Local innovation assessed
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Australia’s innovation system is progressing, but investment challenges persist, according to new figures.
The new Australian Innovation Statistics (AIS) dashboard, launched today, presents a clearer analysis of the nation’s research and development (R&D) landscape, offering updated metrics and insights into both achievements and ongoing barriers.
The report reveals that nearly half (45.7 per cent) of Australian businesses engaged in innovative activities in 2022-23, positioning Australia seventh among 39 OECD nations.
The most active sectors included ICT, manufacturing, and wholesale trade, with over half of firms in these industries reporting innovation efforts.
It also found an increase in scientific research output and collaborations.
Access to funding has now overtaken cost and skill shortages as the primary barrier to commercialising innovations.
In 2022-23, 23.2 per cent of surveyed businesses cited “lack of skills” as an obstacle, while 19.1 per cent reported difficulties accessing additional funds. This funding gap aligns with a decline in venture capital deals, signalling broader challenges in financing innovative ventures.
The federal government’s R&D spending rose by 4.7 per cent this financial year to $14.4 billion, up from $13.8 billion in 2023-24.
Most of this funding supports industry, education, and health, distributed across 151 programs within 14 portfolios.
The boost aligns with earlier data showing slight business R&D growth in 2022-23, following a decade of flatlining.
Industry and Science Minister Ed Husic acknowledged the positive trend but emphasised that more needs to be done.
“For over a decade, R&D investment has languished,” he claimed.
“We need good data and an honest appraisal of what the barriers are to lifting R&D… While there have been encouraging signs in initial R&D uplift, we still have a lot of work to do.”
While most innovations rely on adapting existing technologies - a process called ‘diffusion’ - there has been a slight rise in original “new-to-world” innovations, from 4.7 per cent in 2020-21 to 5.2 per cent in 2022-23.
However, investment in knowledge-intensive assets like software and machinery has been either low or declining since the 1990s.
Despite recent improvements, Australia’s R&D expenditure as a percentage of GDP remains below the OECD average, highlighting the need for sustained investment to maintain global competitiveness.
More details are available on the Department of Industry’s website.