Australia must get smart about research spending
Universities and small companies have kept research alive, but government and big business have pulled back. Now is the time to change course. Joining Horizon Europe, the world’s largest collaborative research and innovation fund, would connect Australia to a €95.5bn ($172bn) network of expertise and investment, and show that Australia is serious about scientific diplomacy, long-term capability and competitiveness.
Horizon Europe funds research and commercialisation partnerships in areas aligned with Australia’s strategic interests, from clean energy and digital infrastructure to critical minerals and medical technology. It provides access to infrastructure, global talent and consortiums that expand what we can achieve beyond domestic investment alone. It supports mission-driven innovation that links research to industrial transformation and productivity growth.
Australia has much to contribute. We lead globally in cybersecurity and digital trust and hold a strong position in critical minerals.
The opportunity isn’t just to export raw materials; it’s to collaborate on advanced processing, new materials and resilient manufacturing supply chains. To move beyond commodities, we need to build onshore capacity for higher-value products, and R & D is essential. In contrast to shipping unprocessed resources, we can develop rare earth magnets, battery cells, electric motor components and precision parts for wind turbines or satellites – designed, refined and produced in Australia.
Sovereign manufacturing begins in research labs and engineering centres. Before moving to Australia in 2011, I worked in the Netherlands, where the government adopted a national “valorisation” strategy turning academic research into economic value. Co-ordinated investment often converted €1 of public R & D into €5-€7 of private sector follow-on. Australia can achieve similar returns with the right focus.
Earlier I was a postgraduate student at Stanford University, supervised by Nobel laureate Douglas Osheroff. Stanford didn’t just generate knowledge, it incubated companies such as Google. That kind of STEM-powered ecosystem is within Australia’s reach if we invest with purpose.
We have momentum. Renew IT founder James Lancaster is working with UNSW MICROfactorie researchers to turn plastic e-waste into high-performance 3D printing filament. The partnership tackles environmental challenges while creating skilled jobs in design, logistics and manufacturing.
Contrast this with the $2.4bn recently committed to extend the life of a polluting steelworks in Whyalla. That decision reflects a broader dilemma: do we invest in industries of the past or build the ones we need next?
Australia has the resources, talent and institutions to lead. What’s missing is the strategic framework and international collaboration to turn research strength into economic outcomes. Horizon Europe provides a ready-made platform.
The energy transition, digital capability and supply chain resilience are too complex to tackle alone. Australia must work with like-minded nations. Europe treats research as foundational to its economic and security strategy. If we don’t follow suit, we risk falling behind.
The government’s strategic examination of R & D, led by Tesla board chairwoman Robyn Denholm, is the right vehicle to formalise this shift.
It should include Horizon Europe participation within a broader strategy tied to national priorities. This isn’t about spending more; it’s about investing smarter. Horizon Europe is not just a research opportunity; it’s an economic one.
Sven Rogge is dean of science at UNSW Sydney.
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Australia is experiencing its lowest productivity growth in decades, while investment in research and development has steadily declined as a share of GDP for 15 years. In contrast, peer nations are ramping up support for science, technology, engineering and mathematics as central to sovereign capability and economic resilience.