Strategic Evaluation of R&D

Australia stands at a critical crossroads in its research and development (R&D) journey. Despite decades of rhetoric and countless reviews about becoming a "clever country," our members have not seen material changes to match these aspirations. This stark reality demands immediate and substantive action, not merely incremental adjustments to a system that has consistently failed to translate Australia's world-class research into economic prosperity and productivity gains.

Our members have actively participated in the examinations consultations and provided input into this submission. Their message is clear and unanimous: we cannot afford to wait any longer for meaningful change.

Times are exceptionally challenging for our members. They value the importance of R&D in their businesses but are grappling with slowing investment, a restrictive workplace relations system, an increasingly uncompetitive tax system, a complex regulatory environment, ongoing skilled labour shortages, and uncertainty over energy affordability and availability.

These pressures are occurring against a backdrop of wildly volatile international conditions and once-in-a-generation national security challenges. In such difficult circumstances, the capacity and confidence to invest in business R&D in Australia is severely constrained, precisely when innovation and productivity enhancement are most needed.

The SERD discussion paper presents a thorough analysis of Australia's R&D landscape, and in recognition of its comprehensive nature, our submission focuses more on potential solutions where possible. However, we must emphasise a critical gap requiring attention-the commercialisation imperative.

Calls to increase research funding to 3% of GDP are divorced from economic reality if the commercialisation imperative is not addressed. Simply pouring more funding into a dysfunctional system won't enhance its effectiveness or lift national productivity. What Australia desperately needs isn't more of the same, but rather a fundamentally new approach for how R&D translates into commercial outcomes that drive productivity growth across our economy.

The time for incremental change has passed. With the converging challenges of decarbonisation, diversification, and digitalisation, rebuilding our capacity to not only generate but also commercialise R&D is essential to our national prosperity, productivity and security.

We urge the panel to place commercialisation at the centre of any reform agenda for Australia's R&D system.