ABS data shows dramatic drop in university research spending

University research spending is at its lowest level since 2008 as a proportion of Australia’s GDP.

Medical research receives the lion’s share of university research spending, which is bad news for Australia’s advanced manufacturing efforts.

University research spending has dropped dramatically as a proportion of Australia’s GDP according to new figures from the Australian Bureau of Statistics.

In 2022 university research spending totalled $14bn, or 0.55 per cent of GDP, down from 0.61 per cent in 2020. It is the lowest figure since 2008.

“While the fall appears small, it’s the largest two-year decline in this sector since the ABS started collecting this data in 1992. This drop in share of GDP is equal to $2 billion in spending,” said Rob Ewing, ABS head of business statistics.

Despite the fall as a proportion of GDP, the $14bn spend on research by universities in 2022 was 10 per cent higher than 2020. Mr Ewing attributed much of the rise to a recovery from the impact of Covid restrictions, and the rising cost of materials and labour.

The lion’s share ($4.9bn) was spent on health research, followed by $2.4bn spent on expanding fundamental knowledge, $876m on environmental management, and $764m on manufacturing. Only $431m was spent on research in information and communication services.

CSIRO board member and advanced manufacturing champion Roy Green said this reflected “not only the hollowing out of Australian manufacturing, with fewer opportunities for productivity boosting research collaboration, but also the absence of co-ordination across the national research and innovation system”.

The latest figures make it more difficult for the Albanese government to fulfil its pledge to raise Australia’s total research spending to 3 per cent of GDP. Currently the figure sits at 1.8 per cent, well below the OECD average of 2.7 per cent.