Australia’s economy suffering from poor use of R&D: report

AUSTRALIA is failing to capitalise on research and development (R&D) to build prosperity, according to a government-commissioned report, leaving its economy with flagging growth, lower productivity and limited complexity.

The report’s authors, including chair of Tesla Robyn Denholm, said that Australia had for years relied too heavily on the “good fortune” of its mineral wealth despite an internationally competitive R&D sector. As a result, the economy is now “unprepared to achieve sustained growth based on a complex economy and highly-skilled workers”, they noted.

“Boosting a focus on R&D will prevent Australia’s slide into mediocrity. It will ensure we will be offered a seat at the international table at which big global decisions are made – because we earn it,” the report added.

Industry and Science Minister Ed Husic, who commissioned the independent panel to examine Australia’s R&D sector in December 2024, said that the report made for “sobering reading”.

“There’s a growing reliance on small and medium enterprises to drive R&D which contrasts with other advanced economies where it’s dominated by large companies,” Husic will say in a speech on Wednesday (Feb 12), according to excerpts provided by his office. “Turning this around will take a concerted effort.”

Australia’s economy has slowed to a crawl in recent quarters after the Reserve Bank of Australia pushed interest rates to a 13-year high to try to rein in inflation. The centre-left government has attempted to encourage diversification of the economy away from its mining base, however, the results have been mixed.