$100 billion benefit from boost in R&D investment

Two people in lab. | Newsreel
An investment boost to research and development will add billions to the economy. | iStock

The Australian economy would be $100 billion bigger and support an extra 42,000 new jobs if 3 per cent of GDP was invested in research and development, new analysis by the nation’s peak body for science and technology has found.

Science & Technology Australia President Professor Sharath Sriram said reaching the 3 per cent target would turn Australia into an innovation nation and create an innovation ecosystem that would secure the country’s economic future.

Professor Sriram works at connecting industry and researchers and has created more than $9 million in commercial partnerships for RMIT.

He said Australia’s spending on research and development as a percentage of GDP had been in decline for more than a decade and we now spend less than 2 cents in every dollar on economy-boosting R&D, while The United States spends more than double that and South Korea almost triple.

“If we were investing that 3 per cent of GDP in R&D right now, the economy would be $100 billion and 42,000 jobs better off. And this is a conservative estimate,” Professor Sriram said.

“To maintain our standard of living, Australia must increase R&D expenditure to 3 per cent of GDP as fast as we can.”

Key to the success of that plan would be a connected innovation ecosystem that smoothly took great Australian ideas and turned them into products and services.

“The three parts of our innovation ecosystem need to work in cohesion – universities and research institutes generating ideas, businesses transforming and adopting them, with government championing the efforts with strategic incentives and driving efficiencies,” Professor Sriram said.

“Creating this ecosystem is crucial. Failing to build it will have big consequences.

“If we fail to diversify, if we don’t become an innovation-driven economy, then we will be a nation of consumers rather than creators. We will end up paying an ever-increasing rent to the rest of the world.

“Unless we become a smarter country, we’re doomed to become a poorer one.”