Australia is missing out on billions in economic growth due to underinvestment in research and development, a new report warns. The country’s gross domestic product could be increased by 3% if decision-makers focus on boosting investment in research and development.
The Australian Academy of Technological Sciences and Engineering has released its ‘Boosting Australia’s Innovation’ report outlining a series of strategies and recommendations for research and development investment that will turn Australia into “one of the world’s leading technology and innovation economies.”
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While the report emphasises the broad economic benefits of innovation investment, Australia’s current standing in AI highlights areas needing urgent attention. There is some evidence that Australia is on the back foot globally in this arena, particularly with AI. It ranked 12th in the world for number of AI patents filed between 2018 and 2022, and placed 28th for AI readiness according to Stanford University. More generally, it ranked 24th out of 132 countries on the Global Innovation Index in 2023. By contrast, countries like the United States and China dominate these rankings, demonstrating the scale of competition Australia faces.
The advice originated in roundtable discussions with leaders in economic, scientific, engineering, and technological disciplines, and is aimed at governments, large industry players, small and medium businesses, and research institutions.
“Australia has all the building blocks for a thriving innovation ecosystem, and so much potential to grow our impact, our wellbeing and our economy,” said ATSE CEO Kylie Walker in a press release. “Better systems and structure to connect and empower researchers, investors, startups, policymakers and innovators can provide fertile ground for lucrative new national industries to flourish.”
The report aligned its recommendations to four outcomes: innovation-ready institutions, improved collaboration, increasing innovation investment, and improved impact measurement.
Recommendations for innovation-ready institutions
- Consider the commercialisation potential of research projects as well as traditional academic metrics like publications and citations in promotion decisions.
- Implement programmes for IP development to boost researchers’ engagement with industry.
- Integrate commercialisation awareness and pathways throughout the research process.
- Establish policies for managing conflicts of interest where researchers have spun out a company.
- Encourage diversity in innovation activities.
Recommendations for improving collaboration
- Implement programmes and provide infrastructure that facilitate collaboration between small and medium businesses and researchers.
- Evaluate existing innovation programs and scale the high-performing ones across government departments and jurisdictions.
Recommendations for increasing innovation investment
- Provide financial support for start-ups in science, technology, engineering, and mathematics, for example, through tax incentives.
- Use established procurement funds that support innovative domestic technologies addressing market and societal needs.
Recommendations for improved impact measurement
- Implement an innovation performance measurement framework to track the impact of policy initiatives and compare them with international equivalents.
- Identify and address global challenges that may be preventing Australia from becoming a competitive player in innovation.
Additional strategies to keep in mind when applying the recommendations:
Funding decision-makers should also keep the following in mind:
- The value of knowledge creation extends beyond economic returns, with benefits for the public good.
- Successful industrial policy implementation requires a long-term perspective beyond current political cycles.
- A non-linear approach in research, including iterative discovery, development and application cycles, should be embraced.
- Clear policies can help to overcome collaboration barriers, such as differing incentives and IP ownership concerns.
- Consolidating overlapping research initiatives, when sensible, can streamline resources.
- A centralised resource hub offering advice on commercialisation, legal matters, and funding opportunities can allow all stakeholders to navigate the innovation landscape effectively.
- Aligning research efforts with market needs can enable scaling, drive tangible impact, and maximise returns on innovation investments.
“We can and should implement the extraordinary solutions and exciting opportunities our researchers and developers create,” Walker said. “Every step we take to empower Australian knowledge and invention to thrive and build bridges across the economy will be repaid many times over in the new industries, jobs, products and opportunities we create.”
With strategic investment and policy changes, Australia can unlock its full innovation potential. The next step lies in how swiftly decision-makers act on these recommendations.