Business spending on research and development topped 24.4 billion in 2023-24, an 18% rise from the COVID hangover of 2021-22.
New data from the Australian Bureau of Statistics indicated that there had been a rise in R&D spend, with the biggest growth in professional, technical and scientific services, which was up 31.5% and a 42% jump in IT R&D.
While business spending on R&D has risen by almost 40% since 2017-18, the spend as a proportion of GDP has remained static, at an underwhelming 0.9% throughout the period.
Universities Australia CEO Luke Sheehy welcomed the quantum increase, but repeated the sector's decades-long warning that Australia continues to fall behind due to underinvestment in research.
“Australia invests less than 1.7 per cent of GDP in R&D, compared with an OECD average of 2.7 per cent. Countries like South Korea and Germany are well above three per cent and are reaping the productivity gains that come with it,” Mr Sheehy said.
“The Australian Government has set a target of lifting R&D investment to three per cent of GDP. The current Strategic Examination of R&D is the right opportunity to align policy and funding with that ambition, but we need urgent action to close the gap.”
Recent analysis indicated that Australia faced not only a funding complexity problem, with more than 150 separate federal research funding programs handing out scant funds; but also a workforce problem.
"Australia faces a shortfall of 12,000 PhD-qualified researchers by 2031," he said.
“We know what needs to be done. The challenge now is to build a coherent, better-funded research system that brings universities and business together to drive national prosperity.”