If Australia wants to get serious about lifting productivity and fuelling long-term economic growth, we need to go big on research and development (R&D) and fast.

That’s the message from the Business Council of Australia (BCA), which is urging the government and industry to ramp up investment in R&D to supercharge innovation, unlock new industries and create high-value jobs right here on home soil.

Australia is falling behind and it’s costing us

Currently, Australia spends just 1.7 per cent of its GDP on R&D. Well below the OECD average of 2.7 per cent and miles behind innovation leaders like Israel, which tips in around 6 per cent.

Business Council Chief Executive Bran Black says it’s time for a national wake-up call.

“Supercharging research and development investment in Australia presents a significant opportunity for business and the Government to lift productivity and raise living standards for all Australians,” he said.

“We need a new approach to R&D that starts with incentivising businesses to invest more, otherwise investment opportunities will go overseas, and we will fall further behind.”

A new R&D strategy for the nation

The BCA wants R&D declared a new national strategic priority, with a 10-year plan and public and private investment increasing to 3 per cent of GDP.
Among their policy wish list:

A full review of the R&D Tax Incentive to ensure it’s fit for purpose — including raising or scrapping the current cap.

Tax perks for income generated from intellectual property developed in Australia.

Creating industry-led R&D hubs based on the UK’s Catapult Network (which delivers £5.50 back to GDP for every £1 invested).

A national directory of researchers to make it easier for businesses to find and collaborate with experts.

The BCA says the commercialisation of R&D, turning ideas into real-world products and services, should be a key priority. And there’s big money in it too. According to the CSIRO, every dollar invested in R&D returns $3.50 to the economy.

Time to back Aussie innovation

Bran Black says building new industries will take time, effort and coordinated investment, but it’s worth it.

“R&D is crucial to ensuring we have a future made in Australia, expanding our current industries and opening up new sectors like quantum, advanced manufacturing, cyber and artificial intelligence,” he said.

“Part of our strategy needs to include better collaboration between universities and industry to identify where there are opportunities that can be commercialised.”

With so many small businesses already innovating in areas like AI, clean energy, agtech and advanced manufacturing, more support for R&D could be the key to unlocking Australia’s next big growth chapter.

The BCA’s full submission to the Government’s Strategic Examination of Research and Development is now online. You can read it here.

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