Core arguments and facts of the 2018 Benchmark Report: Innovation and Skills

21 Feb 2018

Tags

  • Edmund Tang
  • Benchmark Report
  • Australian Economy

Innovation and Skills is one of the five major reasons for investing in Australia underlined in Austrade’s 2018 Benchmark Report (BMR) (in previous posts I covered Robust Growth and Dynamic Industries). Under this heading, the BMR also highlights our world-class scientific and academic institutions, our strong commitment to research and development (R&D), and the availability of Australia’s highly educated, multicultural and multilingual workforce.

Australian policymakers and businesses recognise the contribution of science and innovation to the nation’s growth, economic prosperity and ability to create the jobs of the future, and as a result Australian expenditure on R&D is one of the fastest growing in the world. Moreover, the country’s services-based workforce has expertise in a range of sectors, including world-leading niche capabilities in new disruptive technologies such as automation, immersive simulation and quantum computing.

International organisations have numerous opportunities to collaborate with Australian research institutions, invest in or incorporate Australian solutions into existing products, or enter into joint ventures to take them to the global market.

Below is one of the BMR charts [1] that shows how Australia compares with leading OECD economies across a selection of indicators relevant to the innovation and skills theme:

  • Australia’s secondary education enrolment rate is the world’s fourth highest and the tertiary education enrolment rate the fifth highest, according to the World Economic Forum’s Global Competitiveness Report 2017–18.
  • Australia has a highly educated workforce with the skills to service a diverse range of industries. Australia’s knowledge- and technology-intensive industries add more value to its economy than the knowledge- and technology-intensive industries of France, Germany, Japan and South Korea.
  • The quality of Australia’s infrastructure, human capital and research, and scientific research institutions are all ranked in the world’s top 10.
  • Australia also ranks second in the United Nations Development Programme’s Human Development Report 2016, which measures a country’s human, physical and educational wellbeing based on years of schooling, life expectancy and income.

skilled-workforce

Australia’s annual gross expenditure on research and experimental development (GERD) is one of the fastest-growing in the world, having risen about eight per cent per annum between 2000–01 and 2015–16. Business expenditure on R&D accounts for 54 per cent of Australia’s total R&D expenditure, expanding from A$5 billion in 2000–01 to about A$17 billion in 2015–16 – a compound annual growth rate of over eight per cent since 2001.[2]

  • Australia’s annual GERD was estimated to be around US$23 billion (on current purchasing power parity terms), according to the latest calculations of the OECD. [3] This represents an average growth rate of 8.5 per cent a year since 2000, well above the OECD average rate of 4.9 per cent. In relative terms (that is, researcher per thousand employment versus GERD as a % of GDP), Australia’s GERD places it among the world’s leading innovative countries, including the USA, Japan, Germany and South Korea. [4]
  • Australia has six universities in the top 100 in the Academic Ranking of World Universities 2017 : the University of Melbourne, the University of Queensland, Monash University, the University of Sydney, the University of Western Australia and the Australian National University. The number of Australian universities listed on the ARWU top 500 rankings has increased from 14 in 2004 to 23 in 2017. [5]
  • Australia’s scientific research publications averaged a relative impact of at least 20 per cent above the global average in almost 82 per cent of the 22 scientific research fields in the Essential Science Indicators classification. Australia’s seven strongest categories of published research – physics, space science, multidisciplinary, computer science, clinical medicine, engineering and environment/ecology – reflect the country’s diverse research interests. [6]
  • Australia’s research sector shows a strong collaboration performance on a range of indicators, according to the Australian Innovation System Report 2017 In the proportion of the world’s top one per cent of highly cited publications that have an international co-author, Australia ranked seventh across all disciplines, fifth for Humanities, Arts and Social Science and eighth for Natural Sciences and Engineering among 38 OECD+ countries from 2013–15. During the same period, almost half of the publication output from Australia’s top ten universities (ranked by publication output) had an international co-author (43–50 per cent). [7]

innovation-credentials

Australia’s highly educated, multicultural and multilingual workforce has the smarts and skills to drive innovation and grow international businesses.

  • Eighty-eight per cent of Australians are employed in the services sector. Over 40 per cent or five million people work in sectors where tertiary education is standard for many employees, including education and training; professional, scientific and technical services; financial and insurance services; health care; information media and telecommunications; and public administration (see chart below).
  • Australia has the third highest number of researchers in the government and higher education sector per thousand workers out of OECD+ countries. [8] Australia also had relatively high levels of higher degrees by research graduates, with 11.7 doctorate holders per thousand people in the working-age population. [9]
  • International companies can tap into a multilingual workforce across Australia. Almost 30 per cent of Australia’s 12.2 million-strong employed persons were born overseas. Many foreign-born employees are from Asia or Europe, enriching Australia’s reputation for culturally diverse workplaces and boosting the nation’s competitive edge in international business. [10]
  • Twenty-seven per cent (or 6.4 million) of the nation’s population speak an Asian or European language. Almost 3.2 million (or one in seven) Australians speak an Asian language – more than 900,000 speak a Chinese language and 800,000 speak a Southern Asian language – and 1.4 million Australians speak a European language. [11]

employed-persons-by-industry

While the BMR emphasises that Australia already demonstrates a range of strong innovation credentials, Innovation and Science Australia (ISA) has recently released its report to the government, Australia 2030: Prosperity through Innovation – a plan for Australia to thrive in the global innovation race. The ISA Board was tasked by the government to produce a strategic plan to advise policy makers on how to accelerate innovation, science and research and optimise Australia's innovation system out to 2030.

The Plan makes 30 recommendations for governments to help achieve this goal and has identified five urgent imperatives for action across the innovation system in Australia. These imperatives include education, industry, government, research and development, and culture and ambition. Within these imperatives, the Plan describes specific opportunities where governments can exercise leadership and influence to accelerate the nation's innovation performance out to the year 2030.

ISA has developed a strategy looking out to 2030 to advise the Australian Government on how to generate and capture more of the benefits of innovation for Australians. The strategy makes 30 recommendations which are framed in the context of five strategic imperatives.

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[1] Austrade’s Why Australia Benchmark Report 2018 (BMR 2018), page 28
[2] BMR 2018, page 30
[3]OECD dataset: Main Science and Technology Indicators (Data extracted on 19 Feb 2018 from OECD. Stat) 
[4] BMR 2018, Chart: Leading Economy for R&D Expenditure, page 29 
[5] BMR 2018, Chart: Top Ranking Academic Institutions, page 32 
[6] BMR 2018, Chart: Relative Impacts of Australian Scientific Publications by Research Field – 2012–16 , page 31
 [7] Department of Industry, Innovation and Science, Australian Innovation System Report 2017 , 2. Skills and capabilities, page 19 
[8] OECD+ includes all 35 member countries of the OECD, as well China, Taiwan and Singapore (where data is available) 
[9] Ibid, page 87 
[10] BMR 2018, Chart: Culturally Diverse Labour Force, page 33 
[11] BMR 2018, Chart: a Multilingual Population , page 35