Recently, the Australian government launched a strategic review of the nation’s Research and Development (R&D) system. The paper suggests that the country is at risk of falling behind global competitors if urgent action is not taken.
The Strategic Examination of R&D Discussion Paper, released today, highlights significant challenges in Australia’s research sector. It highlights a decline in R&D investment, weak industry-research collaboration, and a lack of economic complexity.
Key Findings of the Research and Development review Paper
Australia’s gross expenditure on R&D (GERD) has declined to 1.66% of GDP, well below the OECD average of 2.73%. This places Australia far behind other nations such as South Korea, Germany, and the United States. The report identifies the decline in business-led R&D as a primary cause. As large enterprises reduce their investments and small-to-medium enterprises (SMEs) struggle to fill the gap.
The report also raises concerns about Australia’s falling economic complexity ranking. This reflects the country’s heavy reliance on resource exports rather than high-tech industries. Without significant policy changes, Australia risks being left behind in the global innovation race.
A Call for Reform
The independent expert panel leading the review, chaired by Robyn Denholm, emphasized the need to increase industry engagement, enhance public-private research partnerships, and develop stronger commercialization pathways for Australian innovations.
“Australia has world-class research institutions, but we are not doing enough to translate research into real-world applications,” Denholm said. “We need policies encouraging businesses to invest in experimental development and strengthen the connection between universities and industry.”
Proposed Recommendations:
- Increase government incentives
- Strengthen university-industry collaborations
- Develop a more strategic approach
- Support First Nations knowledge systems
- Expand workforce training and career mobility
A National Conversation
The government has opened a public consultation process. They have invited stakeholders from industry, academia, and the public to provide feedback on the discussion paper. The expert panel will present its final recommendations by the end of 2025.
With Australia’s economic future at stake, policymakers are being urged to act quickly. If no action is taken, the country risks slipping further behind in the global knowledge economy. Ultimately, weakening its ability to tackle pressing challenges such as climate change, technological disruption, and economic security.
For more information or to participate in the consultation process, visit industry.gov.au/StrategicR&D.
