Innovation & skills: how Australia’s workforce stacks up in a global economy

25 Sep 2020


  • Edmund Tang

Australia’s workforce has two priceless assets – great skills and an urge to innovate. This year’s Benchmark Report provides the evidence. It shows how Australia stacks up globally in terms of scientific institutions, and research and development achievements. It also sifts some of the education characteristics of our multicultural and multilingual workforce.

Australia’s strength in skills and innovation isn’t accidental. The Australian Government recognises that embracing science, technology and innovation is important to raising the country’s productivity and long-term growth. Support for our researchers and innovators helps Australian organisations to address national and global challenges. Today, Australian institutions collaborate with partners across the world.

Innovation is underpinned by heavy investment in research and development (R&D) — by government and the private sector. Opportunities abound, from energy to advanced manufacturing, and mining to deep space.1 We have world-leading capabilities in block chain and quantum computing. What’s more, Australia’s vibrant start-up ecosystem is channelling investment into agtech, edtech, fintech, foodtech and medtech.

Australia’s workforce scores top global rankings

First, some general workforce and labour metrics. Australia ranks sixth in the United Nations Development Programme’s Human Development Report 2019. The report uses global comparisons to measures a country’s human, physical and educational wellbeing based on years of schooling, life expectancy and income. Its findings neatly benchmark Australia’s workforce in a global economy.

  • Australia is ranked third for workforce diversity: this includes ethnicity, religion, sexual orientation and gender.
  • Australia also ranks in the top ten for availability of skilled labour, human capital and research, and scientific research publications.  

Skilled workforce and innovation Indicators – Global Rankings, 2019


The Australian economy has global admirers. For example, The Economist Intelligence Unit has ranked Australia as the economy most prepared for technological change – and the most attractive places for tech companies to invest in – for the period 2018–22.2

There are a number of ways to measure the intensity of innovation. For example, Australia has a relatively high proportion of innovators among its corporate ranks. The Australian Government estimates that in 2018–19, around 45 per cent of Australian firms were innovation-active.3

Academic prowess

Then there’s academia. Australia's share of the world's scientific publications has been growing steadily, rising from 3.6 per cent in 2011 to 4.2 per cent in 2019.4 As set out in the Benchmark report, Australia’s research publications achieve an impact that is at least 20 per cent above the global average in 20 out of 22 fields of academic research.5

According to one, well-regarded ranking, Australia has seven universities in the top 100 in 2020. This is the third highest number in the world, according to the 2020.6

And Australian research is highly regarded. According to Clarivate – formerly Thompson Reuters Intellectual Property and Science Business – Australia has the world’s fifth largest number of highly cited researchers.7

High rates of investment & entrepreneurship

Australia currently invests approximately US$22 billion on R&D each year, calculated on a purchasing power parity basis. This puts the nation among the world’s powerhouse researchers, which include the US, Japan, France, Germany and South Korea.

Most is private investment. Business expenditure on R&D makes up 53 per cent of Australia’s total R&D expenditure, and this has expanded rapidly – from A$5 billion in 2000–01 to A$17.4 billion in 2017–18. This represents a compound annual growth rate (CAGR) of 7.6 per cent since 2001, almost 2 percentage points faster than Australia’s economic growth over the same period.8

According to the Washington-based Global Enterprise and Development index, Australia ranks first in the Asia-Pacific region and fifth globally, in terms of global entrepreneurship. This places Australia ahead of many Asian economies, including Hong Kong (13rd), Taiwan (18th), South Korea (24th), Singapore (27th), Japan (28th), China (43rd), India (68th) and Indonesia (94th).

Australia's innovation credentials


An educated and multilingual workforce

Last, there’s Australia’s extraordinary workforce. Well over one quarter of our population in 2018 was born overseas. This puts Australia well ahead of the OECD average, and above major developed economies including Canada, Germany, the UK, the US and France.

This overseas-born workforce is very highly skilled. Around 60 per cent of immigrants (2.4 million) has a tertiary education. Around 2 million are from Asia and 1.1 million are from Europe. With a high proportion of skilled migrants, Australia’s workforce is culturally diverse, with language and business skills that give Australia a built-in advantage in many aspects of cross-border business.9

Currently, almost nine out of ten of Australians are employed in the services sector. Within these services industries, around 44 per cent (5.7 million out of 13 million people) work in sectors where having a tertiary education is more common than not.10 (see chart below)

Australia's employed persons by industry, 2019


In some services sectors, over 60 per cent of the workforce holds a tertiary qualification. The Australian workforce also boasts a relatively high level of higher degrees by research graduates: currently there are 11.7 doctorate holders per thousand people in the working-age population.11

So, Australia’s success in the global economy is built on far more than energy, resources and agriculture. Our national competitive advantage rests on a priceless human asset – the skills, talent and ingenuity of our workforce.



1 Department of Industry, Science, Energy and Resources (DISER), Innovation and Science, Partnering with Australia on Innovation, Science and Research, Version 3, March 2020

2 Economist Intelligence Unit, 2018 Technological Readiness Ranking, forecast for 2018-2022

3 DISER, Australian Innovation System Monitor, September 2020 edition, page 17

4 Ibid, page 67

5 BMR, Chart: Relative Impacts of Australian Scientific Publications by Research Field – 2014–18, page 33

6 BMR, Chart: Academic ranking of world universities, 2020, page 34

7 Web of Science (WS), a Clarivate Analytics company, is an information publications organisation, than collates content and usage by academia, corporations, publishers and governments. ‘Highly Cited Researchers’ are those who have demonstrated significant and broad influence through their publication of multiple papers, as evinced by peer citations over the past decade. These highly cited papers must rank in the top 1% by citations for a chosen field or fields and year in Web of Science (WS).

8 BMR, page 32

9 BMR 2020, Chart: Foreign-born population, page 36

10 Australian Bureau of Statistics Cat. No. 2270DO001_201905 Education and Work, Australia, May 2019 (Released 13 November 2019), Table 13

11 DISER, Australian Innovation System Report 2017, page 87