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Australia’s economy has been one of the world’s most resilient during the global economic crisis and has benefited greatly from a global commodities boom. Following the 2013 general election, the Australian government is implementing “Our Plan – Real Solutions for all Australians” to build a stronger, more productive and diverse economy, with more efficient government and more productive businesses.

Hot Issues

Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.

Encouraging innovation in firms and supporting entrepreneurship and SMEs

Australia’s economy relies relatively heavily on primary and resource-based industries. In line with its industrial structure, BERD is at the OECD median at 1.23% of GDP (2011); the share of high-technology manufacturing is considerably below the OECD median (Panel 2). Innovation output, as measured by triadic patents, is also below the median (Panel 1f) while trademark registrations are slightly above (Panel 1g). The government encourages innovation and entrepreneurship in firms of all sizes and in all sectors of the economy. The R&D tax incentive, introduced in 2011 to replace the R&D tax concession, offers preferential conditions for SMEs. In 2014, the Australian government announced it would invest USD 329 million (AUD 484.2 million) in a new Entrepreneurs’ Infrastructure Programme with AusIndustry being the single business service to deliver it. The new programme will encourage entrepreneurship and equip businesses to undertake changes and expansion and commercialise new ideas.

Improving the framework conditions for innovation (including competitiveness)

Australia has a reasonably favourable business environment (Panel 1j). However, availability of venture capital is below the OECD median (Panel 1h). The new government aims to improve productivity and job growth by cutting the costs of red tape for business and community groups by USD 680 million (AUD 1 billion) a year. This includes abolishing the carbon tax introduced by the previous government and lowering the company tax rate.

Improving returns and impact of science

Australia has a relatively strong science base with high public expenditure on R&D, world-class universities, and high-quality scientific publications (Panel 1a, b, c). IndustryIndustry- financed public R&D expenditure is above the OECD median (Panel 1o), as a result of government tax incentives that are designed to improve academic-industry linkages. The government aims to ensure that the science sector continues to deliver economic and social benefits to all Australians. To increase co-operation between public science and industry, the Industrial Transformation Research Programme, administered by the Australian Research Council, funds research partnership between Australian universities and industry. CSIRO, Australia’s national science and technology agency, has incorporated impact-led decision making into all science areas to help plan, monitor and evaluate the impact of its research programmes.

Targeting priority areas/sectors

The government aims to achieve a world-class “five-pillar economy” by building on the country’s strengths. Five industry growth sectors and related services are targeted: i) manufacturing innovation, ii) advanced services, iii) agricultural exports, iv) world-class education and research, and v) mining exports. It is considering policy initiatives that target priority areas and sectors. The Australian government is currently considering mechanisms to provide greater focus to its investment in science and research, including the development of science and research priorities to drive investment in areas of immediate and critical importance to Australia and its place in the world.

Innovating to contribute to structural adjustment and a new approach to growth

The Australian government is supporting investment in industries and maintaining industry capabilities through the Growth Fund and the Manufacturing Transition Grants Programme. In addition, its Industry Investment and Competitiveness Agenda will focus on initiatives to promote national competitiveness and productivity, including economy- wide measures to boost the competitiveness of Australian manufacturing and lower the costs of doing business.

Country Charts

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Selected Highlights

STI policy governance

As a result of the change in government, the Department of Industry and Department of Education were established in November 2013. The Department of Industry’s vision is to enable growth and productivity for globally competitive industries, by building skills and capability, supporting science and innovation, promoting investment, and improving regulation. The Department of Education is responsible for promoting a rise in economic productivity and social well-being through access to quality higher education, international education and international quality research. The Australian government is considering whole-of-government co-ordination mechanisms for science, research and innovation with a view to providing strategic advice on all aspects of the system.

Universities and public research

Excellence in Research for Australia (ERA) evaluates the quality of the research undertaken in Australian universities against national and international benchmarks. The outcomes are determined and moderated by committees of distinguished researchers, drawn from Australia and overseas. The unit of evaluation is broadly defined as the Field of Research (FoR) within an institution based on the Australia and New Zealand Standard Classification (ANZSRC). The indicators used in ERA include a range of metrics such as citation profiles which are common to disciplines in the natural sciences, and peer review of a sample of research outputs which is common in the humanities and social sciences. ERA is a comprehensive collection. The data submitted by universities covers all eligible researchers and their research outputs. The precise set of indicators used has been developed in close consultation with the research community. This approach ensures that the indicators used are both appropriate and necessary, which minimises the resourcing burden of ERA for Government and universities and ensures that ERA results are both robust and broadly accepted. The first full round of ERA occurred in 2010 and the results were published in early 2011. This was the first time a nationwide stocktake of discipline strengths and areas for development had ever been conducted in Australia. The second round of ERA was completed with the publication of the ERA 2012 National Report on 6 December 2012. The next ERA round will occur in 2015 and preparations are currently under way. Subsequent rounds will occur every three years.<br /> <br /> The National Collaborative Research Infrastructure Strategy (NCRIS), administered by the Department of Education, supports major research infrastructures in order to encourage collaboration between the research sector, industry and government on world-class research. NCRIS is designed to provide Australia’s research sector with ongoing access to high-quality, operational research infrastructure facilities to ensure that Australian research continues to be competitive and rank highly on an international scale. The Australian government is providing USD 102 million (AUD 150 million) in 2014-15 to secure Australian researchers’ access to current major research facilities and the supporting infrastructure and networks necessary to undertake world-class research.


The Department of Industry has a partnership agreement with the Australian Trade Commission, which affirms strong mutual interests in jointly developing Australia’s economic interests through industry policy, international trade and productive FDI. One outcome of this collaboration has been the development and promotion of a common narrative and a consistent message to international audiences on opportunities for investment and collaboration on innovation. The current agreed priorities between the organisations are: resources and energy investment; skills; global value chains [mining, equipment, technology services (METS), oil and gas, food processing, and advanced manufacturing in medical technology and aerospace]; advanced services and technologies investment; and improving the co-ordination of delivery.

Skills for innovation

Australia performs well on skills indicators: as demonstrated e.g. by its fourth highest PISA scores in science for 15-year-olds in the OECD area and the adult tertiary education attainment level (Panel 1v, t). To help ensure the quality of future skill supplies, the Australian Curriculum Programme seeks to strengthen overall education, especially in maths and science skills. Australia’s vision for 2020 is a strong and productive Australian research workforce, with the scale, breadth and depth of skills required to support innovation, education of the next generation of Australians, and ultimately productivity improvements across the economy.