‘Get smart and get cracking’ on R&D

Australian governments and companies must boost funding for research and development across new technologies and emerging industries.

Australian governments and companies must significantly boost funding for research and development across new technol­ogies and emerging industries to reposition the nation as a major manufacturing player in the global­ supply chain.

Ahead of the October 6 budget, which is expected to feature a major manufacturing package to create jobs and support Australia’s shift to a digital economy, business leaders have called for a greater focus on establishing and bolstering new industries to ­support post-COVID-19 growth.

University of Technology Sydney emeritus professor Roy Green, who has provided support to COVID-19 commission special adviser Andrew Liveris in the devel­opment of the Morrison government’s manufacturing strat­egy, said it was time Australia took investment in R&D “seriously”.

Professor Green, who served on the prime minister’s manufacturing taskforce under Julia Gillard, said the nation had failed to maximise opportuniti­es presented during the mining boom.

The former chairman of the CSIRO manufacturing advisory council and NSW Manufacturing Council said Australia had also lagged behind in “terms of our manufacturing proportion of our economy for some time”.

“We’re down to about 6 per cent. Other economies are around 15-20 per cent,” he said.

Professor Green said Aust­ralia’s reliance on overseas manufacturing, dominated by China, had exposed “great vulnerabilities in our manufacturing supply chains”.

He said the COVID-19 pandemic had revealed weaknesses in domestic manufacturing, which should be used as an opportunity to “identify niches in the world economy where we can be globally competitive”.

“There’s a big opportunity there. It’s going to require big investmen­ts both by the public and private sectors in lifting our R&D performance, which is lamentable­. We’re down to 1.79 per cent of GDP. The rest-of-world average (for OECD ­nations) is 2.4 (per cent). Korea, Japan, Switzerland, Germany are all over 3 per cent now,” he said.

“We really have to take that investmen­t seriously. Germany has just invested $80bn in digital manufacturing, digital transformation. Britain has just committed to $40bn to lift their R&D performance. Even Singapore has committed $20bn. Joe Biden … in his new program is committing to more than $400bn.

“This is the scale that the rest of the world is thinking about and we can’t just think in terms of a few million. We’ve got to multiply what we do.”

Business Council of Australia chief executive Jennifer Westacott on Tuesday said “now is the time to accelerate the move to a digital economy” and “harness research and development systems”.

The BCA chief also identified university collaboration systems, approvals systems and export licensing systems as key priorities for the private sector.

“We also need to get smarter about how Australian businesses can be quality and specialist suppliers in the global supply chain,” Ms Westacott said. “We’re never going to manufacture entire giant rockets in Australia. But we can harness specific technology to produce the componentry that will make us a world leader in the supply chain for areas such as space exploration.”

Anthony Albanese said on Tuesday that “COVID-19 has demonstrated just how vulnerable Australia is to global supply chain shocks” adding that the ­nation “needs a more sophistic­ated manufacturing plan than just responding to crises’’.