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Robyn Denholm comments on R&D Spending Gap

In recent comments published by The Australian, Robyn Denholm, the Australian-based Tesla chair, has expressed concerns over slowing business investment in Australia, noting that “Australia is not living up to its full potential” in terms of investment and R&D

She highlighted that Australia’s combined government and business spending on R&D has fallen to 1.68% of GDP since 2008, compared to the OECD average of 2.73%.

This R&D spending gap equates to approximately $25 billion per year.

 “We need to see R&D as central to economic strategy, innovation as the engine of productivity, job creation and long-term security,” Denholm told The Australian.

Denholm is currently leading a strategic examination and review of Australia’s R&D system, which will assess how to maximise the value of R&D investments, strengthen industry linkages, and support national priorities.

The review will examine existing systems, such as the Research and Development Tax Incentive (RDTI), and explore broader strategies to ensure Australia remains competitive in global innovation.

The strategic examination will be conducted until 31 December 2025.

Swanson Reed has recently completed its submission to the review of Australia’s R&D system, and we have called for maintaining stability and modestly augmenting the current R&D Tax Incentive.