Investment in research and development (R&D) is an important driver for innovation. Innovation in turn is a strong driver for increased productivity and improved competitiveness. Firms that innovate have been shown to be more likely to increase their profitability, more likely to export, more likely to increase employment and more likely to offer training to their employees. Private sector investment in R&D is clearly important, but government investment is also very important. Total Australian investment in R&D as a proportion of GDP has largely remained steady for a number of years and the statistics in the area suggest we are slightly below the OECD average for gross expenditure on R&D. In terms of the share of R&D funded by government and the higher education sector, Australia is above the OECD average. However, business investment in R&D is well below the OECD average.
Governments have become strategic investors in research infrastructure and have major programs to invest in science, technology and innovation capability. In addition, they are committed to increase the 'innovation dividend' from public investment in research, prompting an increased interest in programs that seek to generate economic and social benefits.
Universities and research groups are under pressure to demonstrate the benefits they provide to taxpayers and to the States and Territories in which they are located. They are being increasingly required to look to additional sources of funding for research infrastructure, both capital for construction and to fund recurring costs for the operation and maintenance of that infrastructure.
Companies investing in research and innovation do so to gain a competitive advantage. However, creating and maintaining an investment structure that encourages private firms to invest in R&D and innovation in an operating environment where ideas are easily transferable remains a significant policy challenge.
How ACIL Allen Consulting can help you
ACIL Allen Consulting provides research and advice services related to innovation, including:
- evaluation of research and innovation policy frameworks
- evaluation of research and innovation programs
- economic, social and environmental impact analysis
- detailed, up-to-date advice on research and innovation trends and data
- analysis of investment, including measures of spending and international benchmarks.
Our consultants have worked on major projects for research funding and research organisations in the public and private sectors, including cooperative research centres, universities, and government agencies such as the Australian Government Department of Innovation, Industry, Science and Research, the Victorian Department of Business and Innovation, the Australian Nuclear Science and Technology Organisation, the CSIRO and primary industries research organisations.
For further information about research and development, please contact John Soderbaum