ATSE recommends that Australia’s governments (state, territory and federal), in collaboration with industry, universities and not-for-profit organisations, boost Australia’s annual investment in research, development and innovation to 3% of GDP, as part of the economic reforms.
The future of Australia’s economic prosperity is productivity and innovation. Research and development (R&D) is one of the few levers to facilitate long-term productivity growth that is largely within the control of governments. Stagnating productivity growth over the last few decades, now sitting at just 0.9% (Australian Bureau of Statistics 2023a), is correlated with the long-term decline in Australian investment in R&D, both as a proportion of GDP and compared to international competitors. Increasing investment into innovation can help Australia unlock new technologies, industries and jobs, find new markets, and address pressing national challenges, and support Australia’s sovereign capability and economy. This will require a joint effort, led by the Australian Government, in partnership with state and territory governments, industry, universities, research institutions and not-for-profit organisations.
ATSE recommends that the Economic Reform Panel supports a raise in R&D investment across all sectors to the 3% of GDP level that leading R&D nations spend, exceeding the OECD average of 2.7% of GDP. As outlined in our submission, Australia has fallen well behind international standards for comparable nations. This lack of investment is linked with lower productivity growth and reduced future economic activity, risking Australia’s prosperity and sovereign capability. Siezing this opportunity to reinvest into Australian innovation will see the opposite – stronger sovereign capabilities, productivity growth and GDP growth. ATSE’s previous work on Boosting Australian’s Innovation and the work currently being conducted by the SERD provide a strong foundation to begin the process of boosting Australia’s investment in innovation and growth.
Explore our Boosting Australia’s Innovation report, which outlines some of Australia’s challenges with innovation, research and development in more detail than can be achieved in this submission and provides a dozen recommendations on how to improve Australia’s innovation sector.
Australia stands at a critical juncture in its journey to boost the national innovation ecosystem. A thriving economy that makes the most of invention, puts new knowledge to work, and grows new industries is key to the nation’s wellbeing and future success.
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