Opinion
Australia has proven its capacity to produce advanced research capability, but hasn’t yet evidenced effectiveness at translating this into the economy.
The Strategic Examination of Research and Development (SERD) has unambiguously documented this weakness. The Australian Tertiary Education Commission’s (ATEC)’s forthcoming first negotiated compact round now affords a genuine reset opportunity for Australian research.
Through ATEC’s process, every university could now be asked to detail not only how it will produce research capability, but how that capability will move into the wider economy.
Asking that simple question will likely beget some complex answers – but also some necessary outcomes in changed institutional behaviours.
There will never be a better time.
Confluences are unique moments of alignment and possibility.
Sometimes they’re like waiting for buses only to have two arrive at once. In this instance, our confluence is the arrival four months ago of Australia’s Strategic Examination of Research and Development (the SERD) and the contemporary commencement of ATEC’s first round of negotiated mission-based compacts. Ostensibly, these are two independent occurrences. They need not be thought of as such.
In fact, there’s possibly much more to gain in linking the two than to be risked in keeping them apart. Industry policy and higher education planning are inextricably linked – through skills and capabilities. Research training and researcher development are the critical elements which straddle them both.
If the SERD is a diagnostic of national need, then compacts could be a salve to soothe some of the identified woe. The opportunity now is to explore whether compacts can connect university missions to national capability needs identified by the SERD.
What did the SERD do for us?
The SERD surfaced the well-established fact that Australia’s R&D expenditure was in stark decline, cascading from an already low 2.09% of GDP in 2013 to an even lower ebb of 1.68% in 2022 enviously comparing itself to the OECD average level of almost 2.7%. Compounding this, business R&D intensity was shown to have fallen by 31% since 2009, with government intensity dropping even more calamitously in the same period, by 37%.
The report categorised fragmentation, a lack of coordination and deficits in translation to economic outcomes as key failings in the Australian R&D system – bluntly presenting clear confirmation of fears that many had held for some time.
It highlighted how Australia has too few researchers working in industry and business and the limited mobility which exists across institutional boundaries.
It called out the relative absence of absorptive capacity for research in Australian business and its capacity to commission and apply the outcomes of research.
It also signalled that a policy of incremental reform was unlikely to remedy the situation. The SERD made these weaknesses difficult to ignore, but was not directly coupled to machinery with the capacity to enact the necessary changes for their resolution. The research engine of Australia currently lies in its universities – so the challenge therefore is to now link the engine to where its power is best economically deployed.
Tuning the research engine for economic needs
In aggregate, based on OECD comparators, it’s reasonable to say that Australia isn’t suffering from having too few PhDs.
Whether these researchers are working in domains pertinent to economic prosperity is a different matter.
The PhD capability in this country has largely evolved to be architected and organised around the needs of universities, not industry and the economy. This stems from the nature of the training, the measures of success which are applied and the nature of supervisory capacity.
It is compounded by career expectations shaped by an academic labour market trajectory and by ‘bolting on’ industry relevance instead of embedding it in the research, training and outcomes.
There is no doubt that the existing system can produce excellent researchers – but the challenge is to couple this excellence to economic relevance and to embed it as part of the productive economy.
But let us not lay the blame solely on the academy here. Many elements of industry have allowed a form of research surrogacy to proliferate, deferring research costs from its profit line to the grant line of the exchequer for many years. Consequently, they have not advanced the capability to employ, absorb or make best use of trained researchers – reinforcing academic alignment. It’s not that there are too few researchers – the system is not geared towards their broader economic deployment.
The resulting structural mismatch is made worse when the economics of higher degrees by research – from the researcher’s perspective – are examined. We want our best and brightest to become research capable employees, driving productivity. We ask that cohort to take on additional debt in their undergraduate years as they complete honours qualification and to forego employment for an average four further years.
During that time, they subsist on an average stipend of ca. $35,000 per year. On completion they enter a workforce that too often cannot absorb them appropriately – often positioning them behind peers without equivalent qualifications.
