Australia’s alarming slide: Declining investment in R&D sparks fierce debate

Medical: In a release that is raising eyebrows across the nation, Australia’s investment in science and research and development (R&D) is experiencing an alarming 14-year decline, despite the country’s heavy reliance on these sectors to navigate a complex economic landscape.

The Australian Bureau of Statistics (ABS) data reveals that the overall national investment in R&D has dipped once again, renewing worries about the nation’s future preparedness. In the fiscal years 2019/20 to 2021/22, the national investment in science and research witnessed a decrease from 1.80% to 1.68%. As the data was released, attention turned to how Australia’s commitment to R&D stacks up against other nations in terms of gross domestic expenditure on R&D as a percentage of GDP.

The Organisation for Economic Co-operation and Development (OECD) average for this metric stands at 2.74%, casting Australia in an unfavourable light as it falls short not only of this average but also lags behind nations like the United States, Germany, United Kingdom, China, and Canada.

Leading voices within the scientific community have expressed their concerns about the ramifications of this trend. Professor Chennupati Jagadish, President of the Australian Academy of Science, stressed that Australia’s capacity to effectively address challenges laid out in the Intergenerational Report is dwindling.

“Australia urgently needs to develop a 10-year plan to boost government, higher education and business investment in R&D, so we are equipped to manage a large-scale energy transition, an ageing population, and develop critical national security technology,” Professor Jagadish stated.

He emphasised that if the current trajectory persists, with a decrease of 0.1% of GDP each year, Australia will find itself among the lowest R&D investors within the OECD within five years. In contrast, a 0.1% annual increase in R&D investment could propel the country to reach the OECD average within a decade, assuming the average remains stable.

Nadia Levin, CEO of Research Australia, echoed these concerns, particularly focusing on health and medical research and innovation.

“For health and medical research and innovation to flourish, we must sustain the whole pipeline. Strategic and coordinated financial settings for all stages of the health and medical research pipeline will ensure Australian health and medical research can contribute to a healthy population and economy.

“The Medical Research Future Fund Board of Guardians approved up to $870 million for release from the MRFF to fund research in 2023-24. Of that available $870 million only $650 million is flowing through to the MRFF in 2023-24 and the subsequent three financial years. We will be working with Government to understand why,” Ms Levin stated.

Professor Jagadish reiterated the necessity of increased R&D investment across all sectors, stressing its pivotal role in enhancing productivity, fostering the knowledge economy, and cultivating new job opportunities and industries.

“Australia has one of the world’s least differentiated economies. We remain vulnerable when our prosperity relies on such a narrow range of industries. It is imperative we improve Australia’s economic complexity, which can be driven by a more strategic focus on science and research – the fuel for innovation and industry growth,” Professor Jagadish commented.

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