Investing in innovation could give a $100bn boost to the economy

In what has been a volatile period for the economy, new research is showing some light at the end of the tunnel, highlighting the potential for huge changes.

A new analysis by Science and Technology Australia is making claims of the possibility for the economy to receive a $100 billion boost from 42,000 new jobs by simply hitting a target of investing 3 per cent of GDP in research and development.

Speaking at the National Press Club, Science and Technology Australia president, Professor Sharath Sriram made a powerful case for reaching the 3 per cent target to turn Australia into an innovation nation. Sriram claims that creating an innovation ecosystem will secure the country's economic future.

“If we were investing that 3 per cent of GDP in R&D right now, the economy would be $100 billion and 42,000 jobs better off. And this is a conservative estimate,” said Sriram.

Sriram also warns of the consequences of failing to do so. Australia’s overall spending on research and development as a percentage of GDP has been in decline for more than 10 years. Australia now spends less than 2 cents in every dollar on economy-boosting research and development. The US, in comparison, spends more than double Australia’s investment, and South Korea spends triple.

“To maintain our standard of living, Australia must increase R&D expenditure to 3 per cent of GDP as fast as we can,” said Sriram.

Key to the success of that plan will be a connected innovation ecosystem that smoothly takes great Australian ideas and turns them into products and services.

“The three parts of our innovation ecosystem need to work in cohesion – universities and research institutes generating ideas, businesses transforming and adopting them, with government championing the efforts with strategic incentives and driving efficiencies.”

“Creating this ecosystem is crucial. Failing to build it will have big consequences,” said Sriram. “If we fail to diversify, if we don’t become an innovation-driven economy, then we will be a nation of consumers rather than creators. We will end up paying an ever-increasing rent to the rest of the world.”

“Unless we become a smarter country, we’re doomed to become a poorer one.”