Billions in innovation lost to other nations while R&D investment plummets

Australia is losing its competitive edge by giving away world-leading research with minimal economic benefit, according to Industry and Science Minister Ed Husic, who launched a discussion paper on the state of research and development (R&D) in Australia at the National Press Club. However, despite raising concerns over the nation’s declining investment, Minister Husic stopped short of committing to a national R&D target or tax incentives to drive business investment.

The paper paints a troubling picture of Australia’s R&D performance, revealing a sharp decline over the past 15 years. Local investment in R&D has dropped to just 1.66% of GDP – significantly below the OECD average of 2.7%.

Minister Husic issued a stark warning about the consequences of this trend, saying “It’s been almost 20 years since we asked the hard questions about why our R&D performance is lagging. We’re virtually giving our world-class science away for free to other countries to exploit, and this needs to stop.”

He added, “R&D boosts productivity, creates more jobs, strengthens our economic and national security resilience and leverages our strengths in science. The review is about how we can reshape the way we all work together so we can bring those benefits into our economy.”

More than a quarter (26%) of all Australian R&D spending – approximately $10 billion – is dedicated to health and medical research innovation and development, making this sector a focal point of the review.

The timing of this review is critical, according to Research Australia CEO Nadia Levin, as it coincides with the development of the National Health and Medical Research Strategy.

“These two national processes offer a once-in-a-generation reform process to take a whole-of-government, including across portfolios and jurisdictions, and whole-of-pipeline approach to health and medical research. Both the Chairs need to work with the sector to ensure we bring our insights to this opportunity with enthusiasm and commitment,” Levin stated.

Rebekah Cassidy, CEO, said AusBiotech, said “Now is the time for bold steps toward unlocking Australia’s innovation potential within our R&D ecosystem. We must supercharge our incredible world-class medical research, ensuring it translates into life-changing commercialised innovations.

“We will also continue our urgent call for a unified whole-of-government strategic approach to the life sciences industry, whose numerous policy touchpoints, including R&D, are currently dispersed across over eight different Australian Government portfolios.”

Strategic Examination of R&D Panel Chair, Robyn Denholm, underscored the urgency of putting innovation at the centre of national priorities.

“A robust and forward-looking R&D ecosystem is vital to the future of the country. Australia’s greatest assets include our people and our extraordinary know-how. We excel in research. Developing, translating, and commercialising that research is critical for economic growth.

“My objective through this examination is to unlock the immense potential of Australian research by turning it into tangible outcomes that deliver economic and societal benefits and enhance our global competitiveness.”

Levin emphasised the need for structural reform. She said, “Australia needs to mobilise the disparate parts of the pipeline, activate policy implementation and remove barriers for the sector to thrive, and ignite the urgency of doing this now. The health and medical research innovation pipeline, including the policy and funding landscape, needs to be truly collaborative, transparent and competitive.”

With submissions to the R&D consultation open until April 11, the government’s next steps will determine whether Australia reclaims its position as a global R&D leader or continues to let its cutting-edge discoveries be capitalised on by others.

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