Australia has been handed a roadmap to strengthen its research and innovation system, with the release of the final report from the Strategic Examination of Research and Development prompting renewed calls for the federal government to act quickly to boost the country’s productivity and economic resilience.
The review comes at a moment when Australia’s productivity growth has stalled and global economic and geopolitical shifts are reshaping the competitive landscape. Sector leaders argue the report presents a critical opportunity to rethink how the country invests in research and innovation — and how that investment translates into new industries, jobs and economic growth.
Luke Sheehy, chief executive of Universities Australia, said strengthening the national research and development system is central to Australia’s long-term prosperity.
“Research and development are the engine room of productivity, economic growth and living standards,” Sheehy said.
“If we want to be an ambitious, thriving, prosperous and modern country, we have to get serious about innovation.”
The examination was led by Robyn Denholm and supported by a panel including Ian Chubb, Fiona Wood and Kate Cornick, whose recommendations aim to strengthen Australia’s innovation ecosystem and better connect research with industry.
According to Sheehy, the report recognises the strength of Australia’s existing research base but warns the country risks falling further behind globally without stronger policy support and investment.
“For too long Australia has been falling behind in the global race for research and innovation, while our economy remains heavily reliant on digging things out of the ground instead of building new industries,” he said.
Universities and research leaders have long argued that Australia’s relatively low investment in R&D compared with other advanced economies limits the country’s ability to translate scientific discoveries into commercial and industrial outcomes.
Supporters of the review say a stronger R&D system could help Australia diversify its economy, develop sovereign capability in critical sectors and accelerate the transition to cleaner energy technologies.
It could also play a role in addressing broader economic challenges, including stagnant productivity and cost-of-living pressures, by helping create higher-value industries and better-paying jobs.
Sheehy said parts of the report reflect proposals previously advanced by Universities Australia, including recommendations aimed at strengthening collaboration between universities, industry and government.
But he warned that the real test will come in the government’s response.
“Reports alone don’t lift productivity or build new industries — action does,” he said.
With fiscal pressures facing the federal budget, the sector acknowledges the challenge of new spending commitments. However, proponents argue investment in research and innovation should be seen as a long-term economic strategy rather than a cost.
“R&D is an investment that pays for itself many times over through stronger productivity, new industries and better jobs,” Sheehy said.
“If Australia wants to build the industries of the future, make more of what we need here at home and lift living standards, R&D and innovation have to be front and centre.”
“The countries that back innovation shape their future. Australia must decide to be one of them.”
