Sectors Research and development

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. The most recent OECD figures show that gross expenditure on R&D as a percentage of GDP fell dramatically from 2.11 per cent in 2013-14 to 1.88 per cent in 2015-16. That is well below the OECD average of 2.36 per cent. The OECD figures also show that business expenditure on R&D dropped by 12 per cent between 2013-14 and 2015-16, or by $2.2 billion. Gross expenditure on R&D fell by $2.3 billion, or 7 per cent.

Nonetheless, governments continue to invest in science, technology and innovation capability. However, they are increasingly seeking to increase the 'innovation dividend' from public investment in research. This is driving a significant increase in efforts by research organisations to show that the R&D they do generates economic, environmental and social benefits.

Research organisations need to demonstrate the benefits they provide to taxpayers and to the States and Territories in which they are located as they seek to compete for, what is currently, a shrinking funding pool. They are also increasingly seeking 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. Collaboration between the business and research sector has been repeatedly shown to deliver better outcomes, yet it remains an area where we could do much better.

ACIL Allen has recently worked on a joint project with CSIRO to study the role of science in policy development. The study found that a close and trusting relationship between the two parties was key to ensuring that good science informed good policy.

How ACIL Allen can help you

We provide research and advice services related to innovation, including:

  • evaluation of research and innovation policy frameworks
  • evaluation of research and innovation programs
  • assessments of the economic, social and environmental benefits delivered by R&D
  • 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 organisations that fund and or do research, including cooperative research centres, universities, government agencies, and many primary industries research organisations.