ºÚÁÏÀÏ˾»ú Chief Executive Officer Luke Sheehy
If Australia wants higher productivity, a sustainable standard of living and long-term prosperity, we need to get serious about research and innovation. For too long, the national economic debate has focused on regulation, tax and labour markets.
Those things matter. But one of the most powerful drivers of long-term economic and productivity growth is how effectively a country turns ideas into products and industries.
For much of our modern history, Australia hasn’t had to confront that question directly. Our economic story has long been shaped by a different set of advantages – those associated with being the ‘lucky country’.
For generations we’ve benefited from abundant natural resources, a skilled workforce and a stable economy. Digging things out of the ground has served us well, but luck alone won’t carry us through the decades ahead as productivity lags, living standards come under pressure and the global economy becomes more competitive.
If Australia wants to remain a prosperous, modern country with rising living standards, we will need to build the industries of the future, not simply rely on the ones of the past.
That’s why the Strategic Examination of Research and Development matters. Robyn Denholm’s final report lays out serious ideas to strengthen Australia’s innovation system and better harness the research capability already on our shores.
The opportunity now is for the government to respond with ambition and turn those ideas into reform. Because, ultimately, the debate comes down to a simple question: are we ambitious enough to back our own ideas?
At its core, the report makes clear that countries that invest seriously in research and innovation build stronger economies, create better jobs and achieve higher productivity. The global evidence is clear.
South Korea invests more than five per cent of its GDP in research and development and has transformed itself into a global technology powerhouse, home to companies like Samsung and Hyundai. Israel invests more than six per cent and has built one of the most dynamic innovation ecosystems anywhere. Meanwhile, Germany’s sustained investment in research and industrial innovation underpins one of the world’s most productive advanced manufacturing sectors.
Countries that back research build new and lasting industries. Those industries support businesses big and small – from start-ups to established firms – and they create jobs and drive productivity and economic growth.
Australia already has many of the ingredients to do the same. Our researchers consistently punch above their weight globally, contributing new knowledge across fields from medical science to agriculture, quantum technologies and renewable energy.
But too often the economic benefits of those discoveries are realised elsewhere. Part of the problem is structural. Federal research funding is spread across more than 150 programs run by multiple portfolios with different rules and priorities.
The result is a fragmented system that makes it harder to turn great ideas into industries and jobs and helps explain why Australia is still digging prosperity out of the ground rather than building it.
There is nothing wrong with being a successful resources exporter, but relying too heavily on any single source of economic strength leaves us exposed in an increasingly competitive and technologically driven global economy.
Research and innovation offer a path to diversification. When discoveries are translated into industries, they create high-skilled jobs, new export opportunities and stronger productivity growth across the economy.
The challenge now is one of ambition. Australia has the talent and the ideas. What we need is a national commitment to make innovation central to our economic strategy. That will require reform, coordination and sustained investment.
The fiscal environment is tight, and governments face many competing priorities. But investment in research and development is not ordinary spending. Done well, it pays for itself many times over through higher productivity, new industries and better jobs. Some estimates suggest every dollar invested returns three to the economy.
The Strategic Examination of R&D provides a roadmap. But reports alone don’t lift productivity – action does. If the government responds with ambition and backs reform with the right investment, we can build a stronger, more diverse and more productive economy – one powered not only by the resources beneath our feet, but by the ideas in our heads.
Countries like South Korea, Israel and Germany didn’t build their innovation economies by accident. They made deliberate national choices to back research, build industries and compete globally. Australia now faces the same choice.
If we want higher productivity, a sustainable standard of living and long-term prosperity, we must be ambitious enough to back our own ideas.
ENDS