In the interim, they have foregone significant sums in ‘lost’ wages during the period of their training. The fact that this financial gearing materially disadvantages diverse cohorts of potential students from attaining higher qualifications is a topic for another conversation.
Notwithstanding a PhD student’s capacity to endure relative financial deprivation to their non-researching peers, during their studies scholarship stipend recipients have little to no access to superannuation during this period of study as they are not employees, they leave with the totality of their undergraduate debt unpaid and are often even further removed from economic relevance by the nature of their training than they were before they commenced.
Stipends, completion times and career uncertainty are all real and all require attention.
Australia unfairly asks talented people to accept a large personal economic penalty to acquire advanced research capability and without a structure to couple this capability to economic prosperity – for the individual and for wider society.
But improving these elements alone will not improve business’s research capabilities in Australia. We have an ingrained weak connection between how research graduates are trained and where their advanced capabilities are needed in the economy beyond academia. But now we have an opportunity to think about how we could address this.
Moving from research training to research capability – at scale.
The objective of the Australian research system cannot be simply to train researchers and hope for the best. We must nurture a system which increases the research capability of the Australian economy. It’s therefore a deployment challenge – bringing trained and qualified researchers to the point of need. Or a case of matching the supply (from universities) to demand (in a research-capable economy).
Research capability should be viewed as national infrastructure. Like any infrastructure it must be built deliberately and maintained over time. Shifting the objective to capability rather than training shifts the associated policy conversation accordingly.
It becomes less a conversation around the number of PhDs, publications and completions and more a conversation around considering where research graduates are (or should be) working, where they are adding capability, which sectors are being strengthened, and about how industry-led R&D execution is being enhanced.
This is a shift from production to productivity. There are ample global benchmarks for what good looks like in this regard.
How can compacts help?
ATEC cannot make enterprises employ researchers, invest in R&D or build technical management capability. It can however encourage universities to become more outward-facing. In its dialogue with Australian universities, ATEC can posit one critical question. ‘How will your university’s research and research training strengthen Australia’s capability beyond the institution?’
To answer this, universities will need to think not only about the purpose of research, but its translation. They will need to consider its partnering, its relevance and its outcomes. Before this is decried as the death-knell of basic research – it is not – and it cannot be allowed to be.
The same question must interrogate capability across the domains of basic, oriented basic, applied and near market research – not prioritise one over the other. ATEC’s first compacts are an opportunity to nudge and shape institutional strategic alignment to national objectives – in participation, and in outcomes.
They are an opportunity to lead to institutional diversity – and to encourage different universities to answer differently – to step away from homogenous research training to diverse research capability building aligned to need – across the entirety of the Australian economy – from the arts to sciences, from health and technology and engineering to the social sciences.
Some institutions will, through such interrogation and supported differentiation, become industry-facing research universities. Others regional capability builders. Some will specialise in sovereign capabilities and others in global translation of technologies and discoveries.
They will all have purpose and relevance – and they can all be linked to benefits and outcomes needed in this country. Not every university can plausibly claim to be all things to all people. Compacts should force strategic choices. That is exactly what they are intended to achieve. If they ask the right questions to drive joined-up answers.
What next?
Not every PhD should be an industry project. Curiosity cannot be sacrificed at the altar of the ‘D’ in R&D.
Australia will continue to require the conduct of world-leading fundamental research, it is an integral part of national capability – the translation of discovery to economic and societal benefit occurs along a spectrum.
That said, we must shift away from considering research training as being conceived solely as a university (internal) endeavour. Our levers must encourage research training’s connectivity to enterprise and end-users so that we can strengthen the nation’s capability – and through bolstering national competitiveness and productivity, we can build a sustainable research career path beyond academia which drives even greater activity.
It all starts with asking the right questions. Compacts should require research capability to move beyond the university, while preserving fundamental research and institutional differentiation. ATEC’s first compacts can set a consequential direction for system stewardship. They can ask every university not simply how much research capability it intends to produce, but what national need it will serve.
Emeritus Professor David Lloyd was Vice Chancellor of UniSA from 2013-2026 and Founding Co-Vice Chancellor of Adelaide University 2024-2026. He now works for BlueRange Advisory.