News & Views item - April  2005

 

 

The Australian Government's Innovation Report 2004-05 -- Another Point of View. (April 19, 2005)

    In Peter Hall's assessment of Lies, Damn Lies and 223 Extra Statisticians we are told "the Innovation Report's executive summary observes, 'The Australian Government invests in human capital at every level, including schools and the higher education system.' From 2000 to 2002, Australia's higher education expenditure on research and development increased by 22.9%. Investment by business in university research shot up by 29%. The decline in participation by school students in science subjects, which dates 'from 1976' and so is not the government's fault, is today 'partly offset by increasing participation in other sciences, such as psychology.' In fact, according to the executive summary, in our universities 'the number of science and engineering graduates rose rapidly as a percentage of total graduates over the last few years.'
    "However, if you want to know what is really going on you'll have to dig another 80 to 100 pages deeper into the Report, and dissect the data and graphs. There you'll find a very different story. In fact, 'the fall in numbers of [school] students undertaking specialised mathematics and science subjects in senior years is a cause for concern.' You'll wonder how the rapid rise in numbers of science and engineering graduates, noted in the previous paragraph, sits with the 'decline in the proportion of year 12 students, and participation at the undergraduate level in university, in the physical sciences... [This] suggests that the long-term sustainability of Australia’s skills base in the enabling sciences could be under pressure.'"

 

Now Peter Roberts writing in yesterday's Australian Financial Review looks at the Department of Education, Science and Training's innovation report and under the banner "Report card focuses on inputs instead of outcomes" says, "The federal government needs to spend less time patting itself on the back for boosting funding for scientific research and a lot more time addressing our chronic inability to make the most of the resulting knowledge business." For openers, Roberts hasn't looked critically at the government's ineptitude in fostering the needed inputs into the "knowledge business", but that aside he brings home another side of the government's incapacity. "[T]he report... glosses over the crucial measure of Berd [Business Expenditure on Research and Development], which is where researchers -- usually engineers and technicians -- apply knowledge to create new business opportunities for their firms. On this score Australian business spends the equivalent of 0.79 percent of gross domestic product on research, half the OECD average... only a few bland lines of comment [are included] on business research other than to list the government programs that support R&D --and, as is obvious from the Berd figure, support it inadequately."

 

Representatives of Australian business have claimed that the low figure for BERD is a result of the sorts of industry that make up the nation's private sector and hark back to Australia's relatively small population. Meanwhile the government pretty well washes its hands of responsibly for needing to significantly alter the milieu to foster a greater interest by the private sector to usefully up its commitment to R&D.

 

The chart below is taken from DEST's innovation report and shows where Australia's BERD lies within the OECD.

 

 

On the assumption that the business sectors in the eighteen nations that place above Australia don't invest in R&D as a charitable effort, it seems probable that there are differences in the economic environments that would be worth analysing.

 

As to the matter of BERD, population size and industry type they must be kidding.

 

Australia ranks 53rd in population

Sweden - 86th

Finland - 113th

Switzerland - 94th

Iceland - 179th

 


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