By Dr Tony Granville
November 2025

The Strategic Examination of R&D (SERD), announced by the Department of Industry, Science and Resources in February of this year, begins with the statement: “The immense potential of Australian research is a resource we’ve been sharing freely. It’s time to harness this resource to reignite our economy.”

The focus of the examination is to determine how addressing R&D funding can significantly increase and improve the Australian economy, against measures such as future prosperity, resilience and productivity. The independent panel also produced six issues papers, and they focused on addressing and improving business enterprise R&D (BERD).

The SERD has been described by Professor Jagadish of the Academy of Australian Science as “a once-in-a-generation opportunity to build an R&D system that can delivery economic and social benefits”. His view is broadly supported by Science and Technology Australia, along with other leading research organisations.

However, both the AAS and STA claim that the SERD is missing the mark and failing to address fundamental basic research, and both these organisations argue for more funding.

It is no surprise that major sectors and lobby groups are trying to steer the R&D funding conversation and push for more funding into their areas; that is what lobby groups do. However, to criticise SERD – clearly a process about aligning R&D with economic growth – on the basis that it is not focused on pure research, is disingenuous, especially when the SERD is an opportunity to help shape an R&D system focused on real economic outcomes.

The SERD’s own discussion paper in February was based on analysis from the OECD and the ABS, and it finds that basic research in Australia already punches well above its weight given the funding levels it currently receives. Higher Education R&D (HERD) accounts for 60% of Australia’s basic research and 50% of applied research, far more than any of the OECD countries. Additionally, the discussion paper finds that HERD output results in the 6^th highest percentage of publication, by country, and the 4^th highest percentage of citation impact. While more funding could undoubtedly boost output, the sector already performs exceedingly well against its peers.

But the problem that SERD points out is that Business Enterprise R&D (BERD) is weak in Australia, and this is why HERD is carrying the load. It’s not that the academic sector and fundamental research are being overlooked; the glaring issue is in BERD and economic translation.

The AAS is quick to cite “there is no ‘D’ without ‘R’”, but citations and publications will not sustainably grow the Australian economy. This is especially true when the bulk of the research output remains locked behind publishing journal paywalls accessible only by fellow academics, further stunting the translation of fundamental research. This is a sentiment echoed by the former Australian Chief Scientist, Dr Cathy Foley.

The SERD has highlighted, from the start, the gap in translating research efforts into innovations that businesses can use. A point shared by Dr Goennemann of the Advanced Manufacturing Growth Centre (AMGC) when he stated “…we [Australians] are not good innovators, we are good inventors”.

This is why the focus of the SERD in the issue papers has addressed means by which BERD can be stimulated and the applied research shifted away from the higher education sector and to the industrial sector. If businesses did more of the applied research, converting fundamental research into applicable innovative technologies, then HERD’s 50% of applied research would be significantly reduced. This would result in more funding being available for fundamental research activities. By lifting BERD, establishing a viable framework that stimulates research activities from industry to translate these innovations into marketable technologies, the university sector can focus more on fundamental research and the next new discovery.

The university sector, and all their lobby groups, have been very vocal advocates for increased funding. Where do the lobby groups suggest the funding comes from? Calling for more money is easy, but every dollar must come from somewhere. Without concrete suggestions for funding sources, it’s difficult for the government to act effectively. This is where SERD could do better – and offer viable solutions on how to fund it.

Lifting business activities to shift applied research from universities to industry is a start, because funding can be linked to ROIs and economic growth. This will result in higher R&D tax incentive (RDTI) funds going back to businesses and away from government coffers. And while this will still require businesses to self-fund the initial project expenses, such a framework would inevitably require additional government funding. However, by driving it from the industry end of the R&D puzzle, it can be measured for outcomes.

Where does the additional funding come from?

• • Lift the resource rent tax, to fund future innovation with our plentiful natural resources.
  • Increase GST to 11% or 12%.
  • Divert extra taxation of high superannuation balances towards research and innovation.

These are only a few potentially bold suggestions to consider. But we need to be bold with suggestions that boost the Australian economy through translating innovative research.

Finally, Australia doesn’t lack for pure and applied research. What we don’t do well is translate invention to industry. If academic lobby groups intend to critique the focus of SERD, they should include not only a strategic plan for increasing BERD and stimulating economic growth, but also practical recommendations for how the government can fund and implement it.

Dr Tony Granville is the Innovation Manager for Harrison SPARC.