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Australia spends $10 billion a year on research and development but where’s all the innovation?


The Australian Government injects around $10 billion each year on research and development for science and innovation, according to Innovation and Science Australia (ISA).

But much of this research is failing to see the light of day, says ISA chair Bill Ferris.

“As a nation we’re good at creating knowledge but simply not good enough at transferring or applying,” Ferris said in a statement.

“In both our number of researchers per capita and the proportion of highly-cited publications we produce, we sit in the top ten internationally.

“We are, however, performing relatively poorly in transferring that knowledge and ultimately applying it.

“It is these activities that create the types of new goods and services that not only improve our lives—think break-through medical technologies, environmentally friendly production techniques and new ways of growing and storing our food—but also provide economic growth and sustainable jobs.”

ISA’s latest report predicts that for the 2016-17 financial year, 16 Australian government research agencies will receive more than $1.9 billion for research and development.

More than 75% of this funding is expected to be directed to the CSIRO, the Defence Science and Technology group and the Australian Nuclear Science and Technology organisation.

The report also reveals that under 5% of “innovation-active businesses” in Australia collaborate with universities or higher education institutions.

StartupSmart spoke with members of Australia’s startup sector to find out what they think about the report’s findings.


“The focus for too long has been on the ‘R’ side of R&D,” StartupAus chief executive Alex McCauley tells StartupSmart.

“We need to be focusing a lot more on the ‘D’ side and commercialising the development for impact.

“It’s not good having really great researchers researching stuff that just sits on the shelf.”

McCauley says startup founders have limited access to the research being developed in Australia.

“The trouble has been that Australia’s setup is really lacking when it comes to connecting research with development … it is very difficult for entrepreneurs to access IP being developed in Australian universities,” he says.

As a result, Australia is one of the worst performers of commercialisation among OECD countries, says McCauley.


“Academic institutions are failing to commercialise academic research and interact functionally with industry whether that be small (startups) or large industry, they make it very difficult,” says Dr Elaine Stead, managing director of Blue Sky Venture Capital.

“And I use to work with one of those academic institutions doing exactly that, so I can speak from experience … I think we need to honestly evaluate our performance in commercialising innovation, no matter where that derives.”

That being said, Stead believes there is also a disconnect between the type of innovation that comes our of research institutions and that being developed by startups.

“I [also] think there should also be a honest acknowledgement that most ‘startup’ innovation is not (and never will be) academic research derived innovation,” she says.


Girl Geek Academy chief executive Sarah Moran believes academic culture sits in contrast to startup culture.

“Red tape, IP issues and non-disclosure agreements prevent most universities from innovating from within,” Moran tells StartupSmart.

“Some are doing great work, but often it’s tied up and siloed in a commercialisation arm of the uni, rather than a skunkworks attracting startups to come in and discover untapped business potential.”

Considering these issues, how can startups and universities work together to solve Australia’s $10 billion innovation problem? Find out in part two of this article.

This article is originally published in Startup Smart by Dinushi Dias.

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