Submission to the Strategic Examination of Research and Development Issues Papers

A strong research and development (R&D) sector benefit all Australians. ATSE welcomes the release of the Strategic Examination of Research and Development (SERD) Issues Papers and the proposed actions to strengthen Australia’s R&D sector. Many of these proposals reflect recommendations in our initial submission to the SERD or from our Boosting Australia’s Innovation report.

This submission examines each of the first four Issues Papers and provide recommendations on the implementation of these measures to ensure they are as effective as possible in building Australia’s R&D system. 

1. National coordination

ATSE welcomes the establishment of a national coordination body to streamline R&D funding, reduce duplication and set a long-term strategic direction for the sector. A Commonwealth-level governance board with a 10-year planning cycle could make the system more efficient and effective, particularly if aligned with existing national and state strategies. Its success will depend on expert, cross-sector representation (including international perspectives), broad and outcome-oriented priorities, and flexibility to respond quickly to emerging challenges such as pandemics or technological shifts. Climate change and green energy should be at the forefront of these priorities, supported by mechanisms to add new focus areas as needs evolve.

Recommendation 1: Ensure membership of the Commonwealth level governance board includes board members with broad experience across high performing international R&D sectors, industry, transdisciplinary R&D and cross-sector R&D.
Recommendation 2: Ensure focus areas set mission-driven objectives without limiting the research scope to allow support for convergent research projects directed towards meeting these objectives.
Recommendation 3: Develop a process for adding emerging priority areas to the list of identified priorities to ensure the governance board can react to rapid technological or societal changes.

2. Scaling the system

ATSE emphasises that scaling up Australia’s R&D system requires a deliberate, programmatic approach that strengthens existing collaboration mechanisms, reforms university and government processes and embeds greater tolerance for risk and failure. Alongside changes to grants and procurement to encourage innovation, there must be support for industry development, domestic manufacturing, and knowledge transfer. Improving access to academic outputs and research data through open access and interoperable systems will accelerate innovation, enable new partnerships, and address Australia’s low levels of industry–academia collaboration.

Recommendation 4: Use government procurement policy and revenue contingent loan or grant schemes to help scale startups and small businesses conducting or based on Australian R&D.
Recommendation 5: Invest in research data infrastructure to support open access and open data while instituting open access and open data requirements for government-funded research.

3. Research, development & innovation incentives

ATSE notes that while the R&D Tax Incentive (R&DTI) is Australia’s largest industry research incentive, it has been criticised for being overly broad, administratively complex, and not driving additional business R&D investment. A more effective model would balance a refined R&DTI with direct funding, procurement, and income-contingent loans to support priority areas and help businesses through the “valley of death.” Alongside funding reform, a skilled workforce is essential. ATSE strongly supports mentoring and commercialisation training for researchers and highlights its Industry Mentoring Network in STEM (IMNIS) program as a proven model to build industry knowledge, skills and connections.

Recommendation 6: Reform the R&DTI to better target additionality, national priorities and collaboration, while directing savings towards direct funding through income-contingent loans.
Recommendation 7: Base the proposed entrepreneurial and commercialisation mentorship program on ATSE’s IMNIS program for research students and early career researchers.

4. Investment and capital

ATSE highlights the significant potential of Australia’s $4 trillion superannuation system to boost national R&D investment, noting it is set to become the world’s second-largest retirement savings system. Even a small mandated allocation—for example, 0.1% of balances, could unlock billions in additional R&D funding while costing members only a few dollars each. Pooled investment vehicles, pilot requirements for public sector funds, or opt-in mechanisms could make superannuation investment in R&D simpler, less risky and more accessible. This approach would not only fund innovation but also build a stronger national culture of investing in Australian R&D, with Hostplus already demonstrating the practicality and profitability of such investments.

Recommendation 8: Leverage superannuation funding to invest in Australian R&D through a small minimum Australian R&D investment mandate or investment options.