Tax breaks aren't the way to grow

The Finns have a practical approach that tells them exactly what results they get. Instead of subsidising technology exports indirectly through a tax break, they subsidise them directly with a commercialisation grant.

Companies that receive the grant have to produce an export product or pay back the money.

Australia, in fact, needs little encouragement to do more research. Where we generally fail is in turning the R&D into commercial and other outcomes and getting them adopted. It would be far more logical to apply the subsidy to this part of the technology chain, where the results can be clearly seen. This, in turn, would induce companies with strong prospective new products to commission more research.

The other bizarre claim justifying the R&D tax break is that it enables knowledge diffusion between companies that normally would not share with one another. Well, $8 billion is an awful lot to spend on fixing a communication problem that can be remedied at a fraction of the cost.

Communicating science is an urgent issue. Of the 1.2 million scientific papers produced worldwide each year, it is said that 90 per cent are never cited and 50per cent are never read by anyone other than their authors, editors and publisher. If Australia reflects the global trend, up to half our new knowledge could be going down the tubes. This is not a problem a tax break will fix.

The Australian Research Council's new chief executive Margaret Shiel put her finger on this issue in last week's HES when she acknowledged the importance of making the ARC's research and its scientists more widely known.

In the knowledge century, the largest rewards will go not to the nation with the best science but to the one that is swiftest to disseminate the best science and turn it to competitive or social advantage.