not be realised.
Improving productivity and facilitating economic growth are key priorities
Improving the translation of Australia’s world class research into economic
value is central to addressing these priorities.
Industry is facing an increasingly competitive environment, and research
organisations need to demonstrate their value. There is an urgent need to
improve the linkages between these two sectors.
Connecting researchers and industry is imperative to building strong,
innovative industries – an innovative, productive, profitable industry
culture requires the contribution of intellectual property from research
institutes and businesses.
Collaboration between publicly funded research organisations and industry
is crucial to improving the translation of research into productive outcomes
that increase the nation’s output. However, there remain fundamental
systemic barriers to increasing this collaboration in Australia.
In many OECD countries it has been demonstrated that industry assistance
programs are needed and those whose value is proven must have
significant scale and long-term stability to provide investment certainty.
Indeed, even overseas governments that are doing well in technological
innovation have recognised the need to intervene consistently.
Government assistance for firms in Australia is low by OECD standards.
In 2011, the direct government funding of business R&D in the USA was
thirteen times greater as a percentage of GDP compared with Australia
Experience has shown that effective collaboration between business and
research organisations can benefit from independent facilitation to build
trust and to establish momentum between parties.
For example, Australia lags well behind the leaders when it comes to
business expenditure on research and development (BERD). While
research and development is only one element of innovation, BERD is a
useful indicator of the level of innovation activity. The level of BERD in
Australia is less than half that of Israel and well behind Korea and Finland
as a percentage of GDP (Figure 2).
Australia also lags well behind at translating and commercialising
research. In comparison to leading OECD countries, Australia ranked near
last on measures of innovation in industry.
The reasons for this market failure are complex. Part of the problem is a
cultural one, with industry in the past turning to imported technology
paid for by resources availability and cheap energy.
But other factors are important – market size; the dominance in the
technology sector of overseas-owned companies undertaking their
research elsewhere; the lack of major government procurement programs
in defence; the low priority afforded by the fairly thin capital markets to
investment in technology; and risk-averse large technology purchasers
preferring to buy proven products from around the world rather than
undertake the daunting task of developing them here.
Figure 1 Direct government funding of business R&D - 2011
Figure 2 Business enterprise expenditure on R&D – 2011
Source: OECD STI Scoreboard 2013
A secure and growing revenue base will ensure
Australia’s enduring fiscal health.
The only way to achieve this is by building a
robust, diversified economy.
Innovation is crucial to this vision. Innovative
businesses are more productive and more
profitable. Profitable businesses pay more
tax, employ Australians and strengthen the
Government’s revenue streams.
Australia needs to achieve greater technological
innovation off its research base to drive industry
growth, productivity and profitability.
Australia has excellent capabilities in basic
research through our universities and our
publicly funded research organisations.
However, there is a pressing need to translate
Australia’s investment in research into useful
economic outcomes, through innovation.
Without translation assistance within our
policy landscape even less translation of basic
research to deliver value to the economy will
result, effectively stalling our prospects for an
Research and its translation needs to be driven
by market and government demand, with
strong input from the research establishments
that are well-placed to realise what
opportunities for improvement exist.
Collaboration provides businesses affordable
and rapid access to skills, people, equipment,
facilities and ideas and so contributes to
improved productivity. Collaboration between
businesses and publicly funded research
organisations must be improved if Australia is
to realise the economic benefits from its world
However, there remain fundamental systemic
barriers in Australia including financial barriers,
information asymmetry, differing timescales,
absorptive capacity and cultural differences that
can cause a mismatch of goals between parties
and different risk perceptions balanced with
A lack of incentives, including via targeted
government assistance programs, for research
translation to technological innovation and
commercialisation remains a fundamental
problem in Australia.
ATSE believes that better translation of
Australia’s publicly funded research into
economic outcomes for Australia can be
Promoting Australia's advancement through technology