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R&D and business in Australia

By Steven Meyer - posted Tuesday, 11 November 2014

I have no quarrel with anything Allen Greer wrote in "Funding scientific research: money can't buy love". Measuring the quantity and quality of scientific output is always going to be difficult. There is no one measure.

That being said I think he did an excellent job of presenting the most important measures and I agree absolutely with his concluding remark.

"…in scientific research, money doesn't buy impact but collaboration does."


I would however like to present a different perspective on Australian R &D, one which is complementary to Mr. Greer's.

In Australia, as is the case in all OECD countries, most R & D is funded by business. To call the figures rubbery is an understatement. The most recent stats I was able to find, from the OECD iLIbrary, suggests a business-public ratio of 2:1. This is in line with a report presented to parliament in 2002 that also had a ratio of 2:1. By OECD standards this is quite a low ratio. In most countries businesses spend more.

At any rate, more than half of R & D expenditure in Australia seems to come from business.

From the business perspective, expenditure on R&D needs to result in some sort of profitable innovation for it to be sustainable. So, how innovative is Australia?

As a proxy for innovativeness I've taken the number of patents Australian inventors registered in the US per billion dollars of GDP and compared that to other countries. Registering and defending a patent in the US is expensive and, presumably, the inventors who do so believe they have a commercially valuable property.

Here are the results for 2013 for selected countries:


*Included in the "other category" on the USPTO website.

I took the GDP figures from the CIA World Factbook and the number of patents from the USPTO website. The selected countries are all the OECD countries excluding the US plus Brazil, China, India, Hong Kong, Russia, Saudi Arabia, Singapore, South Africa and Taiwan.

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About the Author

Steven Meyer graduated as a physicist from the University of Cape Town and has spent most of his life in banking, insurance and utilities, with two stints into academe.

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