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Australia Now

Research and Development

Australia’s strong business performance in recent years has been underpinned by a record of innovation and a longstanding commitment to research and development (R&D), aimed at increasing productivity, building new markets and boosting international competitiveness. Australian governments, private enterprise and research institutions are firmly committed to supporting Australian innovation and excellence.

According to the Australian Bureau of Statistics, business spending on R&D totalled $10.1 billion in 2005–06, an increase of 11.8 per cent in real terms over the previous year. The major contributors were manufacturing ($3.9 billion), property and business services ($1.7 billion) and mining industries (also $1.7 billion).

The mining industry reported the biggest growth in R&D spending, increasing by $417.2 million (33 per cent) in 2005–06 compared to the previous year. Although Australia’s R&D expenditure as a proportion of gross domestic product remains lower than the OECD average, Australia’s spending has increased for the past seven successive years.

More than 119,000 Australians were employed full-time in R&D activities in 2004–05. This is measured in person years of effort, where one person year of effort is equal to a full-time employee whose time is entirely devoted to R&D for a whole year. The Australian Government supports R&D through direct funding as well as providing significant tax concessions to encourage private sector investment.

The Australian Government allows companies to deduct 125 per cent of eligible expenditure incurred on R&D activities when they lodge their corporate tax returns. In some circumstances, the tax offset for a portion of their spending may be increased to 175 per cent. The R&D tax offset also allows eligible small companies to ‘cash out’ their R&D tax losses. At June 2007, more than 6295 companies with a reported R&D expenditure of around $9.2 billion were registered for the tax concessions.

In May 2007, the Australian Government further boosted R&D investment with a 10-year, $1.4 billion package to help Australian industries become more internationally competitive and sustainable. The package included the provision of $500 million to extend eligibility for the premium 175 per cent tax concessions for R&D projects undertaken in Australia, regardless of whether the intellectual property is held overseas or in Australia.

The Australian Government also provided $200 million a year for the Commercial Ready program, which was introduced in 2005 to provide matching grants to small to medium-sized businesses for R&D activities with a high commercial potential, proof-of-concept activities, and early stage commercialisation. An additional $90.3 million over 10 years was allocated in 2007 for Commercial Ready Plus to provide matching grants to small to medium-sized enterprises and spin-offs from universities and public sector research organisations through a faster and simpler application process.

Priority areas

R&D priority areas include information and communications technology (ICT), biotechnology, manufacturing, mining and the food industry.

The Australian Government has committed $380 million over 10 years to 2011 to a centre of excellence for ICT research, research training and commercialisation. The centre, known as National ICT Australia (NICTA), was established in 2002 as an independent, not-for-profit company. NICTA is now one of Australia’s largest ICT research organisations, employing more than 300 research and support staff and around 260 postgraduate students.

In 2000, the Australian Government launched a National Biotechnology Strategy, which was strengthened in 2004. The strategy is designed to enable government and key stakeholders to work together to ensure that developments in biotechnology are harnessed for the benefit of the Australian community, industry and the environment and to strengthen Australia’s competitiveness in biotechnology.

In the food sector, the Australian Government is providing $54.2 million over four years from 2007 for R&D activities to further improve the food industry’s export competitiveness.

The Australian Government has also awarded $36.2 million to the Commonwealth Scientific and Industrial Research Organisation (CSIRO) to support the development of niche manufacturing businesses based on nanotechnology through the creation of a new National Research Flagship.

Research and development capability

Australia has a strong research and development capability. There are about 50 000 people in higher education organisations who are involved in R&D, another 36 000 in the business sector and 19 000 in federal and state government agencies and laboratories. Each year about 16 000 science students and 9000 engineering students graduate from Australia’s 39 universities.

CSIRO is the biggest government R&D agency in Australia. Founded in 1926, it is one of the world’s largest and most diverse research institutions. Its staff of about 6500 includes 4000 scientists and other researchers working in more than 50 laboratories and field stations in Australia and overseas. Their research covers agribusiness, information technology, manufacturing, health, sustainable energy, mining and minerals, space, the environment and natural resources. Internationally, CSIRO is involved in more than 740 research activities with scientific organisations and agencies in more than 80 countries.

Since 2003, CSIRO’s National Research Flagship program has been developing large-scale collaborations to address national challenges in climate, energy, food, light metals, health, minerals, manufacturing, water and oceans.

Cooperative research centres

The cooperative research centre (CRC) program is an Australian Government-funded initiative to enhance collaboration between business and researchers. The program was established in 1990 with the aim of turning Australia’s scientific innovations into successful new products, services and technologies, making our industries more efficient, productive and competitive. Participants include private sector organisations (both large and small enterprises), industry associations, universities and government research agencies.

CSIRO is the biggest single participant in the program, providing staff and other resources to nearly 40 CRCs in 2006. The Australian Government has directly committed more than $2 billion to the program since its establishment and CSIRO has committed $1 billion.

The Australian Government grants awards of between $20 million and $40 million to CRCs over a seven-year project period. This funding must be matched by cash and/or in-kind contributions, such as expertise and research facilities. Since the program’s inception, the government has funded 158 CRCs. The program currently has a network of around 70 CRCs.

The CRCs cover six broad sectors:

Since 1990, CRCs have taken out more than 2600 patents in Australia and 3400 overseas.

Some recent CRC successes include:

Innovations and discoveries

Government and private sector support, coupled with the talent of individual Australian scientists and researchers, has resulted in an impressive record of inventiveness and improved the lives of millions of people in many countries. Techniques and processes as commonplace as industrial refrigeration, the ready-mix system of transporting concrete and the use of polymer rather than paper for printing money were developed in Australia.

Other Australian inventions include the Synroc system for storing radioactive waste, the interscan microwave aircraft landing system, the black box flight data recorder, and smart proton probes for conducting research into materials and living cells.

Australia is also a great innovator in mining technology services. Australian companies have developed about 60 per cent of the world’s mining software. They also lead in exploration assessment and mineral processing technologies, development of mining equipment, and scientific analysis technologies.

Australian scientists have also been responsible for many medical breakthroughs, including ultrasound scanners; the cochlear implant, designed to help the hearing impaired and the profoundly deaf; Relenza, the world’s first anti-influenza drug, which was developed in 1996 and is now sold in more than 50 countries; and the SolarScan, developed in 1998, which can quickly detect cancerous moles.

Recent successes include:

Key Facts

Further information

This fact sheet is also available to download ( PDF)

Note: Unless otherwise stated, all dollar amounts are in Australian dollars. The term ‘billion’ means ‘a thousand millions’ (one billion therefore equals 1,000,000,000); the term ‘trillion’ means ‘a million millions’ (one trillion therefore equals 1,000,000,000,000).

last updated April 2008