April 14, 2025
Strategic Examination of R&D – IRU submission
The Innovative Research Universities (IRU) welcomes the opportunity to provide input to the Strategic Examination of R&D (SERD). The SERD panel is tasked with exploring ways to optimise R&D investment, enhance research-industry collaboration, align efforts with national priorities, encourage industry innovation, and increase Australia’s R&D intensity. Lifting Australia’s R&D intensity to OECD levels requires significantly increased investment in R&D from all sectors.
The IRU strongly supports the intention of the SERD to examine how a more systematic approach to public R&D investment and policy could increase R&D intensity in the business, government and not-for-profit sectors. We believe there is considerable potential to better leverage Australian universities’ strength in foundational research, research training and education towards solving problems in the national interest. Universities are unique within the R&D system as institutions dedicated to advancing knowledge and providing research-informed education. All university graduates are exposed to research throughout their education and build the absorptive capacity of Australia’s workforce for R&D and new ideas.
The SERD discussion paper recognises how Australia has successfully increased our national research base through university expansion. The IRU discussion paper Concentration and diversity in Australian research funding, output and impact demonstrates how this has been achieved through a broadening of research excellence across the Australian university sector. This is a uniquely Australian success story of greater differentiation, productivity and equality. Other countries, such as Canada and the UK, remain heavily reliant on a minority of research-intensive universities to support their national research systems. The Australian system is now less reliant on our traditional research-intensive universities and is more equal, with newer universities outperforming others in publication output growth rates. This contributes importantly to the SERD Terms of Reference for ensuring R&D benefits are equitably distributed across regions and communities.
However, there are systemic challenges in our research system. Australia is now more reliant on university R&D due to the declines in business and government expenditure (BERD and GOVERD). University research is now more oriented towards applied research, rather than the basic or discovery research that has provided the foundational knowledge for our system. Base public funding for university research has eroded, leaving universities more reliant on private sources, including international student revenue. IRU analysis of the “dual funding system” for university research (where funding for competitive grants and contract research is matched by the research block grant) suggests that block grant funding has declined from around $0.80 in block grant per $1 research income in the early 2000s, to $0.40 in recent years. This has been due to a growth in engagement and contract research that has outstripped the growth in the research block grant, as well as the addition of the Medical Research Future Fund into the competitive grants system.
It is essential that the ambition to lift Australia’s gross expenditure on R&D is driven by new public investment and careful reconfiguration of existing investments. There are problems in our R&D system with a fragmentation of Australian Government programs and policies, limiting business sector investment in R&D. But there are also good examples of where universities are effectively collaborating with industry. The SERD discussion paper encouragingly notes the initial success of the new National Industry PhD Program established under the 2021 Research Commercialisation Action Plan, including ARC Linkage Industry Fellowships. There are also the longstanding Cooperative Research Centres (CRC) and rural research and development corporations (RDCs). These programs are home-grown examples of innovation that are admired globally. They are intended to be partnerships that help business solve their problems, but they can end up being too reliant on universities to drive the research agenda due to the limited scale of R&D in industry. But it is important that the successes of these programs are not lost in any changes. The IRU recommends that the SERD panel consider how a new national coordination agency could advise on how existing public R&D programs can be updated, broadened or scaled up to better enable small and medium sized enterprises to engage with universities on their problems.
A new national coordination agency could also help foster innovation by partnering with the proposed Australian Tertiary Education Commission (ATEC) to fund mission diversity through university compacts. A new national R&D agency could direct public investment towards strategic priorities, with ATEC helping align these with individual university missions. Mission-based compacts currently outline each university’s mission and priorities to government, but they lack incentive mechanisms. The Accord proposed that an ATEC work with universities through their mission-based compacts to establish strategic priorities and deliver base funding for research and teaching. A national R&D agency could help further secure our research base and better leverage university compacts towards solving problems in the national interest. It could also help resolve challenges of how to provide long-term support for strategic and collaborative research infrastructure.
The IRU recommends that the SERD panel:
- Fully consider the research recommendations contained in the Australian Universities Accord.
- Prioritise the development of a National Research Evaluation and Impact Framework.
- Recognise the need for balance between commercial outcomes and broader public/social good impacts from R&D.
- Explore a systematic approach to public R&D investment through a new national coordination agency.
- Consider how the R&D system can foster innovation and boost R&D intensity through mission diversity.
Read the full submission here.
