Australian R&D Spending: the Canary in the Coal Mine
In as much as a dying canary in a coal mine suggested the air quality in the mine was deteriorating and would soon impact human life in the mine — so is the signalling of R&D expenditure for a country’s future economic prospects.
We all know that technology is impacting every job in every company in every industry and the only way to ensure continued survival is to adequately invest in the next phase of products and services. This investment is your Research and Development (R&D) expenditure.
R&D expenditure is a very good proxy for the future economic prosperity of a company/industry and by extension, a country — with future economic prosperity being a reasonable marker to a sustainable high standard of living for citizens. Spend less on R&D and we can pretty much guarantee a lower standard of living in the future.
So how is Australia doing?
At a high level Australia’s R&D spend is just OK (see the helpful chart below by UNESCO)
However if you break out mining hardware and look instead at R&D in value add areas (often referred to as areas of ‘economic complexity’) the picture gets very dark.
Exacerbating this situation is a Federal Government that has reduced R&D expenditure across the board — at a time when countries such as China, Germany, UK, USA, Canada are increasing Government R&D spend . We also have a business sector that spends less on R&D than comparable companies and industries overseas.
This is a recipe for one big disaster.
We need to quickly realise that whether we like it or not, technology in all forms is changing the economic landscape at a pace never seen before. If we do not start to invest heavily into the jobs of tomorrow — we won’t have jobs of tomorrow nor the stable society such a future would provide.
The answers are simple:
- The Federal Government should increase NHMRC, ARC, RDTI expenditure to pre-2015 levels with accelerators going forward
- Companies should be economically motivated to invest in R&D and NOT produce franked dividends
- We need to open up all industries to allow more competition. Nothing will get our slow moving companies more motivated than to have their tidy oligopolies opened up.
- We need to (as about every functioning adult Australian has said in the past) increase the understanding of STEM in the broader population
- …..a bunch of other very good recommendations that came out of the Innovation Review in 2016 https://www.industry.gov.au/data-and-publications/australia-2030-prosperity-through-innovation
shhh I can hear the canary gasping for air….