Australians are well known for their innovative approach to problems and the ability to think outside the square.

Historically, these unique qualities have placed Australia at the forefront of discoveries - many of which have resulted in worldwide commercial success stories. From the bionic ear, plastic banknotes and wine casks, to pacemakers and penicillin, the pioneering efforts of Australians have made a difference to peoples' lives around the world.

Culture of innovation

Australia's open social and political culture, advanced education system and investment in research encourage innovation and inventiveness. In more recent times, Australia has given the world a range of innovations, including Google Maps, pacemakers, Biota’s flu treatment (Relenza), polymer banknotes, wireless networking technology, CSL’s anti-cancer vaccine (Gardasil), Cross Market Surveillance Service’s stock market fraud detection system, and Cochlear’s bionic ear.

The country has also produced a significant number of Nobel Laureates:

• William Henry Bragg - Physics 1915 
• William Lawrence Bragg - Physics 1915 
• Howard Walter Florey - Physiology or Medicine 1945 
• Frank Macfarlane Burnet - Physiology or Medicine 1960 
• John Carew Eccles - Physiology or Medicine 1963 
• Alexander Mikhailovich Prokhorov - Physics 1964 
• Bernhard Katz - Physiology or Medicine 1970 
• Patrick White - Literature 1973 
• John Warcup Cornforth - Chemistry 1975 
• Peter Charles Doherty - Physiology or Medicine 1996 
• Barry J. Marshall - Physiology or Medicine 2005 
• J. Robin Warren - Physiology or Medicine 2005
• Elizabeth H.Blackburn - Physiology or Medicine 2009

Strong support for R&D 

Australia’s culture of innovation, combined with the fast adoption of new ideas, has earned it a reputation as a dynamic, forward-thinking and productive investment destination, and many international companies have benefited from collaborative partnerships with Australian businesses and researchers.

Australian government support for research and development is matched by strong growth in business expenditure on research and development. In 2007-08, business expenditure on research and development reached a record $14.4 billion, representing a nine percent increase in real terms on the previous year. This expenditure was concentrated in the areas of manufacturing (30 per cent), mining (23 per cent) and professional, scientific and technical services (16 per cent) industries.

Australia also offers a highly skilled workforce within the R&D sector, ranking 14th from 57 key economies in terms of its total R&D personnel nationwide per capita (Source: IMD World Competitiveness Yearbook 2009). 

R&D programs 

The Australian Government places a premium on world-class innovation and actively promotes R&D.

The Australian Government has recently instituted a range of initiatives that will substantially promote both public and private sector R&D. These include: 

• The Enterprise Connect Network, which provides a national network of innovation centres and R&D services that support Australian small and medium enterprises by giving them access to expert practical advice. 
• The International Science Linkages program, through which the government is channelling $95 million over nine years in support of international scientific collaboration. 
• The Australian Laureate Fellowship Scheme, which will provide $240 million into post-doctoral and post-graduate research and mentoring.  

R&D tax incentive 

The Australian Government has announced a A$1.8 billion R&D Tax Incentive to provide eligible companies with a tax offset for expenditure on eligible R&D activities.

The tax offsets reduce a company’s income tax liability. A 45 per cent refundable tax offset will be available for eligible companies whose turnover is less than A$20 million per year. A 40 per cent offset is available for all other eligible entities.

The list of eligible entities includes Australian companies and also foreign entities with Australian residency for tax and R&D purposes. R&D activities undertaken overseas may also be eligible, and the resulting intellectual property from R&D undertaken in Australia can reside overseas. 

A strategic location for technology tests and trials

Australia has a strong reputation as a location to conduct clinical trials. It is also ranked highly for the level of knowledge transfer between companies and universities, and for the availability of R&D personnel.

As a country of early adopters, Australia is the ideal location for trials of new services and products, and Australians have quickly adapted to technical innovations including mobile phones, digital photography and electronic funds transfer.

The Australian population encompasses people from 200 different countries and offers a microcosm of the world's populations, allowing for simultaneous testing against the preferences of numerous ethnic or linguistic groups.

At the same time, Australia's westernised consumer and corporate culture means that products that are successful here are also highly likely to be adopted by other western cultures.

The close alignment of Australia’s financial and legal frameworks to those of North America and Europe means that products which have been successfully introduced in Australia will have already been through regulatory scrutiny similar to that which they will face in those markets. 

Research focus

Australia has highly sophisticated infrastructure supporting R&D, and its scientific research institutions have been ranked eighth in the world (Source: World Economic Forum, Switzerland and Harvard University, Global Competitiveness Report 2008-09 (134 economies)).

The country has a unique Cooperative Research Centre (CRC) program, which combines the research efforts of the public and private sectors in 48 CRCs operating across a wide range of industry sectors. In the program’s latest selection round, announced in December 2009, $130 million was granted to seven CRCs focusing on areas including biotechnology, mining and remote communities, and engineering asset management.

Australia's Commonwealth Scientific and Industrial Research Organisation (CSIRO), which is among the world’s largest scientific institutions, is the biggest participant in CRCs. The organisation employs more than 6,600 staff and maintains more than 50 sites across Australia and biological control research stations in France and Mexico. Worldwide, CSIRO is involved in more than 850 current or recently completed research projects, working with leading scientific organisations in more than 80 countries.

A biotechnology powerhouse

Australia is recognised as a powerhouse of biotechnology and pharmaceutical innovation. The country is home to a network of 470 biotechnology companies focusing on key industries such as therapeutics, agricultural biotechnology and diagnostics.

In 2008, it was reported that 399 alliances had been announced involving Australian life sciences companies in the previous 12 months. Of these, more than 70 per cent were with international organisations – 101 from North America, 100 from Europe and 57 from Asia (Source: Hopper and Thorburn, 2008 BioIndustry Review: Australia and New Zealand). Australia has a well established medical device industry, a strong position in nanobiotechnology and it is internally recognised for its expertise in stem cell research.

An early adapter of information technology

Australia’s technology savvy customer base and highly skilled workforce makes it a strategic location for information, communications and technology (ICT) activities with a regional and global focus. 

The country’s ICT market, worth A$100 billion, is the fifth largest in the Asia Pacific and the 14th largest in the world, and between 2001 and 2008 the industry grew nearly 14 per cent – faster than those of Japan, Hong Kong South Korea and Taiwan (Sources: ABS. Information and Communication technology Australia, 2006-07, October 2008. WITSA, Digital Planet: The Global Information Economy, May 2008). In 2008, Australia’s IT industry was ranked as the second most competitive in the Asia Pacific and the seventh globally, as well as ranking sixth for e-readiness (Sources: EIU: How Technology Sectors Grow. Benchmarking IT Industry Competitiveness 2008. EIU, E-Readiness Report 2008).

Australia’s software industry is worth A$2.7 billion, its success underpinned by comparatively low development costs and a highly skilled workforce. In addition, the country’s creative digital industries generate more than A$23 billion per year, the digital game development sector alone generating $136.9 million in 2006-07, with 93 per cent derived from exports (Source: Microsoft Australia, Local Software Economy Initiative: Annual Report 2007. ARC Centre of Excellence for Creative Industries and Innovation, Queensland University of Technology Digital Game Development Services, Australia, 2006-07).

The combination of these factors has led Australia to become an increasingly attractive location for companies to base their R&D facilities.