Billions of dollars in incentives to get Australian businesses to invest in innovation have not shifted a low level of research and development (R&D).<\/p>\n
Having tried a carrot, one of the nation’s top scientific bodies wants to try the stick: whacking big business with a levy if they don’t invest a minimum amount in R&D.<\/p>\n
“Research and development underinvestment by both government and business had been long-term and is now intolerable,” said Anna-Maria Arabia, chief executive at the Australian Academy of Science.<\/p>\n
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Australian Academy of Science chief executive Anna-Maria Arabia says “our back is up against a wall now”.<\/p>\n
“It’s time to call time, and rectify declining investment in business research and development. It’s time our economy and industry become more innovative.”<\/p>\n
As the government searches for ideas to boost the nation’s flagging productivity and economic growth, the Australian Academy of Science is calling for a rebatable levy on businesses with annual revenue of more than $100 million.<\/p>\n
The idea is to force them to spend up on R&D \u2014 say 0.25 per cent or 0.5 per cent of their revenue \u2014 or cop a levy equal to that, with the money invested by the government in innovation.<\/p>\n
Clock ticking as Australia’s spend falls<\/p>\n
The academy is arguing that a massive boost in research and development is needed to boost productivity.<\/p>\n
“It’s not just me saying it, it’s the Treasury, it’s the Productivity Commission,” said Ms Arabia, who blasted the complacency of Australian businesses.<\/p>\n
And it is not just them either.<\/p>\n
The Lowy Institute’s Jenny Gordon was chief economist at the Department of Foreign Affairs and Trade (DFAT) and supports the push to fund R&D more effectively.<\/p>\n
“I don’t know whether I’d call it a stick, I mean, you could also call it an incentive scheme,” she said.<\/p>\n
“This is an alternative way to say, ‘Well, we need to raise funding, reliable funding for R&D’. So that is not at the whim of government and whatever the budget decides to allocate.<\/p>\n
“So there’s a long-term, reliable source of funding.”Australia ‘lagging’ on R&D spend<\/p>\n
Australia spends vastly less than similar nations on R&D.<\/p>\n
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How much do we spend on research and development, as a proportion of what we make? Not much. (Supplied: Australian Academy of Science)<\/p>\n
In 2023, the Productivity Commission wrote that Australian businesses were not “keeping pace” with innovation.<\/p>\n