Australia needs to invest more in R&D to move forward

Australia’s national science and innovation body has released a roadmap to steer the nation forward, calling for businesses in all sectors to ramp their focus on innovation and investment in research and development (R&D).

In its report, Australia 2030: Prosperity through innovation, Innovation and Science Australia (ISA) made some 30 recommendations for the government to consider if the nation is to avoid becoming a global backwater.

“At the time when Australia needs to accelerate its innovation performance, we are falling behind our global peers, particularly in student performance in science and mathematics, and in business investment in research and development,” said ISA chairman Bill Ferris.

“This is more than a canary chirp in our economic mineshaft: it is a clarion call for national action,” he warned.

According to the ISA report, Australia currently ranks 20th among nations in the Organisation for Economic Cooperation and Development (OECD) in R&D investment, which amounted to 1% of GDP in 2015, compared with 3.6% in Israel, 2% in Germany and the US, and 1.6% in China.

ISA board members such as venture capitalist Daniel Petre stressed the urgency of the issue, noting that Australia needs to move faster because it is a “comfortable country” with companies in oligopolies that do not have to compete hard.

“I think this is the last chance we’ve got. There will be extraordinary upheaval, both positive and negative in the next 12 years, and if we don’t create the substructure, the skills, innovation best practice…we are destined to have a very different lifestyle in Australia,” said Petre.

Michaela Cash, Australia’s minister for jobs and innovation, said the government welcomed the ISA report, and had already moved to act on some recommendations – largely through its 2015 national innovation and science agenda that promised A$1.1bn worth of investments over four years.

The government’s big spending focus this week, however, has been on international arms sales, with an initiative launched to make Australia one of the top 10 defence exporters.

Exactly how much government support will be available to fund ISA’s recommendations – such as more and targeted spending around R&D, plus access to skills through migration programmes and improved education – may become clearer when the Budget is announced in May.

The Australian Information Industry Association (AIIA), the technology industry’s peak body, largely welcomed the ISA report, particularly its focus on skills and more innovation from local businesses.

“AIIA supports the focus on SMEs [small and medium-sized enterprises] and the recommendations to improve their access to export markets, and the establishment of a specific procurement target of 33% of contracts (by dollar value) being awarded to Australian SMEs by 2022,” said AIIA CEO Rob Fitzpatrick.

Fitzpatrick also applauded the call for more action in the areas of artificial intelligence and machine learning, open data initiatives and the modernisation of government services.

However, he lamented the fact that software innovation – a key element of business transformation – was not covered by the R&D Tax Incentive Act, and vowed to continue to lobby the government for reform in that area.