According to the OECD Science, Technology and Industry Scoreboard 2017 and Australian Bureau of Statistics, Australian spending on research and development was down from 2.11 percent of GDP in 2013-14 to 1.88 percent in 2015-16, with the OECD average being 2.38 percent. Chief Executive of Universities Australia Belinda Robinson said that this represented a stark warning against government research cuts, which would put future jobs at risk.
Research and development involve producing new and improved products, technologies, and processes or ‘knowledge-based capital’ and is a crucial driver of long-term economic gain. The government is key in supporting R&D through investment as it involves a high degree of risk for companies, with gains often not seen for several years.
A meeting between the Group of Eight universities and peer organizations next week will discuss how to defend long-term research in an environment demanding immediate solutions. Governments must keep in mind the planet’s future – areas such as climate change and food sustainability are critical areas that will need funding over long periods in order to find solutions.
The OECD report found that government R&D budgets have declined or stagnated in many OECD countries. Not for all though; Turkey has increased its R&D budget by almost 80 percent since 2008 and the British Government has recently announced an extra US$3 billion for R&D investment. In Australia, government support for business R&D is high, with R&D budgets increasing by 9 percent between 2008 and 2016.
In addition to direct funding, innovation is encouraged through indirect support like R&D tax incentives. Australia is one of the top countries for claiming R&D tax incentives, with claims totaling US$2.3 billion. R&D tax incentives are a key tool for promoting business R&D. In Australia, companies with a turnover of under $20 million can receive a refundable offset of 43.5 percent and businesses with a turnover of over $20 million can receive a non-refundable offset of 38.5 percent for eligible expenditure. Businesses can find out whether they qualify here.