Innovation and skills: How Australia stacks up in the global economy

27 Apr 2021

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  • Edmund Tang
  • Benchmark Report

Australia’s innovation and skills is one of the five major reasons for investing in Australia, according to Austrade’s Why Australia Benchmark Report 2021 (BMR).

The report highlights Australia’s world-class scientific and academic institutions, strong commitment to research and development (R&D), and educated, multicultural and multilingual workforce as the country’s major drawcards.

Australia’s strength in these areas isn’t accidental. The Australian Government and businesses recognise that embracing science, technology and innovation is vital to raising the country’s productivity and economic growth.

It’s why we invest heavily in R&D. Our annual gross domestic expenditure on R&D reached A$34 billion in 2018–19. This places Australia alongside the UK, Singapore and France as one of the highest spenders on R&D.[i]

Australia’s commitment to innovation also allows our researchers and innovators to find new solutions that address the challenges facing Australia and the world – often in collaboration with global partners.

A smart, diverse workforce

Australia is one of the world’s most literate and educated nations, ranking 8th on the 2020 United Nations Human Development Index. Our human capital and research are ranked in the world’s top 10.

Almost 9 out of 10 Australians are employed in our services-driven economy.[ii] Within these services industries, around 47% work in sectors where having a tertiary education is standard.[iii]

Australia also boasts a multicultural workforce. In 2019, we had the third highest proportion of foreign-born citizens among OECD countries. Twenty-nine per cent of our population was born overseas, twice the average for OECD countries.[iv] This makes it relatively easy for international companies to employ skilled, multilingual workers with intercultural understanding.

We’re also proud of our diverse workforce, which is ranked third in the world in terms of ethnicity, religion, sexual orientation and gender.[v]

A nation of entrepreneurs

Australians are enterprising inventors and pioneers. We are ranked first in the Asia-Pacific region and sixth globally in the 2019 Global Entrepreneurship Index, ahead of Hong Kong (13th), South Korea (21st), Japan (26th), Singapore (27th), China (34th) and India (78th). Australia also ranks ahead of many major European Union economies including France (14th), Germany (15th), Spain (31st) and Italy (36th).

We have a relatively high proportion of innovation-active firms by international standards. In 2018–19, around 44% of Australian firms were innovation-active.[vi] In the tech sector alone, Australia’s globally renowned innovators include Afterpay, Airwallex, Atlassian, Canva and SafetyCulture.

The Economist Intelligence Unit ranks Australia as the economy most prepared for technological change, and the most attractive place for tech companies to invest in the forecast period (2018–22).[vii] Cisco’s annual Digital Readiness Index 2019 ranks Australia third in the Asia-Oceania region, and 12th globally.[viii]

 

World-class universities

Many of Australia’s entrepreneurs and workers are graduates of Australia’s academic institutions. We have seven universities in the top 100, the third highest number in the world, according to the 2020 Academic Ranking of World Universities.[ix]

Australia’s share of the world’s scientific publications has been growing steadily, rising from 3.6% in 2011 to 4.2% in 2019.[x] In 20 out of 22 fields of academic research, Australia’s research publications achieve an impact that is at least 20% above the global average.[xi]

Australia’s intellectual capital, commercial focus and collaborative approach makes it an ideal partner for business, investment and research. From medicine to IT, high-skilled professionals from around the world are coming here set up their business or to work at private and public institutions across the country. Read their stories.

Benchmark Report 2021

Australia’s innovation and diverse skills base make it an excellent choice to establish a business or research partnership. For a more in-depth analysis, take a look at the Benchmark Report 2021.

In my next blog, I’ll take a look at how Australia’s global ties underpin its trade and investment performance.

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[i] Why Australia Benchmark Report 2021, page 34
[ii] Australian Bureau of Statistics (ABS), Labour Force, Australia, Detailed - Electronic Delivery (6291.0.55.001) and Labour Force, Australia, Detailed, Quarterly (6291.0.55.003) (released 22 October 2020)
[iii] ABS, Education and Work, Australia Table 13 (released 11 November2020, reference period: May 2020)
[iv] Why Australia Benchmark Report 2021, page 39
[v]> Why Australia Benchmark Report 2021, page 30
[vi] Department of Industry, Science Energy and Resources, Australian Innovation System Monitor, September 2020 edition, page 17
[vii] Why Australia Benchmark Report 2021, page 29
[viii] Why Australia Benchmark Report 2021, page 31
[ix] Why Australia Benchmark Report 2021, page 37
[x] Why Australia Benchmark Report 2021, page 35
[xi] Ibid.