Australian Research Council grants return $3 for every $1 spent

A new economic study finds that the billions invested in research by the Australian Research council return $3 for every dollar spent.

Research spending produces a large economic injection.

Money invested by the Australian Research Council in university research returns over $3 for every dollar spent, according to a new study.

Economic consultants ACIL Allen found that each dollar the federal government spends on the ARC’s competitive grants program leads to a $3.32 GDP boost compared to using it for general government expenditure.

The study, which was commissioned by the ARC, examined the impact of the $17.6 billion (in 2022 dollars) in competitive grants which the council awarded to university researchers in the 20 year period from 2002 to 2021.

The report, titled Impact Assessment of ARC-funded Research, also said that an average of 6571 full-time equivalent jobs will be created each year up to 2046 as a result of the ARC grants. The peak employment impact will come in 2029 when about 15,000 full-time equivalent jobs are expected to be created.

It also said that 216 start-up companies were formed using ARC-funded research projects.

ACIL Allen said that it had not included other benefits of ARC- funded research that are harder to quantify including the training of postgraduate reseachers, many of whom go on to work outside academia, and boosting Australia’s overall research capacity.

ARC chief executive Judi Zielke said the findings highlighted “how ARC-funded research has built Australia’s research capability and improved outcomes for critical technology and communications, environmental sustainability, food supply chains, social policy and First Nations peoples”.

Science and Technology Australia CEO Misha Schubert said the study revealed the cost of underinvesting in the nation’s research.

“Every dollar not spent on research is $3.32 in economic activity lost. Imagine how many jobs could be created, how much wealth generated, and how many life-improving advancements could be invented through a powerful boost to the nation’s research funding,” she said.

The study comes after new figures from the Australian Bureau of Statistics last week that revealed Australia’s total investment in R&D continues to trend downward relative to the size of the economy. Gross expenditure on R&D was at 1.68 per cent of GDP in 2021-22, compared to 1.8 per cent in 2019-20.

By comparison, the figure stood at 2.24 per cent of GDP in 2008.

Universities Australia CEO Catriona Jackson said the declining investment in R&D was seriously jeopardising Australia’s ability to advance as a nation.

Australian Academy of Science president Chennupati Jagadish said the nation needed to urgently put in place a ten year plan to boost R&D investment from government, universities and business “so we are equipped to manage a large-scale energy transition, an ageing population, and develop critical national security technology”.

“If investment in R&D continues to decline by 0.1 per cent of GDP per year, in five years’ time Australia will be among the lowest of OECD countries,” Professor Jagadish said.

“Conversely, if Australia increased investment in R&D by 0.1 per cent of GDP each year, we would reach the OECD average in 10 years if the average stayed the same.”