Large Dividends from Science and Innovation Support

There are important economic, social and environmental benefits to Australia from the $6 billion public support of science and innovation, according to a report released by the Productivity Commission. Nevertheless, in its final report on Public Support for Science and Innovation, the Commission has identified a number of areas of the science and innovation system where reforms are needed.

Commissioner Mike Woods, in releasing the final report, said, ‘The most important functions of publicly-supported science and innovation are nurturing a highly skilled and creative workforce and generating knowledge that is broadly and publicly useful. Increasingly, public support has focussed on commercialising R&D, but in most instances the private sector is best placed to fund this activity.’

Consistent with this, the Commission argues that the objectives of Cooperative Research Centres should be re-aligned to the broad attainment of economic, social and environmental goals, not just commercial ones. Strong public funding support is justified for Rural R&D Corporations that have a significant public good orientation. But the Commission considers that the level of public co-funding for some of the more industry-focused corporations could be too high and should be re-assessed.

The Commission found that there would be a better chance of stimulating R&D in the business sector if there were changes to the design and scope of the $600 million R&D Tax Concession. Commissioner Woods said ‘we need to increase the likelihood that businesses getting these subsidies use them for R&D they wouldn't otherwise undertake.’ The Commission also identified a need for more nimble R&D collaborative arrangements between business and universities, and has proposed a complement to the CRC program that could achieve this, as well as a 'proof of concept' program that would help universities transfer developed ideas to businesses.

The Commission canvasses some options that might increase the possibility of net benefits from the recent Government decision to adopt the Research Quality Framework (RQF). The Commission favours a scheme that is more strongly weighted against the poorest research performers than currently envisaged. But as the RQF evolves, the Commission suggests the use of a lower cost, risk-minimisation approach that only applies to poor performing areas in universities.